BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2006

Transcription

1 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2006

2 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. TABLE OF CONTENTS YEAR ENDED JUNE 30, 2006 Page Number Independent Auditor's Report FINANCIAL STATEMENTS Statement of Financial Position 1 Statement of Activities 3 Statement of Functional Expenses 4-5 Statement of Cash Flows 6 Notes to Financial Statements 7-13

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4 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. STATEMENT OF FINANCIAL POSITION JUNE 30, 2006 ASSETS CURRENT ASSETS Cash $ 310,676 Grants receivable 24,339 Accounts receivable 5,442 Unconditional promises to give 161,818 Prepaid expenses 17,041 TOTAL CURRENT ASSETS 519,316 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $51,327 37,838 OTHER ASSETS Deposit 3,319 TOTAL ASSETS $ 560,473 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Obligation under capital lease, current portion $ 9,832 Accounts payable 4,556 Accrued expenses 6,195 Refundable advances 26,196 Liability for funds held as agent 8,383 TOTAL CURRENT LIABILITIES 55,162 LONG TERM LIABILITIES Obligation under capital lease, net of current portion 14,746 TOTAL LIABILITIES 69,908 NET ASSETS Unrestricted 328,747 Temporarily restricted 161,818 TOTAL NET ASSETS 490,565 TOTAL LIABILITIES AND NET ASSETS $ 560,473 The accompanying notes are an integral part of these financial statements. 1

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6 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2006 TEMPORARILY UNRESTRICTED RESTRICTED TOTAL PUBLIC SUPPORT AND REVENUES Contributions $ 186,670 $ - $ 186,670 United Way 14, , ,934 Grants 245, ,513 Special events revenue $ 192,289 less: direct benefit costs 34,157 Net revenues from special events 158, ,132 Interest income 5,308-5,308 Net assets released from restrictions 154,872 (154,872) - TOTAL SUPPORT AND REVENUES 764,611 6, ,557 EXPENSES Program services 636, ,012 Management and general 60,181-60,181 Fundraising 29,212-29,212 TOTAL EXPENSES 725, ,405 CHANGE IN NET ASSETS 39,206 6,946 46,152 NET ASSETS, BEGINNING OF PERIOD 289, , ,413 NET ASSETS, END OF PERIOD $ 328,747 $ 161,818 $ 490,565 The accompanying notes are an integral part of these financial statements. 3

7 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2006 Program Services Community- Total Based School-Based Program Mentoring Mentoring Services EXPENSES Insurance $ 11,939 $ 11,939 $ 23,878 Interest 1,393 1,392 2,785 Licenses and fees Meetings 1,556 1,853 3,409 Occupancy 19,419 19,419 38,838 Office expense Payments to affiliated organizations 4,127 8,252 12,379 Personnel costs 208, , ,809 Postage ,880 Printing and publications ,226 Professional services 4,663 5,552 10,216 Program activities 7,085 7,085 14,170 Repairs and maintenance 1,184 1,185 2,369 Supplies 5,358 5,358 10,716 Telephone 4,351 5,180 9,531 Training 3,186 3,792 6,978 Travel 7,684 9,147 16,831 Utilities 2,424 2,424 4,848 TOTAL EXPENSES BEFORE DEPRECIATION 284, , ,364 Depreciation 9,324 9,324 18,648 TOTAL FUNCTIONAL EXPENSES $ 294,040 $ 341,972 $ 636,012 The accompanying notes are an integral part of these financial statements. 4

8 Support Services Total Management Support and General Fundraising Services Total $ 487 $ - $ 487 $ 24, , ,705 4,140 1,363 5,503 44,341 19,122-19,122 19, ,296 24,827 14,896 39, ,532 2, ,821 4,701 1, ,838 3, , , ,705 1,142 9,640 10,782 21, , , ,464 18, ,535 58,193 28,558 86, ,115 1, ,642 21,290 $ 60,181 $ 29,212 $ 89,393 $ 725,405 The accompanying notes are an integral part of these financial statements. 5

9 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC. STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2006 CASH FLOWS FROM OPERATIONS: Change in net assets $ 46,152 Adjustments to reconcile change in net assets to cash provided from operations: Depreciation 21,290 Loss on disposal of assets 2,528 Donated assets (9,172) Forgiveness of debt (18,719) (Increase) decrease in assets: Grants receivable 150 Accounts receivable (5,442) Bequest receivable 2,147 Unconditional promises to give (6,946) Prepaid expenses (1,204) Increase (decrease) in liabilities: Accounts payable 3,642 Accrued expenses (1,118) Refundable advances 26,196 Liability for funds held as agent (4,143) CASH PROVIDED (USED) BY OPERATIONS 55,361 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of assets (11,612) CASH PROVIDED (USED) BY INVESTING (11,612) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on capital lease (8,879) CASH PROVIDED (USED) BY FINANCING ACTIVITIES (8,879) NET CHANGE IN CASH 34,870 CASH, BEGINNING OF PERIOD 275,806 CASH, END OF PERIOD $ 310,676 INTEREST PAID: $ 3,180 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Donated assets $ 9,172 Forgiveness of debt $ 18,719 The accompanying notes are an integral part of these financial statements. 6

