North Florida Council, Boy Scouts of America, Inc. (a non-profit organization) Jacksonville, Florida

Transcription

1 Jacksonville, Florida Consolidated Financial Statements

2 Table of Contents Page No. Independent Auditors' Report 1 Consolidated Statements of Financial Position 3 Consolidated Statements of Changes in Net Assets 4 Consolidated Statements of Functional Expenses 7 Consolidated Statements of Cash Flows 8 10

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5 Consolidated Statements of Financial Position ASSETS Operating Fund Capital Fund Endowment Fund Total, All Funds Cash $ 429,490 $ 378,664 $ 179,916 $ 49,346 $ 235,336 $ 195,693 $ 844,742 $ 623,703 Restricted cash 200, , , ,785 Accounts receivable 342, ,015 32,964 25,102 (162,103) (166,053) 213, ,064 Pledges receivable 143, , , , , ,904 1,069, ,223 Inventories 94,236 61, ,236 61,211 Prepaid expense 137,418 90, ,418 90,457 Investments 629, , ,851,073 11,059,550 11,480,567 11,706,940 Property and equipment, net of accumulated depreciation - - 6,421,410 5,213, ,421,410 5,213,906 $ 1,977,653 $ 1,932,990 $ 6,893,556 $ 5,861,205 $ 11,590,943 $ 11,297,094 $ 20,462,152 $ 19,091,289 LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses $ 83,984 $ 65,833 $ - $ 4,441 $ - $ - $ 83,984 $ 70,274 Deferred activities 88,376 18, ,376 18,435 Custodial accounts 223, , , ,981 Line of credit - - 1,425, , ,425, ,000 Total liabilities 395, ,438 1,425, , ,821, ,690 Net Assets: Unrestricted 1,370,048 1,446,823 3,099,050 2,880,067 3,337,779 3,444,875 7,806,877 7,771,765 Temporarily restricted 212, ,729 2,369,006 2,365, , ,621 3,013,354 3,024,236 Permanently restricted ,820,876 7,400,598 7,820,876 7,400,598 Total net assets 1,582,108 1,653,552 5,468,056 5,245,953 11,590,943 11,297,094 18,641,107 18,196,599 $ 1,977,653 $ 1,932,990 $ 6,893,556 $ 5,861,205 $ 11,590,943 $ 11,297,094 $ 20,462,152 $ 19,091,289 The accompanying notes are an integral part of this statement

6 Consolidated Statements of Changes in Net Assets For the years ended Operating Fund Capital Fund Endowment Fund Total, All Funds CHANGES IN UNRESTRICTED NET ASSETS: Direct public support: Friends of Scouting $ 677,276 $ 745,113 $ - $ - $ - $ - $ 677,276 $ 745,113 Project sales contributions , ,850 Capital Contributions , ,500 - Special events - gross 432, , , ,505 Less cost of direct benefits (166,032) (190,577) (166,032) (190,577) Net special events 266, , , ,928 Legacies and bequests ,635 12,485 6,635 12,485 Foundations and trusts 143, ,047 63,931 57, , ,694 Other direct support 24,116 31,914 4, ,027 31,914 Total direct public support 1,111,455 1,199,002 79,417 63,497 6,635 12,485 1,197,507 1,274,984 Indirect public support: United Way 305, , , ,743 Fees from government agencies 374, , , ,000 Total indirect public support 680, , , ,743 Revenue: Product sales 1,091,803 1,206, ,091,803 1,206,395 Less cost of goods sold (211,099) (206,535) (211,099) (206,535) Less commissions paid to units (427,701) (495,030) (427,701) (495,030) Net product sales 453, , , ,830 Investment income (loss) 709, ,385-66,229 (86,750) (325,102) 622, ,512 Camping revenue 843, , , ,353 Activity revenue 241, , , ,964 Other revenue 107, , ,335 2, , ,709 Total revenue 2,354,782 2,373, ,335 68,229 (86,750) (325,102) 2,754,367 2,116,368 Net assets released from restriction 171, ,351-2, , ,296 Total public support and revenue 4,318,132 4,414, , ,671 (80,031) (312,617) 4,803,853 4,236,391 The accompanying notes are an integral part of this statement

