ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL Bloomington, Illinois. FINANCIAL STATEMENTS September 30, 2016 and 2015

Transcription

1 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL Bloomington, Illinois FINANCIAL STATEMENTS September 30, 2016 and 2015

2 TABLE OF CONTENTS PAGE INDEPENDENT ACCOUNTANTS REVIEW REPORT 1 FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities and Changes in Net Assets 4 Statements of Cash Flows 6 Notes to the Financial Statements 7 SUPPLEMENTARY INFORMATION Schedule of Financial Position all designations 13 Schedule of Activities Compared to Budget 14

3 INDEPENDENT ACCOUNTANTS REVIEW REPORT Board of Directors Illinois-Eastern Iowa District of Kiwanis International Bloomington, Illinois We have reviewed the accompanying financial statements of Illinois-Eastern Iowa District of Kiwanis International (District) (a not-for-profit corporation), which comprise the statements of financial position as of September 30, 2016 and 2015, and the related statements of activities and changes in net assets and cash flows for the years then ended, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management s financial data and making inquiries of the District s management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement whether due to fraud or error. Accountant s Responsibility Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion. Accountant s Conclusion Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. 1

4 Board of Directors Illinois-Eastern Iowa District of Kiwanis International Supplementary Information The accompanying Schedule of Financial Position - All Designations and Schedule of Activities Compared to Budget (collectively, supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the financial statements. The supplementary information has been subjected to the review procedures applied in our review of the basic financial statements. We are not aware of any material modifications that should be made to the supplementary information. We have not audited the supplementary information and do not express an opinion on such information. CliftonLarsonAllen LLP Bloomington, Illinois February 15,

5 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL STATEMENTS OF FINANCIAL POSITION September 30, 2016 and 2015 ASSETS CURRENT ASSETS Cash and cash equivalents $ 207,227 $ 202,817 Accounts receivable 5,000 - Prepaid expenses 17,678 20,014 Inventory 1, Total current assets 231, ,388 Capital assets, net of accumulated depreciation of $15, TOTAL ASSETS $ 231,542 $ 223,388 LIABILITIES LIABILITIES AND NET ASSETS Accounts payable $ - $ 1,110 Payroll liabilities 1,770 1,723 TOTAL LIABILITIES 1,770 2,833 NET ASSETS Unrestricted, undesignated 125, ,226 Unrestricted, designated: Capital projects 1,864 1,863 Convention reserves 32,912 27,293 International leadership 7,065 4,065 Operating reserves 50,506 45,561 Restricted scholarship 7,000 8,139 Key leader reserves Aktion club outreach fund 4,258 3,208 Total unrestricted, designated 103,805 90,329 Total net assets 229, ,555 TOTAL LIABILITIES AND NET ASSETS $ 231,542 $ 223,388 See independent accountants' review report and accompanying notes. 3

6 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS Years Ended September 30, 2016 and REVENUES AND SUPPORT Membership dues $ 167,150 $ 168,300 New member fees 16,870 15,708 Spastic paralysis - office subsidy 4,000 4,000 Interest/ dividend income District conventions and conferences ,131 - District conventions and conferences ,506 International convention and conferences 5,889 29,726 Illeiowan advertising revenues 2,000 2,000 Scholarship fund revenues 2,861 5,639 Aktion club outreach 1,050 1,775 Miscellaneous Total revenues and support 260, ,957 EXPENSES Program services Illeiowan publication 5,500 5,450 Convention expenses: District conventions and conferences ,687 - District conventions and conferences ,374 International convention 13,471 54,592 Meeting expense and district administrator's reimbursements: Sponsored programs administrator and adult committee expenses 10,850 16,646 Other board expenses Governor's expenses 5,590 4,336 Governor assistant's expenses 500 1,000 Immediate past governor's expenses Lieutenant governor's expenses 6,467 6,450 Governor elect expenses 1,500 1,500 Treasurer's expenses Committee chair expenses - 16 Training expenses 18,622 17,368 Recognition and awards 1,580 1,176 Growth initiatives expenses 3,356 5,862 Scholarship grants 4,000 3,000 Mid-winter convention 2,423 2,500 Total program expenses $ 140,896 $ 189,682 See independent accountants' review report and accompanying notes. 4

7 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS (Continued) Years Ended September 30, 2016 and Management and general expenditures Salaries and wages $ 63,712 $ 63,170 Employee benefits 12,190 11,845 Executive director expenses 2,628 2,058 Occupancy and maintenance 13,483 12,070 Officer insurance Professional fees 5,510 5,310 Stationery, printing and supplies 2,694 2,865 Postage 940 1,299 Equipment rental Telephone 2,507 2,384 Equipment and software purchases 4,968 3,978 Other administrative expenses Total management and general expenses 110, ,601 Total expenses 251, ,283 Increase (decrease) in unrestricted net assets 9,217 (14,326) NET ASSETS, BEGINNING OF YEAR 220, ,881 NET ASSETS, END OF YEAR $ 229,772 $ 220,555 See independent accountants' review report and accompanying notes. 5

