COMMUNITY ASSISTANCE COUNCIL, INC. FINANCIAL STATEMENTS YEARS ENDED MAY 31, 2016 AND 2015

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1 FINANCIAL STATEMENTS YEARS ENDED

2 TABLE OF CONTENTS YEARS ENDED INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION 3 STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS 4 STATEMENTS OF FUNCTIONAL EXPENSES 5 STATEMENTS OF CASH FLOWS 7 NOTES TO FINANCIAL STATEMENTS 8

3 CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS REPORT Board of Directors Community Assistance Council, Inc. Kansas City, Missouri We have audited the accompanying financial statements of Community Assistance Council, Inc. (the Council), which comprise the statements of financial position as of May 31, 2016 and 2015, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the years 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. Auditors Responsibility 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Council 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 Council 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. (1)

4 Board of Directors Community Assistance Council, Inc. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Community Assistance Council, Inc. as of May 31, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. a CliftonLarsonAllen LLP St. Joseph, Missouri September 15, 2016 (2)

5 STATEMENTS OF FINANCIAL POSITION ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 64,119 $ 91,358 Cash and Cash Equivalents - Designated 110, ,865 Total Cash and Cash Equivalents 174, ,223 Contracts Receivable 34,464 52,036 Pledges Receivable 2,500 - Inventory 53,149 43,676 Prepaid Expenses 9,167 9,219 Total Current Assets 273, ,154 PROPERTY AND EQUIPMENT, NET 25,948 29,844 Total Assets $ 299,461 $ 335,998 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts Payable $ 6,212 $ 3,158 Accrued Expenses 23,674 20,260 Total Current Liabilities 29,886 23,418 NET ASSETS Unrestricted: Undesignated 143, ,903 Board Designated 110, ,865 Total Unrestricted Net Assets 253, ,768 Temporarily Restricted 16,175 22,812 Total Net Assets 269, ,580 Total Liabilities and Net Assets $ 299,461 $ 335,998 See accompanying Notes to Financial Statements. (3)

6 STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS YEARS ENDED Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total REVENUES, GAINS, AND PUBLIC SUPPORT Federal and State Agency Grants $ 160,309 $ - $ 160,309 $ 189,918 $ - $ 189,918 Contributions 88,174 46, , ,262 49, ,725 In-Kind Contributions 267, , , ,240 Earned Fees 2,706-2,706 5,625-5,625 Special Events 20,390-20,390 6,205-6,205 Less Direct Costs (3,049) - (3,049) (3,695) - (3,695) Other Income 16,016-16,016 16,567-16,567 Net Assets Released from Restrictions 53,462 (53,462) - 32,687 (32,687) - Total Revenues, Gains, and Public Support 605,771 (6,637) 599, ,809 16, ,585 EXPENSES Program Services 543, , , ,122 Fundraising 13,654-13,654 14,836-14,836 Management and General 85,338-85,338 82,465-82,465 Total Expenses 642, , , ,423 CHANGES IN NET ASSETS (36,368) (6,637) (43,005) 23,386 16,776 40,162 Net Assets - Beginning of Year 289,768 22, , ,382 6, ,418 NET ASSETS - END OF YEAR $ 253,400 $ 16,175 $ 269,575 $ 289,768 $ 22,812 $ 312,580 See accompanying Notes to Financial Statements. (4)

7 STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED MAY 31, 2016 Supporting Services Total Total Total Program Management Supporting Functional Services Fundraising and General Services Expenses EXPENSES Client Services $ 358,018 $ - $ - $ - $ 358,018 Salaries 111,239 9,080 47,553 56, ,872 Payroll Taxes 10, ,279 5,097 15,114 Training and Workers' Compensation 3, ,539 1,833 5,435 Occupancy 37,583 2,302 14,253 16,555 54,138 Office 11, ,390 5,099 16,674 Travel 2, ,007 3,283 Program Supplies 1, ,246 Dues and Subscriptions Insurance 1, ,982 3,095 4,935 Professional Fees - - 7,375 7,375 7,375 Depreciation 3, ,620 Other ,434 Total Expenses $ 543,147 $ 13,654 $ 85,338 $ 98,992 $ 642,139 See accompanying Notes to Financial Statements. (5)

