DAYSTAR LIFE CENTER, INC.

Transcription

1 Financial Statements with Independent Auditors Report For the Years Ended August 31, 2016 and 2015

2 Table of Contents August 31, 2016 and 2015 INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS Statement s of Financial Position...3 Statement s of Activities...4 Statements of Changes in Net Assets...5 Statements of Cash Flows...6 Statement of Functional Expenses...7 Notes to Financial Statements

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5 Statements of Financial Position August 31, 2016 and 2015 Assets Cash and cash equivalents $ 395,700 $ 194,350 Certificates of deposit 76, ,334 Investments 8,956 - Grants and awards receivable 69,113 22,144 Prepaid expenses 1,300 2,353 Unconditional promises to give 85,645 95,948 Property and equipment, net of accumulated depreciation 252, ,485 Total assets $ 889,151 $ 868,614 Liabilities and Net Assets Liabilities Accounts payable and accrued expenses $ 32,199 $ 21,641 Mortgage notes payable 205, ,738 Total liabilities 237, ,379 Net Assets Unrestricted 498, ,956 Temporarily restricted 153, ,279 Total net assets 651, ,235 Total liabilities and net assets $ 889,151 $ 868,614 See accompanying notes to financial statements. 3

6 Statements of Activities Year Ended August 31, 2016 (with comparative total for 2015) Support and Revenue Temporarily Unrestricted Restricted Total Total Contributions and bequests $ 285,111 $ 25,000 $ 310,111 $ 294,448 In-kind contributions 476, , ,687 Fundraising events 144, , ,300 Grants and awards 166,776 52, , ,080 Community Development Block Grant - forgiveness of debt 122, ,738 - Interest income 3,830-3,830 2,911 Thrift shop sales 109, ,303 96,558 Other income 2,847-2,847 2,746 Donated services 202, , ,213 Donated use of facilities 16,548 5,476 22,024 22,623 Total support and revenue 1,530,528 82,476 1,613,004 1,387,566 Net assets released from restrictions 46,747 (46,747) - - Total support, revenue, and assets released from restrictions 1,577,275 35,729 1,613,004 1,387,566 Operating Expenses Program services 1,411,902-1,411,902 1,298,488 Management and general 23,893-23,893 21,816 Fundraising 44,492-44,492 42,758 Total expenses 1,480,287-1,480,287 1,363,062 Increase in net assets 96,988 35, ,717 24,504 Net assets at beginning of year 401, , , ,731 Net assets at end of year $ 498,944 $ 153,008 $ 651,952 $ 519,235 See accompanying notes to financial statements. 4

7 Statements of Changes in Net Assets Years Ended August 31, 2016 and 2015 Unrestricted net assets: Unrestricted operating support and revenue $ 1,530,528 $ 1,353,226 Unrestricted operating expenses (1,480,287) (1,363,062) Net assets released from restrictions 46,747 49,906 Increase in unrestricted net assets 96,988 40,070 Temporarily restricted net assets: Grant allocation 52,000 28,265 Contributions 25,000 - Donated use of facilities 5,476 6,075 Net assets released from restrictions (46,747) (49,906) Increase (decrease) in temporarily restricted net assets 35,729 (15,566) Increase in net assets 132,717 24,504 Net assets at beginning of year 519, ,731 Net assets at end of year $ 651,952 $ 519,235 See accompanying notes to financial statements. 5

