SOCIETY OF ST. VINCENT DE PAUL, PARTICULAR COUNCIL OF SAN MATEO COUNTY INCORPORATED

Transcription

1 PARTICULAR COUNCIL OF SAN MATEO COUNTY INCORPORATED FINANCIAL STATEMENTS for the years ended and 2007 and Report of Independent Auditors

2 CONTENTS Page Report of Independent Auditors 1 Statements of Financial Position 2 Statements of Activities 3 Statements of Cash Flows 4 Statements of Functional Expenses 5-6 Notes to Financial Statements 7-17

3 REPORT OF INDEPENDENT AUDITORS Board of Directors Society of St. Vincent de Paul, Particular Council of San Mateo County Incorporated San Mateo, California We have audited the statements of financial position of the Society of St. Vincent de Paul, Particular Council of San Mateo County Incorporated as of and 2007, and the related statements of activities, cash flows and functional expenses for the years then ended. These financial statements are the responsibility of the Society'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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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 Society of St. Vincent de Paul, Particular Council of San Mateo County Incorporated as of and 2007, 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. San Francisco, California January 14, 2009

4 STATEMENTS OF FINANCIAL POSITION as of and 2007 ASSETS Current Assets: Cash and cash equivalents $ 2,334,425 $ 1,882,046 Investments at fair value 974,097 1,099,413 Pledges receivable 15,000 24,000 Legacy receivable 152, ,998 Accrued interest and other receivables 44,860 15,575 Inventory 43,362 25,203 Prepaid expenses and deposits 69, ,143 Total Current Assets 3,633,041 3,791,378 Long-Term Assets: Property and equipment, net of accumulated depreciation and amortization 2,652,962 2,682,725 Total Long-Term Assets 2,652,962 2,682,725 Total Assets $ 6,286,003 $ 6,474,103 Current Liabilities: Current portion of long-term debt $ 54,805 $ 50,167 Accounts payable and accrued expenses 215, ,429 Total Current Liabilities 270, ,596 Long-Term Debt, net of current portion 102, ,644 Total Liabilities 373, ,240 Commitments SOCIETY OF ST. VINCENT DE PAUL, LIABILITIES AND NET ASSETS Net Assets: Unrestricted Designated by board of directors 845, ,500 Not designated 4,210,151 4,440,026 Total unrestricted 5,055,761 5,169,526 Temporarily restricted 735, ,215 Permanently restricted 122, ,122 Total Net Assets 5,912,921 5,938,863 Total Liabilities and Net Assets $ 6,286,003 $ 6,474,103 The accompanying notes are an integral part of these financial statements. 2

5 STATEMENTS OF ACTIVITIES for the years ended and Un- Temporarily Permanently Un- Temporarily Permanently restricted Restricted Restricted Total restricted Restricted Restricted Total Revenue and Support: Donations and grants $ 1,939,276 $ 112,251 $ 3,499 $ 2,055,026 $ 3,363,477 $ 287,598 $ 27,958 $ 3,679,033 Gross profit on store sales of $1,790,682, (2007: $1,804,624) 1,703, ,703,306 1,705, ,705,844 Trust income 178, , , ,679 Vehicle income, net of preparation costs of $330,624 ( 2007: $98,463) 236, , , ,570 Free distribution from stores 305, , , ,797 Loss on disposition of property (2,876) - - (2,876) (1,175) - - (1,175) Other income 27, ,238 6, ,320 In-kind donations 1,639, ,639,000 1,553, ,553,000 Net assets released from restrictions 22,861 (22,861) ,780 (34,780) - - Total revenue and support 6,048,607 89,390 3,499 6,141,496 7,207, ,818 27,958 7,488,068 Expenses: Program Services: Direct services 3,143, ,143,456 2,876, ,876,271 Stores 2,011, ,011,415 1,944, ,944,070 Restorative justice 426, , , ,517 Supporting Services: Management and general 236, , , ,981 Fund raising 321, , , ,670 Total expenses 6,139, ,139,617 5,624, ,624,509 Change in operating net assets (91,010) 89,390 3,499 1,879 1,582, ,818 27,958 1,863,559 Investment income: Interest and dividend income 90,162 4,402 4,509 99,073 64,844 4,070-68,914 Net realized and unrealized gains/(loss) (112,917) - (13,977) (126,894) 84,068-6,382 90,450 Total investment income (22,755) 4,402 (9,468) (27,821) 148,912 4,070 6, ,364 Change in net assets (113,765) 93,792 (5,969) (25,942) 1,731, ,888 34,340 2,022,923 Net assets at beginning of year 5,169, , ,122 5,938,863 3,437, ,327 93,782 3,915,940 Net assets at end of year $ 5,055,761 $ 735,007 $ 122,153 $ 5,912,921 $ 5,169,526 $ 641,215 $ 128,122 $ 5,938,863 The accompanying notes are an integral part of these financial statements. 3

