WILLIAM TEMPLE HOUSE. Audited Financial Statements. For the Year Ended September 30, 2017

Transcription

1 Audited Financial Statements For the Year Ended

2 INDEPENDENT AUDITOR'S REPORT To the Board of Directors William Temple House We have audited the accompanying financial statements of William Temple House (a nonprofit corporation), which comprise the statement of financial position as of, and the related statements of activities, functional expenses, and cash flows for the year 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 audit. We conducted our audit accordance with auditing standards generally accepted in the United States of Print America. Those Area 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 organization 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 organization 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. 520 SW Yamhill Street Suite 500 Portland, Oregon P: F: mail@mcdonaldjacobs.com mcdonaldjacobs.com - 1 -

3 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of William Temple House as of, and 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. Report on Summarized Comparative Information We have previously audited William Temple House s 2016 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated January 24, In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2016 is consistent, in all material respects, with the audited financial statements from which it has been derived. Portland, Oregon January 23,

4 STATEMENT OF FINANCIAL POSITION (With comparative totals for 2016) ASSETS Cash and cash equivalents $ 174,131 $ 188,403 Accounts receivable 29,084 - Contributions receivable 10,000 47,722 Prepaid expenses 49,996 27,256 Inventory 65,736 69,806 Investments 1,368,967 1,400,884 Assets held in charitable trust - 109,018 Property and equipment, net 845, ,452 TOTAL ASSETS $ 2,543,250 $ 2,690,541 LIABILITIES AND NET ASSETS Liabilities: Accounts payable $ 25,674 $ 27,516 Accrued personnel expenses 83,068 75,181 Deferred revenue 43,294 33,740 Liability under charitable trust - 30,258 Total liabilities 152, ,695 Net assets: Unrestricted: Undesignated 49,594 44,339 Board designated 1,075,722 1,128,279 Net property and equipment 845, ,452 Total unrestricted 1,970,652 2,020,070 Temporarily restricted 236, ,998 Permanently restricted 183, ,778 Total net assets 2,391,214 2,523,846 TOTAL LIABILITIES AND NET ASSETS $ 2,543,250 $ 2,690,541 See notes to financial statements

5 STATEMENT OF ACTIVITIES For the year ended (With comparative totals for 2016) 2017 Temporarily Permanently 2016 Unrestricted Restricted Restricted Total Total Support and revenue: Thrift store sales $ 813,286 $ - $ - $ 813,286 $ 859,028 In-kind donation of goods 788, , ,945 Less inventory sold (813,330) - - (813,330) (850,921) Net sales of donated merchandise 788, , ,052 Contributions 315, , , ,682 Donated materials and services 748, , ,300 Program service revenue 26, ,188 25,576 Special event revenue, net of direct costs of $37,334 for 2017 and $40,293 for , , ,816 Investment income, net 117,183 24, ,401 98,117 Change in value of liability under charitable trust - 30,258-30,258 1,332 Other income 35, ,576 6,281 Net assets released from restrictions: Satisfaction of purpose restrictions 290,598 (290,598) Total support and revenue 2,440,637 (83,214) - 2,357,423 2,154,156 Expenses: Program services 2,004, ,004,526 1,750,824 Administration 296, , ,389 Fundraising 188, , ,877 Total expenses 2,490, ,490,055 2,214,090 Change in net assets (49,418) (83,214) - (132,632) (59,934) Net assets: Beginning of year 2,020, , ,778 2,523,846 2,583,780 End of year $ 1,970,652 $ 236,784 $ 183,778 $ 2,391,214 $ 2,523,846 See notes to financial statements