10 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Agency Organization and Purpose Big Brothers Big Sisters of Central Florida, Inc. (Organization) is a nonprofit Corporation whose function is to provide mentors for children from single parent families for social and emotional development and mentors for students who are at risk for future school failure. It is supported primarily through contributions, grants, fundraisers and allocations from United Way. Basis of Presentation The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows: Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. Temporarily restricted net assets Net assets subject to donor-imposed stipulations that may or will be met, either by actions of the Organization and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted net assets Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. The Organization had no permanently restricted net assets at June 30, Tax Status The Organization is exempt from income tax under Section 501(c) (3) of the U.S. Internal Revenue Code, and has been determined to be an organization that is not a private foundation. Contributions to the Organization are qualified as deductions for charitable contributions. Cash and Cash Equivalents For purposes of the statements of cash flows, the Organization considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. At June 30, 2006, the Organization did not hold any cash equivalents. Grants Receivable Management of the Organization considers grants receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. 7

11 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Promises to Give Contributions are recognized when a donor or funding agency makes a promise to give to the Organization that is, in substance, unconditional. The Organization believes all unconditional promises receivable are collectible; therefore, no allowance for uncollectible unconditional promises is required. The need for an allowance is based on prior years' experience and management's analysis of specific promises made. Equipment and Depreciation The Organization capitalizes all expenditures for equipment with a value in excess of $500 and a useful life greater than one year. Lesser amounts or purchases with a useful life of less than a year are expensed. Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as support at their estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organization reclassifies temporarily restricted net assets to unrestricted net assets at that time. Property and equipment are depreciated using the straight-line method over the assets expected useful lives. Revenue Recognition Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donorrestricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose 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. 8

12 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Donated Materials and Services Donated services are reflected in the financial statements at the fair value of the services received. The contributions of services are recognized if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills that are provided by individuals possessing those skills and would typically need to be purchased if not provided by donation. For the year ended June 30, 2006, approximately $5,500 of donated services was recognized in the financial statements as revenue and capital asset for specialized services performed to establish the Organization s website. Donated materials of approximately $8,000 were recognized in the financial statements as equipment and as revenues and expenses for specialized items provided for the Organization s fundraiser, Men Cooking from the Heart. Additional donated services of approximately $5,600 benefited the Organization in management and general expenses. The Organization also receives donated services from a variety of unpaid volunteers who assist in carrying out major fundraisers, administration duties and outreach efforts. No amounts have been recognized for these services in the accompanying statement of activities because the criteria for financial statement recognition of such volunteer effort have not been satisfied. Functional Allocation of Expenses The costs of providing the various programs and activities have been summarized on a functional basis in the accompanying statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 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. NOTE 2 OFF BALANCE SHEET CREDIT RISK The Organization maintains cash in banks in amounts that are from time to time in excess of federally insured limits. As of June 30, 2006, the excess subject to credit risk was approximately $211,000. NOTE 3 - PROMISES TO GIVE Promises to give of $161,818 at June 30, 2006, all of which are receivable in less than one year, consist of allocations and designations from United Way. 9

13 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 4 - SPLIT-INTEREST AGREEMENT The Organization is the remainder beneficiary of an irrevocable charitable remainder annuity trust, the Margaret S. Domick Charitable Remainder Annuity Trust, which was executed July 15, 1996 by an individual grantor. The trust will make a monthly annuity payment to the grantor for her lifetime, and then the trustee will distribute the assets remaining in the trust to the Organization. No receivable from this split-interest agreement has been recorded in the accompanying financial statements, as it appears that there will be no residual assets after satisfaction of the Trust s obligation to the primary beneficiary. For purposes of calculating the value of the residual interest, trust assets have been assumed to yield 3% annually and the life expectancy of the grantor at June 30, 2006 was determined to be approximately four years. It has been assumed that the trust will retain its tax-exempt status throughout that period. These factors used in calculating the residual interest under the trust are estimates and could change in the near term; such a change could be material to the financial statements. NOTE 5 - EQUIPMENT At June 30, 2006, equipment consisted of: Accumulated Net Book Estimated Cost Depreciation Value Life Office equipment and furniture $ 49,596 $ 25,815 $ 23, years Equipment under capital lease 39,569 25,512 14,057 3 years Total $ 89,165 $ 51,327 $ 37,838 NOTE 6 - LINE OF CREDIT The Organization has established a line of credit with a financial institution. The line is in the amount of $50,000, bearing a variable interest rate not less than five percent annually (nine and one quarter percent at June 30, 2006). Payments of interest are due monthly. At June 30, 2006, the organization had not borrowed against the line, leaving the full amount available at that date. NOTE 7 DEBT FORGIVENESS At the end of fiscal 2006, debt in the form of a note payable and accrued interest totaling $18,719 was forgiven by the trustee of the Margaret S. Domick Charitable Remainder Annuity Trust. This is reflected in the accompanying financial statements as an unrestricted contribution. 10