6 STATEMENTS OF CASH FLOWS for the years ended and Cash Flows from Operations: Change in net assets $ (25,942) $ 2,022,923 (Gains)/Loss on investments 126,894 (90,450) Loss on disposition of property 2,876 1,175 Donated securities (8,127) (9,534) Donated automobiles (19,575) (20,639) Depreciation and amortization 139, ,041 (Increase) decrease in operating assets: Pledges receivable 9,000 15,500 Legacy receivable 468,873 (620,998) Accrued interest and other receivables (29,285) 69,075 Inventory (18,159) 2,321 Prepaid expenses 54,971 (3,119) Increase (decrease) in operating liabilities: Accounts payable and accrued expenses (111,991) 132,038 Total cash provided by operations 589,519 1,606,333 Cash Flows from Investing Activities: Proceeds from sale of property and equipment 4,925 3,885 Purchases of property and equipment (100,285) (341,375) Proceeds from sale of investments 66, ,336 Securities purchased (58,337) (402,675) Total cash flows used by investing activities (86,973) (571,829) Cash Flows from Financing Activities: Payments on long term debt (50,167) (45,922) Total cash flows used by financing activities (50,167) (45,922) Increase in cash balances 452, ,582 Cash and Cash Equivalents Balances: Beginning of year 1,882, ,464 End of year $ 2,334,425 $ 1,882,046 Supplemental cash flow disclosures: Interest paid $ 16,435 $ 20,681 In-kind donations $ 1,639,000 $ 1,553,000 Free distribution of stores $ 305,578 $ 267,797 The accompanying notes are an integral part of these financial statements. 4

7 STATEMENT OF FUNCTIONAL EXPENSES for the year ended Program Services Supporting Services--- Direct Restorative Management Fund Services Stores Justice and General Raising Total Personnel Expenses: Salaries $ 170,290 $ 951,258 $ 232,382 $ 107,903 $ 142,323 $ 1,604,156 Payroll taxes 14,140 85,114 19,457 8,652 11, ,225 Employee benefits 35, ,476 37,748 9,297 15, ,372 Total personnel expenses 220,185 1,269, , , ,281 2,074,753 Direct assistance and donations 1,092,453-38, ,131,302 Free distribution from stores 59, , ,578 In-kind expenses 1,639, ,639,000 Advertising and public relations 11,201 5, ,024 27,674 Depreciation and amortization 8,830 82,224 25,061 14,157 9, ,984 Other donations 19, ,482 Dues, extension and renewal 9, ,020-11,330 Dump fees - 48, ,474 Event expenses ,475 47,475 Insurance 16,482 52,105 12,452 19, ,253 Interest expense - 16, ,435 Licenses and fees 1,525 26,775 2,086 1,008 1,640 33,034 Maintenance - building 8,925 27,164 2,173 15,432 5,342 59,036 Other 22,411 6,538 5, ,051 35,260 Payroll service 503 4, ,877 Printing postage and supplies 4,636 17,703 7,343 12,087 54,811 96,580 Professional fees 1,479 1,905 13,785 24,854 14,675 56,698 Property Taxes 906 1,406 1, ,909 Rent - 62,521-3,572-66,093 Telephone 9,182 19,600 6,948 6,533 3,233 45,496 Travel and meetings 2,601 5,636 4,429 3, ,055 Utilities 9,712 40,881 5,796 3,375 1,333 61,097 Vehicle expenses 5,857 75,806 10,975 4,104-96,742 Total Expenses $ 3,143,456 $ 2,011,415 $ 426,588 $ 236,645 $ 321,513 $ 6,139,617 The accompanying notes are an integral part of these financial statements. 5