8 STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED MAY 31, 2015 Supporting Services Total Total Total Program Management Supporting Functional Services Fundraising and General Services Expenses EXPENSES Client Services $ 350,903 $ - $ - $ - $ 350,903 Salaries 101,911 9,440 43,711 53, ,062 Payroll Taxes 9, ,214 5,099 14,652 Employee Benefits 1, ,002 2,880 Training and Workers' Compensation 3, ,613 1,952 5,609 Occupancy 36,639 2,582 15,236 17,818 54,457 Office 11, ,275 4,999 16,175 Travel 2, ,046 1,223 3,739 Program Supplies 2, ,173 Dues and Subscriptions ,337 Insurance 1, ,043 3,178 5,093 Professional Fees ,270 6,282 6,450 Depreciation 3, ,848 Other ,045 Total Expenses $ 528,122 $ 14,836 $ 82,465 $ 97,301 $ 625,423 See accompanying Notes to Financial Statements. (6)

9 STATEMENTS TO CASH FLOWS YEARS ENDED CASH FLOWS FROM OPERATING ACTIVITIES Changes in Net Assets $ (43,005) $ 40,162 Adjustments to Reconcile Changes in Net Assets to Net Cash Provided (Used) by Operating Activities: Depreciation 4,620 4,848 Loss on Sale of Property and Equipment Gifts-In-Kind Received for Inventory - Net (9,473) (2,379) Effects of Changes in Operating Assets and Liabilities Contracts Receivable 17,572 3,378 Pledges Receivable (2,500) 60,000 Prepaid Expenses 52 (48) Accounts Payable 3,054 (6,987) Accrued Expenses 3,414 5,632 Net Cash Provided (Used) by Operating Activities (25,930) 104,606 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property and Equipment (1,060) (6,011) Net Cash Used by Investing Activities (1,060) (6,011) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (26,990) 98,595 Cash and Cash Equivalents - Beginning of Year 201, ,628 CASH AND CASH EQUIVALENTS - END OF YEAR $ 174,233 $ 201,223 See accompanying Notes to Financial Statements. (7)

10 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Community Assistance Council, Inc. (the Council) is a Missouri nonprofit organization formed in 1976 to provide emergency assistance to economically challenged residents of southern Kansas City, Missouri. Assistance is provided through a variety of programs, as defined below: Food Pantry Providing a week s worth of groceries, on an as-needed basis through two food pantry locations, and serving as a distribution point for the United States Department of Agriculture s Emergency Food Assistance Program. Utility/Housing Assistance Arranging payments with landlords/mortgage/utility companies on an emergency basis. Homeless Case Management Aiding neighbors facing major housing issues, and providing assistance with setting goals for long-term stability. Home Delivered Meals Delivering a hot noonday meal, five days a week, in partnership with the Mid-America Regional Council. Seasonal Programs Allowing families to have the opportunity to shop for gifts and receive food for holiday meals, distributing school supplies, distributing fans to eligible families during summer months, and providing weekend meals to nutritionally challenged elementary school children. Clothes Closet Providing good clean, second-hand clothing, including coats and school uniform pieces solely through in-kind donations and volunteer support. Transitional Housing Providing a structured program to help families break the cycle of homelessness in their lives by becoming self-sufficient. Other Client Services Offering emergency assistance for medical, dental and optical assistance in connection with the Kansas City Medicine Cabinet, providing an outreach center for job seekers, arranging a variety of life skills and other educational programs. (8)

11 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Use of Estimates in Preparing Financial Statements The presentation 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 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. Significant estimates include the valuation of gift-in-kind donations, the estimated lives of depreciable assets, and the allocations incorporated into the statements of functional expenses. Actual results could differ from those estimates. Net Assets Financial statement presentation follows the recommendations of Financial Accounting Standards ASC 958, Financial Statements of Not-for-Profit Organizations. Under ASC 958, the Council is required to report information regarding its financial position and activities according to three classes of net assets: Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Unrestricted Unrestricted net assets include all net assets which are neither temporarily nor permanently restricted. This category includes board designated net assets. Temporarily Restricted Temporarily restricted net assets include contributed net assets for which donor imposed time and purpose restrictions have not been met and the ultimate purpose of the contribution is not permanently restricted. Permanently Restricted Permanently restricted net assets include contributed net assets which require, by donor restriction, that the corpus be invested in perpetuity and only the income be made available for program operations in accordance with donor restrictions. The Council currently has no permanently restricted net assets. Recognition of Donor Restricted Contributions 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 unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. Cash and Cash Equivalents Cash and cash equivalents consist of bank accounts that are available for current operations. (9)

