WORLD EDUCATION AND DEVELOPMENT FUND

Transcription

1 FINANCIAL STATEMENTS WORLD EDUCATION AND DEVELOPMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2010 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2009

2 CONTENTS PAGE NO. INDEPENDENT AUDITORS' REPORT 2 EXHIBIT A - Statement of Financial Position, as of September 30, 2010, with Summarized Financial Information for EXHIBIT B - Statement of Activities and Change in Net Assets, for the Year Ended September 30, 2010, with Summarized Financial Information for EXHIBIT C - Statement of Functional Expenses, for the Year Ended September 30, 2010, with Summarized Financial Information for EXHIBIT D - Statement of Cash Flows, for the Year Ended September 30, 2010, with Summarized Financial Information for NOTES TO FINANCIAL STATEMENTS

3 GELMAN, ROSENBERG & FREEDMAN CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To the Board of Directors World Education and Development Fund New York, New York We have audited the accompanying statement of financial position of the World Education and Development Fund (Worldfund) as of September 30, 2010, and the related statements of activities and change in net assets, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of Worldfund's 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 Worldfund's financial statements for the year ended September 30, 2009 and, in our report dated January 12, 2010, we expressed an unqualified opinion on those 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Worldfund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Worldfund as of September 30, 2010, and its change in net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. January 12, MONTGOMERY AVENUE SUITE 650 NORTH BETHESDA, MARYLAND (301) FAX (301) MEMBER OF CPAMERICA INTERNATIONAL, AN AFFILIATE OF HORWATH INTERNATIONAL MEMBER OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS' PRIVATE COMPANIES PRACTICE SECTION 2

4 EXHIBIT A STATEMENT OF FINANCIAL POSITION AS OF SEPTEMBER 30, 2010 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2009 CURRENT ASSETS ASSETS Cash and cash equivalents $ 1,053,225 $ 322,506 Grants and contributions receivable (Note 2) 660, ,710 Other receivables 1,210 - Prepaid expenses 30,641 33,911 FIXED ASSETS Total current assets 1,745, ,127 Office equipment 25,253 16,726 Furniture 25,487 19,662 Website 4,566 3,066 Software 27,797 27,797 83,103 67,251 Less: Accumulated depreciation and amortization (56,665) (48,605) OTHER ASSETS Net fixed assets 26,438 18,646 Deposits 18,876 18,876 Grants and contributions receivable, net of current portion (Note 2) 1,104, ,717 Total other assets 1,123, ,593 TOTAL ASSETS $ 2,895,149 $ 1,320,366 CURRENT LIABILITIES LIABILITIES AND NET ASSETS Accrued expenses $ 198,335 $ 36,881 Accrued vacation 6,181 4,858 NET ASSETS Total current liabilities 204,516 41,739 Unrestricted 713, ,310 Temporarily restricted (Note 3) 1,977, ,317 Total net assets 2,690,633 1,278,627 TOTAL LIABILITIES AND NET ASSETS $ 2,895,149 $ 1,320,366 See accompanying notes to financial statements. 3

5 EXHIBIT B STATEMENT OF ACTIVITIES AND CHANGE IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2010 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2009 REVENUE Unrestricted Temporarily Restricted Total Total Grants and contributions (net of direct benefit to donors of $176,325 and $181,999 for 2010 and 2009, respectively): Individuals $ 320,383 $ 1,233,628 $ 1,554,011 $ 1,592,555 Foundations 71, , , ,579 Corporations 817,402 1,148,644 1,966,046 1,072,010 Interest income ,787 Contributed services (Note 4) 49,666-49,666 - Program service fees 19,874-19,874 21,696 Net assets released from donor restrictions (Note 3) 1,633,710 (1,633,710) - - EXPENSES Total revenue 2,912,953 1,150,802 4,063,755 2,994,627 Program Services 2,036,113-2,036,113 1,578,134 Supporting Services: General and Administrative 216, , ,259 Fundraising 404, , ,828 Total supporting services 621, , ,087 Total expenses 2,657,128-2,657,128 2,154,221 Change in net assets before other item 255,825 1,150,802 1,406, ,406 OTHER ITEM Gain on currency translation 5,379-5,379 1,993 Change in net assets 261,204 1,150,802 1,412, ,399 Net assets at beginning of year 452, ,317 1,278, ,228 NET ASSETS AT END OF YEAR $ 713,514 $ 1,977,119 $ 2,690,633 $ 1,278,627 See accompanying notes to financial statements. 4