8 Statements of Cash Flows Years Ended August 31, 2016 and 2015 Cash flows from operating expenses Change in net assets $ 132,717 $ 24,504 Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 42,760 42,559 Forgiveness of debt on Community Development Block Grant (122,738) - Donation of investments (11,439) - (Increase) in grants and awards receivables (46,969) (9,495) Decrease (increase) in prepaid expenses 1,053 (396) Decrease in unconditional promises to give 10,303 9,705 Increase in accounts payable and accrued expenses 10,558 3,624 Net cash provided by operating activities 16,245 70,501 Cash flows from investing activities Purchase of certificates of deposit - (115,000) Redemption of certificates of deposit 192, ,912 Certificate of deposit interest reinvested (895) (1,847) Sale of donated investments 2,483 - Purchase of furniture, fixtures, and building improvements (8,515) (6,619) Net cash provided by (used in) investing activities 185,105 (10,554) Net increase in cash and cash equivalents 201,350 59,947 Cash and cash equivalents at beginning of year 194, ,403 Cash and cash equivalents at end of year $ 395,700 $ 194,350 Supplemental information on non-cash transactions: Donation of investments $ 11,439 $ - Forgiveness of debt on Community Development Block Grant $ 122,738 $ - See accompanying notes to financial statements. 6

9 Statement of Functional Expenses Year Ended August 31, 2016 (with comparative total for 2015) Program Management Services and General Fundraising Total Total Salaries and related expenses $ 237,111 $ 8,599 $ 16,986 $ 262,696 $ 255,644 Pension expense 18, ,478 20,831 19,353 Sister stipend ,600 Bike locks and lights 6, ,000 3,490 Bus tokens 9, ,750 16,578 Clothing 11, ,039 11,733 Clothing - in-kind 122, ,137 98,600 Depreciation 40,682 2,078-42,760 42,559 Education and training 2, ,305 3,223 Education and training - clients 1, ,062 5,266 Food 50, ,917 34,852 Food - in-kind 251, , ,883 Fundraising ,236 17,236 17,136 Insurance 2, ,110 3,100 Household items 2, ,263 1,550 Household items - in-kind 86, ,826 72,324 Maintenance and repair 9, ,966 11,094 Medical - client 1, ,508 1,729 Miscellaneous 6, ,086 7,856 8,089 Personal hygiene 9, ,118 8,351 Personal hygiene - in-kind 7, ,838 7,455 Personal identification 16, ,163 20,603 Postage 2, ,148 1,698 Professional services 6,000 7,750-13,750 16,150 Professional services - in-kind 199,376 2, , ,213 Rent 45, ,248 46,248 Rent and mortgage assistance 29, ,075 13,810 Supplies 7, ,547 6,450 Supplies - client 1, ,343 2,003 Supplies - in-kind 2,034-5,975 8,009 5,426 Traveler's aid 34, ,885 30,543 Utilities - client 160, , ,393 Utilities 23, ,877 24,638 Vehicle expense 5, ,630 6,278 Total $ 1,411,902 $ 23,893 $ 44,492 $ 1,480,287 $ 1,363,062 See accompanying notes to financial statements. 7

10 Notes to Financial Statements Years Ended August 31, 2016 and SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES Center and Purpose Daystar Life Center, Inc., (the Center) was founded in August, 1982 and incorporated in August, 1992, as a Florida not-for-profit corporation. The Center operates primarily to provide financial assistance and other non-financial basic needs services to families and individuals who demonstrate need. The Center provides qualifying clients with rent, utility, personal identification, medical prescription, transportation, traveler s aid, food, clothing, client mail services, tax preparation assistance, advocacy, information referrals and other reasonable requests. Key to the Center s success is the amount of donated services by individuals performing interviewing and other services on a volunteer basis. Basis of Accounting The accompanying financial statements have been prepared using the accrual basis of accounting with generally accepted accounting principles. Net assets, revenues, expenses, gains and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of the Center and changes therein are classified and reported as follows: Unrestricted net assets Includes net assets that are not subject to donor imposed stipulations and include designated net assets. Temporarily restricted net assets Includes gifts for which donor imposed restrictions have not been met and promise to give for which the ultimate purpose of the proceeds is not permanently restricted. Permanently restricted net assets Includes gifts, trusts, and pledges that require, by donor restriction, that the corpus be invested in perpetuity and only the income be made available for operations in accordance with donor restrictions and gifts that have been donor stipulated. Cash Equivalents For the purposes of reporting cash flows, the Center considers all liquid investments in money market and savings accounts with maturities of three months or less to be cash equivalents. Investments Investments consist of donated stocks and are carried at their fair values in the statement of financial position. Donations of investments are recorded as contributions at their estimated fair value at the date of donation. At August 31, 2016 the fair market value approximated the original donation value. Property and Equipment Property and equipment are stated at cost or, for donations, at fair market value, as of the date received. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, which range from four to twenty years. Expenditures with a cost in excess of $750 and with an estimated useful life in excess of one year are capitalized. Gifts of long-lived assets are reported as unrestricted support. 8

