Y.M.C.A. of Greensburg

Transcription

1 Y.M.C.A. of Greensburg Financial Statements and Supplementary Information Years Ended June 30, 2011 and 2010 with Independent Auditor s Reports

2 YEARS ENDED JUNE 30, 2011 AND 2010 TABLE OF CONTENTS Independent Auditor's Report Financial Statements: Statements of Financial Position 1 Statements of Activities 2 Statements of Cash Flows 3 Notes to Financial Statements 4 Supplementary Information: Statements of Functional Expenses: - Year Ended June 30, Year Ended June 30, Office of Developmental Programs Cost Report: - Cost Report Reconciliation - Audit to Cost Report 17 - Cost Report Schedule A Expense Report 18 Agreed-Upon Procedures: Independent Accountant s Report on Applying Agreed- Upon Procedures 19 Schedule of Funding Sources Relating to Grants from Westmoreland County MH/MR Program 21 Schedule of Functional Expenditures, Revenues, and Contract Amount Relating to Grants from Westmoreland County MH/MR Program 22 Schedule of Units of Service 23

3 YEARS ENDED JUNE 30, 2011 AND 2010 TABLE OF CONTENTS (Continued) Independent Auditor's Report in Accordance with Government Auditing Standards: Independent Auditor s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 24

4 Independent Auditor s Report Board of Directors Y.M.C.A. of Greensburg We have audited the accompanying statements of financial position of the Y.M.C.A. of Greensburg (YMCA), a non-profit organization, as of June 30, 2011 and 2010, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the YMCA s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 audits provide 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 the YMCA as of June 30, 2011 and 2010, and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated January 27, 2012 on our consideration of the YMCA s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Pittsburgh, Pennsylvania January 27, 2012

5 STATEMENTS OF FINANCIAL POSITION YEARS ENDED JUNE 30, 2011 AND 2010 Assets Current assets: Cash and cash equivalents $ 327,131 $ 393,540 Accounts receivable: YMCA programs 53,737 49,215 Westmoreland County 2,410 1,429 Commonwealth of PA - ODP 67,329 29,796 Other 14,898 17,620 Total accounts receivable 138,374 98,060 Other assets 6,304 5,678 Total current assets 471, ,278 Property and equipment, net of depreciation 3,142,174 3,206,254 Other long-term assets: Endowment assets 469, ,598 Beneficial interest in perpetual trust 731, ,928 Total other long-term assets 1,201,712 1,126,526 Total Assets $ 4,815,695 $ 4,830,058 Liabilities and Net Assets Current Liabilities: Accounts payable $ 56,835 $ 92,556 Lines of credit 270, ,980 Accrued wages 58,183 93,417 Accrued compensated absences 48,917 65,087 Total Liabilities 433, ,040 Net Assets: Unrestricted: Board-designated endowment 441, ,346 Unrestricted 3,174,436 3,091,046 Total unrestricted 3,615,968 3,457,392 Temporarily restricted 5,612 81,446 Permanently restricted 760, ,180 Total Net Assets 4,381,760 4,299,018 Total Liabilities and Net Assets $ 4,815,695 $ 4,830,058 See acompanying notes to financial statements. 1

6 STATEMENTS OF ACTIVITIES YEARS ENDED JUNE 30, 2011 AND Unrestricted Net Assets: Support and revenues: Contributions - foundations and trust $ 7,470 $ 10,198 Contributions - individuals and businesses 2,353 37,523 Contributions - gifts 6,160 2,425 Government grants: Adult Training Facility: Commonwealth of PA - ODP 609, ,662 Westmoreland County 38,501 13,436 Strong kids campaign 32,627 48,532 United Way support 38,620 39,582 Rental income 161,866 81,067 Membership dues 704, ,505 Program service fees 1,336,995 1,264,833 Fundraising events 34,070 28,330 Investment income 119,994 99,405 Other income 19,385 17,095 Net assets released from restrictions 75, ,579 Total support and revenues 3,188,293 3,300,172 Expenses: Y.M.C.A. programs 1,995,944 2,178,003 Adult Training Facility 586, ,606 Supporting services: Management and general 353, ,625 Fundraising - general 37,233 33,682 Fundraising - special events 15,103 13,742 Payments to the national and world Y.M.C.A. organizations 41,028 47,103 Total expenses 3,029,717 3,089,761 Change in Unrestricted Net Assets 158, ,411 Temporarily Restricted Net Assets: Other contributions - 25,205 Net assets released from restrictions (75,834) (416,579) Change in Temporarily Restricted Net Assets (75,834) (391,374) Change in Net Assets 82,742 (180,963) Net Assets: Beginning of year 4,299,018 4,479,981 End of year $ 4,381,760 $ 4,299,018 See accompanying notes to financial statements. 2