6 EXHIBIT C STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED SEPTEMBER 30, 2010 WITH SUMMARIZED FINANCIAL INFORMATION FOR Supporting Services 2009 Program Services General and Administrative Fundraising Total Supporting Services Total Expenses Total Expenses Salaries $ 300,418 $ 86,295 $ 185,011 $ 271,306 $ 571,724 $ 458,790 Payroll taxes and other benefits 38,108 11,035 21,186 32,221 70,329 51,271 Grants to schools 818, , ,805 Program instructors and curriculum development 379, , ,413 Program participants' travel and lodging 145, , ,607 Program evaluations 30, ,045 11,991 Books and class supplies 13, ,073 7,378 Consulting fees 89,354 4,979 35,576 40, , ,682 Accounting/audit services 37,949 9,348 14,512 23,860 61,809 60,751 IT expenses 12,202 5,847 4,685 10,532 22,734 23,822 Occupancy (Note 5) 30,985 6,849 10,822 17,671 48,656 46,532 Travel 101,343 9,180 18,625 27, , ,523 Telephone 6,747 2,393 1,691 4,084 10,831 7,958 Insurance 1,563 1, ,491 4,054 5,134 Office and general expense 12,428 3,889 8,981 12,870 25,298 8,603 Postage and shipping 2, ,902 3,581 6,211 9,889 Registration fees 604 2, ,937 3,541 5,325 Bank and credit card fees , ,244 15,818 11,320 Payroll processing fees ,141 1,803 1,838 Printing and printed materials ,711 4,512 5,235 16,975 Depreciation and amortization 4,926 1,205 1,929 3,134 8,060 12,600 Moving costs 3,784 1,323 1,660 2,983 6,767 - Gala expenses ,049 89,049 89,049 74,469 In-kind legal expenses (Note 4) - 49,666-49,666 49,666 - Other expenses 4,861 2,699 2,674 5,373 10,234 6,545 TOTAL $ 2,036,113 $ 216,497 $ 404,518 $ 621,015 $ 2,657,128 $ 2,154,221 See accompanying notes to financial statements. 5

7 EXHIBIT D STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2010 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2009 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 1,412,006 $ 842,399 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 8,060 12,600 (Increase) decrease in: Grants and contributions receivable (838,332) (538,994) Other receivables (1,210) - Prepaid expenses 3, Increase (decrease) in: Accounts payable - 7,343 Accrued expenses 161,454 12,982 Accrued vacation 1,323 4,858 Grants payable - (270,000) Net cash provided by operating activities 746,571 71,241 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (15,852) (11,214) Net cash used by investing activities (15,852) (11,214) Net increase in cash and cash equivalents 730,719 60,027 Cash and cash equivalents at beginning of year 322, ,479 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,053,225 $ 322,506 See accompanying notes to financial statements. 6

8 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION Organization - The World Education and Development Fund (Worldfund) is a non-profit organization, incorporated in 2002, and located in the State of New York. Worldfund's mission is to support high-quality and results-driven education in Latin America. Its vision is for every child in Latin America to have access to a high-quality education and the tools to become a productive member of his or her local community. Through its teacher and principal training programs and investments in schools and after-school academic programs, Worldfund is impacting 186,000 impoverished students annually. Basis of presentation - The accompanying financial statements are presented on the accrual basis of accounting, and in accordance with FASB ASC 958, Not-for-Profit Entities. 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 Worldfund's financial statements for the year ended September 30, 2009, from which the summarized information was derived. Recently issued accounting standards - In June 2009, the Financial Accounting Standards Board (FASB) issued FASB ASC 105, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification as the sole source of authoritative generally accepted accounting principles. Pursuant to the provisions of FASB ASC 105, Worldfund has updated references to GAAP in its financial statements issued for the year ended September 30, The adoption of FASB ASC 105 did not impact Worldfund s financial position or results of operations. Cash and cash equivalents - Worldfund considers all cash and other highly liquid investments with initial maturities of six months or less to be cash equivalents. At times during the year, Worldfund maintains cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) limits. Management believes the risk in these situations to be minimal. Grants and contributions receivable - Grants and contributions receivable approximate fair value. Management considers all amounts to be fully collectible. Accordingly, an allowance for doubtful accounts has not been established. Fixed assets - Fixed assets in excess of $1,000 are capitalized and stated at cost. Fixed assets are depreciated on a straight-line basis over the estimated useful lives of the related assets, generally three to five. Leasehold improvements are amortized over the remaining life of the lease. The cost of maintenance and repairs is recorded as expenses are incurred. 7