11 Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES (CONTINUED) Contributions Contributions, including unconditional promises to give, are recorded when made. All contributions are available for unrestricted use unless specifically restricted by the donor. Conditional promises to give are recognized when the conditions on which they depend are substantially met. Contributions that are restricted by the donor are reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the contribution is recognized. All other donor restricted contributions are reported as an increase in temporarily restricted net assets. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. In-kind Contributions Donations of food, clothing, personal hygiene products, and household goods are not recognized as revenue until the time of distribution, which is generally within a few days of the date of receipt. As a result, the Center does not record such gifts as inventory. Donated Services The Center receives a significant amount of donated services from unpaid volunteers who assist in interviewing, general operations, fundraising and other special projects. However, these services do not require specialized skills as defined in the standards and are not recorded in the accompanying financial statements. Volunteers have contributed approximately 34,000 hours. If the criteria for recognition were met, approximately $742,000 of additional contributions and program service expenses would be recognized in the Statement of Activities for the year ended August 31, Thrift Shop The Center operates a small thrift shop at a donated site. The intent of the thrift shop is to provide a venue to sell excess donation items to customers at a good value and provide Center clients with needed goods. The shop is also intended to supply a modest stream of income to the Center for general operation of the organization. Income Taxes The Center is exempt from U.S. Federal income tax under Section 501(c)(3) of the Internal Revenue Code and has been determined not to be a private foundation. The Center did not conduct unrelated business activities; therefore, no provision has made for federal income taxes in the accompanying financial statements. As of August 31, 2016, the Center s federal Return of Organization Exempt from Income Tax, Form 990, filed for the tax years beginning in 2012, 2013, and 2014 were still subject to possible examination by the Internal Revenue Service. Functional Allocation of Expenses The costs of providing the various programs and other activities are presented in the statement of functional expenses and have been summarized on a functional basis in a separate statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 9

12 Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES (CONTINUED) Reclassifications Certain reclassifications have been made to the 2015 financial statements to be in conformity with the 2016 presenta tion. 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 2. UNCONDITIONAL PROMISE TO GIVE Effective April 1994, the Center entered into a 20 year lease agreement with the Diocese of St. Petersburg for use of its facility for a period of 20 years for $1 per year. The use of the facilities at below market rates was recognized as a contribution in 1994, measured by the fair market value of the contribution, and a corresponding unconditional promise to give was recorded. The asset is being amortized over the remaining term of the lease. The lease stipulated that the facility must be used for the original purpose for which the Center was organized. Effective August 23, 2001, the Center entered into an addendum to the lease agreement which extended the lease term for an additional 10 years to March 28, A third addendum was signed to allow the Center to make alterations and improvements to the property, which were made and funded through the Community Development Block Grants received from the City of St. Petersburg. Future amounts of unconditional promise to give, net of discount, are estimated as follows: Less than 1 year $ 15, years 78,899 Subsequent years 9, ,883 Unamortized discount (18,238) 3. GRANTS AND AWARDS RECEIVABLE $ 85,645 Grants and awards receivable consists of the following at August 31, 2016 and 2015: City of St. Petersburg $ 1,314 $ 5,982 Pinellas County 67,799 13,030 Emergency Food and Shelter Program - 3,132 $69,113 $22,144 10

