Lori J Lemieux CPA, PLC

Transcription

1 WOMEN S RESOURCE CENTER FINANCIAL STATEMENTS Lori J Lemieux CPA, PLC

2 WOMEN S RESOURCE CENTER TABLE OF CONTENTS INDEPENDENT AUDITOR S REPORT.. 2 STATEMENTS OF FINANCIAL POSITION 3 STATEMENTS OF ACTIVITIES... 4 STATEMENTS OF FUNCTIONAL EXPENSES.5 STATEMENTS OF CASH FLOWS... 6 NOTES TO THE FINANCIAL STATEMENTS

3 INDEPENDENT AUDITOR S REPORT To the Board of Directors Women s Resource Center Grand Rapids, Michigan Report on the Financial Statements I have audited the accompanying statements of financial position of the Women s Resource Center (a not-for-profit organization) as of December 31, 2012, and the related statements of activities, net assets, and cash flows for the year then ended, and the related notes to the financial statements. The prior year summarized comparative information is derived from the Center s 2011 financial statements and, in my report dated March 13, 2012, I expressed an unqualified opinion on them. 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 My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I 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 auditor s judgment, including 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 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, I do not express such an opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material aspects, the financial position of the Women s Resource Center as of December 31, 2012, and the changes in its net assets and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Grand Rapids Michigan, Lori J Lemieux CPA PLC March 12,

4 WOMEN'S RESOURCE CENTER STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2012 AND 2011 December 31, ASSETS CURRENT ASSETS: Cash and cash equivalents (Note 1) $ 153,763 $ 161,311 Receivables Grants and contracts 94, ,052 Unconditional promises to give - current ( Note 4) 34,249 49,813 Working Women's Clothes Closet Inventory (Note 1) 36,267 38,911 Prepaid expenses 4,579 9,954 TOTAL CURRENT ASSETS 323, ,041 PROPERTY AND EQUIPMENT: (Note 1) Furniture and equipment 74, ,768 Less allowance for depreciation (68,450) (98,544) NET PROPERTY AND EQUIPMENT 5,708 9,224 OTHER ASSETS: Rent deposit 4,500 4,500 Unconditional promises to give - long term (Note 4) 33,796 59,543 Scholarships: Cash - restricted (Note 1) 9,210 11,035 Investments (Note 3) 2,661 3,128 Beneficial interest in asset held by others (Note 5) 44,747 39,980 TOTAL OTHER ASSETS 94, ,186 TOTAL ASSETS $ 423,927 $ 504,451 See Independent Auditor's Report and notes to the financial statements

5 December 31, LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable $ 3,431 $ 11,725 Accrued payroll and other expenses 17,119 18,557 Deferred revenue (Note 1) 2,000 6,750 TOTAL CURRENT LIABILITIES 22,550 37,032 COMMITMENTS AND CONTINGENCIES - NOTE 2 NET ASSETS: (Note 6) Unrestricted 196, ,942 Temporarily restricted 165, ,358 Permanently restricted 39,119 39,119 TOTAL NET ASSETS 401, ,419 TOTAL LIABILITIES AND NET ASSETS $ 423,927 $ 504,451 3.

6 WOMEN'S RESOURCE CENTER STATEMENT OF ACTIVITIES AND NET ASSETS FOR (WITH COMPARATIVE TOTALS FOR 2011) Unrestricted SUPPORT AND REVENUE: Grants and contracts $ 336,428 Contributions 106,538 Working Women's Clothes Closet donations (Note 1) 220,250 Special events (net of direct expenses of $68,224 and $61,846) 57,231 United Way - Fees for services 14,516 Donated services and equipment 21,987 Investment income 19 Miscellaneous Income 1,438 Net assets released from restrictions 216,080 TOTAL REVENUE AND SUPPORT 974,487 EXPENSES: Program Services: Comprehensive Career Development Services for Women 876,182 Supporting Services: Management and general 15,483 Fund development 98,820 TOTAL PROGRAM AND SUPPORTING SERVICES EXPENSES 990,485 CHANGE IN NET ASSETS (15,998) NET ASSETS - Beginning of Year 212,942 NET ASSETS - End of Year $ 196,944 See Independent Auditor's Report and notes to the financial statements