9 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Income taxes - Worldfund is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been made in the accompanying financial statements. Worldfund is not a private foundation. Uncertain tax positions - In June 2006, the Financial Accounting Standards Board (FASB) released FASB ASC , Income Taxes, that provides guidance for reporting uncertainty in income taxes. For the year ended September 30, 2010, Worldfund has documented its consideration of FASB ASC and determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. Net asset classification - The net assets are reported in three self-balancing groups as follows: Unrestricted net assets include unrestricted revenue and contributions received without donor-imposed restrictions. These net assets are available for the operation of Worldfund and include both internally designated and undesignated resources. Temporarily restricted net assets include revenue and contributions subject to donorimposed stipulations that will be met by the actions of Worldfund 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 and Change in Net Assets as net assets released from restrictions. Permanently restricted net assets represent funds restricted by the donor to be maintained in-perpetuity by Worldfund. As of September 30, 2010, there were no permanently restricted net assets. Contributions and grants - Unrestricted and temporarily restricted contributions and grants are recorded as revenue in the year notification is received from the donor. Temporarily restricted contributions and grants are recognized as unrestricted support only to the extent of actual expenses incurred in compliance with the donor-imposed restrictions and satisfaction of time restrictions. Temporarily restricted contributions and grants received in excess of expenses incurred are shown as temporarily restricted net assets in the accompanying financial statements. 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. 8

10 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) 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 Activities and Change in Net Assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Reclassification - Certain amounts in the prior year's financial statements have been reclassified to conform to the current year's presentation. These reclassifications had no effect on the previously reported changes in net assets. 2. GRANTS AND CONTRIBUTIONS RECEIVABLE As of September 30, 2010, grants due in more than one year have been recorded at the present value of the estimated cash flows, using Treasury discount rates between 3.25% and 3.40%. Grants are due as follows at September 30, 2010: Year Ended June 30, 2011 $ 660, , , ,000 1,830,000 Less: Discount balance to present value (65,241) 1,764,759 Less: Current portion 660,000 TOTAL NON-CURRENT GRANTS AND CONTRIBUTIONS RECEIVABLE $ 1,104, TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following at September 30, 2010: Inter-American Partnership for Education (IAPE) $ 823,609 School Leadership Program (SLP) 1,019,402 STEM Brasil 65,497 Schools and After-School Programs 68,611 $ 1,977,119 9

11 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, TEMPORARILY RESTRICTED NET ASSETS (Continued) The following temporarily restricted net assets were released from donor restrictions by incurring expenses (or through the passage of time), which satisfied the restricted purposes specified by the donors: Inter-American Partnership for Education (IAPE) $ 339,984 School Leadership Program (SLP) 251,253 STEM Brasil 289,443 Schools and After-School Programs 753, CONTRIBUTED SERVICES $ 1,633,710 During the year ended September 30, 2010, Worldfund was the beneficiary of donated services, which allow Worldfund to provide greater resources towards various programs. The following is a summary of donated services, as reflected in both revenue and expenses, for the year ended September 30, 2010: Donated Legal Services $ 49, OCCUPANCY Worldfund upgraded and executed its first extension for leased office space under a five-year agreement during Base rent is $39,443 per year, plus a cost of living adjustment to be determined every January and July subsequent to the base year. The cost of living adjustments shall be based on 100% of the percentage difference between the Price Index for the preceding months of December and June, and the Price Index for the base year, respectively. The following is a schedule of the future minimum lease payments for the New York office space: 6. RETIREMENT PLAN Year Ended September 30, 2011 $ 48, , , , ,697 $ 249,722 Worldfund has adopted a defined contribution plan for all eligible employees, effective January 1, 2009, covering all full-time employees with six months of eligible experience and a minimum age requirement of 21 years. Matching employer contributions to the plan are on a discretionary basis. During the year ended September 30, 2010, no matching contributions were made. 10

12 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUBSEQUENT EVENTS In preparing these financial statements, Worldfund has evaluated events and transactions for potential recognition or disclosure through January 12, 2010, the date the financial statements were issued. 11