7 Consolidated Statements of Changes in Net Assets For the years ended Operating Fund Capital Fund Endowment Fund Total, All Funds Expenses Program services 3,362,252 3,334, , ,110 49,591 48,098 3,714,991 3,582,152 Support services Management and general 172, ,597 23,006 15,994 4,312 4, , ,773 Fundraising 679, ,373 96,964 67,762 17,968 18, , ,458 Total supporting services 852, , ,970 83,756 22,280 22, ,394 1,015,231 Charter and National service fees 59,356 59, ,356 59,456 Total expenses 4,273,752 4,303, , ,866 71,871 70,603 4,768,741 4,656,839 Increase (decrease) in unrestricted net assets 44, , ,634 (148,195) (151,902) (383,220) 35,112 (420,448) CHANGES IN TEMPORARILY RESTRICTED NET ASSETS: Direct public support: Friends of Scouting 160, , , ,236 Capital Campaign - - 3, , , ,180 Special events - gross 8,950 6, ,950 6,650 Other direct support 5,741 3, ,741 3,425 Total direct public support 174, ,311 3, , , ,491 Revenue: Investment income (loss) 1,931 8, (19,249) (112,241) (17,318) (103,423) Total revenue 1,931 8, (19,249) (112,241) (17,318) (103,423) Net assets released from restrictions (171,498) (144,351) - (2,945) (84) - (171,582) (147,296) Total public support and revenue 5,331 42,778 3, ,235 (19,333) (112,241) (10,882) 258,772 Increase (decrease) in temporarily restricted net assets 5,331 42,778 3, ,235 (19,333) (112,241) (10,882) 258,772 The accompanying notes are an integral part of this statement

8 Consolidated Statements of Changes in Net Assets For the years ended Operating Fund Capital Fund Endowment Fund Total, All Funds CHANGES IN PERMANENTLY RESTRICTED NET ASSETS: Direct public support: Other direct support ,000 48, ,000 48,000 Revenue: Gain (loss) on investments (106,722) (575,444) (106,722) (575,444) Total direct public support ,278 (527,444) 420,278 (527,444) Increase in permanently restricted net assets ,278 (527,444) 420,278 (527,444) INCREASE (DECREASE) IN TOTAL NET ASSETS 49, , , , ,043 (1,022,905) 444,508 (689,120) NET ASSETS, beginning of year Unrestricted net assets 1,446,823 1,370,164 2,880,067 3,054,140 3,444,875 3,767,909 7,771,765 8,192,213 Temporarily restricted net assets 206, ,951 2,365,886 2,037, , ,862 3,024,236 2,765,464 Permanently restricted net assets ,400,598 7,928,042 7,400,598 7,928,042 Total net assets, beginning of year 1,653,552 1,534,115 5,245,953 5,091,791 11,297,094 12,259,813 18,196,599 18,885,719 TRANSFERS AND ADJUSTMENTS (121,155) (34,308) 76,349 (25,878) 44,806 60, NET ASSETS, end of year Unrestricted net assets 1,370,048 1,446,823 3,099,050 2,880,067 3,337,779 3,444,875 7,806,877 7,771,765 Temporarily restricted net assets 212, ,729 2,369,006 2,365, , ,621 3,013,354 3,024,236 Permanently restricted net assets ,820,876 7,400,598 7,820,876 7,400,598 Total net assets, end of year $ 1,582,108 $ 1,653,552 $ 5,468,056 $ 5,245,953 $ 11,590,943 $ 11,297,094 $ 18,641,107 $ 18,196,599 The accompanying notes are an integral part of this statement