6 STATEMENT OF FUNCTIONAL EXPENSES For the year ended (With comparative totals for 2016) Program Services Supporting Services Spiritual Total Social Care Thrift Program Admin Services Counseling Services Store Services istration Fundraising Total Total Salaries and payroll taxes $ 135,334 $ 129,797 $ 34,021 $ 367,939 $ 667,091 $ 182,291 $ 91,630 $ 941,012 $ 926,677 Employee benefits 14,405 14,183 6,504 65, ,322 37,764 10, , ,997 Professional fees 50, ,449 1,869 30, ,636 30,060 40, , ,945 Direct assistance 482, , ,846-4, , ,555 Telephone 3,255 14, ,665 21,357 1, ,503 19,795 Utilities 13,295 10,814 1,296 23,737 49,142 2,907 2,844 54,893 47,708 Repairs and maintenance 16,246 9,894 1,538 24,356 52,034 2,776 2,606 57,416 52,886 Equipment rental 1,285 1, ,519 1,544 1,055 5,118 20,798 Insurance 5,647 6, ,944 22,577 6,932 3,647 33,156 42,304 Security 1,693 1, ,016 7, ,189 9,841 Supplies 5,184 4,227 3,096 5,975 18,482 3,493 2,820 24,795 32,768 Printing, postage and publications ,193 2,808 1,672 7,318 11,798 12,540 Travel, entertainment and training 11, ,226 14,448 4,639 4,267 23,354 11,796 Financial fees ,732 13, ,231 19,338 19,603 Depreciation 11,091 8,256 1,227 19,531 40,105 13,580 7,293 60,978 57,775 Miscellaneous 11,509 7,177 1, ,083 6,718 3,390 30,191 11,102 Thrift store cost of sales , , , , , ,738 52,801 1,385,771 2,817, , ,804 3,303,385 3,065,011 Less expenses deducted directly from revenue (813,330) (813,330) - - (813,330) (850,921) Total expenses $ 764,546 $ 614,738 $ 52,801 $ 572,441 $ 2,004,526 $ 296,725 $ 188,804 $ 2,490,055 $ 2,214,090 See notes to financial statements

7 STATEMENT OF CASH FLOWS For the year ended (With comparative totals for 2016) Cash flows from operating activities: Cash receipts: Thrift store sales $ 813,286 $ 859,028 Contributions and events 633, ,117 Program service, investment, and other revenue 73,437 75,929 Total cash receipts 1,520,592 1,673,074 Cash disbursements: Payroll and related expenses (1,081,448) (1,092,378) Other operating expenses (636,133) (613,378) Total cash disbursements (1,717,581) (1,705,756) Net cash used in operating activities (196,989) (32,682) Cash flows from investing activities: Purchase of property and equipment (58,862) (93,952) Proceeds from the sale of investments 386, ,554 Purchase of investments (144,731) (130,581) Net cash provided by (used in) investing activities 182,717 (102,979) Net decrease in cash and cash equivalents (14,272) (135,661) Cash and cash equivalents - beginning of year 188, ,064 Cash and cash equivalents - end of year $ 174,131 $ 188,403 Reconciliation of cash flow from operating activities: Change in net assets $ (132,632) $ (59,934) Adjustments to reconcile change in net assets to net cash used in operating activities: Depreciation 60,978 57,775 Net realized/unrealized gain on investments (100,644) (54,045) Change in value of charitable trust liability (30,258) (1,332) (Increase) decrease in: Accounts receivable (29,084) - Contributions receivable 37,722 8,376 Prepaid expenses (22,740) (1,152) Net change in donated inventory 4,070 (11,774) Increase in: Accounts payable and accrued personnel expenses 6,045 8,161 Deferred revenue 9,554 21,243 Net cash used in operating activities $ (196,989) $ (32,682) See notes to financial statements

8 NOTES TO FINANCIAL STATEMENTS 1. NATURE OF ACTIVITIES William Temple House (the Organization) was founded in 1965 as a mental health counseling and pastoral care agency providing services to working poor individuals and families in northwest Portland, Oregon. With the founders recognizing a need for emergency assistance, the Organization soon expanded to provide emergency food, clothing and similar assistance. Today, the Organization provides mental health counseling, same-day emergency food and other assistance, and pastoral care to more than 14,000 working poor individuals and families each year from its headquarters in Northwest Portland. The Organization also provides free information and referrals to more than 3,000 people annually. The Organization s programs are as follows: Social Services The Organization provides food, children s clothing, vision exams and eyeglasses, prescription medication assistance, rent and utility assistance, and other emergency and temporary services to individuals and families in the local community without charge. Counseling The Organization provides individual and family mental health counseling, graduate and post graduate training and internship as well as conducts education and training programs for community, professionals and churches. Spiritual Care Services The Organization also provides spiritual care by a community chaplain and trained volunteers on site to all who wish it. Spiritual care is listening centered and regardless of religious or spiritual tradition. Services include prayer, sources, worship and exploration. Thrift Store The Organization operates a thrift store in the Portland metropolitan area, the net earnings of which support direct services to clients. The store functions as a clothing and household goods supply center for social service clients