7 STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2011 AND Cash Flows From Operating Activities: Change in net assets $ 82,742 $ (180,963) Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Depreciation 132, ,102 Unrealized gain on investments (58,908) (38,083) Change in operating assets: Accounts receivable (40,314) 67,780 Other assets (626) 6,475 Change in operating liabilities: Accounts payable (35,721) 36,580 Accrued wages (35,234) (27,593) Accrued compensated absences (16,170) 6,470 Net cash provided by (used in) operating activities 27,812 3,768 Cash Flows From Financing Activities: Payments on line of credit (39,960) (240,433) Proceeds from line of credit 29, ,520 Net cash provided by (used in) financing activities (9,980) (63,913) Cash Flows From Investing Activities: Payments for property and equipment (67,963) (99,049) Proceeds from sale of investments 3,008 3,620 Purchases of investments (19,286) (18,452) Net cash provided by (used in) investing activities (84,241) (113,881) Net Increase (Decrease) in Cash and Cash Equivalents (66,409) (174,026) Cash and Cash Equivalents: Beginning of year 393, ,566 End of year $ 327,131 $ 393,540 Supplemental Information: Interest paid $ 8,896 $ 11,336 See accompanying notes to financial statements. 3

8 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND ORGANIZATION The Young Men s Christian Association of Greensburg (YMCA) is essentially a membership association of men, women, and children of all ages, abilities, incomes, races, and religions. It is dedicated to building healthy spirit, mind, and body of individuals and families. It puts Christian principles into high practice through programs that promote good health, strong families, youth leadership, community development, and international understanding. In addition to the support received from the United Way of Westmoreland County, the YMCA receives minimal public support directly from contributions for general purposes. Other revenue received is from membership dues and program service fees for individuals, as well as the Adult Training Facility Program (ATF), a governmental program administered by the YMCA. Funding for the ATF program is primarily received from the Commonwealth of Pennsylvania, Office of Developmental Programs. A small portion of funding is also received from the Westmoreland County Mental Health/Mental Retardation (MH/MR) Program. The YMCA is a member association of the YMCA of the USA, operating as an autonomous organization governed by its own corporate by-laws and elected Board of Directors (Board). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The YMCA s financial statements are prepared using the accrual basis of accounting. Accordingly, support and revenue are recorded when earned and expenses are recognized when the liabilities are incurred. Basis of Presentation The YMCA classifies its resources for accounting and reporting purposes into three classes of net assets (unrestricted, temporarily restricted, and permanently restricted) established according to their nature and purpose. Separate accounts are maintained for individual funds; however, for financial reporting purposes, funds that have similar characteristics have been combined into net asset classes. The assets, liabilities, and net assets of the YMCA are reported in net asset classes as follows: Unrestricted net assets Net assets that are not subject to any donor-imposed stipulations. 4

9 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 Temporarily restricted net assets When donor restrictions are met, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Donor-restricted contributions whose restrictions are met in the same fiscal year are reported as unrestricted support. Permanently restricted net assets Net assets subject to donor-imposed or other legal restrictions that the principal be maintained permanently by the YMCA. Permanently restricted net assets relate to two separate interests. The Endowment Trust of the Young Men s Christian Association of Greensburg, Pennsylvania, dated May 19, 1949, as amended April 14, 1958 (Trust) represents resources that are subject to restrictions of gift instruments which require in perpetuity that the principal be invested and that only the income from investments be used. The restricted principal balance of the Trust totals $28,252 at June 30, 2011 and 2010, and is included as part of the endowment assets on the statements of financial position. The YMCA is one of five named beneficiaries in a perpetual trust held by third parties. The YMCA s beneficial interest in this perpetual trust approximates the present value of the estimated cash flows from the trust income to be received by the YMCA. The YMCA has rights to the perpetual trust s income into perpetuity but has no right to manage the corpus or receive any portion of the corpus. At June 30, 2011 and 2010, the fair value of the YMCA s beneficial interest is estimated at $731,928. This beneficial interest value will be periodically re-examined to ensure that it approximates fair value. Contributions Contributions received, as well as unconditional promises to give, are recognized in the period received. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Support that is restricted by the donor is reported as an increase in the unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other 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 statements of activities as net assets released from restrictions. Income Tax Status The YMCA is a non-profit community organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. Further, the YMCA annually files a Form 990 as applicable. The form filed is subject to examination by the Internal Revenue Service 5