9 Consolidated Statements of Functional Expenses For the years ended Total Program and Supporting Services Supporting Services Program Management Fund Services and General Raising Total Employee compensation: Salaries $ 1,351,447 $ 81,107 $ 337,947 $ 419,054 1,770,501 $ 1,875,374 Employee benefits 234,191 18,106 75,443 93, , ,177 Payroll taxes 117,765 7,077 29,486 36, , ,636 Employee related expenses 18, ,327 2,886 21,636 24,149 Total employee compensation 1,722, , , ,052 2,274,205 2,401,336 Other expenses: Professional fees 145,349 31,764 27,324 59, , ,295 Supplies 379, ,581 23, , ,090 Telephone 43,795 2,229 9,287 11,516 55,311 50,969 Postage and shipping 11, ,109 8,706 19,722 28,258 Occupancy 287,943 3,012 19,217 22, , ,318 Rental and maintenance of equipment 67,393 2,799 11,714 14,513 81,906 78,075 Publications and media 65, ,441 21,200 86,255 84,198 Travel 201,861 8,074 33,628 41, , ,631 Conferences and meetings 30,036 1,089 12,228 13,317 43,353 42,608 Assistance to individuals 88, ,523 67,216 Recognition awards 201,352 6,159 31,487 37, , ,957 Interest expense 30, , Insurance 108,409 8,205 26,839 35, , ,939 Other expenses 78,407 5,752 33,518 39, , ,616 Total other expenses 1,738,727 70, , ,176 2,066,903 1,930,312 Expenses before depreciation 3,460, , , ,228 4,341,108 4,331,648 Depreciation 254,111 22,097 92, , , ,735 Total functional expenses $ 3,714,991 $ 199,744 $ 794,650 $ 994,394 $ 4,709,385 $ 4,597,383 The accompanying notes are an integral part of this statement

10 Consolidated Statements of Cash Flows For the years ended CASH FLOWS FROM OPERATIONS Operating Fund Capital Fund Endowment Fund Total, All Funds Change in net assets $ 49,711 $ 153,745 $ 145,754 $ 180,040 $ 249,043 $ (1,022,905) $ 444,508 $ (689,120) Adjustments to reconcile change in net assets to net cash flows from operations Depreciation , , , ,735 Amortization (184) (398) - - (1,377) (4,490) (1,561) (4,888) (Gain) loss on sale of investments 14,187 (6,974) ,870 (83,974) 172,057 (90,948) Unrealized (gain) loss in investments (31,236) 39, (418,297) 657,201 (449,533) 696,619 (Gain) loss on disposal of property - - (486,335) (486,335) - and equipment Change in restricted cash (201) 99, (201) 99,784 Change in accounts receivable 68,856 (48,453) 305,321 (209,074) (462,683) 79,257 (88,506) (178,270) Change in inventory (33,025) 2, (33,025) 2,221 Change in prepaid expenses (47,363) (11,420) (46,961) (11,420) Change in accounts payable and accrued expenses 18,151 15,127 (4,441) 4, ,710 19,568 Change in deferred activities 69,941 (907) ,941 (907) Change in custodial accounts 28,015 (18,879) (811) ,204 (18,879) Transfers and adjustments (121,155) (34,308) 76,349 (25,878) 44,806 60, Net cash flows from operations 15, , , ,264 (430,638) (314,725) (10,425) 89,495 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment - - (1,590,230) (170,889) - - (1,590,230) (170,889) Construction in progress (1,399,855) (1,399,855) Proceeds from sale asset , ,784 - Purchases of investments (737,579) (559,461) - - (11,430,359) (6,906,194) (12,167,938) (7,465,655) The accompanying notes are an integral part of this statement

11 Consolidated Statements of Cash Flows For the years ended Operating Fund Capital Fund Endowment Fund Total, All Funds Proceeds from sale of investments 772, , ,900,640 6,872,751 12,673,348 7,457,948 Net cash flows from investing activities 35,129 25,736 (1,089,446) (1,570,744) 470,281 (33,443) (584,036) (1,578,451) CASH FLOWS FROM BORROWING ACTIVITIES Proceeds from line of credit, net , , , ,000 Net cash flows from borrowing , , , ,000 NET INCREASE (DECREASE) IN CASH 50, , ,570 (745,480) 39,643 (348,168) 221,039 (878,956) CASH, beginning of year 378, ,972 49, , , , ,703 1,502,659 CASH, end of year $ 429,490 $ 378,664 $ 179,916 $ 49,346 $ 235,336 $ 195,693 $ 844,742 $ 623,703 The accompanying notes are an integral part of this statement