8 STATEMENT OF FUNCTIONAL EXPENSES for the year ended September 30, Program Services Supporting Services--- Direct Restorative Management Fund Services Stores Justice and General Raising Total Personnel Expenses: Salaries $ 199,300 $ 929,280 $ 193,518 $ 64,270 $ 117,004 $ 1,503,372 Payroll taxes 16,961 83,087 16,784 5,146 10, ,188 Employee benefits 43, ,030 28,888 10,746 9, ,825 Total personnel expenses 259,382 1,267, ,190 80, ,254 1,982,385 Direct assistance and donations 902,497-26, ,320 Free distribution from stores 49, , ,797 In-kind expenses 1,553, ,553,000 Advertising and public relations 1, ,071 14,216 Bags and supplies - 4, ,430 Depreciation and amortization 8,660 67,268 19,183 9,511 3, ,041 Other donations 8, ,278 Dues, extension and renewal 11, ,680-13,507 Dump fees - 41, ,363 Event expenses ,291 76,291 Insurance 21,505 49,879 13,333 7,929 2,242 94,888 Interest expense - 20, ,681 Licenses and fees 1,859 25, ,100 2,065 31,044 Maintenance - building 3,593 20,853 6,664 1,979 3,498 36,587 Other 13,593 9,183 2, ,784 Payroll service 600 3, ,407 Printing postage and supplies 7,682 21,740 7,019 4,641 47,061 88,143 Professional fees 1, ,000 24,493 12,480 50,159 Property Taxes 744 1,319 1, ,781 Rent , , ,732 Telephone 11,222 22,601 6,264 2,590 3,485 46,162 Travel and meetings 3,318 5,792 6,284 1,703 1,411 18,508 Utilities 9,630 36,651 5,612 1,543 1,492 54,928 Vehicle expenses 6,856 64,141 9,240 2, ,077 Total Expenses $ 2,876,271 $ 1,944,070 $ 358,517 $ 141,981 $ 303,670 $ 5,624,509 The accompanying notes are an integral part of these financial statements. 6

9 1. Organization and Operations: Notes to Financial Statements The Society of St. Vincent de Paul, Particular Council of San Mateo County Incorporated (the Society), is incorporated in the State of California. It is a Catholic lay organization which is part of an international group serving in 135 countries. The Society conducts many programs designed to aid the needy including safety net services throughout San Mateo County. As described in its mission statement, In the Spirit of love and justice, the Society of St. Vincent de Paul of San Mateo County provides person-to-person services of time, talent and resources to help our neighbors in need. Led by Christian values, Vincentians (volunteers) offer compassionate help to all individuals based on verified need. Since 1931, the Society of St. Vincent de Paul of San Mateo County has focused its care on marginalized families and individuals in emergency situations. The Society of St. Vincent de Paul of San Mateo County provides basic survival necessities, offers nourishment to the hungry and distributes critical financial support and resources to honor the dignity of each distinct individual served. Homelessness prevention is a primary focus in eliminating suffering. SVdP provides employment for the marginalized, ministers to victims and the incarcerated, and houses previously incarcerated women in a safe home. Organized into 34 small working groups called conferences, over 1,000 volunteers serve every part of San Mateo County. Aid is given regardless of age, gender, race or creed. The Society s main office provides administrative and program support. Description of Program and Supporting Services: The Society turns compassion into action through the following programs and support services, details of which are included in the accompanying financial statements: Direct Services Direct Services are SVdP s largest programs. Aid is primarily given through SVdP s Peninsula Family Resource Center (PFRC), and SVdP s Homeless Help Centers. SVdP s PFRC is a homelessness prevention program providing rent and utility payments, food, transportation assistance and addresses other basic human needs through home visits made by Vincentians throughout all areas of San Mateo County. Calls for assistance are received through a central helpline and from collaborating county service agencies. 7