12 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Contracts Receivable Contracts receivable are primarily from government agency contracts, and are stated at the amounts billed. Contracts are billed to the extent that allowable expenses have been incurred, and are due within thirty days from billing. Accounts outstanding longer than the contractual payment terms are considered past due. The Council writes off receivables as they become uncollectible. An allowance for doubtful accounts is established based upon a review of outstanding receivables, historical collection information, and existing economic conditions. No allowance for doubtful accounts was considered necessary at May 31, 2016 or Pledges Receivable Pledges receivable represents amounts committed by donors that have not yet been received by the Council, and are generally stated at the pledged amount. Management establishes an allowance for uncollectable pledges based upon individual donor payment history, the Council s historical pledge collection information, and existing economic conditions. No allowance for doubtful pledges was considered necessary at May 31, 2016 or In-Kind Contributions In-kind contributions consist of goods and services donated to the Council, and are reflected in the financial statements at their estimated fair market value at the date of donation. In-kind support for contributed services is recognized if these services (a) create or enhance long-lived assets or (b) require specialized skills, are provided by an individual possessing those skills, and would typically need to be purchased if not provided by donation. Such support could be used in the program activities of the Council as well as in fundraising and administrative activities. The value of services meeting these requirements, to the extent measurable, is reflected in the accompanying financial statements. The Council receives a substantial amount of donated services from volunteers who assist in all phases of the Council s operations. Support from non-professional volunteer services that do not meet the criteria listed above are not valued or recorded in the financial statements. Contributed property and equipment is recorded at its fair value at the date of donation. If donors stipulate how long the assets must be used, the contributions are recorded as restricted support. In the absence of such stipulations, contributions of property and equipment are recorded as unrestricted support. (10)

13 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Inventory Inventory consists primarily of donated canned goods, dry boxed food, clothing, and household goods, and is valued at estimated thrift shop values. A small amount of inventory consists of purchased meat, milk, and bread, and is carried at cost (weighted average). All inventories are held for distribution to clients. Property and Equipment The Council s property and equipment is carried at cost if purchased, or fair value if contributed. The cost of property and equipment purchased in excess of $500 is capitalized. Repair and maintenance costs are charged to expense as incurred. Depreciation is provided on the straight-line method over the estimated useful lives of the assets as follows: Equipment Furniture Transitional Housing 3-5 Years 5 Years Years Impairment of Long-Lived Assets The Council reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets held for sale are reported at the lower of their carrying amount or fair value less costs to sell. Functional Allocation of Expenses The costs of providing the Council s various programs and activities have been summarized on a functional basis in the statements of activities and changes in net assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited according to formulas developed by management to, in its judgment, reflect actual costs and efforts expended on each program or supporting service. (11)

14 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Tax Status The Council is tax-exempt under Section 501(c)(3) of the Internal Revenue code and has been determined not to be a private foundation. Although it is exempt from federal and state income taxes on its principal operations, the Council is subject to federal income taxes on the net income from any operations identified by the Internal Revenue Service to generate unrelated business income. No such unrelated business income tax was incurred during 2016 or The Council follows the standards for evaluating uncertain tax positions and has determined no liability should be recorded for uncertain tax positions. NOTE 2 INVENTORY The classes of inventory were as follows at May 31: Clothing $ 14,096 $ 10,630 Food 27,572 18,758 Household Seasonal 11,076 13,388 Total $ 53,149 $ 43,676 NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consisted of the following at May 31: Equipment $ 47,316 $ 47,356 Furniture 4,812 4,812 Land Transitional Housing 30,985 30,985 Total Property and Equipment 83,613 83,653 Accumulated Depreciation (57,665) (53,809) Property and Equipment - Net $ 25,948 $ 29,844 (12)