12 1. Reporting Entity and Nature of Activities The North Florida Council, Boy Scouts of America, Inc. (Council), is a Florida nonprofit organization operating under a Charter from the Boy Scouts of America, Inc. The Council provides the program of Scouting to young men ages 7 through 21, and young women ages 14 through 21 in 17 counties in Northeast Florida. The program utilizes age appropriate curriculum and methods as developed by the Boy Scouts of America, Inc. The Council headquarters is located in Jacksonville, Florida. A local volunteer elected executive board is the governing and reviewing authority for the Council s activities. It is the mission of the North Florida Council, Boy Scouts of America, Inc., that it shall promote, within the territory covered by the charter from time to time granted it by the Boy Scouts of America and in accordance with the Congressional Charter, Bylaws, and Rules and Regulations of the Boy Scouts of America, the Scouting program of promoting the ability of boys and young men and women to do things for themselves and others, training them in Scoutcraft, and teaching them patriotism, courage, self-reliance, and kindred virtues, using the methods which are now in common use by the Boy Scouts of America. The Council s web site address is Its primary headquarters is located at 521 South Edgewood Avenue, Jacksonville, Florida 32205; phone Summary of Significant Accounting Policies Principles of Consolidation The Council has control over and an economic interest in a Trust Fund, which results in the accounts of the Trust Fund being consolidated with those of the Council in the accompanying consolidated financial statements. All intercompany balances and transactions have been eliminated in the consolidation. The Council and the Trust Fund are hereinafter collectively referred to as the Organization. Basis of Accounting The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables and other liabilities. Basis of Presentation In accordance with accounting principles generally accepted in the United Stated, the Organization reports 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. Fund Accounting To ensure observance of limitations and restrictions placed on the use of resources available to the Organization, the accounts of the Organization are maintained in accordance with fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds established according to their nature and purpose. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group

13 The assets, liabilities, and net assets of the Organization are reported in three self balancing fund groups: General Operating fund represents unrestricted resources and the portion of expendable funds that are available for the Organization s day-to-day operations. Capital fund represents all property and equipment used by the Organization and includes the purchase of property and equipment with legally restricted funds that have not yet been expended. Endowment fund represents resources that are set aside for the long-term growth funds to support the operation of the Organization. Contributions Pledges receivable for contributions are recognized upon notification of a donor s unconditional promise to give to the Organization. An allowance for uncollectible promises to give is recorded based on an analysis of collection histories and on reviews of the credit worthiness of major donors. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donorrestricted contributions are reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restrictions. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the consolidated statement of changes in net assets as assets released from restrictions. Donated Materials, Long-lived Assets, Facilities & Services Donated land, buildings, equipment, investments, and other noncash donations are recorded as contributions at their fair market value at their date of donation. The Organization reports the donations as unrestricted support, unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets must be used, and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service. Donated services that do not require specialized skills or enhance nonfinancial assets are not recorded in the accompanying consolidated financial statements because no objective basis is available to measure the value of such services. A substantial number of volunteers have donated significant amounts of their time to the Organization s program services and its fundraising campaigns, the value of which is not recorded in the accompanying consolidated financial statements. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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 consolidated financial statements and the reported amounts of revenues and

14 expenses during the reporting period. Actual results could differ from those estimates. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the consolidated financial statements. Recognition of Pledges Pledges are recorded when received, and allowances are provided for amounts estimated to be uncollectible. The allowance for uncollectible pledges totaled $113,161 and $98,649 at December 31, 2016 and Friends of Scouting enrollments consist of contributions received from individuals and organizations that want to be associated with the Organization through their financial support. There is no requirement for Friends of Scouting to pay an annual membership fee. Inventories Inventory consists of scouting and other items available for resale and is stated at the lower of cost are market determined by the first-in, first-out (FIFO) method. The Organization uses hand receipts to account for the inventory. Donated items are recorded at estimated fair value at the date of donation. Advertising Advertising costs are charged to operations in the period in which the advertisement is placed. Advertising for 2016 and 2015 amounted to $75,334 and $36,886, respectively. Investments Investments consist primarily of assets invested in marketable equity and debt securities, and moneymarket accounts. The Organization accounts for investments in accordance with the FASB standard for investments held by not-for-profit organizations. This standard requires that investments in equity securities with readily determinable fair values and all investments in debt securities be measured at fair value in the consolidated Statement of Financial Position. Fair value of marketable equity and debt securities is based on quoted market prices. The realized and unrealized gain or loss on investments is reflected in the consolidated Statement of Changes in Net Assets. Investments are exposed to various risks such as significant world events, interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the fair value of investments will occur in the near term and that such changes could materially affect the amounts reported in the consolidated Statement of Financial Position. Property and Equipment The Organization capitalizes all expenditures in excess of $2,500 for property and equipment at cost. Contributed property and equipment is recorded at the estimated fair value on the date the gift was acquired. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. Gains and losses on the disposition of fixed assets are recorded as income or loss at the difference between the gross proceeds received and remaining net book value. Construction-in-progress represents costs incurred on the construction of assets that have not been completed or placed in service as of the end of the year