9 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Organization reports information regarding its financial position and activities according to three classes of net assets based on the existence or absence of donorimposed restrictions as follows: Unrestricted net assets represent net assets not subject to donor-imposed stipulations. Temporarily restricted net assets represent net assets subject to donor-imposed stipulations that may or will be met by actions of the Organization and/or the passage of time. Permanently restricted net assets represent net assets subject to donor-imposed stipulations that neither expire with the passage of time nor can be fulfilled or otherwise removed by actions of the Organization. Cash and Cash Equivalents For purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with maturities of three months or less at the time of purchase to be cash equivalents. Cash and short-term investments held in investment accounts are reported as investments instead of cash because the Organization holds those funds as an endowment. Accounts Receivable Accounts receivable are reported at the amount management expects to collect on balances outstanding at year-end. Based on an assessment of the credit history with those having outstanding balances and current relationships with them, management has concluded that realization losses on balances outstanding at year-end will be immaterial. Contributions Receivable Contributions, which include unconditional promises to give (pledges), are recognized as revenues in the period the Organization is notified of the commitment. Conditional promises to give are not recognized until they become unconditional, that is when the conditions on which they depend are substantially met. Bequests are recorded as revenue at the time the Organization has an established right to the bequest and the proceeds are measurable. Inventory Inventory consisting of donated clothing and household and other items is stated at estimated fair value

10 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Investments Investments are carried at fair value. Property and Equipment Acquisitions of property and equipment in excess of $2,500 are capitalized. Property and equipment purchased are recorded at cost. Donated assets are reflected as contributions at their estimated values on the date received. Depreciation Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets which range from 3 to 40 years. Income Tax Status William Temple House is a nonprofit corporation exempt from income tax under section 501(c)(3) of the Internal Revenue Code and applicable state law. No provision for income taxes is made in the accompanying financial statements, as the Organization has no activities subject to unrelated business income tax. The Organization is not a private foundation. The Organization follows the provisions of FASB ASC Topic Accounting for Uncertainty in Income Taxes. Management has evaluated the Organization's tax positions and concluded that there are no uncertain tax positions that require adjustment to the financial statements to comply with provisions of this Topic. Deferred Revenue Revenue collected in advance for events held subsequent to year-end are deferred until the event takes place at which point the revenue is recognized. Restricted and Unrestricted Revenue and Support Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Donor-restricted 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

11 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Donated Assets and Services Donations of property, equipment, materials and other assets are recorded as support at their estimated fair value at the date of donation. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. The Organization recognizes donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Donated assets and services for the years ended and 2016 are as follows: Thrift store donations $ 788,926 $ 843,945 Donated materials and services: Food and supplies, included in program services 359, ,829 Professional counseling services and dental services, included in program services 365, ,611 Accounting, legal and professional services, included in administration 18,600 25,380 Development donated goods and services 4,847 4,480 Total donated materials and services 748, ,300 Total donated assets and services $ 1,537,451 $ 1,306,245 Earnings on the Investment of Endowment and Similar Funds Income, realized net gains, and unrealized net gains and losses on the investment and similar funds are reported as follows: As increases or decreases in permanently restricted net assets if the terms of the gift require that they be added to or subtracted from the principal of a permanent endowment fund; As increases or decreases in temporarily restricted net assets until appropriated for expenditure and if the terms of the gift impose restrictions on the use of the income; As increases or decreases in unrestricted net assets after appropriated for expenditure

12 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities and in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 reporting period. Actual results could differ from those estimates. Subsequent Events The Organization has evaluated all subsequent events through January 23, 2018, the date the financial statements were available to be issued. Reclassifications Certain amounts in the prior year financial statements were reclassified to conform with the current year presentation. Summarized Financial Information for 2016 The financial information as of September 30, 2016 and for the year then ended is presented for comparative purposes and is not intended to be a complete financial statement presentation. 3. ACCOUNTS RECEIVABLE Accounts receivable are unsecured and consist of $29,084 at. The amount is due from an insurance company for a property damage settlement. 4. CONTRIBUTIONS RECEIVABLE Contributions receivable of $10,000 and $47,722 at and 2016, respectively, represent unsecured promises of future contributions that are expected to be collected in the next year. These pledges are considered fully collectible; therefore, no allowance for uncollectible pledges has been recorded