10 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 generally for three years after it is filed. Management asserts that they have no uncertain tax positions requiring the establishment of a liability or disclosure in the financial statements. Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include all highly liquid instruments with maturities of three months or less when purchased. Funds received from the Westmoreland County MH/MR Program are held in a checking account separate from non-mh/mr funding sources per the funding agreement. The YMCA s deposits, comprised of cash and cash equivalents and short-term investments, are fully insured under the FDIC limit. Property and Equipment Land, building, and equipment on hand as of January 1, 1980 have been valued at appraised values due to the lack of historical cost data prior to that date. At June 30, 2011, management believes the difference in net book value of these assets as compared to the net book value at historical cost is immaterial. Subsequent additions to depreciable assets, if greater than $500, are recorded at cost. Maintenance, repairs, and renewals which neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Gains or losses on dispositions of fixed assets are included in income. Disposition of assets on hand at January 1, 1980 are relieved from their respective accounts at estimated market value at January 1, Depreciation expense is being computed over the estimated remaining useful lives of the assets using the straight-line method. Endowment Assets Endowment assets include investments in fixed income and equity mutual funds. These investments are valued at their fair market values based on quoted market prices. The endowment assets are invested in various types of financial instruments. This diversification of the investment portfolio serves to assist in mitigating the various types of risks associated with different types of financial instruments. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of investments could occur in the near-term and that such a change could materially affect the amount reported on the statements of financial position. County Programs The ATF is funded primarily by the Commonwealth of Pennsylvania Office of Developmental Programs. Under the MR Title XIX fee-for-service funding, the YMCA is 6

11 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 reimbursed based on units of service billed to the Commonwealth of Pennsylvania Department of Public Welfare (DPW) at DPW-established payment rates for Waiver services, up to stipulated maximum revenue targets. Revenue targets are revised by the DPW through the quarterly revenue reconciliation process. Any excess of expenditures over revenue is absorbed by the YMCA. The staff of this program is composed of employees of the YMCA; therefore, salaries and wages and benefits are paid directly by the YMCA and reimbursement is made by the program. Occupancy costs are allocated across the program based on square footage of occupied space. Rent expense charged to the program for the use of YMCA facilities was $40,800 and $39,600, respectively, for the years ended June 30, 2011 and Accounts receivable from the Westmoreland County MH/MR to the ATF program were $2,410 and $1,429, respectively, at June 30, 2011 and Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Costs are directly charged to a function if they can be specifically identified. Indirect costs are allocated across various functions based on percentage of staff effort or percentage of square footage of occupied space, as appropriate. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with auditing standards generally accepted in the United States of America 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. Reclassifications Certain reclassifications have been made to the 2010 balances to conform to the 2011 presentation. Subsequent Events Subsequent events have been evaluated through the Independent Auditor's Report date, which is the date the financial statements were available to be issued. 7

