WILLIAM FREMONT HARN GARDENS, INC.

Transcription

1 WILLIAM FREMONT HARN GARDENS, INC. AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDING JUNE 30, 2013 BELL & RHODES, P.C. CERTIFIED PUBLIC ACCOUNTANTS EDMOND, OKLAHOMA

2 INDEPENDENT AUDITORS REPORT The Board of Directors Oklahoma City, Oklahoma We have audited the accompanying financial statements of (the Organization ), (a nonprofit organization) 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 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 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 misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity 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 entity 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

3 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of as of and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. February 14, 2014

4 Statement of Financial Position Assets Current Assets Cash $ 157,293 Cash-restricted 27,159 Distribution receivable-oklahoma City Community Foundation 45,855 Prepaid insurance 6,966 Gift shop inventory 3,169 Miscellaneous receivables 1,204 Total current assets 241,646 Fixed Assets Buildings 536,747 Leasehold improvements 526,893 Furniture and equipment 50,915 Office and gift shop 2,957 Clothing 1,892 Total fixed assets 1,119,404 Less: accumulated depreciation (574,837) Net fixed assets 544,567 Other Assets Endowed funds held by Oklahoma City Community Foundation 20,499 Total assets $ 806,712 Liabilities and Net Assets Current Liabilities Accounts payable $ 14,606 Accrued liabilities 5,348 Deferred revenue 36,750 Total current liabilities 56,704 Unrestricted 694,893 Temporarily restricted 34,616 Permanently restricted 20,499 Total net assets 750,008 Total Liabilities and Net Assets $ 806,712 See accompanying notes to financial statements 3

5 Statement of Activities For the Year Ended Temporarily Permanently Unrestricted Restricted Restricted Total Operating Revenues and Other Support Contributions and grants $ 84,639 $ 8,897 $ - $ 93,536 Facility rentals 122, ,352 Distributions from Oklahoma City Community Foundation 45, ,855 Program fees 39, ,493 Special events 59, ,995 Admission fees 6, ,749 Miscellaneous income 3, ,546 Interest income Released from restrictions 5,000 (5,000) - - Total operating revenues and other support 367,820 3, ,717 Operating Expenses Program expenses 251, ,716 Management and general 52, ,797 Fundraising 40, ,152 Total operating expenses 344, ,665 Changes in net assets from operations 23,155 3,897-27,052 Change in endowed funds held by Oklahoma City Community Foundation Net change in net assets 23,155 3, ,040 Net assets beginning of year 671,738 30,719 19, ,968 Net assets end of year $ 694,893 $ 34,616 $ 20,499 $ 750,008 See accompanying notes to financial statements 4

6 Statement of Cash Flows For the Year Ended Cash Flows from Operating Activities Change in net assets from operations $ 27,052 Adjustments to reconcile change in net assets to net cash provided by (applied to) operating activities Depreciation 40,268 Decrease in restricted cash 3,561 Increase in receivable-oklahoma City Community Foundatio (1,772) Increase in prepaid insurance (6,966) Increase in miscellaneous receivables (1,111) Increase in accounts payable 11,255 Increase in accrued liabilities 1,776 Increase in deferred revenue 14,150 Net cash provided by operating activities 88,213 Cash Flows from Investing Activities Purchase of fixed assets (360) Net cash applied to investing activities (360) Net Increase in cash 87,853 Cash balance beginning of year 69,440 Cash balance end of year $ 157,293 See accompanying notes to financial statements 5

7 Statement of Functional Expenses For the Year Ended Management Program and General Fundraising Total Salaries, payroll taxes and benefits $ 92,713 $ 11,413 $ 19,973 $ 124,099 Grounds maintenance 22, ,506 Utilities 18,614 2,068-20,682 Repairs and maintenance 20, ,423 Special events ,151 19,151 Security 17, ,748 Insurance 11,929 2, ,698 Supplies 5,056 8,976-14,032 Facility rentals-staff expense 10, ,295 Accounting - 8,679-8,679 Advertising 8, ,655 Audit fees - 8,012-8,012 Miscellaneous - 3, ,821 Bank and credit card fees - 3,463-3,463 Copier lease and maintenance - 1,845-1,845 Website 1, ,685 Special programs 1, ,619 Dues and subscriptions - 1,555-1,555 Postage Printing Depreciation expense 40, ,268 $ 251,716 $ 52,797 $ 40,152 $ 344,665 See accompanying notes to financial statements 6

8 Notes to Financial Statements 1. Nature of Activities and Significant Accounting Policies Nature of Activities (the Organization) is incorporated under the laws of the State of Oklahoma as a nonprofit organization, formed for the purpose of operating and maintaining the territorial homestead of William Fremont Harn as a garden and museum complex and to provide education activities regarding the territorial years in Oklahoma. The Organization s support comes primarily from donor contributions, admissions to the complex, facility rentals for private events and other program fees. Promises to Give Contributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Contributions that are restricted by a donor are reported as increases in unrestricted assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Gifts of land, buildings and equipment are reported as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how those long-lived assets must be maintained, expiration of donor restrictions are reported when the donated or acquired long-lived assets are placed in service. Promises to give are reported at their estimated collectible amount. Receivables are determined to be uncollectible when collection efforts have been exhausted and are written off to expense at that time. There were no promises to give receivable at. Contributed Services Contribution service revenue is only recognized if the services are provided by parties who normally provide similar services for compensation or are services substantially the same as those the Organization would normally purchase. During 2012, the Organization received donated services from unpaid volunteers assisting in the activities of the Organization. No value has been assigned to these hours because they did not meet the criteria for recognition in the financial statements. Use of 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. 7