13 5. INVENTORY Inventory consists of the following at and 2016: Clothing and accessories $ 27,675 $ 33,346 Household goods 38,061 36,460 Total inventory $ 65,736 $ 69, INVESTMENTS Investments consist of the following at and 2016: Cash and equivalents $ 87,797 $ 203,976 Fixed income securities 249, ,017 Mutual funds 975, ,369 Bond fund 11,782 69,724 Real estate and tangible investments 43,995 69,816 Total investments $ 1,368,967 $ 1,509,902 Investments as reported in the statement of financial position include the following at and 2016: Investments held in endowment (Note 14) $ 1,368,967 $ 1,400,884 Assets held in charitable trust (Note 7) - 109,018 $ 1,368,967 $ 1,509,

14 6. INVESTMENTS, Continued Investment income consists of the following for the years ended and 2016: Interest and dividends $ 50,973 $ 56,182 Net realized/ unrealized gain on investments 102,543 54,045 Investment expenses (12,115) (12,110) Investment income (loss), net $ 141,401 $ 98, ASSETS AND LIABILITY HELD IN CHARITABLE TRUST The Organization was a beneficiary of a charitable remainder trust. The charitable trust agreement provided for quarterly distributions to the income beneficiary for the life of the beneficiary based on 7% of the preceding year s annual valuation of the trust assets. Upon the death of the income beneficiary during the current year, the Organization received the remaining corpus of the trust with no donor restrictions. The trust assets were settled during the year and no liability remains as of September 30, PROPERTY AND EQUIPMENT Property and equipment consists of the following at and 2016: Land $ 187,214 $ 187,214 Buildings 1,879,576 1,856,631 Furniture and fixtures 198, ,461 Total property and equipment 2,265,165 2,206,306 Less accumulated depreciation 1,419,829 1,358,854 Net property and equipment $ 845,336 $ 847,

15 9. BOARD DESIGNATED ASSETS Board designated net assets at and 2016 total $1,075,722 and $1,128,279, respectively, and consist of unrestricted funds held as an endowment for use in future operations. See Note 14 for additional information. 10. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at and 2016 are as follows: Purpose restricted: Hatfield special needs $ 19,238 $ 3,091 Direct service needs 2,186 36,821 Counseling program 12,304 10,262 Clothing closet 18,162 16,578 Parish partners 6,181 6,517 Spiritual Care program 49,925 78,597 Chapel renovation 1,670 - Other 14, , ,411 Net assets held under charitable trust - 78,760 Endowment earnings (Note 14) 113,045 88,827 Total temporarily restricted net assets $ 236,784 $ 319, PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets consist of endowment fund assets to be held in perpetuity. The income from the assets can be used to support the Organization s general activities. Unexpended endowment income is reported as temporarily restricted net assets until appropriated for expenditure. See Note 14 for additional information

16 12. LEASE COMMITMENTS The Organization leases certain office equipment under operating leases with monthly payments totaling approximately $1,600 and expiring may 2019 through February Total rent expense approximated $21,800 and $16,600 for the years ended and 2016, respectively. Approximate future minimum lease payments under operating leases are as follows: Year ending September 30, 2018 $ 21, , , , ,100 $ 43, RETIREMENT PLAN The Organization maintains the William Temple House 401(k) Plan, under which eligible employees may elect to contribute up to 50 percent of their annual compensation to the plan subject to statutory limitations. The plan guidelines state that the Organization may make discretionary matching and non-matching contributions to the plan. The Organization made matching contributions of $8,184 and $10,073 for the years ended and 2016, respectively. 14. ENDOWMENT The Organization's endowment consists of funds established for long-term support of the Organization. Its endowment includes both donor-restricted endowment funds and funds designated by the Board of Directors to function as an endowment. As required by U.S. generally accepted accounting principles (GAAP), net assets associated with endowment funds, including funds designated by the Board of Directors to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions or Board designations

17 14. ENDOWMENT, Continued Interpretation of Relevant Law The Board of Directors of the Organization has interpreted Oregon s enacted Uniform Prudent Management of Institutional Funds Act (the Act or UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donorrestricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment (b) the original value of subsequent gifts to the permanent endowment and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by the Act. In accordance with UPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: (1) The duration and preservation of the fund (2) The purposes of the Organization and the donor-restricted endowment fund (3) General economic conditions (4) The possible effect of inflation and deflation (5) The expected total return from income and the appreciation of investments (6) Other resources of the Organization (7) The investment policies of the Organization