15 Long-lived assets held and used by the Organization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability would be performed following generally accepted accounting principles. Income Taxes The Organization is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and comparable state law as a charitable organization, whereby only unrelated business income, as defined by Section 509(a)(1) of the Code is subject to federal income tax. The Organization currently has no unrelated business income. Accordingly, no provision for income taxes has been recorded. Statements of Cash Flows For the purpose of the statement of cash flows, the Organization considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. Restricted Cash Cash has been placed in a separate account and pledged to Wells Fargo Bank, N.A. as additional security for the revolving line of credit. These funds were set aside at the request of the lending institution as part of the execution of the revolving line of credit. The restricted cash balance was $200,986 and $200,785 at, respectively. Functional Allocation of Expenses The cost of providing the various programs and other activities has been summarized on a functional basis in the statement of functional expenses. Expenses that relate to a specific function are charged directly to that function. Those expenses that cover more than one function are allocated among the programs and supporting services benefited based on a time study conducted by the Organization. The results of this allocation are added to the previously directly allocated expenses to create the total expense number by functional category. In accordance with the policy of the National Council of the Boy Scouts of America (the National Council ), the payment of the charter fee to the National Council is not allocated as a functional expense. Endowment Spending Policy The Organization s Endowment Fund Corporate Trustee shall pay to the North Florida Council, Boy Scouts of America a quarterly distribution. In making this computation, the fair market value of the assets in the General Fund shall be determined in accordance with recognized asset valuation principles, consistent with the valuation methods regularly used by the Corporate Trustee. In regards to the General Fund, the Trustee shall pay an annualized distribution rate of no more than four and one-half percent (4.5%) based upon the rolling twelve (12) quarter average market value of the General Fund as of the last day of each quarter (March 31/June 30/September 30/December 31). In regards to the Baker Fund, the Trustee shall pay the net income earned each quarter. It shall be the responsibility of the Trust Advisory Committee and Corporate Trustee to periodically review the spending policy against actual returns in order to make any necessary adjustments

16 In January 2015, the Board authorized additional distribution at a rate of no more than one and onehalf percent (1.5%), based upon the rolling twelve (12) quarter average market value of the General Fund. The additional distribution is restricted for the use to the strategies and activities outlined in the Council s approved Business Plan to increase the number of youth enrolled and engaged in scouting. Additional distribution will remain in effect until the Board acts to amend it, or until January 1, Investment Policy The Organization s primary objective of the Endowment Fund investment portfolio is to generate long-term, total rate of return (income plus appreciation) that will permit real growth in Endowment Fund assets. The Organization views its Endowment Fund as permanent that is, having a perpetual life. Therefore, the Organization is willing to rely on projections of long-term market performance and not be overly concerned by short-term reversals in the market. The general investment policy shall be to diversify investments within both equity and fixed-income securities to provide a balance that will enhance total return while avoiding undue risk concentration in any single asset class or investment category. The investment of certain portions of the Endowment Fund in the future may be restricted or otherwise designated and thus not subject to the full context of the investment policy. The Endowment Fund shall be invested with the care, skill, prudence and diligence under the prevailing circumstances that a prudent person acting in like capacity and familiar with such matters would use in the investment of Endowment Funds of like character and with like aims. The investments of the Endowment Fund shall be so diversified as to minimize the risk of large losses. Understanding that risk is present in all types of securities and investment styles, the Endowment Fund Committee recognizes that some risk is necessary to produce long-term investment results that are sufficient to meet the Endowment Fund s objectives. However, the investment managers are to make reasonable efforts to control risk. Investment guidelines allow for common stock purchases to be limited to marketable securities of companies having a minimum market capitalization of $500,000,000 and quoted on a major exchange or in the over-the-counter markets. Fixed income security purchases will be limited to bonds issued in the U.S. Treasury, government agencies and corporations carrying a credit rating of no less than investment grade as defined by Standard & Poor s or its equivalent as defined by other recognized rating agencies. The investment guidelines should be interpreted as only prohibiting the purchase of bonds rated below investment grade. If lower rated bonds are already held within the portfolio, it is the Committee s discretion to hold or sell according to the money manager s recommendation. Reclassifications Certain reclassifications have been made to the 2015 consolidated financial statements information to conform to the current-year presentation. These reclassifications had no effect on the increase in net assets for