12 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND PROPERTY AND EQUIPMENT Land, building, and equipment consist of the following at June 30: Land $ 289,526 $ 289,526 Land improvements 77,613 77,613 Building 4,652,549 4,633,549 Furniture and equipment 1,146,952 1,097,989 Vehicles 34,203 34,203 6,200,843 6,132,880 Accumulated depreciation (3,058,669) (2,926,626) $ 3,142,174 $ 3,206, ENDOWMENT ASSETS AND BENEFICIAL INTEREST IN PERPETUAL TRUST Beneficial Interest in Perpetual Trust held by Third Parties The YMCA is one of five named beneficiaries in a perpetual trust held by third parties. The YMCA receives monthly distributions from the perpetual trust in amounts determined annually. The YMCA has rights to the perpetual trust s income into perpetuity but has no right to manage the corpus or receive any portion of the corpus. The distributions themselves do not carry any restriction and may be used for any purpose consistent with the mission of the YMCA. The present value of the estimated cash flows from these distributions is used to value the YMCA s beneficial interest in this perpetual trust. At June 30, 2011 and 2010, the fair value of the YMCA s beneficial interest is estimated at $731,928. During the years ended June 30, 2011 and 2010, distributions of $41,668 and $41,353 were made, respectively. On the statements of activities for the years ended June 30, 2011 and 2010, the distributions are included in investment income guidance from the American Institute of Certified Public Accountants indicates that beneficial interests in trusts should be classified as input Level 3; therefore, the beneficial interest in perpetual trust has been classified in accordance with this guidance for the years ended June 30, 2011 and There have been no changes in fair values associated with the Level 3 beneficial interest in perpetual trust since the prior year. 8

13 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 Endowment Assets The endowment fund is composed of donor-restricted and board-designated funds. These funds are presently held in trust accounts. The fair market value of the endowment fund as of June 30, 2011 and 2010 is $469,784 and $394,598, respectively. The YMCA s endowment fund was created in 1949 as a reserve for the YMCA s operations and capital needs. In addition to the funds designated by the Board to function as an endowment, the endowment fund contains a small donor-restricted endowment amounting to approximately $28,000 based on the original amount of the gift. Dividends, interest, and realized gains in such endowed assets are reflected as an increase in board-designated, unrestricted net assets based on the intention stipulated by the donor. Fair values of the endowment assets measured on a recurring basis as of June 30, 2011 and 2010 are as follows: Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets (Level 1) Description June 30, 2011 June 30, 2010 Money Market Funds $ 7,062 $ 5,914 Bond Mutual Funds 179, ,565 Equity Mutual Funds 283, ,119 Totals $ 469,784 $ 394,598 Fair values for Level 1 investments are determined by reference to quoted market prices and other relevant information generated by market transactions. Investment income on the statements of activities consisted of the following from endowment assets, beneficial interest in perpetual trust, and depository accounts at June 30: Investment income $ 19,418 $ 19,969 Unrealized gain (loss) on investments 58,908 38,083 Distribution from perpetual trust 41,668 41,353 $ 119,994 $ 99,405 9

14 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 Interpretation of Relevant Law The YMCA has interpreted the Pennsylvania State Act 141 of 1998 (Act) as requiring the preservation of the donor-restricted endowment funds, absent of explicit donor stipulations to the contrary. As a result of this interpretation, the YMCA 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 endowment fund that is not classified in permanently restricted net assets (investment income) is classified as board-designated, unrestricted net assets until those amounts are appropriated for expenditure by the YMCA in a manner consistent with the standard of prudence prescribed by the Act. For the purposes of these disclosures, the endowments are considered to be the endowment assets on the statements of financial position. It does not include the beneficial interest in the perpetual trust. Endowment asset composition by type of fund as of June 30, 2011 and 2010: Temporarily Permanently Unrestricted Restricted Restricted Total Endowment balance as of June 30, 2011: Donor-restricted $ - $ - $ 28,252 $ 28,252 Board-designated 441, ,532 Endowment balance as of June 30, 2011 $ 441,532 $ - $ 28,252 $ 469,784 Endowment balance as of June 30, 2010: Donor-restricted $ - $ - $ 28,252 $ 28,252 Board-designated 366, ,346 Endowment balance as of June 30, 2010 $ 366,346 $ - $ 28,252 $ 394,598 10

15 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 Changes in endowment net assets for fiscal year ended June 30, 2011: Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets as of June 30, 2010 $ 366,346 $ - $ 28,252 $ 394,598 Investment return: Investment income 19, ,286 Net appreciation (realized and unrealized) 58, ,908 Total investment return 78, ,194 Transfer to remove assets from board-designated endowment fund (3,008) - - (3,008) Endowment net assets as of June 30, 2011 $ 441,532 $ - $ 28,252 $ 469,784 Changes in endowment net assets for fiscal year ended June 30, 2010: Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets as of June 30, 2009 $ 313,431 $ - $ 28,252 $ 341,683 Investment return: Investment income 18, ,452 Net appreciation (realized and unrealized) 38, ,083 Total investment return 56, ,535 Transfer to remove assets from board-designated endowment funds (3,620) - - (3,620) Endowment net assets as of June 30, 2010 $ 366,346 $ - $ 28,252 $ 394,598 Return Objectives and Risk Parameters The YMCA follows investment and spending practices for endowment assets that attempt to provide a predictable stream of funding to grow the endowment for future use. Endowment assets include those assets of donor-restricted funds that the organization must hold in perpetuity as well as board-designated funds. Under current practice, the endowment assets are invested in a manner that is intended to produce results in line with market averages 11