7 Temporarily Permanently Total Restricted Restricted $ 45,000 $ - $ 381,428 $ 634, , , , ,231 54, , , , ,516 11, ,987 2,000 4,936-4,955 (890) - - 1,438 3,003 (216,080) (50,044) - 924, , , , ,483 34, ,820 63, , ,405 (50,044) - (66,042) ,358 39, , ,773 $ 165,314 $ 39,119 $ 401,377 $ 467,419 4.

8 WOMEN'S RESOURCE CENTER STATEMENT OF FUNCTIONAL EXPENSES FOR (WITH COMPARATIVE TOTALS FOR 2011) PROGRAM SERVICES SUPPORTING SERVICES Comprehensive Career Development Management Subtotal Services And Fund Supporting Total For Women General Development Services EXPENSES: Personnel expenses: Salaries $ 366,866 $ 9,426 $ 52,259 $ 61,685 $ 428,551 $ 572,395 Employee benefits 34, ,008 3,780 38,237 49,111 Payroll taxes 33, ,480 5,296 38,364 49,670 TOTAL PERSONNEL EXPENSES 434,391-11,014 59,747 70, , ,176 Assistance to clients 313, ,469 90,659 Occupancy and equipment 74,920 1,200 8,411 9,611 84,531 83,768 Supplies and services 7, ,344 70,008 77,065 69,746 Professional services 23, ,580 19,877 43,061 36,748 Printing and publication 7,222-5,575 5,575 12,797 12,397 Telephone and postage 4, ,379 2,420 6,768 7,110 Depreciation 5, ,179 7,244 Travel and conference 3,459 1, ,482 4,941 7,499 Miscellaneous ,828 2,653 3,066 4,604 Scholarships 2, ,700 2,300 TOTAL PROGRAM AND SUPPORTING SERVICES EXPENSE $ 876,182 $ 15,483 $ 167,064 $ 182,547 $ 1,058,729 $ 993,251 Less direct special event expenses (68,244) (68,244) (61,846) $ 98,820 $ 990,485 $ 931,405 See Independent Auditor's Report and notes to the financial statements 5

9 WOMEN'S RESOURCE CENTER STATEMENT OF CASH FLOWS FOR (WITH COMPARATIVE TOTALS FOR 2011) CASH FLOWS FROM OPERATING ACTIVITES: Total Change in net assets $ (66,042) $ 646 Adjustments to reconcile change in net assets to net cash provided by operating activites: Depreciation 5,179 7,244 (Increase) decrease in operating assets: Grants and contracts receivables 22,605 (13,771) Unconditional promises to give 41,311 1,525 Prepaid expenses 5,375 (4,809) Increase (decrease) in operating liabilities: Accounts payable (8,294) 2,894 Accrued payroll and other expenses (1,438) (3,661) Deferred revenue (4,750) (4,950) NET CASH USED IN OPERATING ACTIVITIES (6,054) (14,882) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of furniture and equipment (1,664) (6,539) Transfer of scholarship fund 2,460 2,300 Reinvestment of endowment earnings (2,290) 1,400 NET CASH USED IN INVESTING ACTIVITIES (1,494) (2,839) NET DECREASE IN CASH (7,548) (17,721) CASH & CASH EQUIVALENTS AT BEGINNING OF YEAR 161, ,032 CASH & CASH EQUIVALENTS AT END OF YEAR $ 153,763 $ 161,311 Cash paid for interest $ - $ - Cash paid for income taxes $ - $ - Non cash transactions: In-kind revenue and expenses $ 279,052 $ 38,119 See Independent Auditor's Report and notes to financial statements