17 3. Endowment Fund The Organization s Endowment Fund includes donor-restricted endowment funds. As required by accounting principles generally accepted in the United States, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Unrestricted net assets, identified by the Organization s board of directors to be used for future investment and growth, are included in unrestricted net assets board-designated. The Organization has interpreted the State Prudent Management of Institutional Funds Act ( SPMIFA ) 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, the Organization classifies as permanently restricted net assets: (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by SPMIFA. In accordance with SPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: (1) The duration and preservation of the fund (2) The purposes of the Organization and the donor-restricted endowment fund (3) General economic conditions (4) The possible effect of inflation and deflation (5) The expected total return from income and the appreciation of investments (6) Other resources of the Organization (7) The investment policies of the Organization

18 Changes in the endowment net assets for the years ended are as follows: Unrestricted- Non-Board- Designated Unrestricted- Board- Designated Temporarily Restricted Permanently Restricted Total Endowment Fund Net Assets December 31, 2014 $ 2,695,408 $ 1,072,501 $ 467,798 $ 8,024,106 $ 12,259,813 Net asset reclassification 60,186-96,064 (96,064) 60,186 Endowment Fund, after reclassification 2,755,594 1,072, ,862 7,928,042 12,319,999 Investment return (236,561) (88,541) (112,241) (575,444) (1,012,787) Contributions 12, ,000 60,485 Appropriation of endowment assets for expenditure (70,603) (70,603) Endowment Fund Net Assets December 31, 2015 $ 2,460,915 $ 983,960 $ 451,621 $ 7,400,598 $ 11,297,094 Net asset reclassification 44,890 - (84) - 44,806 Endowment Fund, after reclassification 2,505, , ,537 7,400,598 11,341,900 Investment return (59,919) (26,831) (19,249) (106,722) (212,721) Contributions 6, , ,635 Appropriation of endowment assets for expenditure (71,871) (71,871) Endowment Fund Net Assets December 31, 2016 $ 2,380,650 $ 957,129 $ 432,288 $ 7,820,876 $ 11,590,

19 From time to time, the fair value of assets associated with individual donor-restricted endowments funds may fall below the level the donor or SPMIFA requires the Organization to retain as permanently restricted. Deficiencies of this nature result from unfavorable market fluctuations and would be included in unrestricted net assets. There were no deficiencies at December 31, 2016 or Fair Value Measurements Generally accepted accounting principles clarify that fair value is an exit price, representing the amount that would be received to sell an asset in an orderly transaction between market participants. Under this guidance, fair value measurements are not adjusted for transaction costs. This guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this guidance are described below. Level 1 Valuations for assets traded in active exchange markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 Valuations for assets traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets which use observable inputs other than Level 1 prices, such as quoted prices for similar assets; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. As required by this guidance, the Organization does not adjust the quoted price for such instruments. The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid equities, state, municipal and provincial obligations, and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy

20 Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence. In the absence of such evidence, management's best estimate is used. The following tables set forth the Organization s assets that were accounted for or disclosed at fair value on a recurring basis as of. Fair Value Measurement at Reporting Date Using Fair Value (Level 1) (Level 2) (Level 3) December 31, 2016 Corporate bonds $ 2,655,827 $ - $ 2,655,827 $ - Government bonds 2,071,263-2,071,263 - Mutual funds 1,177,419-1,177,419 - Equity securities 5,367,415 5,367, $ 11,271,924 $ 5,367,415 $ 5,904,509 $ - December 31, 2015 Corporate bonds $ 3,435,994 $ - $ 3,435,994 $ - Government bonds 1,915,115-1,915,115 - Mutual funds 1,478,871-1,478,871 - Equity securities 4,668,317 4,668, $ 11,498,297 $ 4,668,317 $ 6,829,980 $

21 5. Pledges Receivable Pledges receivable at December 31, 2016, and 2015 consist of the following: Restricted Capital Campaign $ 257,917 $ 572,449 Friends of Scouting 249, ,237 Scout Reach endowment 156, ,639 Restricted Properties Maintenance Fund 500,000 45,265 Other unrestricted promises 18,437 24,283 1,182,923 1,043,872 Less: allowanced for uncollectible pledges receivable (113,161) (98,649) $ 1,069,763 $ 945,223 Pledges receivable due in: Less than one year $ 882,883 $ 542,541 One to five years 300, ,331 $ 1,182,973 $ 1,043, Investments Fair values of investments are measured on a recurring basis with quoted prices in active markets. The Organization's investments consist of fixed income securities, equity securities, and real estate. Investments at December 31, 2016 are summarized as follows: Market Unrealized Cost Value Gain/(Loss) Corporate bonds $ 3,611,779 $ 2,655,827 $ (955,952) Government bonds 2,086,856 2,071,263 (15,593) Mutual funds 1,281,329 1,177,419 (103,910) Equity securities 4,983,253 5,367, ,162 11,963,217 11,271,924 (691,293) Other investments Land held for sale 208, ,643 - $ 12,171,860 $ 11,480,567 $ (691,293) Net realized loss on the sale of investment securities was $172,057 for December 31, Mangagement fees for 2016 were $71,871 and one easement was sold during the year

22 Investments at December 31, 2015 are summarized as follows: Market Unrealized Cost Value Gain/(Loss) Corporate bonds $ 3,616,482 $ 3,435,994 $ (180,488) Government bonds 1,931,040 1,915,115 (15,925) Mutual funds 1,676,648 1,478,871 (197,777) Equity securities 4,445,688 4,668, ,629 11,669,858 11,498,297 (171,561) Other investments Land held for sale 208, ,643 - $ 11,878,501 $ 11,706,940 $ (171,561) Net realized gain on the sale of investment securities was $1,235,315 for December 31, Mangagement fees for 2015 were $69,728. No easements were sold during the year. 7. Property and Equipment Property and equipment at December 31, 2016, and 2015 are summarized as follows: Estimated Use Life Land - $ 1,146,670 $ 1,146,670 Buildings and improvements: Camp Echockotee ,324,682 1,312,973 Camp Shands ,878,352 3,006,443 Scout Service Center ,316,823 1,313,488 Guana - 38,150 38,150 Furniture, fixtures, and equipment 5-7 1,078,720 1,114,415 Vehicles , ,792 Aquatic equipment , ,799 11,269,289 8,389,730 Less accumulated depreciation (4,847,880) (4,699,908) 6,421,410 3,689,823 Construction in progress - 1,524,084 $ 6,421,410 $ 5,213, Line of Credit The Company has a revolving line of credit with Wells Fargo Bank, N.A., allowing for borrowings up to $1,600,000, with interest at a fixed rate of 2.50%, with interest payable monthly. The loan