16 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 while assuming a low-to-moderate level of investment risk. The YMCA is currently growing its endowment fund for future use as determined by the Board of Trustees. Strategies Employed for Achieving Objectives To satisfy its long-term objectives, the YMCA 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 YMCA 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. Spending Policy and How the Investment Objectives Relate to Spending Policy The YMCA does not have a formal spending policy; however, its historical practice has been to accumulate the value of the endowment for future use. Therefore, limited distributions have been made from the endowment in recent years. In establishing this practice, the YMCA considered the long-term expected return on its endowment. Accordingly, over the long term, the YMCA expects the current spending practice to allow its endowment to grow at a rate consistent with the overall stock market. This is consistent with the YMCA's objective to maintain the purchasing power of the endowment assets held in perpetuity or for a specified term as well as to provide additional real growth through new gifts and investment return. 5. LINES OF CREDIT The YMCA has three operating lines of credit with limits of $100,000 each. The total outstanding on the three operating lines of credit at June 30, 2011 and 2010 was $270,000 and $279,980, respectively. For all three lines of credit, interest accrues at the Prime Rate. The YMCA opened a line of credit for the ATF Program in May The line of credit available is $50,000. $0 was outstanding for this line of credit at June 30, 2011 and Interest accrues at the Prime Rate. 6. ACCRUED COMPENSATED ABSENCES Accounting principles generally accepted in the United States of America require compensated absences to be expended in the period earned by employees and, if unpaid, to be accrued as a liability. Accrued compensated absences at June 30, 2011 were $48,917. At June 30, 2010, accrued compensated absences were $65,

17 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at June 30, 2011 and 2010 are composed of the following: Capital Campaign $ - $ 50,005 New play area New gym light fixtures 5,171 6,000 Creative curriculum for preschool Dehumidification system for pool - 25,000 $ 5,612 $ 81, NET ASSETS RELEASED FROM RESTRICTIONS Net assets released from restrictions during the years ending June 30, 2011 and 2010 are as follows: Scholarship $ - $ 2,145 Croquet Fund - 379,460 Capital Campaign 50,005 25,764 New play area - 5,710 Pool access lift - 3,500 New gym light fixtures Dehumidification system for pool 25,000 - $ 75,834 $ 416, PENSION PLAN The YMCA participates in the YMCA Retirement Fund Retirement Plan, which is a defined contribution, money purchase, church plan that is intended to satisfy the qualification requirements of Section 401(a) of the Internal Revenue Code of 1986 (Code), as amended and the YMCA Retirement Fund Tax-Deferred Savings Plan, which is a retirement income account plan as defined in section 403(b)(9) of the Code. Both plans are sponsored by the Young Men s Christian Association Retirement Fund (Fund). The Fund is a not-for-profit, tax-exempt pension fund incorporated in the State of New York (1922), organized and 13

18 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2011 AND 2010 operated for the purpose of providing retirement and other benefits for employees of YMCAs throughout the United States. The plans are operated as church pension plans. Participation is available to all duly organized YMCAs and their eligible employees. In accordance with the agreement, contributions for the YMCA Retirement Fund Retirement Plans are a percentage of the participating employees salary and are shared between the employee and employer at 5% and 7%, respectively, of the employee wages. Employee contributions are mandatory and withheld from payroll after tax. Total contributions charged to retirement costs aggregated to $59,748 at June 30, 2011 and $57,544 at June 30, FUNDRAISING EVENTS Annually, the YMCA holds its Friends of the Y event. This event generated $34,070 and $28,330 in gross revenue for the years ended June 30, 2011 and 2010, respectively, which is reflected as fundraising event revenue on the statements of activities. Proceeds from this event are used to support the activities of the YMCA. 11. CLASSIFICATION OF EXPENSES The natural classification of expenses on the statements of activities is as follows: Salaries and benefits $ 2,024,756 $ 2,089,184 Occupancy 347, ,176 Supplies and minor equipment 135, ,022 Depreciation 132, ,102 Miscellaneous 204, ,003 Special events 15,103 13,742 Financing costs 44,142 46,963 Local travel 32,584 27,193 Contract services 36,035 37,932 Payments to national affiliate 41,028 47,103 Telephone 17,834 18,341 Total expenses $ 3,029,717 $ 3,089,761 14