10 1. Organization and Operations: (continued) Description of Program and Supporting Services: (continued) 2. SVdP s Homeless Help Centers, strategically located in South San Francisco, San Mateo and Redwood City, offer basic survival necessities, such as a hot meal and food, clothing, sleeping bags, bus tokens, identification cards, laundry and mail services. In addition to providing emergency motels for special needs such as weather, hospital discharge, etc. SVdP is also the daily vouchering agency for beds at San Mateo County shelters. Restorative Justice SVdP s Restorative Justice Ministry works to heal both the victim and offender, in order to regain the trust of the community. Victims and their families are supported. SVdP s Jail Chaplain and volunteers offer pastoral care to incarcerated men, women and youth. SVdP s Catherine s Center is a residential safe home for women recently released from jail or prison. The purpose of the program is to teach participants to apply restorative justice principles in their own lives. A case manager coordinates support for the increasing number of program alumnae to help reduce their risk of recidivism. Stores SVdP s Stores in Daly City, South San Francisco, San Mateo and Redwood City make available low-cost and no-cost quality goods. The four thrift stores, and donation pick-up service offered in San Francisco, San Mateo and Santa Clara Counties, provide employment and job training for the most marginalized. Free vouchers are given through SVdP s PFRC home visits and at SVdP s Homeless Help Centers to help people shop at SVdP s stores for clothes, beds and basic furnishings at no charge. SVdP s stores also support an electronic and merchandise re-cycling program for the benefit of the community. Fund Raising Fundraising expenses include the necessary costs to encourage and secure financial support from individuals, foundations and corporations. 8

11 1. Organization and Operations: (continued) Description of Program and Supporting Services: (continued) Management and General Management and general expenses include those expenses that are not directly identifiable with any other specific function but provide for the overall support and direction of the Society. This includes the functions necessary to maintain an equitable employment program, manage the financial and budgetary responsibilities of the Society, and other similar functions. 2. Summary of Accounting Policies: Basis of Accounting: The financial statements have been prepared on the accrual basis of accounting. Accordingly all significant receivables, payables and other significant liabilities are reflected in these financial statements. Basis of Presentation: The financial statements are presented on the basis of permanently restricted net assets, temporarily restricted net assets and unrestricted net assets pursuant to Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. 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. Such estimates include inventory valuation, depreciable lives of long lived assets and the value of donated assets and services. Cash and Cash Equivalents: Cash and cash equivalents includes cash on hand, cash in checking and savings accounts and certificates of deposit. Certificates of deposit are carried at market value. For the purpose of the statements of cash flows, cash equivalents include highly liquid debt instruments with original maturities of three months or less. 9

12 2. Summary of Accounting Policies: (continued) Investments: Investments in equity securities with readily determinable fair values and all investments in debt securities are measured at fair value in the statement of financial position. Investment income or loss (including interest, dividends and gains and losses on investments,) is included in the statement of activities as increases or decreases in unrestricted net assets unless the income is restricted by the donor or by law. Inventory: Inventory consists primarily of bed sets and mattresses and is stated at the lower of cost or market using the first-in-first-out convention. Donated Merchandise: The Society regularly accepts donated merchandise from the general public for resale in its thrift stores. The nature and quality of the merchandise donated varies considerably and are valued at fair market value. The value of these donations is not recorded in the books of the Society until sold or provided freely to the needy. Income is not recognized at time of receipt, and cost is not recognized at time of sale of the merchandise. The exception is vehicles, household furniture and appliances whose value is recorded in the books. The Society also benefits from the donated services of a number of individuals in the provision of its services. Contributions of services are recognized if the services received (1) create or enhance nonfinancial assets or, (2) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. During 2008 volunteers donated approximately 144,000 hours, (2007: 169,000 hours), the value of which is not recorded in the books of the Society because they do not meet the criteria for recognition. Property and Equipment and Depreciation: Property and equipment in excess of $1,000 is recorded at cost or, if donated, the fair market value on the date of donation. Depreciation of property and equipment is provided over the estimated useful lives (ranging from three to ten years for furniture, equipment and automobiles, forty years for buildings and the lesser of the useful life or remaining term of the lease for leasehold improvements) of the respective assets on a straight-line basis. 10

