COASTAL MAINE BOTANICAL GARDENS, INC

Transcription

1 COASTAL MAINE BOTANICAL GARDENS, INC FINANCIAL STATEMENTS With Independent Auditors Report

2

3 COASTAL MAINE BOTANICAL GARDENS, INC. TABLE OF CONTENTS Page INDEPENDENT AUDITORS' REPORT 1 Financial Statements Statement of Financial Position 2 Statement of Activities 3 Statement of Cash Flows 4 Notes to Financial Statements 5-11

4

5 Efs Edwards, Faust & Smith Certified Public Accountants 716 Union Street Bangor, ME / FAX INDEPENDENT AUDITORS' REPORT The Board of Directors Coastal Maine Botanical Gardens, Inc. We have audited the accompanying statement of financial position of Coastal Maine Botanical Gardens, Inc. (a non-profit organization) as of, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the Coastal Maine Botanical Gardens management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior-year summarized comparative information has been derived from the Organization s 2007 financial statements and, in our report dated July 18, 2008; we expressed an unqualified opinion on those financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Coastal Maine Botanical Gardens, Inc. as of, and its changes in net assets and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. July 24, 2009

6 Coastal Maine Botanical Gardens, Inc. Statement of Financial Position (With Comparative Totals for 2007) ASSETS Cash and cash equivalents Unrestricted $ 180,189 $ 127,672 Accounts receivable 15,744 5,127 Prepaid expenses and other current assets 5,823 9,680 Inventory 63,551 53,026 Capital campaign pledges and grants receivable 1,629, ,737 Current assets 1,895,170 1,129,242 Investments 757, ,818 Capital campaign pledges and grants receivable 809,348 1,241,767 Land, buildings and equipment 9,900,699 8,582,900 Sculptures 161, ,200 Noncurrent assets 11,629,117 10,330,685 Total assets $ 13,524,287 $ 11,459,927 LIABILITIES Accounts payable $ 54,135 $ 44,463 Accrued expenses 65,839 46,620 Current liabilities 119,974 91,083 Liability for present value of life income 59,775 67,360 Long-term debt 1,613,329 1,531,455 Long term liabilities 1,673,104 1,598,815 Total liabilities 1,793,078 1,689,898 NET ASSETS Unrestricted Undesignated 7,585,283 7,153,070 Board designated 56,307 61,627 Total unrestricted net assets 7,641,590 7,214,697 Temporarily restricted net assets 3,117,618 1,977,911 Permanently restricted net assets 972, ,421 Total net assets 11,731,209 9,770,029 Total liabilities and net assets $ 13,524,287 $ 11,459,927 See notes to financial statements -2-

7 Coastal Maine Botanical Gardens, Inc. Statement of Activities Year Ended (With Comparative Totals for 2007) Temporarily Restricted Permanently Restricted Unrestricted Revenue and other support Contributions $ 472,501 $ 724,960 $ 194,580 $ 1,392,041 $ 2,782,497 Grants 23,000 1,424, ,000 1,647, ,604 Special events 159, ,365 72,078 Program revenue 413, , ,456 Membership dues 249, , ,933 Merchandise sales, net of costs of $317,092 61,294 61,294 63,821 in 2008 and $246,109 in 2007) Rental income 33,350 33,350 26,225 Gains / (losses) on investments (163,588) (163,588) 1,376 Net assets released from restrictions 1,010,206 (1,010,206) Total revenue and other support 2,259,040 1,139, ,580 3,793,327 3,859,990 Expenses Program 1,148,703 1,148, ,595 Fundraising 359, , ,109 Management and general 323, , ,207 Total expenses 1,832, ,832,147 1,461,911 Totals Changes in net assets 426,893 1,139, ,580 1,961,180 2,398,079 Net assets, beginning of year 7,214,697 1,977, ,421 9,770,029 7,371,950 Net assets, end of year $ 7,641,590 $ 3,117,618 $ 972,001 $ 11,731,209 $ 9,770,029 See notes to financial statements -3-