19 Supplementary Information

20 STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2011 Y.M.C.A. Programs Adult Training Facility Total Program Services Management and General Fundraising - General Fundraising - Special Event Payments to National Affiliate Total Item of Expense: Salaries $ 1,056,857 $ 288,474 $ 1,345,331 $ 148,090 $ 23,550 $ - $ - $ 1,516,971 Benefits 232, , , ,551 9, ,239 Miscellaneous personnel - 3,546 3, ,546 Contract services 6,884-6,884 28, ,035 Supplies and minor equipment 124,260 7, ,985 2, ,088 Telephone 12,954 3,051 16, ,834 Postage 1,389-1,389 1, ,280 Occupancy 306,225 40, , ,025 Staff expense 4,340-4,340 1, ,856 Public relations 5,158-5,158 15,359 2, ,695 Local travel 20,796 10,696 31,492 1, ,584 Conference expense 4,367-4,367 1, ,844 Dues and subscriptions 5,672-5,672 1, ,413 Leased equipment 32,542-32, ,542 Financing costs , ,142 Fixed assets, repairs, and maintenance 9,235 6,680 15, ,915 Depreciation 128,871 3, , ,043 Special event ,103-15,103 Payments to national affiliate ,028 41,028 Miscellaneous 43,525 67, , ,534 Total $ 1,995,944 $ 586,788 $ 2,582,732 $ 353,621 $ 37,233 $ 15,103 $ 41,028 $ 3,029,717 15

21 STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2010 Y.M.C.A. Programs Adult Training Facility Total Program Services Management and General Fundraising - General Fundraising - Special Event Payments to National Affiliate Total Item of Expense: Salaries $ 1,142,841 $ 278,141 $ 1,420,982 $ 143,008 $ 23,332 $ - $ - $ 1,587,322 Benefits 275, , ,068 87,267 7, ,236 Miscellaneous personnel - 3,626 3, ,626 Contract services 12,934-12,934 24, ,932 Supplies and minor equipment 136,119 8, ,973 2, ,022 Telephone 13,568 2,788 16,356 1, ,341 Postage 1,966-1,966 2, ,727 Occupancy 293,576 39, , ,176 Staff expense 2,862-2, ,087 Public relations 7,223-7,223 11, ,231 Local travel 20,180 6,691 26, ,193 Conference expense ,361 Dues and subscriptions 3,704-3,704 1, ,784 Leased equipment 44,334-44, ,334 Financing costs , ,963 Fixed assets, repairs, and maintenance 2,859 3,640 6, ,499 Depreciation 129,959 3, , ,102 Special event ,742-13,742 Payments to national affiliate ,103 47,103 Miscellaneous 89,201 21, , ,980 Total $ 2,178,003 $ 495,606 $ 2,673,609 $ 321,625 $ 33,682 $ 13,742 $ 47,103 $ 3,089,761 16