9 Notes to Financial Statements 1. Nature of Activities and Significant Accounting Policies-continued Cash and Cash Equivalents The Organization considers highly liquid investments with original maturities of three months or less to be cash equivalents. There were no cash equivalents as of. Property and Equipment Fixed assets are recorded at cost. Donated items are recorded at their fair value at the date of receipt. Items costing or having a donated value of less than $500 are expensed. As of June 30, 2013, no restrictions exist for long-lived assets. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. In 1993, a donor deeded approximately 9 1/3 acres of land on which the William Fremont Harn Gardens, Inc. is located. The donor retained the mineral rights to the property and made the transfer subject to several conditions as described below: a. The land shall never be used for private purposes, nor shall it ever be sold for private purposes, and any such attempted sale shall terminate Organization s title to the land. b. The donated tract of land shall always be designated as The William Fremont Harn Gardens. c. The Organization shall use the land only for its public, nonprofit purpose and shall not use it for purposes of providing recreation to the citizens of Oklahoma City. It shall be used only as a historical museum in accordance with the articles of incorporation of the Organization. d. Any proceeds from the condemnation of any of the land by the governmental agency shall be paid to the donor. Contributions and Support reports information regarding its financial position and changes in net assets according to three classes of net assets, if applicable, based on the existence or absence of donor-imposed restrictions, as follows: Unrestricted expendable amounts available for support of the Organization s operations. Temporarily restricted amounts which have been temporarily restricted by donors for specific purposes or time periods. The Organization treats restricted contributions that have the restrictions met in the same year as received as unrestricted contributions. Permanently restricted amounts required to be maintained for the benefit of William Fremont Harn Gardens, Inc. with income generated by such amounts available for purposes specified by the donor. The endowed funds on deposit at the Oklahoma City Community Foundation are considered permanently restricted. 8

10 Notes to Financial Statements 1. Nature of Activities and Significant Accounting Policies-continued Income Taxes The Organization is exempt from federal income tax under Section 501(a) of the Internal Revenue Code (IRC) as an organization described in Section 501(c)(3), and is classified as a publicly supported organization in accordance with the provisions of IRC Section 509(a)(2). The Organization s Forms 990 Return of Organization Exempt from Income Tax for the years ending June 30, 2009, 2010, 2011and 2012 are subject to examination by the Internal Revenue Service, generally three years after they were filed. Investments Investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the statement of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by the donor are reported as increases in unrestricted net assets if the restrictions are met (either by passage of time or use) in the reporting period in which the income and gains are recognized. Inventory The inventory consists of items in the Museum Gift Shop. It is carried at the lower of cost or market value. Functional Allocation of Expenses The cost of providing various programs and other activities has been summarized on a functional basis in the Statement of Activities and in the Statement of Functional Expenses. Certain costs, primarily payroll and occupancy costs have been allocated among the programs and supporting services benefited. 2. Restrictions on Net Assets Temporarily Restricted Net Assets at consisted of the following items. Preservation project $ 17,866 Land Run Event 10,000 Schoolhouse and education 1,591 Technology 331 Other $ 4,828 34,616 The organization maintains temporarily restricted donations in a separate account until their purpose is met at which time the funds are transferred to the operating account. 9

11 3. Fair Value Measurements Notes to Financial Statements reports its fair value measures using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy, established by GAAP, requires that entities maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows: Level 1. Quoted prices for identical assets or liabilities in active markets to which the organization has access at the measurement date. Level 2. Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include a. quoted prices for similar assets or liabilities in active markets; b. quoted prices for identical or similar assets in markets that are not active c. observable inputs other than quoted prices for the assets or liability (for example, interest rates and yield curves); and d. inputs derived principally from, or corroborated by, observable market data by correlation or other means Level 3. Unobservable inputs for the asset or liability. Unobservable inputs should be used to measure the fair value to the extent that observable inputs are not available The fair values of the assets comprising investments at are: Level 2 Inputs Endowed Funds held by Oklahoma City Community Foundation $ 20, Oklahoma City Community Foundation The value of the reciprocal transfers to the Oklahoma City Community Foundation (OCCF) by the Organization is recognized as assets in the financial statements of William Fremont Harn Gardens, Inc. Funds on deposit for the Organization s benefit that were placed there by third parties are not recognized as assets in its financial statements. Reciprocal transfer assets totaling $20,499 are reflected as Endowed Funds held by Oklahoma City Community Foundation and as permanently restricted net assets in the statement of financial position. The market value of assets held by OCCF for the benefit of the Organization which have not been recorded in the Organization s financial statements totaled approximately $930,000 at June 30,

12 Notes to Financial Statements 4. Oklahoma City Community Foundation-continued Annual distributions from income are made to the Organization based on OCCF s spending policy, which is currently five percent of the average market value over the previous eight quarters of all assets held for the benefit of the Organization. A distribution in the amount of $45,855 was due to the Organization at and is reflected as a receivable in the statement of financial position and as income in the statements of activities. 5. Line of Credit The Organization has an unsecured line of credit with a local bank in the amount of $35,000. As of the Organization had not advanced on this the line. 6. Concentrations serves primarily the greater Oklahoma City area. As a result, support of the Organization is highly dependent upon the general economic conditions in the area. The risk of near term severe impact on the operations and mission of the Organization due to these concentrations is limited by the diversity of the Organization s programs and the donor base. 7. Evaluation of Subsequent Events The Organization has evaluated subsequent events through February 14, 2014, the date which the financial statements were available to be issued. 11