8 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL STATEMENTS OF CASH FLOWS Years Ended September 30, 2016 and CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 9,217 $ (14,326) Effects of changes in operating assets and liabilities: Accounts receivable (5,000) 40 Prepaid expenses 2,336 (1,915) Inventory (1,080) - Accounts payable (1,110) (3,390) Payroll liabilities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,410 (19,554) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 202, ,371 CASH AND CASH EQUIVALENTS, END OF YEAR $ 207,227 $ 202,817 See independent accountants' review report and accompanying notes. 6

9 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS September 30, 2016 and 2015 NOTE 1 SUMMARY OF ACCOUNTING POLICIES A summary of significant accounting policies consistently applied in the preparation of the accompanying financial statements follows: Nature of Operations The Illinois-Eastern Iowa District of Kiwanis International (District) is a not-for-profit organization established to attain the objectives of Kiwanis International through the clubs within the District. Basis of Accounting The accompanying financial statements are presented in accordance with the accrual basis of accounting, whereby, revenue and support is recognized when earned and expenses are recognized when incurred. Financial Statement Presentation Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Account Standards Codification (ASC) ASC Revenue Recognition and ASC Presentation of Financial Statements. ASC requires the District to distinguish between contributions received for each net asset category in accordance with donor-imposed restrictions. As such, contributions are recognized as revenue when they are received. ASC requires the District to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. A description of the net asset categories that are applicable to the District 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 District and/or the passage of time. When a restriction is met, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities as net assets released from restrictions. As of September 30, 2016 and 2015, none of the net assets were temporarily restricted. Permanently restricted net assets Net assets subject to donor-imposed stipulations that will be maintained permanently by the District. As of September 30, 2016 and 2015, the District had no permanently restricted net assets. Cash and Cash Equivalents For financial statement purposes, cash equivalents primarily include money market funds, savings accounts, and certificates of deposits with an initial maturity of three months or less. 7

10 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS September 30, 2016 and 2015 NOTE 1 SUMMARY OF ACCOUNTING POLICIES (Continued) Property and Equipment Property and equipment are recorded at cost. The District capitalizes all expenditures for fixed assets over $500. Normal repairs and maintenance are charged to operations in the period incurred. Depreciation is calculated on the straight-line method over the useful life of the asset. Inventory Inventory consists of shirts and emblems for purchase by the members. Inventory is stated at original cost. 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. Income Tax Status The District is exempt from federal income taxes under the provision of Section 501 (c)(4) of the Internal Revenue Code. However, income from any activities not directly related to the District s tax exempt purpose is subject to taxation as unrelated business income. The District qualifies for the charitable contribution deduction under Section 170{b}(1)(A). Management is not aware of any violation of its tax status as exempt from income taxes, or any exposure to unrelated business income tax or other tax liabilities. Certain Significant Concentrations Financial instruments that potentially subject the District to concentrations of credit risk consist principally of checking accounts, money markets, and certificates of deposit. The balances are insured by the Federal Deposit Insurance Corporation (FDIC). As of September 30, 2016 and 2015, the District had no uninsured deposits. Entities Under Common Control For the years ended September 30, 2016 and 2015, various officers of the District were also officers of the Illinois-Eastern Iowa District of Spastic Paralysis Research Foundation, a related entity. It is management s opinion that the financial position and results of activities of the District have not been significantly affected by the transactions with this entity. Advertising The District expenses its advertising costs as they are incurred. 8

11 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS September 30, 2016 and 2015 NOTE 1 SUMMARY OF ACCOUNTING POLICIES (Continued) Prepaid Expenses Expenses incurred in the current fiscal year for the upcoming Governor-Elect and his Board of Directors are reported as prepaid expenses. Those prepaid expenses are then reclassified as expenses in the next fiscal year to correctly match the expense with the Governor s term. The amount of Governor-Elect expenses included in prepaid expenses for fiscal years 2016 and 2015 was $16,700 and $18,488, respectively. Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis. Costs are charged on a direct functional basis whenever practicable and all other costs are allocated on the basis of the proportional use of the services provided. NOTE 2 CASH AND CASH EQUIVALENTS The District s cash and cash equivalents at September 30, 2016 and 2015 consist of the following: Checking accounts PayPal (credit card settlement account) $ 7 $ 158 Soy Capital Bank (money market) 175, ,913 Soy Capital Bank (petty cash account) 2,138 1,603 Soy Capital Bank (operating account) 29,754 64,143 Total $ 207,227 $ 202,817 NOTE 3 PROPERTY AND EQUIPMENT At September 30, 2016 and 2015, the costs and related accumulated depreciation of property and equipment consisted of the following: Accumulated Cost Depreciation Net Net Computer equipment, including software $ 4,217 $ 4,217 $ - $ - Furniture and fixtures 11,673 11, Total $ 15,890 $ 15,890 $ - $ - Depreciation expense for the years ended September 30, 2016 and 2015 was $0. 9