13 2. Summary of Accounting Policies: (continued) Functional Allocation of Expenses: The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of functional expenses. Accordingly, certain costs have been allocated, based on periodic time and expense reports, among the programs and supporting services benefited. Pledges Receivable: Pledges receivable are recognized as revenues in the period when the Society is notified that a pledge has been made. Certain pledges are restricted to specific purposes and are recognized only when the conditions on which they depend are substantially met and the pledges become unconditional, or the donor releases the funds for use in other areas. The Society has not recorded an allowance for doubtful pledges as it considers all such pledges to be collectible. Advertising: Advertising costs are expensed as incurred. The Society recorded public relations and advertising expense of $27,674 and $14,216 for the years ended and 2007, respectively. Tax Exempt Status: The Society has been granted tax-exempt status by the Internal Revenue Service and the California Franchise Tax Board under a group exemption given to all charitable and religious institutions operated, supervised, or controlled by or in connection with the Roman Catholic Church in the United States appearing in the Official Catholic Directory. Under this ruling the Society is not a private foundation. The Society has been classified as a nonprofit public benefit corporation by the Secretary of State of the State of California. The Society is also registered with the Registry of Charitable Trusts of the Office of the Attorney-General of the State of California. The IRS has classified the Society as a 501(c)(3) organization. In December 2008 the Society applied for separate 501(c)(3) tax-exempt status from the Internal Revenue Service. No ruling has yet been received. 11

14 3. Trust Income: The Society is a co-beneficiary, with Guide Dogs for the Blind, of a testamentary trust created under the will of Edna Palmuth, which is administered by Wells Fargo Bank. The Society and Guide Dogs for the Blind share equally in the income of the trust. The Society is also a co-beneficiary, with San Francisco Society for the Propagation of the Faith, of a testamentary trust created under the McKeever Family Trust which is administered by Wells Fargo Bank. The Society and San Francisco Society for the Propagation of the Faith share equally in the income of the trust. 4. Legacy Receivable: During fiscal year 2007, the Society received notification that it was the beneficiary of part of the estate of a donor. The bequest included a fractional interest in a mobile home park which was valued at $76,000. The Society may sell or retain its interest in the mobile home park at its option. $500,665 was received during the year, and $152,125 is the outstanding receivable at. The Society has received the remaining amounts from the estate in December 2008 (see subsequent event footnote). 5. Property and Equipment: Property and equipment is summarized as follows: Land and buildings $2,974,850 $2,941,916 Furniture and equipment 217, ,958 Vehicles 442, ,192 Leasehold improvements 51,477 51,477 3,685,921 3,583,543 Less accumulated depreciation and amortization 1,032, ,818 $2,652,962 $2,682,725 Included in land and buildings are properties used as thrift stores and homeless help centers in Redwood City, South San Francisco and San Mateo and the administrative office in San Mateo. Certain of the properties have been pledged as security for the long-term-debt. See Note 6. Depreciation and amortization expense for the years ended and 2007 was $139,984 and $108,041, respectively. 12

15 6. Long Term Debt: At September 30, long-term debt consisted of the following: Interest Rate Maturity Mortgage secured by building 8.875% 2011 $157,644 $207,811 Less current portion 54,805 50,167 Total Long Term Debt $102,839 $157,644 Scheduled payments of long-term debt are as follows: Year Ended September $ 54, , ,967 Total Long-Term Debt $157,644 Interest expense for 2008 was $16,435, (2007: $20,681). 7. Contingencies: From time to time, the Society is involved in certain legal actions arising in the normal course of its business. At there are no known actions which might have a material effect on the Society s financial position. 8. Vehicle Joint Venture: The Society is a member of a joint venture with other Particular Councils of the Society of St. Vincent de Paul in our area. In this venture, vehicles donated to the Society are processed directly by the venture with the Society receiving allocable proceeds net of selling costs. 9. Subsequent Events: The interest in the mobile home park referred to in Note 4 was sold in December The sale of the interest generated proceeds of $76,000. The receivable has been settled in full. 13