15 NOTES TO FINANCIAL STATEMENTS NOTE 4 UNRESTRICTED NET ASSETS The Council s Board of Directors has designated resources to be used as an operating reserve. The amount designated totaled $110,114 and $109,865 at May 31, 2016 and 2015, respectively. NOTE 5 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are restricted for the following purposes at May 31: Training and Education $ 1,552 $ 1,552 Lawn Mower for Transitional House Food Pantry Thanksgiving Meals Christmas Meals 1,477 - Home Delivered Meals 1,123 1,772 PT Employee - KC Medicine Cabinet 1,063 2,174 Housing/Utility Assist and Wages 9,976 9,877 Utility Assistance and Wages - 3,374 CAC Rent - 2,800 One Step Garden Total $ 16,175 $ 22,812 During the years ended May 31, 2016 and 2015, net assets were released from donor restrictions by satisfying the time or purpose restrictions as stipulated by the donors as follows: Food Pantry $ 9,242 $ 3,584 Thanksgiving Meals Christmas Meals 98 1,589 Home Delivered Meals 1, PT Employee - KC Medicine Cabinet 6,443 4,491 Housing/Utility Assistance and Wages 29,900 10,124 Utility Assist and Wages 3,374 6,626 Rent 2,800 5,600 One Step Garden Total $ 53,462 $ 32,687 (13)

16 NOTES TO FINANCIAL STATEMENTS NOTE 6 CONTRIBUTED GOODS AND SERVICES The Council receives office space at a significant discount from the Hickman Mills School District. The value of this discounted rent and utilities was $44,916 for the years ended May 31, 2016 and 2015, respectively. This amount is included in in-kind contributions and occupancy expenses in the accompanying financial statements. In addition, volunteers have donated approximately 6,091 and 5,664 hours to the Council s program and support services for the years ended May 31, 2016 and 2015, respectively. These contributions in-kind are not reflected in the financial statements since these services do not meet the criteria for recognition. NOTE 7 PROGRAM EXPENSES Expenses were incurred for the Council s program services as follows: Food Pantry $ 163,751 $ 171,112 Utility Assistance 89,509 78,439 Housing Assistance 39,591 35,273 Homeless Case Management 52,253 27,545 Home Delivered Meals 13,722 12,081 Seasonal Programs 37,109 46,652 Clothes Closet 71,478 70,069 Transitional Housing 10,924 21,834 Other Client Services 64,810 65,117 Total $ 543,147 $ 528,122 NOTE 8 CONDITIONAL GRANT RECEIVABLES The Council has conditional grant receivables totaling approximately $111,000 that management anticipates will be received in Payments are conditional upon the successful completion of contract stipulations. Since these receivables are conditional upon future events, they are not recognized as revenue at May 31, (14)

17 NOTES TO FINANCIAL STATEMENTS NOTE 9 OPERATING LEASES The Council leases certain office equipment under operating leases requiring monthly rental payments. Rent expense was $3,420 for each of the years ended May 31, 2016 and Future minimum lease payments (excluding executory costs) under these operating leases are as follows for the years ending May 31: Amount 2017 $ 3, , ,140 Total $ 7,980 NOTE 10 RELATED PARTY TRANSACTIONS The Council purchases items and receives in-kind donations from an organization that employs a member of the board of directors. Purchases from the organization totaled $8,405 and $16,307 and in-kind contributions from the organization were valued at $68,357 and $74,048 for the years ended May 31, 2016 and 2015, respectively. NOTE 11 CONCENTRATIONS The Council receives substantial support from federal, state and local governmental units. While there is no indication that such grants and contracts will not continue, the operations of the Council would be adversely impacted if such grants and contracts did not continue. For the years ended May 31, 2016 and 2015, 27% and 29% of revenues, respectively, were from governmental entities. At May 31, 2016 and 2015, 85% and 98% of receivables, respectively, were from one entity. Additionally, the Council's sources of support are concentrated in a small geographic area. NOTE 12 CONTINGENCIES Financial awards from federal, state, and local governmental entities are subject to special audits. Such audits could result in claims against the Council for disallowed costs or noncompliance with grantor restrictions. No provision has been made for any liabilities that may arise from such audits since the amounts, if any, cannot be determined at this date. (15)

18 NOTES TO FINANCIAL STATEMENTS NOTE 13 FLUCTUATION IN THE ECONOMY The Council receives significant funding from the receipt and collection of donor contributions within the local community and adjacent areas. The vitality of local and regional economies has the potential to significantly impact the willingness of donors to contribute. Conversely, the Council tends to experience the most demand for its services, and therefore need for funding, during periods of economic retrenchment. NOTE 14 SUBSEQUENT EVENTS Management evaluated subsequent events through September 15, 2016, the date the financial statements were available to be issued. Events or transactions occurring after May 31, 2016, but prior to September 15, 2016, that provided additional evidence about conditions that existed at May 31, 2016, have been recognized in the 2016 financial statements. (16)