10 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF ACTIVITIES Women s Resource Center s mission is "to improve women's workplace and economic opportunities". The Center realizes this mission by walking alongside women in transition, encouraging them to believe in themselves and teaching them skills to succeed at work. The Center s services are gender-responsive in design and delivery in order to meet the specific needs of women, particularly those with barriers to self sufficiency. The Center offers comprehensive programs that include career exploration, employment guidance, employability and life skills classes, one-on-one coaching, assistance with job and education/training placements, follow-up services to increase placement retention, volunteer/peer mentoring, support groups, and a clothing closet to help women dress for success. When opening its doors in November 1973, WRC was the first independent, community-based women s center to exist in Michigan, and one of the first throughout the nation. WRC continues to be a leading organization, dedicated to promoting women s professional and personal development. Services are delivered by professional staff as well as trained volunteers to produce results that are both effective and costefficient. WRC services create a ripple effect. Each year, WRC impacts approximately 900 women through its services and that ripples outward to positively impact their children, their neighborhood, and the entire community. WRC focuses its services in the Kent County area of West Michigan. BASIS OF ACCOUNTING The financial statements of the Women s Resource Center have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. BASIS OF PRESENTATION Under the provisions of authoritative guidance, net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of the Women s Resource Center and changes therein are classified and reported as follows: Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. Temporarily restricted net assets Net assets subject to donor-imposed stipulations that may or will be met either by actions of the Center and/or passage of time. Permanently restricted net assets Net assets subject to donor-imposed stipulations that they be maintained permanently by the Center. Revenues are reported as increases in net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets. Expirations of temporarily restricted net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as net assets released from restrictions. 7

11 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued CASH AND CASH EQUIVALENTS For purposes of the financial statements, cash equivalents include all highly liquid investments with initial maturities of one year or less. CASH RESTRICTED Restricted cash represents segregated donations that are restricted for scholarships at December 31, INVESTMENTS Investments are carried at fair market value. Fair values for all investments were determined using quoted market prices in active markets (Level 1 valuation). Unrealized gains and losses of investments are recognized in the accompanying Statement of Activities. PROPERTY AND EQUIPMENT Property and equipment are carried at cost, or, if donated, at the approximate fair market value at the date of donation. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets. DEFERRED REVENUE Deferred revenue consists of funds received for an event to occur during 2013 and is recognized when the event occurs. DONATED ASSETS Donated marketable securities and certain other noncash donations are recorded as contributions at their estimated fair values at the date of donation. DONATED SERVICES The Center recognizes donated services that creates or enhances nonfinancial assets or that require specialized skills, are proved by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Donated services consist of $36,815 for special events, $2,900 of professional services, and $19,086 in reduced rent expense that are included in revenue and a corresponding expense for the year ended December 31, The Center also receives significant donations of time by volunteers for program services and general operations, which are not recorded in the financial statements. During the years ended December 31, 2012, management estimates the fair value of those services to be $94,000. 8

12 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued DONATED SERVICES continued The Working Women s Clothes Closet is an integral program of the Women s Resource Center. The Working Women s Clothes Closet provides a source of good quality clothing for women who aspire to be employed outside the home and cannot afford to buy the clothing and accessories they need for job interviews or to re-enter the workforce. The Working Women s Clothes Closet received donations of new and used clothing from individuals, centers, clothing drives, and area retail stores. As of January 1, 2012, these donations are recognized in the financial statements. Total estimated value of these donations for the year ending December 31, 2012 was $220,250. INCOME TAX STATUS The Center is a tax-exempt center under section 501 (c) (3) of the Internal Revenue Code In addition, the Center qualifies for a charitable contribution deduction under Section 170 (b) (1) (A) and has been classified as an organization that is not a private foundation under Section 509 (a) (2). Management believes tax years 2010 through 2012, following administrative practice of taxing authorities, remain open and subject to review. Management believes that its income tax positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse effect on its financial condition, results of operations or cash flows. Accordingly, for all open tax years, the Center has not recorded any reserves or related accruals for uncertain income tax positions at December 31, 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. EXPENSE ALLOCATIONS All costs are allocated among the various programs and support services. Expenses that can be identified with a specific program or support service are directly allocated according to their natural expense classification. Certain expenses such as administration, accounting and occupancy are allocated and charged to specific programs and/or funding sources where budgetary considerations permit. 9

