FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. Samaritan Ministry of Greater Washington.

Transcription

1 FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

2 CONTENTS Page Report of Independent Certified Public Accountants 1 Financial Statements Statement of Financial Position 2 Statement of Activities 4 Statement of Functional Expenses 5 Statement of Cash Flows 6 Notes to Financial Statements 8

3 Farmer & First, P.C. CERTIFIED PUBLIC ACCOUNTANTS Grow Your Business With Us INDEPENDENT AUDITORS REPORT August 24, 2010 To the Board of Directors of Washington, DC We have audited the accompanying statement of financial position of Samaritan Ministry of Greater Washington (a non-profit corporation) as of, and the related statements of activities, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of the Organization's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of. as of, and the change in its net assets and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Warren, Rhode Island -1- Six State Street, Warren, RI Ottawa Place, Silver Spring, MD (401) Phone (401) Fax (877) Toll Free

4 STATEMENT OF FINANCIAL POSITION ASSETS CURRENT ASSETS: Cash and cash equivalents $ 341,659 Investments 101,713 Grants receivable 20,000 Promise to give and pledge receivables 309,051 Prepaid expenses 14,074 Total current assets 786,497 PROPERTY AND EQUIPMENT: Building and improvements 408,122 Land 264,802 Office furniture and equipment 119,381 Total property and equipment 792,305 Less: accumulated depreciation 115,700 Property and equipment, net 676,605 OTHER ASSETS Promise to give and pledge receivables - net of current portion 156,712 TOTAL $ 1,619,814 The accompanying notes are an integral part of these statements. -2-

5 STATEMENT OF FINANCIAL POSITION (continued) LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Current portion of long-term debt $ 6,710 Accounts payable - trade 8,185 Accrued expenses 32,344 Unspent funds returnable to funding source 124,694 Line of credit - Deferred revenue 63,986 Total current liabilities 235,919 LONG-TERM DEBT - less current portion 484, ,308 NET ASSETS: Unrestricted Net operating 209,077 Board designated - Endowment 172,145 Board designated - M Keane discretionary fund 1, ,222 Temporarily restricted 517,284 Total net assets 899,506 TOTAL $ 1,619,814 The accompanying notes are an integral part of these statements. -3-

6 SUPPORT & REVENUE: STATEMENT OF ACTIVITIES For the Year Ended Temporarily Unrestricted Restricted Total Grants and contributions $ 1,226,091 $ 191,140 $ 1,417,231 Federal and local government contracts 168, ,781 Fundraising income, net of direct expenses 42,907-42,907 Unrealized and realized gains (losses) 49,933-49,933 Interest and dividend income 5,826-5,826 Other income Net assets released from restrictions 170,222 (170,222) - Total support and reclassifications 1,664,702 20,918 1,685,620 FUNCTIONAL EXPENSES: Program services: HIV/AIDS Burial Assistance 219, ,088 HIV/AIDS RetreatsSocial services 33,325-33,325 Employment & Sicial programs 1,007,746-1,007,746 Supporting services Management and general 108, ,860 Fundraising 124, ,236 Net functional expenses 1,493,255-1,493,255 Change in net assets 171,447 20, ,365 Net assets, April 1, AS RESTATED 210, , ,141 Net assets, $ 382,222 $ 517,284 $ 899,506 The accompanying notes are an integral part of these statements. -4-

7 STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended Program Services Supporting Services Total HIV/AIDS HIV/AIDS Employment & Program Mgmt & Fund- Total Functional Burial Asst Retreats Social Services Services General Raising Support Expenses Salaries $ 5,011 $ - $ 278,180 $ 283,191 $ 64,292 $ 86,209 $ 150,501 $ 433,692 Fringe benefits 4,042-35,038 39,080 7,509 8,878 16,387 55,467 Payroll taxes 1,684-23,199 24,883 5,206 6,192 11,398 36,281 Stipends ,897 50, ,497 Total payroll and related expenses 11, , ,651 77, , , ,937 Consultant & professional 93,900 19, , ,472 11,168 1,094 12, ,734 Client assistance and other ser 60,657 13,953 84, , ,543 Occupancy 3,934-41,677 45,611 1,033 1,356 2,389 48,000 Interest expense 21, ,302 4,836-4,836 26,138 Insurance ,872 13,833 2,970 3,899 6,869 20,702 Internet and communications 5,780-13,677 19, ,247 Utilities 1,526-11,074 12,600 1,271 1,668 2,939 15,539 Depreciation 713-9,559 10,272 2,206 2,894 5,100 15,372 Printing and reproduction 1,390-7,511 8, ,529 3,532 12,433 Accounting & audit 10, ,000 2,270-2,270 12,270 Telephone 1,025-7,514 8, ,727 10,266 Office supplies 2,267-3,238 5, ,353 6,858 Administrative 208-4,224 4,432 1, ,907 6,339 Equipment repairs and maintenance 285-3,815 4, ,156 2,037 6,137 Postage and delivery 112-2,976 3, ,592 2,939 6,027 Repairs & maintenance 81-5,214 5, ,876 Computer supplies , ,324 1,437 2,918 Travel 2, , ,615 Bank fees ,809-1,809 1,809 Miscellaneous Totals $ 219,088 $ 33,325 $ 1,007,746 $ 1,260,159 $ 108,860 $ 124,236 $ 233,096 $ 1,493,255 The accompanying notes are an integral part of these statements. -5-