13 Notes to Financial Statements 4. PROPERTY AND EQUIPMENT Property and equipment consists of the following at August 31, 2016 and 2015: Leasehold improvements $560,607 $554,557 Furniture, fixtures and equipment 72,747 70,282 Vehicle s 27,798 27, , ,637 Less accumulated depreciation (408,912) (366,152) Net property and equipment $252,240 $286, MORTGAGE NOTES PAYABLE In January 2002, the Center entered into an agreement with the City of St. Petersburg to construct an addition to and to rehabilitate its current facility. As a part of this agreement the Center executed a mortgage note in the amount of $205,000 through the Community Development Block Grant (CDBG) Program. The Diocese of St. Petersburg has joined the Center as a mortgagor; however, the Center holds a leasehold interest in the property by virtue of its lease agreement with the Diocese. This is a non-interest bearing note and the principal amount is deferred until December 31, 2022, if the Center remains fee simple, operates said property as a social service agency and fulfills other program requirements. If the Center complies with the terms and conditions of the agreement, the note will be forgiven on January 1, 2023 (see Note 11). In February 2011, the Center entered into an agreement with the City of St. Petersburg to remodel its current facility and executed a mortgage note in the amount of $122,738 through the CDBG Program. The Diocese of St. Petersburg joined the Center as a mortgagor; however, the Center holds a leasehold interest in the property by virtue of its lease agreement with the Diocese. This was a non-interest bearing note and the principal amount was forgiven on January 1, 2016 since the Center had complie d with the terms and conditions of the agreement. 6. RESTRICTED NET ASSETS At August 31, 2016 and 2015, temporarily restricted net assets consist of the following: Long-lived assets use of facility $ 85,645 $ 95,948 Capital acquisition account 25,000 - Pinellas County Social Action funds 37,363 - Rays Baseball Foundation 5,000 - Allegany Franciscan Ministries - 15,000 St. Elizabeth Mission Society - 2,240 Emergency Food and Shelter Program - 4,091 The Center has no permanently restricted net assets. 11 $153,008 $117,279

14 Notes to Financial Statements 7. IN-KIND CONTRIBUTIONS Components of in-kind contributions for the years ended August 31, 2016 and 2015 are as follows: Food $252,146 $166,883 Clothing 122,137 98,600 Personal items and other 102,673 85,204 Rent 22,024 22,623 Total in-kind contributions $498,980 $373, DONATED SERVICES Components of donated professional services for the years ended August 31, 2016 and 2015 are as follows: Skilled labor $141,688 $167,763 Accounting 48,738 47,125 Computer consultant 11,225 17,425 Photography and video production 750 4,900 Total donated services $202,401 $237, RETIREMENT PLAN During December 2005, the Center was approved to participate in the Archdio cese of Miami/Dio cese of St. Petersburg/Diocese of Venice Pension Plan (the Plan ). The effective date of participation was July 1, The Plan is a non-contributory, defined benefit plan. Specific retirement benefits are paid based on years of service and other criteria. The Center incurred retirement expenses of $20,830 and $19,353 in 2016 and 2015, respectively. 10. CONCENTRATION OF RISK Financial instruments that potentially subject the Center to concentrations of credit risk consist primarily of cash. The Federal Deposit Insurance Corporation (FDIC) currently insures bank deposit accounts up to $250,000 per depositor. At August 31, 2016, the Center had no cash balances that exceeded the insurance coverage provided by the FDIC. 11. SUBSEQUENT EVENTS Management has evaluated subsequent events through January 4, 2017, the date on which the financial statements were available to be issued. In October 2016 the Center made an offer of $260,000 to purchase a vacant lot in south St. Petersburg. At the same time the Center received a charitable pledge agreement from a donor which agrees to donate funds to pay all the costs of the land acquisition. 12

15 Notes to Financial Statements 11. SUBSEQUENT EVENTS (CONTINUED) On October 5, 2016 the City of St. Petersburg forgave the outstanding note payable balance of $205,000 and the Center received a full satisfaction of the mortgage payable. 13