12 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS September 30, 2016 and 2015 NOTE 4 BOARD DESIGNATED NET ASSETS The Board of Directors of the Illinois-Eastern Iowa District of Kiwanis International has designated net assets for various purposes. These designations are as follows: Capital Projects Fund The Board established this fund in 1998 for the purpose of accounting for the purchase of capital items, such as computers, office equipment, furniture, etc. An initial budget of $5,000 was allocated to the capital projects fund. Convention Reserves Fund The Board established this fund for the purpose of providing reserves to cover convention expenses in years where the convention revenues do not exceed the expenses resulting from less than anticipated attendance, unexpected expenses, and other unforeseeable events. The Finance Committee established a reserve balance goal equivalent to 50% of the average expenses of the annual conferences or conventions. International Leadership The Board established this fund in 1998 for the purpose of supporting District candidates for International leadership positions. During each year ended September 30, 2016 and 2015, the board designated an additional $3,000. During the year ended September 30, 2016 and 2015, the Board paid $0 and $8,953, respectively, for leadership positions. Operating Reserves Fund The Board established this fund in 2007 to provide reserves to cover operating expenses in years when the dues revenue for the District do not exceed the operating expenses. The Board established a reserve balance goal equal to one year of normal operating expenses to be funded at a rate of $.75 per paid member per year from current dues revenue until the goal balance is achieved; or at an amount equal to the current year operating net revenue if that is less than $.75/paid member. During the year ended September 30, 2016 and 2015, operating reserves of $.75 per member totaling $4,945 and $5,345 were allocated. Restricted Scholarship Fund The Board established this fund through specific fundraising efforts to provide dollars required for Circle K and Key Club Scholarships awarded by our Illinois- Eastern Iowa District of Kiwanis International. The funds receipts consist of matching dollars from the Kiwanis International Foundation (based on 5% of the total dollars they receive from the I-I District Clubs during the previous year) and fundraising efforts at the annual District Convention. The District finance committee annually decides how many scholarships are given for each entity based on the dollars available in the fund. Aktion Club Outreach Fund The Board established this fund for the purpose of providing outreach support to new and potential Aktion clubs. Aktion clubs are Kiwanis clubs for adults with special needs requirements. Key Leader Outreach Fund The Board established this fund for the purpose of providing outreach support to the District s Key Leader Program. Key Leader is a weekend conference held annually for today s emerging leaders ages This is a life-changing event focused on service leadership as the first, most meaningful development experience. Workshops, lectures and teambuilding activities take place over the course of the weekend, providing opportunities to grow in confidence, make new friends and learn skills that can be taken back to the school community. Positive interaction with other Key Leader graduates can offer continuing reinforcement, encouragement and growth of leadership skills. 10

13 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS September 30, 2016 and 2015 NOTE 4 BOARD DESIGNATED NET ASSETS (Continued) Designated net assets as of September 30, 2016 and 2015 are as follows: Designated for: Capital projects $ 1,864 $ 1,863 Convention reserves 32,912 27,293 International leadership 7,065 4,065 Operating reserves 50,506 45,561 Restricted scholarships 7,000 8,139 Key leader reserves Aktion club outreach fund 4,258 3,208 Total designated net assets $ 103,805 $ 90,329 NOTE 5 OPERATING LEASES The District enters into lease agreements for equipment and office space under annual and multiyear lease agreements. Certain of the agreements contain renewal options. Total lease expense for the years ended September 30, 2016 and 2015 was $12,172 and $12,928, respectively. Future minimum lease payments at September 30, 2016 are as follows: , , ,429 Total $ 38,373 NOTE 6 RELATED-PARTY TRANSACTIONS The District shares occupancy and office supplies expenses with the Illinois-Eastern Iowa District of Kiwanis International Spastic Paralysis Research Foundation. The Foundation reimbursed the District for its estimated share of expenses in the amount of $4,000 for each of the years ended September 30, 2016 and