13 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued FAIR VALUE MEASUREMENT OF ASSETS The Center adopted the Financial Accounting Standards Board s (FASB) standard which provides a framework for measuring fair value under generally accepted accounting principles. The standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard for Fair Value Measurements establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value measurement is determined based on the assumptions referred to as inputs which market participants would use in pricing the investment, as follows: Level 1 inputs observable quoted price in an active market for an identical investment; Level 2 inputs input that is observable for the investment, either directly or indirectly, other than quoted prices included in level 1; Level 3 inputs unobservable inputs for the investment, used only when observable inputs are not available. The Center invests in publicly traded securities which are exposed to various risks such as interest rate, market, and credit risks. Due to the level of the risk associated with investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the statement of financial position. NOTE 2 COMMITMENTS AND CONTINGENCIES LEASE COMMITMENTS The Center leases its office space under an operating lease, which expires June 30, The Center also leases certain office equipment under operating leases that expire at various dates through February Future minimum lease payments under operating leases at December 31, 2012 that have lease terms in excess of one year are as follows: Year ending December 31: 2013 $79, , , ,452 The Center incurred expenditures totaling $75,169 under operating leases during the year ended December 31, The landlord has given a 50% rent reduction for July December 2012, which was accounted for as an in-kind donation. 10

14 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 2 COMMITMENTS AND CONTINGENCIES - continued CONCENTRATION OF CREDIT RISK The Center maintains cash balances at a financial institution located in Western Michigan. Accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. LINE OF CREDIT The Center has an available line of credit with a financial institution of $70,000. This line of credit has an interest rate equal to 2.5% of prime rate and matures on October 30, There was no balance on this line of credit at December 31, NOTE 3 INVESTMENTS The Center carries investments in marketable securities measured at fair value on a recurring basis at quoted prices in active markets for identical assets in the Statement of Financial Position. Unrealized gains and losses are included in the change in net assets in the accompanying Statement of Activities under investment income. The Center s investments at December 31, 2012 consist of the following: Cost Market Value Taxable Bonds $2,327 $2,661 NOTE 4 UNCONDITIONAL PROMISES TO GIVE During the fiscal year ended December 31, 2010, the Center began a Major Gifts campaign for long term financial support of the Center. The goal of the campaign is to raise $250,000 over the next 5 years to provide a sustainable pipeline of funding. As of December 31, 2012, the Center has raised approximately $198,700. Unconditional promises to give at December 31 are $65,366 and are expected to be received as follows: December 31, 2013 $28, , , ,250 $ 65,366 Less allowance for doubtful accounts (3,270) Net Unconditional Promises to Give $ 62,096 Discount on unconditional promises to give was immaterial at December 31, Unconditional promises to give also include United Way Donors Choice pledges of $5,

15 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 5 BENEFICIAL INTEREST IN ASSETS HELD BY OTHERS The Center has adopted FASB ASC No , Agency Transactions, in relation to its fund at the Grand Rapids Community Foundation. This statement establishes standards for transactions in which a community foundation accepts a contribution from a donor and agrees to transfer those assets, the return on investment of those assets or both to another entity that is specified by the donor. FASB ASC No specifically requires that if a Not-for-Profit Center (NPO) establishes a fund at a community foundation with its own funds and specifies itself as a beneficiary of that fund, the center must account for the transfer of such assets as a beneficial interest in funds held by the community foundation. The community foundation refers to such funds as agency fund endowments. The Foundation maintains variance power and legal ownership of agency endowment funds and as such continues to report the funds as assets of the Foundation. However, in accordance with FASB , an asset has been established for the fair value of the funds, which is generally equivalent to the present value of future payments expected be received by the Center. In addition to agency gifts, individual donations have been made to this fund. These funds were paid directly to the Grand Rapids Community Foundation and are recorded as assets of the Foundation, not Women s Resource Center. The Center has a current beneficial interest in these funds, which are valued at $292 as of December 31, NOTE 6 NET ASSETS TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of the following at December 31, 2012: Scholarship Operating Fund $ 1,791 Earnings on Endowment Fund 15,708 Time restricted promises to give 120,027 Restricted grants to be expended 27,788 Total $ 165,314 PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets are restricted by donors for the Founders Circle Endowment Fund and are being held at the Grand Rapids Community Foundation. However, net investment income earned from permanently restricted net assets is to be used to support the programs and projects directly benefiting the mission of the Center. Annual distributions are limited to 5% of the value of the fund at the end of the year. No distributions were made during The fair value of the investment in the Community Foundation was determined by Level 3 inputs. Permanently restricted net assets also include funds designated for the DeJourno Scholarship Endowment fund, totaling $10,080 for year ending December 31,