8 STATEMENT OF CASH FLOWS (continued) For the Year Ended NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 186,511 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets (665,549) Gross proceeds from sale of marketable securities 131,583 Net cash used by investing activities (533,966) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from mortgage on property acquisition 495,000 Principal payments on long term debt (3,901) Net cash provided by financing activities 491,099 NET INCREASE IN CASH AND CASH EQUIVALENTS 143,644 Cash and cash equivalents, April 1, ,015 Cash and cash equivalents, $ 341,659 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest $ 23,395 The accompanying notes are an integral part of these statements. -6-

9 STATEMENT OF CASH FLOWS For the Year Ended CASH FLOWS FROM OPERATING ACTIVITIES: Increase in net assets $ 192,365 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 15,372 Donations of marketable securities (35,239) Allowance for uncollectible pledges 28,145 Unrealized (gain) of marketable securities (50,810) Realized loss in sale of marketable securities 877 Decrease (increase) in operating assets: Grants receivable (20,000) Promise to give and pledge receivables 27,399 Prepaid expenses 1,981 Increase (decrease) in operating liabilities: Accounts payable - trade 5,531 Accrued expenses 6,301 Unspent funds returnable to funding source 10,580 Deferred revenue 4,009 Net cash provided by operating activities $ 186,511 The accompanying notes are an integral part of these statements. -7-

10 NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES 1. Nature of Activities (the Organization) is an independent, nonprofit organization incorporated in the District of Columbia in The Organization was organized to serve the religious, charitable and educational needs of the Greater Washington, DC. community. This is accomplished by providing support and assistance to, and fostering growth and increased self-reliance among, individuals and families who are homeless, in poverty, unemployed or otherwise in need and who seek to take Next Steps toward better lives. A majority of the organization s revenue consists of contributions from churches, corporation and individuals, as well as reimbursements from government grants. 2. Basis of Accounting The Organization recognizes income on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. 3. Basis of Presentation The financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted and permanently restricted. The Organization did not have permanently restricted net assets as of. 4. Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the Statement of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. -8-

11 NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (continued) 5. Property and Equipment Property and equipment are stated at cost. Depreciation is calculated for financial statement purposes using the straight-line method based on the property's estimated life. Additions and improvements that add materially to productive capacity or extend the life of an asset are capitalized. Normal repairs and maintenance are charged against income. When facilities are retired or sold, their cost and accumulated depreciation are removed from the accounts and related gains or losses are included in income. In case of trade items, any remaining book value increases the basis of the new acquisitions. 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 donation asset to a specific purpose. The estimated lives used in determining depreciation are: Computer equipment and office furniture Leasehold improvements Building 5 7 years 10 years 40 years 6. Income Taxes The Organization is a not-for-profit organization that is generally exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. In addition, the Organization has been classified as an organization that is not a private foundation under Section 590(a)(1). Income that is not related to exempt purposes, less applicable deductions, is subject to Federal and state corporate income taxes. The Organization did not have any unrelated business income for the year ended March 31, Cash and Cash Equivalents For purposes of the statements of financial position and cash flows, the Organization considers all unrestricted highly liquid investments, with an initial maturity of three months or less to be considered cash. -9-

12 NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (continued) 8. Contributed Services The value of contributed social work, legal, and other professional services meeting the requirements for recognition in the financial statements was recorded at the value of $476,641 for the year ended. Additionally, the Organization received donated space valued at $14,400 and clothing and food totaling $67,993 that were recorded to the financial statements. Various volunteers provided other services to the Organization which do not require specialized skills, has not been recognized in the financial statements although the value of these services is estimated to be $489, Restricted and Unrestricted Revenue Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. All 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. 10. Promises to Give Unconditional promises to give are recognized as revenue or gains in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized when the conditions on which they depend are substantially met. All promises to give are due in less than one year. -10-

13 NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (continued) 11. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. 12. Uncertain Tax Provisions Accounting for uncertain income tax positions, relating to both federal and state income taxes, are required when a more likely than not threshold is attained. If such positions result in uncertainties, then the unrecognized tax liability is estimated based on a cumulative probability assessment that aggregates the estimated tax liability for all uncertain tax positions. With the adoption of these new rules, the Organization assessed its tax positions in accordance with the guidance. The Organization has determined that its tax status as a DC non-profit corporation is its only tax position and is highly certain. Therefore, these new rules had no impact on the Organization s financial statements. 13 Subsequent Events Management has evaluated subsequent events through August 25, 2010, the date which the financial statements were available to be issued. NOTE B FUNDRAISING ACTIVIES The Organization conducted fundraising activities during the year ended March 31, Revenue and expenses for the activities are as follows: Total revenue raised $69,644 Total expenses 26,737 $42,