8 Coastal Maine Botanical Gardens, Inc. Statement of Cash Flows Year Ended (With Comparative Totals for 2007) Cash flows from operating activities Changes in net assets $ 1,961,180 $ 2,398,079 Adjustments to reconcile to changes in net assets to net cash provided (used) by operating activities Depreciation 287, ,213 Investment (gains) losses 163,588 Decrease (increase) in Accounts receivable (10,617) (5,127) Pledges and grants receivable receivable (263,707) (379,557) Inventory (10,525) (50,092) Prepaid expenses and other current assets 3,857 (289) Increase (decrease) in Accounts payable 9,671 (108,325) Liability for present value of life income (7,585) 3,891 Accrued expenses 19,220 9,602 Net cash provided by operating activities 2,152,267 2,105,395 Cash flows from investing activities Purchase of sculptures - (81,200) Purchases of investments (576,640) (206,463) Purchase of property and equipment (1,604,984) (751,041) Net cash used by investing activities (2,181,624) (1,038,704) Cash flows from financing activities Net change in construction line of credit 81,874 (1,228,061) Principal payments on long-term debt (3,359) Net cash provided (used) by financing acitivities 81,874 (1,231,420) Net change in cash 52,517 (164,729) Cash and cash equivalents, beginning of year 127, ,401 Cash and cash equivalents, end of year $ 180,189 $ 127,672 Additional disclosure items Interest paid in cash and expensed $ 60,313 $ 21,482 See notes to financial statements -4-

9 1. Summary of Significant Accounting Policies Nature of the Business Coastal Maine Botanical Gardens, Inc Notes to Financial Statements Coastal Maine Botanical Gardens, Inc., founded in 1991, is a not-for-profit corporation organized as a publiclysupported organization under Internal Revenue Code Section 509(a)(1). Its major purpose is to protect, preserve, and enhance the botanical heritage of Coastal Maine for people of all ages through education, research, and development of public gardens. It is located on approximately one mile of tidal shorefront in Boothbay, Maine. Financial Statement Presentation The Organization follows the financial statement presentation of Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Accordingly, information regarding its financial position and activities is reported under three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Information regarding these net asset classes follows: Unrestricted net assets These assets are not subject to donor imposed stipulations. They may be used at the discretion of the organization, and certain assets may be designated by the board for various purposes. Temporarily restricted net assets These assets are subject to donor stipulations that will either be met by the passage of time or use of funds for donor designated purposes. Permanently restricted net assets These assets must be permanently maintained. The preparation of financial statements in conformity with 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. Estimates also affect the reported amounts of revenues and expenses. Actual results could differ from those estimates. The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the organizations financial statements for the year ended December 31, 2007, from which the summarized information was derived. Certain reclassifications have been made to prior year amounts to permit comparison. Classification of Expenses Expenses are classified as program, general and administrative, or fundraising, depending on the activities supported. Program services are the activities that result in services being distributed to beneficiaries or members that fulfill the mission for which the organization exists

10 1. Summary of Significant Accounting Polices Coastal Maine Botanical Gardens, Inc Notes to Financial Statements General and administrative activities include oversight, business management, general record-keeping, budgeting, financing and related administrative activities, and all management and administration except for direct conduct of program services or fundraising activities. Fundraising activities include publicizing and conducting fundraising campaigns, maintaining donor mailing lists, conducting special fundraising events, preparing and distributing fund-raising materials, and conducting other activities involved with soliciting contributions from individuals, foundations, government agencies and others. Contributions Unconditional promises to give cash and other assets are reported at fair value at the date the promise is received which is then treated as the asset s cost basis. The gifts are reported as either temporarily or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted net assets have been restricted by donors to be maintained by the Organization in perpetuity. The organization uses the allowance method to determine uncollectible unconditional pledges receivable. The allowance is based on prior years experience and management s analysis of specific promises made. Pledges are written-off when management determines they are not collectible. Property, Plant, and Equipment Property, plant and equipment are stated at cost or, if acquired by gift, at appraised value at date of gift. Contributions of long-lived assets with no donor-imposed time restrictions are recognized as unrestricted support. Proceeds from the sale of assets, if unrestricted, are reported as an increase in unrestricted net assets or, if restricted, as an increase in temporarily or permanently restricted net assets, as appropriate. Depreciation is provided over the estimated useful lives of the respective assets on a straight line basis. Furniture and equipment are depreciated generally over 5 10 years, buildings are depreciated over years, and gardens and other land improvements are depreciated over years. The Organization capitalizes equipment costing over $2,500 with estimated useful lives exceeding one year. Cash Flow Information Cash equivalents include money market mutual funds and certificates of deposit with short term maturities. The Organization is conducting a major fund raising campaign that is expected to continue through Funds raised are to help cover current operating costs and to develop the botanical gardens. Because funds are available for both purposes, all funds raised are currently being reported as operating cash flows in the financial statements