16 NOTE 6 NET ASSETS - continued WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS PERMANENTLY RESTRICTED NET ASSETS - continued The Board of Directors of Women s Resource Center has interpreted current law as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, Women s Resource Center classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment and (b) the original value of subsequent gifts to the permanent endowment. The remaining portion of the donor-restricted endowment fund that is not classified as permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the center in a manner consistent with the policies of the endowment fund. Endowment Net Asset Composition by Type of Fund As of December 31, 2012 Temporarily Permanently Unrestricted Restricted Restricted Total Scholarship Fund -0- $ 1,791 $10,080 $11,871 Founders Circle -0- $15,708 $29,039 $44,747 Total $-0- $17,499 $39,119 $56,618 Changes in Endowment Net Assets For the year ended December 31, 2012 Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets, Beginning of year -0- $15,023 $39,119 $ 54,142 Investment return: Investment Income -0-1, $ 1,478 Investment fees -0- (500) -0- $ (500) Unrealized gain on Investment -0-3, $ 3,958 Total Investment return -0-4, $ 4,936 Contributions Amounts expended -0- (2,700) -0- $ (2,700) Endowment net assets, End of year $-0- $17,499 $39,119 $ 56,618 13

17 NOTE 6 NET ASSETS - continued WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS PERMANENTLY RESTRICTED NET ASSETS - continued From time to time, the fair value of the assets associated with donor-restricted endowment funds may fall below the level that the donor requires the Center to retain as a fund of perpetual duration. In accordance with GAAP, deficiencies of this nature are reported in unrestricted net assets. These deficiencies result from unfavorable market fluctuations that occur occasionally. There were no such deficiencies as of December 31, NOTE 7 FAIR VALUE MEASUREMENTS Assets measured at fair value on a recurring basis on December 31, 2012 Level 1 Level 3 Total Quoted Prices Unobservable inputs Investments $ 2,661 $2, Beneficial interest in asset held by others $44, $44,747 Level 3 inputs are the fair value of the Beneficial interest in asset held by other as provided by the Grand Rapids Community Foundation. NOTE 8 TAX DEFERRED ANNUITY PLAN The Center has a tax-deferred annuity plan, which is qualified under section 403(b) of the Internal Revenue Code. The plan covers substantially all employees. The Center contributes 1% of gross salaries for qualified employees to the plan. Employees may make contributions to the plan up to the maximum amount allowed by the Internal Revenue Code if they wish. Plan expenses were $2,715 for year ended December 31, NOTE 9 - COMPARATIVE FINANCIAL STATEMENTS The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with center s financial statements for the year ended December 31, 2011, from which the summarized information was derived. NOTE 10 AUDIT UNDER OMB CIRCULAR A-133 The Center receives federal funds under various contracts. The total federal funds expended is less than the required amount to obtain an audit under OMB Circular A- 133, and therefore, an audit under A-133 was not required for the period 01/01/12 12/31/12. 14

18 WOMEN S RESOURCE CENTER NOTES TO THE FINANCIAL STATEMENTS NOTE 11 SUBSEQUENT EVENTS Subsequent events were evaluated through March 12, 2013, which is the date of the financial statements were available to be issued. 15