14 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS September 30, 2016 and 2015 NOTE 7 COMMITMENTS AND CONTINGENCIES The District has agreements with various hotels and convention centers for Board meetings and its conventions. As of September 30, 2016, the District had the following agreements for events: Commitment Minimum Date Venue and Event Event Dates Commitment January 2014 Double Tree, Bloomington, IL 2017 District Convention 8/09/17-8/13/17 $ 43,412 July 2016 July 2016 August 2016 Marriott, Peoria, IL 2018 District Convention Crowne Plaza, Springfield, IL 2019 District Convention Double Tree, Bloomington, IL Mid-Year Board Meeting 8/01/18-8/05/18 44,510 7/31/19-8/04/19 38,664 2/25/17 1,990 Total Commitments as of September 30, 2016 $ 128,576 NOTE 8 SUBSEQUENT EVENTS In preparing these financial statements, the District has evaluated events and transactions for potential recognition or disclosure through February 15, 2017, the date the financial statements were available to be issued. See independent accountants review report. 12

15 SUPPLEMENTARY INFORMATION

16 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL SCHEDULE OF FINANCIAL POSITION - ALL DESIGNATIONS Year Ended September 30, 2016 Aktion Key Capital Convention International Operating Restricted General Club Leader Projects Reserves Leadership Reserve Scholarship Fund Fund Fund Fund Fund Fund Fund Fund ASSETS Current assets Cash and equivalents $ 103,422 $ 4,258 $ 200 $ 1,864 $ 32,912 $ 7,065 $ 50,506 $ 7,000 Accounts receivable 5, Prepaid expenses 17, Inventory 1, Total current assets 127,737 4, ,864 32,912 7,065 50,506 7,000 Capital assets Furniture and equipment Less accumulated depreciation Total capital assets Total assets $ 127,737 $ 4,258 $ 200 $ 1,864 $ 32,912 $ 7,065 $ 50,506 $ 7,000 LIABILITIES AND NET ASSETS Current liabilities Accounts payable $ - $ - $ - $ - $ - $ - $ - $ - Payroll liabilities 1, Total current liabilities 1, Net assets Unrestricted 125, Designated for capital projects , Designated for convention reserves , Designated for international leadership , Designated for operating reserves ,506 - Designated for restricted scholarship ,000 Designated for key leader reserves Designated for Aktion club - 4, Total net assets 125,967 4, ,864 32,912 7,065 50,506 7,000 Total liabilities and net assets $ 127,737 $ 4,258 $ 200 $ 1,864 $ 32,912 $ 7,065 $ 50,506 $ 7,000 See independent accountants' review report. 13

17 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL SCHEDULE OF ACTIVITIES COMPARED TO BUDGET Year Ended September 30, 2016 Actual Budget Variance Revenues and support Membership dues $ 167,150 $ 175,000 $ (7,850) New member fees 16,870 8,500 8,370 Spastic Paralysis - office subsidy 4,000 4,000 - Interest/dividend income Illeiowan advertising revenues 2,000 2,000 - Aktion Club 1,050-1,050 Miscellaneous Scholarship fund revenues 2,861-5,639 Total revenues and support 194, ,750 7,504 Expenses Program services Illeiowan publication 5,500 7,200 1,700 Convention expenses: District conventions and conferences, net ,556 - (6,556) International convention, net ,582 11,200 3,618 Meeting expense and district administrator's reimbursements: Sponsored programs administrator and adult committee expenses 10,850 17,300 6,450 Other board expenses Governor's expenses 5,590 7,000 1,410 Governor assistant's expenses 500 1, Immediate past governor's expenses Lieutenant governor's expenses 6,467 10,000 3,533 Governor elect expenses 1,500 1,500 - Treasurer's expenses Committee chair expenses Training expenses 18,622 18,000 (622) Recognition and awards 1,580 1, Growth initiatives expenses 3,356 7,000 3,644 Scholarship grants 4,000 - (4,000) Midwinter meetings 2,423 2,500 - Total program services $ 74,876 $ 86,000 $ 11,124 See independent accountants' review report. 14

18 ILLINOIS-EASTERN IOWA DISTRICT OF KIWANIS INTERNATIONAL SCHEDULE OF ACTIVITIES COMPARED TO BUDGET (CONTINUED) Year Ended September 30, 2016 Actual Budget Variance Management and general services Salaries and wages $ 63,712 $ 66,405 $ 2,693 Employee benefits 12,190 12,000 (190) Executive director expenses 2,628 3, Occupancy and maintenance 13,483 14,575 1,092 Officer insurance Professional fees 5,510 6, Stationery, printing and supplies 2,694 2, Postage 940 1, Equipment rental Telephone 2,507 2, Equipment and software purchases 4,968 6,500 1,532 Other administrative expenses Depreciation expense - 1,000 1,000 Total management and general services 110, ,895 8,512 Total expenses 185, ,895 (19,636) Changes in net assets $ 9,217 $ (15,145) $ 24,362 Net assets, beginning of year 220,555 Net assets, end of year $ 229,772 See independent accountants' review report. 15