22 EXPENSES BY CATEGORY Audit Cost Report Difference Schedule A Column Reference: F F F Eligible and Ineligible Expenses for Waiver Participants Eligible and Ineligible Expenses for Waiver Participants Eligible and Ineligible Expenses for Waiver Participants 1 Program Direct Care Staff Salary/Wages (Schedule D) $ 165,254 $ 165,254 $ - 2 Program Direct Care Staff ERE (Schedule D) 87,466 87,466-3 Other Program Staff Salary/Wages (Schedule D-1) 89,992 89,992-4 Other Program Staff ERE (Schedule D-1) 48,780 48,780-5 Contracted Staff (Schedule D-2) Administrative Staff Salary/Wages (Schedule D-3) 11,065 11,065-7 Administrative Staff ERE (Schedule D-3) 1,566 1,566-8 Program Supplies (Schedule F) 6,751 6,751-9 Other Vehicle Expense (Schedule E-1) Other Program Expense (Schedule F) 13,782 13, Transportation - Participant Motor Vehicle (Schedule E-1) Transportation - Participant (Schedule I) 13,658 13, Other Occupancy Expense (Schedule F-1) 41,228 41, Depreciation - Buildings (Schedule E) Depreciation - Fixed Assets/Equipment (Schedule E-2) TOTAL EXPENSES (EXCLUDING RESIDENTIAL OCCUPANCY $ 480,223 $ 480,223 $ - 17 CONTRIBUTIONS/REVENUE (EXPENSE OFFSET) (Schedule B) $ - $ - $ - 18 EXPENSES, NET OF CONTRIBUTIONS/REVENUE $ 480,223 $ 480,223 $ - RESIDENTIAL OCCUPANCY OFFICE OF DEVELOPMENTAL PROGRAMS (ODP) SUPPLEMENTAL SCHEDULE RECONCILIATION - AUDIT TO COST REPORT YEAR ENDED JUNE 30, 2011 Schedule A Column F Reconciliation 24 Residential Occupancy (Schedule J) $ - $ - $ - 26 TOTAL EXPENSE (Line 16 + Line 24) $ 480,223 $ 480,223 $ - Schedule B Column B Reconciliation Audit Cost Report Difference TOTAL REVENUE WAIVER LOB $ 587,753 $ 516,713 $ 71,040 * * The revenue amount was reported in error in the initial submission of the Cost Report. The audited amount reflects the correct revenue amount. A revised Cost Report will be submitted to reflect an accurate revenue amount. 17

23 EXPENSES BY CATEGORY Excluded Non- Allowable Waiver Expenses Eligible and Ineligible Expenses for Waiver Participants 1 Program Direct Care Staff Salary/Wages (Schedule D) $ - $ 165,254 2 Program Direct Care Staff ERE (Schedule D) - 87,466 3 Other Program Staff Salary/Wages (Schedule D-1) - 89,992 4 Other Program Staff ERE (Schedule D-1) - 48,780 5 Contracted Staff (Schedule D-2) Administrative Staff Salary/Wages (Schedule D-3) - 11,065 7 Administrative Staff ERE (Schedule D-3) - 1,566 8 Program Supplies (Schedule F) - 6,751 9 Other Vehicle Expense (Schedule E-1) Other Program Expense (Schedule F) - 13, Transportation - Participant Motor Vehicle (Schedule E-1) Transportation - Participant (Schedule I) - 13, Other Occupancy Expense (Schedule F-1) - 41, Depreciation - Buildings (Schedule E) Depreciation - Fixed Assets/Equipment (Schedule E-2) TOTAL EXPENSES (EXCLUDING RESIDENTIAL OCCUPANCY) $ - $ 480, CONTRIBUTIONS/REVENUE (EXPENSE OFFSET) (Schedule B) $ - $ - 18 EXPENSES, NET OF CONTRIBUTIONS/REVENUE $ - $ 480,223 RESIDENTIAL OCCUPANCY OFFICE OF DEVELOPMENTAL PROGRAMS (ODP) SUPPLEMENTAL SCHEDULE SCHEDULE A - EXPENSE REPORT YEAR ENDED JUNE 30, Residential Occupancy (Schedule J) $ - $ - 26 TOTAL EXPENSE (Line 16 + Line 24) $ - $ 480,223 18

24 Agreed-Upon Procedures

25 Board of Directors Y.M.C.A. of Greensburg Independent Accountant s Report on Applying Agreed-Upon Procedures We have performed the procedures enumerated below, which were agreed to by the Westmoreland County Mental Health/Mental Retardation (MH/MR) Program, the Commonwealth of Pennsylvania Department of Public Welfare (DPW), and the Y.M.C.A. of Greensburg (YMCA), solely to assist you with respect to the financial schedules and exhibits required by the DPW Single Audit Supplement. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the Westmoreland County MH/MR Program and DPW. Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the purpose for which this report has been requested, or for any other purpose. The procedures and associated findings are as follows: a. We have verified by comparison of the amounts and classifications that the supplemental financial schedules listed below, which summarize amounts reported to DPW for the fiscal year ended June 30, 2011, have been accurately compiled and reflect the audited books and records of the YMCA. We have also verified by comparison to the example schedules that these schedules are presented, at a minimum, at the level of detail and in the format required by the Westmoreland County MH/MR Program and the DPW Single Audit Supplement pertaining to this period. Program Name Mental Retardation Referenced Schedules/Exhibits Schedule of Funding Sources Schedule of Functional Expenditures, Revenues, and Contract Amount Schedule of Units of Service b. We have inquired of management regarding adjustments to reported revenues or expenditures, which were not reflected on the reports submitted to Westmoreland County and DPW for the period in question. Management has asserted that interim reports were not required for Mental Retardation Programs. c. The processes detailed in paragraphs (a) and (b) above disclosed no adjustments that have been reflected on the corresponding schedules. We were not engaged to, and did not, perform an audit, the objective of which would be the expression of an opinion on the specified elements, accounts, or items. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. * * * * * * * * * * 19