23 requires periodic principal reduction payments such that the outstanding balance does not exceed $1,400,000 at March 11, 2017, $1,200,000 at March 11, 2018, $600,000 at March 11, 2019, and paid off by March 11, The line of credit is collateralized by a savings account deposited at the financial institution and specifically identified securities. The collateral value at December 31, 2016 is $1,797,762. At, the Organization had drawn $1,425,500 and $610,000, respectively, on the line of credit. 9. Operating Lease The Organization has entered into operating lease agreements for office equipment. One lease began in January 2013 and requires sixty-three equal monthly payments of $1,250. Another operating lease began April 2013 and requires sixty equal monthly payments of $460. Estimated lease payments under non cancelable operating leases for the next five years and in the aggregate are as follows: 2017 $ 20, $ 8,090 28, Restrictions on Net Assets Temporary Restrictions Although restricted contributions typically are reported as support that increases restricted net assets, they may be reported as unrestricted support if the restrictions are met in the same reporting period, the policy is followed consistently, and it is disclosed. Net assets were temporarily restricted for the following purposes: Operating Fund: Unspent donations with donor imposed specific purpose $ 212,060 $ 206,729 Capital Fund: Unspent donations with donor imposed specific purpose $ 2,369,006 $ 2,365,886 Endowment Fund: The 1910 Society - income $ 155,228 $ 184,317 Tom Baker Building Maintenance Fund 84,650 96,064 Ringhaver pool 3,327 3,411 Camp Shands improvements (formerly Camp Guana) 189, ,829 $ 432,288 $ 451,621 Plans for Camp Guana improvements have been abandoned and these funds will be used for improvements to Camp Shands in the near future

24 Permanent Restrictions The Organization has interpreted state law as requiring the preservation of the permanent funds, unless explicit donor stipulations express otherwise. The permanent restrictions on net assets include endowment fund investments held indefinitely. All investment income, excluding capital gains and losses realized in the endowment account, if not donor restricted, are considered expendable for Organization operations. Net assets were permanently restricted for the following purposes: The 1910 Society $ 3,696,478 $ 3,714,164 ScoutReach Endowment 2,492,998 2,551,827 James E. West Fellowship Program 736, ,436 Property Maintenance Fund 500,000 - Tom Baker Building Maintenance Fund 200, ,000 Bert Reid Campership Fund 117, ,885 MacLean Teachers' Breakfast 77,338 79, $ 7,820,876 $ 7,400,598 The Property Maintenance Fund has not been funded as of December 31, The funding is contingent on the Organization matching the gift in its entirety before the gift will be paid. 11. Net Assets Released from Restrictions Net assets were released from donor restrictions during 2016 and 2015 by incurring expenses satisfying the restricted purposes or by the occurrence of other events specified by donors. Net assets released were donated by the following: Friends of Scouting $ 149,191 $ 118,941 Special events 6,650 11,580 Other direct contributions and revenues 15,741 16, Retirement Plan $ 171,582 $ 147,296 The National Council, BSA has a qualified contributory retirement plan administered at the national office, which covers employees of the National Council, including the North Florida Council, Boy Scouts of America, Inc. The plan name is the Boy Scout of America Master Pension Trust Boy Scouts of America Retirement Plan for Employees and covers all employees who have completed one year of service and who have agreed to make contributions. Eligible employees contribute two percent (2%) of compensation and the Council contributes an additional seven percent (7%) to the plan. Pension expenses for the years ending, were $86,812 and $98,147, respectively.

25 The actuarial information for the multi-employer plan as of February 1, 2014, indicates that it is in compliance with ERISA regulations regarding funding. The assumed rate of return used in determining actuarial present values of accumulated benefits was four percent (4%). The mortality assumption was changed from the RP-2000 Mortality tables for annuitants and non-annuitants projected using Scale AA to 2019 and 2027, to the RP-2000 Mortality tables for annuitants and nonannuitants projected using Scale AA to 2020 and The actuarial valuation includes all Plan amendments as of February 1, The Organization has established an Eligible 457(b) Deferred Compensation Plan for the benefit of a select group of highly compensated employees. 13. Affiliates The Organization is obligated to pay an annual administrative and charter fee to the National Boy Scouts of America. 14. Risk Concentrations The Organization maintains several bank accounts at two banks. Accounts at institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of December 31, 2016, the uninsured portion of the balances was $1,048, Fees from Government Agencies The Organization receives a substantial amount of its support from government agencies. This support is subject to change with little notice or inadequate funding to pay for the related cost. A significant reduction in the level of its support, if this were to occur, may have an effect on the Organization s programs and activities. 16. Supplemental disclosures of Cash Flow Statement During the years ended cash payments for interest expense were $30,114 and $142, respectively. 17. Evaluation of Subsequent Events The Organization has evaluated subsequent events through April 12, 2017, the date which the financial statements were available to be issued