14 NOTES TO FINANCIAL STATEMENTS NOTE C INVESTMENT IN SECURITIES The Organization classifies investment in securities as available-for-sale securities. All securities are carried at their fair market values in the statement of financial position. Unrealized gains and losses are included in the net assets section of the accompanying statement of financial position.. As of, details of the unrealized gains and losses are as follows: Amortized Cost Gross Unrealized Gain Gross Unrealized Losses Fair Market Value Available-for-sale securities: Equity securities $85,496 $16,217 $ -0- $101,713 NOTE D COMMITMENTS The Organization is obligated under the following rental leases: Lessor Location/Type Term / Exp. Date Terms Trinity Episcopal Church 2207 Columbia Amended and Pike, Arlington, VA restated/ December 31, St Philip the Evangelist 1345 U Street, SE, Amended to month Episocal Church Washington, DC to month beginning March 1, 2008 Konica Minolta Business Copier lease Commenced in December, 2007/ term 60 month $1,675/month $1,025/month $429/month -12-

15 NOTES TO FINANCIAL STATEMENTS NOTE D COMMITMENTS (continued) The future minimum rental commitments under operating leases as of are as follows: For the year ending March 31, 2011 $25,248 For the year ending March 31, 2012 $14,373 For the year ending March 31, 2013 $ 3,861 NOTE E NOTES PAYABLE On June 29, 2009, the Organization entered into an agreement to borrow $495,000 to purchase a property at 1516 Hamilton Street, NW, Washington, DC. This agreement requires 36 monthly payment of $3,160 including interest at the rate of 6.50%. Beginning on July, 29, 2012, for 24 months, the interest rate for the monthly payment will be adjusted to the weekly average of the two year U.S. Treasury security plus 3.50 percentage points. The note has a balloon payment due on June 29, 2014 and is secured by the property. As of, the balance of this obligation was $491,099. Aggregate maturities of long-term debt for each of the five years following March 31, 2010 are as follows: For the year ending March 31, 2011 $ 6,710 March 31, ,626 March 31, ,070 March 31, ,543 March 31, 2015 and thereafter 463,150 Total $ 491,099 NOTE F - LINE OF CREDIT The Organization has an available bank line of credit, due on October 25, 2010 at the amount of $100,000, under which the Organization may borrow on at the bank's prime rate plus 1.0%. (but not less than 5.0%). There were no amounts outstanding under this line of credit at. -13-

16 NOTES TO FINANCIAL STATEMENTS NOTE G TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at are available for the following programs and net assets during the year ended were released from restrictions by incurring expenses satisfying the restricted purpose and/or restricted time period. Net assets were released and are available in the following programs: Balance 04/01/09 Additions Net Assets Released Balance 3/31/10 Art Contest $ 2,150 $ -0- $ -0- $ 2,150 Retreats 23, ,950 Building fund 15, , ,059 6,421 Pledge receivable 456,103 9, ,763 General operations of 2010/ , ,000 Total $ 496,366 $ 191,140 $ 170,222 $ 517,284 NOTE H UNCONDITIONAL PROMISES TO GIVE Unconditional promises to give are as follows: Individuals $ 493,908 Less: Allowance for uncollectible promises 28,145 Net unconditional promises to give $ 465,763 Receivables due in less than one year $ 309,051 Receivables due in one to two years 85,471 Receivables due in two to three years 52,955 Receivables due in three to four years 18,286 Net unconditional promises to give $ 465,763 The pledge receivables are shown at the present value of the estimated future cash flows using Treasury bill rates for similar term investments. -14-

17 NOTE I RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS The Organization maintains a Section 403(b) pension plan for its employees. Employee contributions are optional. The employer match begins after six months of service and are determined by the board on an annual basis up to a certain level per participant. The Organization contributed $5,920 to the plan for the benefit of its employees during the year ended. Employees are immediately vested in their voluntary contributions and in the Organization s contributions. NOTE J CONCENTRATION OF CREDIT RISK Concentration of Risk Cash The Organization maintains its cash in bank accounts that, at times, may exceed federally insured limits. The uninsured amount as of was $91,659. The Organization has not experienced any losses in such accounts and believes it is not exposed to any significant risk of loss on cash and cash equivalents. Concentration of Risk Marketable Securities The Organization maintains an account with a brokerage firm and mutual fund companies. These accounts contain cash and securities. Balances are insured up to $500,000 (with a limit of $100,000 for cash) by the Security Investor Protection Corporation. The brokerage firms maintain additional insurance to cover any significant credit risk on cash and cash equivalents. The Organization has not experienced any losses in such accounts. The Organization believes that it is not exposed to any significant credit risk on cash and cash equivalents. NOTE K RESTATEMENT OF FINANCIAL STATEMENTS The financials statements as of March 31, 2009 were restated to reflect an adjustment of the treatment of permanently restricted net assets. Accordingly, the permanently restricted net assets were reduced to zero and unrestricted net assets balance was increased by $184,