26 Board of Directors Y.M.C.A. of Greensburg Independent Accountant s Report on Applying Agreed-Upon Procedures This report is intended solely for the information and use of the Board of Directors and management of the YMCA, the Westmoreland County MH/MR Program, and the Commonwealth of Pennsylvania Department of Public Welfare and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Pittsburgh, Pennsylvania January 27,

27 SCHEDULE OF FUNDING SOURCES RELATING TO GRANTS FROM WESTMORELAND COUNTY MH/MR PROGRAM YEAR ENDED JUNE 30, 2011 MENTAL RETARDATION PROGRAMS Funding Sources Amount State Funds: ADT-ATF Maintenance $ 38,501 County Match - Westmoreland County MH/MR contract amount $ 38,501 21

28 SCHEDULE OF FUNCTIONAL EXPENDITURES, REVENUES, AND CONTRACT AMOUNT RELATING TO GRANTS FROM WESTMORELAND COUNTY MH/MR PROGRAM YEAR ENDED JUNE 30, 2011 MENTAL RETARDATION PROGRAMS MR Base MR Base Habilitation Transportation Total Expenditures: Personnel services: Wages and salaries $ 17,109 $ 3,918 $ 21,027 Employee benefits 9,002 2,058 11,060 Miscellaneous personnel expenses Operating expenses: Occupancy 2, ,865 Communications Administrative supplies Treatment and supportive supplies Transportation Miscellaneous operating expenses Equipment and other fixed assets: Purchase of fixed assets (program-funded) Repairs and improvements of fixed assets Agency administration Total expenditures 31,033 7,093 38,126 Less: ineligible expenditures Gross eligible expenditures 31,033 7,093 38,126 Revenue and Income: State funds - Direct Total revenue and income Net eligible expenditures 31,033 7,093 38,126 Retained revenues Total reimbursable expenditures 31,033 7,093 38,126 Westmoreland County contract amount 30,561 7,940 38,501 Surplus (Deficit) of Contract Amount Over Total Reimbursable Expenditures $ (472) $ 847 $

29 SCHEDULE OF UNITS OF SERVICE YEAR ENDED JUNE 30, 2011 MENTAL RETARDATION PROGRAMS Cost Centers/Categories Budgeted Actual Units of Units of Gross Eligible Other Net Eligible Actual Gross Service Service Expenditures Revenue Expenditures Rate Mental Retardation ADT-ATF: MR Base Habilitation 10,810 10,762 $ 31,033 $ - $ 31,033 $ 2.88 MR Base Transportation ,093-7, Total Mental Retardation 11,286 11,234 $ 38,126 $ - $ 38,126 $

30 Y.M.C.A. of Greensburg Independent Auditor s Report in Accordance with Government Auditing Standards Year Ended June 30, 2011

31 Independent Auditor s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Board of Directors Y.M.C.A. of Greensburg We have audited the financial statements of the Y.M.C.A. of Greensburg (YMCA) as of and for the year ended June 30, 2011, and have issued our report thereon dated January 27, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the YMCA's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the YMCA s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the YMCA s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the YMCA s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the YMCA in a separate letter dated January 27,

32 Board of Directors Y.M.C.A. of Greensburg Independent Auditor s Report on Internal Control over Financial Reporting and on Compliance and Other Matters * * * * * * * * * * This report is intended solely for the information and use of the Board of Directors, management, others within the YMCA, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Pittsburgh, Pennsylvania January 27,