18 14. ENDOWMENT, Continued Endowment net asset composition by type of fund as of and 2016 is as follows: Temporarily Permanently Unrestricted Restricted Restricted Total Donor-restricted $ - $ 113,045 $ 183,778 $ 296,823 Board-designated 1,075, ,075,722 $ 1,075,722 $ 113,045 $ 183,778 $ 1,372,545 September 30, 2016 Donor-restricted $ - $ 88,827 $ 183,778 $ 272,605 Board-designated 1,128, ,128,279 $ 1,128,279 $ 88,827 $ 183,778 $ 1,400,884 The changes in endowment net assets for the year ended is as follows: Board Temporarily Permanently Designated Restricted Restricted Total Endowment net assets - September 30, 2016 $ 1,128,279 $ 88,827 $ 183,778 $ 1,400,884 Contributions 87, ,955 Investment income 125,489 26, ,715 Investment expenses (10,066) (2,008) - (12,074) Appropriated for expenditure (255,935) - - (255,935) Endowment net assets - $ 1,075,722 $ 113,045 $ 183,778 $ 1,372,

19 14. ENDOWMENT, Continued The changes in endowment net assets for the year ended September 30, 2016 is as follows: Board Temporarily Permanently Designated Restricted Restricted Total Endowment net assets - September 30, 2015 $ 1,081,901 $ 73,108 $ 183,778 $ 1,338,787 Contributions 65, ,787 Investment income 91,599 17, ,220 Investment expenses (10,203) (1,902) - (12,105) Appropriated for expenditure (100,805) - - (100,805) Endowment net assets - September 30, 2016 $ 1,128,279 $ 88,827 $ 183,778 $ 1,400,884 Return Objectives and Risk Parameters The Organization has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Organization must hold in perpetuity or for a donor-specified period as well as boarddesignated funds. Strategies Employed for Achieving Objectives To satisfy its long-term rate-of-return objectives, the Organization relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Organization targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints. 15. FAIR VALUE MEASUREMENTS Assets and liabilities recorded at fair value in the statement of financial position are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows: Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities

20 15. FAIR VALUE MEASUREMENTS, Continued Level 2: Observable inputs other than those included in Level 1, such as quoted market prices for similar assets or liabilities in active markets, or quoted market prices for identical assets or liabilities in inactive markets. Level 3: Unobservable inputs reflecting management s own assumptions about the inputs used in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair values requires significant management judgment or estimation. Fair values of assets measured on a recurring basis at and 2016 are as follows: Level 1 Level 2 Level 3 Investments: Fixed income securities $ 249,499 $ - $ - Domestic equity mutual funds 733, International equity mutual funds 242, Alternative non-traditional bond fund 11, Real estate and tangibles 43, Level 1 Level 2 Level 3 September 30, 2016 Investments: Fixed income securities $ 286,017 $ - $ - Domestic equity mutual funds 730, International equity mutual funds 149, Alternative non-traditional bond fund 69, Real estate and tangibles 69,816 - Liabilities: Liability under charitable trust - - (30,258) Fair values for investments are determined by reference to quoted market prices and other relevant information generated by market transactions. Fair values of investments in real estate and intangibles are estimated based on market prices for similar assets or liabilities

21 15. FAIR VALUE MEASUREMENTS, Continued The liability under charitable trust is determined by calculating the present value of the future distributions to be made using published life expectancy tables and a 5.6% discount rate. Assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3 inputs): Liability under charitable trust Balance at beginning of year $ (30,258) $ (31,590) Additions 5,964 8,644 Distributions to beneficiary (5,964) (8,644) Change in value of remaining obligation (included in temporarily restricted net assets) 30,258 1,332 Balance at end of year $ - $ (30,258) 16. CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES The Organization maintains its cash balances in two financial institutions. Balances at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The balances, at times, may exceed the federally insured limit. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of financial position. 17. ENVIRONMENTAL REMEDIATION LIABILITY The Organization has recorded a liability at related to an oil tank decommission at the main location. The amount estimated by the Organization for the decommission work is approximately $20,000, with $5,000 of this amount expensed for work completed prior to. The remaining balance of $15,000 has been accrued at year-end. The Organization is looking into any potential recoveries; however, no recoveries or insurance proceeds are recorded as of