16 9. Subsequent Events: (continued) In October 2008, due to the uncertain market, the Society converted the majority of their investments to U.S. Treasury Notes and cash equivalents. The Society retained corporate bonds with a cost basis of $63,000. The Portfolio declined in value by $61,000 in October 2008 due to market conditions. 10. Commitments: The Society leases certain facilities under non-cancellable operating leases and certain other facilities on a month-to-month basis. Management expects that in the normal course of business, the leases will be renewed under available options or replaced by other leases. Minimum rental commitments under noncancellable leases at September 30 were: Year Ended September $ 63, , ,867 $183,313 Rental expense for the years ended and 2007 was $66,093 and $65,732 respectively. 11. Investments: Investments are stated at fair value. At September 30, securities consisted of the following: Cost Fair Value Cost Fair Value U.S. Treasuries $107,730 $111,766 $137,700 $ 149,199 Corporate bonds 259, , , ,606 Equity securities 543, , , ,608 $910,343 $974,097 $906,582 $1,099,413 14

17 11. Investments: (continued) Interest and dividends earned on these securities and other interest bearing accounts amounted to $99,073 in 2008 and $68,914 in Realized gain amounted to $1,828 and $29,175 in 2008 and 2007 respectively. Unrealized gains/(loss) amounted to $(128,722) and $61,275 in 2008 and 2007 respectively. Investment management fees were $8,190, (2007: $6,655). 12. Concentration of Credit Risk: Financial instruments that potentially subject the Society to credit risk are limited to cash and bank certificates of deposit in excess of the federal insurance amount of $100,000. Cash at Merrill Lynch is insured to a maximum of $500,000. At the Society had approximately $90,694 excess of the insurance limit at banks. Federal insurance amount was temporarily increased to $250,000 in October Permanently Restricted Net Assets: Permanently restricted net assets at are restricted to the following purposes: P. Moriarty and R. Merry Restorative Justice Endowment $122,153 $128,122 Income from the endowment is being used to support the Society s Restorative Justice Program. 14. Temporarily Restricted Net Assets: Support that is restricted by a grantor agency or a donor is reported as an increase in unrestricted net assets if the restriction expires, or the conditions are met, 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, temporarily restricted net assets are reclassified to unrestricted net assets. 15

18 14. Temporarily Restricted Net Assets: (continued) At September 30 temporarily restricted net assets consist of:: Rosetta C. Miller fund $108,377 $124,009 Rent and other assistance 12,630 2,220 SVDP s Catherine s Center 547, ,359 FEMA rent assistance 9,582 8,772 Restricted to future periods 57,126 26,855 Total $735,007 $641,215 Under the terms of her will, the income from the estate of Rosetta C. Miller is restricted to the spiritual and material needs of people living within the boundaries of the parish of Our Lady of Perpetual Help Church in Daly City, California. Net assets released from restrictions during the year by incurring expenses satisfying the restricted purposes were as follows: Rent and other assistance $ - $27,280 Rosetta C. Miller fund 15,632 - Restricted to future periods 7,229 7,500 Total assets released from restrictions $22,861 $34, Designated Net Assets: Certain funds have been set aside by the Society s board for the following purposes Conferences $466,422 $321,760 Property reserve 254, ,746 Property repair and maintenance 49,750 87,994 Stores capital reserve 75,000 75,000 Total $845,610 $729,500 16

19 16. In-Kind Donations: The Society regularly accepts donated food, professional services and other items from the general public for use in its programs. During 2008 the Society received approximately $1,639,000, (2007: $1,553,000) in such items, which have been recorded in the books of the Society. 17. Reclassifications Certain items in the financial statements for the year ended September 30, 2007 have been reclassified to conform to the 2008 presentation. Such reclassifications have had no effect on the net assets or changes in net assets as previously reported. 17