11 1. Summary of Significant Accounting Polices Inventory Coastal Maine Botanical Gardens, Inc Notes to Financial Statements Inventory consists of gift shop and café merchandise for sale. It is carried at the lower of cost, first-in, first-out, or market. Charitable Gift Annuities The Organization is party to various charitable gift annuities. Assets received from these arrangements are included in investments at the fair market value of the underlying assets. The present value of estimated future payments to beneficiaries is reported as a liability in the statement of financial position. The discount rate used to calculate the present value of estimated future payments to the beneficiaries is 4.92% for Donor contributions to these agreements are recorded as contribution revenue in the year the gift is made. Subsequent changes in value are included in the Change of Net Assets. Other Assets Other assets consist of works of art and similar assets, which are stated at cost or, if acquired by gift, at the appraised value at the date of the gift. Income Taxes Coastal Maine Botanical Gardens, Inc. is exempt from federal income taxes under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3) and is also exempt from Maine income taxes. In addition, it has been determined by the Internal Revenue Service not to be a private foundation within the meaning of Section 509(a) of the Code. 2. Investments Investments in marketable securities are valued at their fair values based on closing market prices. Unrealized gains and losses are included in the Change of Net Assets. Fair values of marketable securities are as follows: Maine Community Foundation pooled accounts $ 673,926 $ 232,013 Various mutual funds 30,619 90,945 Various equity securities 53,325 21,860 Total $ 757,870 $ 344,818 The Maine Community Foundation accounts are diversified investments that fund both board designated and permanently restricted net assets. The mutual funds and other equity securities fund the charitable gift annuity liability

12 Coastal Maine Botanical Gardens, Inc Notes to Financial Statements 3. Promises to Give and Grants The Organization is currently conducting a major capital campaign, Planting a Living Legacy, the goal of which is to raise a total of $20 million by 2010 to provide for the completion of the gardens in the main campus and to start an endowment fund. Total contributions, including regular and capital campaign amounts, were $1,392,041 in 2008 and $2,782,497 in Grants for regular operations and the capital campaign totaled $1,647,953 in 2008 and $386,604 in In 2007, a group of three donors made a $1,000,000 challenge pledge based on overall receipts. Through December 31, 2007, $600,000 was earned on the challenge, and the balance was earned in In 2008, a foundation made a $1,500,000 challenge pledge, of which $780,000 was earned during the year. Pledges and grants receivable consist of the following: Current Government grants 1-5 years Over 5 years $ 1,641,420 31, ,107 - $ 899,521 55,227 1,446,194 7,892 2,609,241 2,408,834 Less: Discount to present value at 5% (104,836) (173,034) Allowance for uncollectible pledges (65,194) (60,296) 2,439,211 2,175,504 Less: Current portion (1,629,863) (933,737) Long-term portion $ 809,348 $ 1,241,767 Pledges and grants receivable are restricted as follows: Timing $ 2,256,185 $ 1,824,558 Permanent endowment 183, , Property, Plant and Equipment $ 2,439,211 $ 2,175,504 Property, plant and equipment consists of the following: Land held for conservation $ 1,456,428 $ 1,456,428 Gardens 2,067,838 1,937,635 Land improvements 3,291,713 2,103,650 Furniture and equipment 557, ,295 Buildings 3,203,897 3,033,099 10,577,091 8,972,107 Less: Accumulated depreciation 676, ,207 Depreciation expense totaled $287,185 for 2008 and $237,213 in $ 9,900,699 $ 8,582,900