14 NOTE 8 CAPITAL LEASES BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 The Organization is the lessee of office equipment under two capital leases expiring in April 2008 and May The assets and liabilities under the capital leases are recorded at the lower of the present value of the future minimum lease payments or the fair value of the assets. Minimum future lease payments under the capital leases are as follows: Year ending June 2007 $ 11, , ,051 27,443 Less: amount representing interest (2,865) Total $ 24,578 NOTE 9 REFUNDABLE ADVANCES The balance of $26,196 in refundable advances at June 30, 2006 represents amounts received under cost reimbursable contracts that will be expended in the next fiscal year in accordance with the grant/contract requirements. NOTE 10 FUNDS HELD AS AGENT The Organization is holding funds totaling $8,383 contributed for the benefit of another group that assists children. The funds are not available for the unrestricted use of the Organization and would be returned if not used as directed by the donors; therefore, this amount has been presented in current liabilities. NOTE 11 - RESTRICTIONS ON NET ASSETS Temporarily restricted net assets at June 30, 2006 consist of $161,818 of funds allocated by United Way for the fiscal year ended June 30, NOTE 12 - CONCENTRATIONS There is a concentration of risk in the volume of support provided by certain contributors because they represent a significant portion of the Organization's support. The Organization received 21 percent of its revenues for the year ended June 30, 2006 from United Way organizations serving Brevard County and the Orlando area, 18 percent of its revenue through a grant from the state affiliate, Big Brothers Big Sisters Association of Florida, and 13 percent of its revenue through two grants from the national affiliate, Big Brothers Big Sisters Association of America. Also, there are concentrations of risk associated with receivables, as 82 percent is due from the state affiliate. There is a concentration of risk in the amount of debt carried by lenders; capital lease obligations with two lenders represent 30 and 21 percent of total liabilities, respectively. 11

15 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 13 - RELATED PARTY TRANSACTIONS The secretary of the Board of Directors of the Organization is also the president and owner of the corporation which serves as trustee for the Margaret S. Domick Charitable Remainder Annuity Trust, described in Note 4, under which the Organization is a remainder beneficiary. As of June 30, 2006, a note payable to the trust and all related accrued interest was forgiven. The effect of this debt forgiveness, a total of $18,719, is reflected in revenues as a contribution. Total payments to affiliates were $13,296 for the year ended June 30, Dues of $4,125 were paid to Big Brothers Big Sisters of Florida. Payments of $9,171 were made to Big Brothers Big Sisters of America for the use of their name, services of field representatives, training and social work guidelines. NOTE 14 RETIREMENT PLAN The Organization has a tax deferred annuity plan that meets the requirements of Section 401(k) of the Internal Revenue Code. All persons who have been employed by the Organization for at least one year and have attained 18 years of age are eligible to participate in the plan. For the year ended June 30, 2006, one employee was a plan participant with total payroll deductions of $2,172 representing voluntary contributions to the tax-deferred annuity plan. NOTE 15 - OPERATING LEASES The Organization occupies a suite of offices in West Melbourne under a month to month lease. Monthly lease payments are $1,605 and include amounts for common area maintenance, taxes and insurance. The basic rent amount is subject to annual increases in accordance with increases in the Consumer Price Index. The Organization is responsible under the lease for payments for utilities and certain maintenance costs for the property. The Organization occupies a suite of offices in Winter Park, Florida under a lease ending on September 30, The base rent will increase in September 2006 when the Organization begins occupying additional space and will increase each twelve months thereafter by 3%. In addition to the base rent, the Organization is responsible for additional rent, defined as a pro rata share of certain operating expenses and maintenance costs. 12

16 BIG BROTHERS BIG SISTERS OF CENTRAL FLORIDA, INC NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 15 - OPERATING LEASES (CONTINUED) Minimum future lease payments under the Winter Park operating lease are as follows: Year ending June, 2007 $ 31, , , ,835 Total $ 109,801 Total rent expense for fiscal year ended June 30, 2006 under both leases was $44,