13 Coastal Maine Botanical Gardens, Inc Notes to Financial Statements 5. Borrowing Debt consists of the following: Prime rate note payable to bank, credit line to be converted to term loan in May 2010; see note below $ 1,613,329 $ 1,531,455 On May 13, 2005, the Organization entered into a new loan agreement securing a $4,500,000 loan with a financial institution. The loan is secured by 128 +/- acres of real estate and improvements located at Barter Island Road, as well as all pledges receivable, account receivable, inventory, machinery and equipment, and furniture and fixtures of the Organization. The loan consists of two phases. The construction and pledge phase is a sixty-month line of credit for the purpose of funding construction of the Education and Visitors Center and various botanical gardens. Loan availability under the line will be limited to the sum of 75% of the appraised value of the property and 80% of pledges receivable but can at no time exceed the total of the construction/pledge line of credit. The interest rate during this phase is variable and was 3.25% at. Interest payments are due monthly and the loan will automatically convert to the term out phase on May 13, The term-out phase is a fixed principal and interest payment which will commence one month after the construction and pledge phase has ended, June 13, The bank will adjust the monthly payment to an amount which will approximately amortize the remaining principal balance over 240 months, at projected interest rates. The Organization incurred total interest costs of $77,313 in 2008 and $179,082 in 2007, of which $17,400 and $157,600 was capitalized to construction in progress in 2008 and 2007 respectively. 6. Net Assets Temporarily restricted net assets are available for the following purposes at December 31: Garden Exhibits $ 651,587 $ 132,385 Educational Materials 18,469 12,000 Other 191,377 8,964 Timing 2,256,185 1,824,562 $ 3,117,618 $ 1,977,911 Temporarily restricted net assets timing consists of unconditional promises to give that management expects to collect in 2009 and beyond which were not explicitly intended by the donor to be used in the current period or a past period

14 Coastal Maine Botanical Gardens, Inc Notes to Financial Statements 6. Net Assets Permanently restricted net assets consist of the following: Pledges receivable, net of allowance and discount $ 183,026 $ 350,946 Investments 601, ,475 Other cash and market losses expected to be recovered 187,474 25,000 $ 972,001 $ 577,421 Board designated net assets consist of cash equivalents and investments designated for future projects. The reduction in board designated net assets from $61,627 in 2007 to $56,307 in 2008 resulted primarily from unrealized investment losses. 7. Retirement plan The Organization has a 403(b) deferred salary plan. No contributions to the plan were made by the Organization through December 31, However, effective January 1, 2008, the Organization began making discretionary matching contributions up to 1.5% of an employee s gross compensation. The matching rate is determined annually. Retirement expense for 2008 was $5, Commitments The Organization has certain operating leases for equipment. Lease expense for 2008 and 2007 was $3,426 and $591 respectively. Scheduled payments on operating lease obligations for the next five years are as follows: 2009 $ 2, , , , Thereafter

15 Coastal Maine Botanical Gardens, Inc Notes to Financial Statements 9. Fair Values Fair values of assets measured on a recurring basis as of are as follows: Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Capital campaign pledges receivable $ 2,439,211 $ $ - $ 2,439,211 Investments 757, ,870 Total $ 3,197,081 $ 757,870 $ - $ 2,439,211 Fair value of capital campaign pledges receivable is based on a discount to present value at approximately 5%. In addition, an allowance for uncollectible pledges is reflected based on historical results and analysis of individual pledges. Fair value of investments is determined based on market values of the securities as of the close of business at the end of the year