WORLD EDUCATION AND DEVELOPMENT FUND

Transcription

1 FINANCIAL STATEMENTS WORLD EDUCATION AND DEVELOPMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2010

2 WORLD EDUCATION AND DEVELOPMENT FUND CONTENTS PAGE NO. INDEPENDENT AUDITORS' REPORT 2 EXHIBIT A - Statement of Financial Position, as of September 30, 2011, with Summarized Financial Information for EXHIBIT B - Statement of Activities and Change in Net Assets, for the Year Ended September 30, 2011, with Summarized Financial Information for EXHIBIT C - Statement of Functional Expenses, for the Year Ended September 30, 2011, with Summarized Financial Information for EXHIBIT D - Statement of Cash Flows, for the Year Ended September 30, 2011, with Summarized Financial Information for NOTES TO FINANCIAL STATEMENTS

3 GELMAN, ROSENBERG & FREEDMAN CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To the Board of Directors World Education and Development Fund New York, New York We have audited the accompanying statement of financial position of the World Education and Development Fund (Worldfund) as of September 30, 2011, and the related statements of activities and change in net assets, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of Worldfund's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from Worldfund's financial statements for the year ended September 30, 2010 and, in our report dated January 12, 2010, we expressed an unqualified opinion on those statements. We conducted our audit 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Worldfund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Worldfund as of September 30, 2011, and its change in net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. January 17, MONTGOMERY AVENUE SUITE 650 NORTH BETHESDA, MARYLAND (301) FAX (301) MEMBER OF CPAMERICA INTERNATIONAL, AN AFFILIATE OF HORWATH INTERNATIONAL MEMBER OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS' PRIVATE COMPANIES PRACTICE SECTION 2

4 EXHIBIT A WORLD EDUCATION AND DEVELOPMENT FUND STATEMENT OF FINANCIAL POSITION AS OF SEPTEMBER 30, 2011 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2010 CURRENT ASSETS ASSETS Cash and cash equivalents $ 1,640,457 $ 1,053,225 Grants and contributions receivable (Note 2) 764, ,000 Other receivables 2,240 1,210 Prepaid expenses 18,239 30,641 FIXED ASSETS Total current assets 2,425,541 1,745,076 Office equipment 29,683 25,253 Furniture 25,487 25,487 Website 16,791 4,566 Software 28,957 27, ,918 83,103 Less: Accumulated depreciation and amortization (68,139) (56,665) OTHER ASSETS Net fixed assets 32,779 26,438 Deposits 18,876 18,876 Grants and contributions receivable, net of current portion (Note 2) 851,535 1,104,759 Total other assets 870,411 1,123,635 TOTAL ASSETS $ 3,328,731 $ 2,895,149 CURRENT LIABILITIES LIABILITIES AND NET ASSETS Accrued expenses $ 223,879 $ 198,335 Accrued vacation 8,796 6,181 NET ASSETS Total current liabilities 232, ,516 Unrestricted 976, ,514 Temporarily restricted (Note 3) 2,119,802 1,977,119 Total net assets 3,096,056 2,690,633 TOTAL LIABILITIES AND NET ASSETS $ 3,328,731 $ 2,895,149 See accompanying notes to financial statements. 3

5 EXHIBIT B WORLD EDUCATION AND DEVELOPMENT FUND STATEMENT OF ACTIVITIES AND CHANGE IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2010 REVENUE Unrestricted Temporarily Restricted Total Total Grants and contributions (net of direct benefit to donors of $210,937 and $176,325 for 2011 and 2010, respectively): Individuals $ 819,899 $ 233,212 $ 1,053,111 $ 1,554,011 Foundations 51, , , ,286 Corporations 658,297 1,341,634 1,999,931 1,966,046 Interest income 8,466-8, Contributed services (Note 4) 73,302-73,302 49,666 Program service fees 31,286-31,286 19,874 Other Net assets released from donor restrictions (Note 3) 1,849,701 (1,849,701) - - EXPENSES Total revenue 3,492, ,683 3,635,410 4,063,755 Program Services 2,460,818-2,460,818 2,036,113 Supporting Services: General and Administrative 285, , ,497 Fundraising 435, , ,518 Total supporting services 720, , ,015 Total expenses 3,181,729-3,181,729 2,657,128 Change in net assets before other item 310, , ,681 1,406,627 OTHER ITEM (Loss) gain on currency translation (48,258) - (48,258) 5,379 Change in net assets 262, , ,423 1,412,006 Net assets at beginning of year 713,514 1,977,119 2,690,633 1,278,627 NET ASSETS AT END OF YEAR $ 976,254 $ 2,119,802 $ 3,096,056 $ 2,690,633 See accompanying notes to financial statements. 4

6 EXHIBIT C WORLD EDUCATION AND DEVELOPMENT FUND STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH SUMMARIZED FINANCIAL INFORMATION FOR Supporting Services 2010 Program Services General and Administrative Fundraising Total Supporting Services Total Expenses Total Expenses Salaries $ 331,812 $ 113,915 $ 221,711 $ 335,626 $ 667,438 $ 571,724 Payroll taxes and other benefits 50,253 16,040 26,642 42,682 92,935 70,329 Grants to schools 537, , ,091 Program instructors and curriculum development 644, , ,820 Program instructors' and participants' travel 421, , ,223 Program evaluations 40, ,089 30,045 Books and class supplies 39, ,855 13,073 Consulting fees 149,448 11,088 9,052 20, , ,909 Accounting/audit services 52,993 12,363 15,781 28,144 81,137 61,809 IT expenses 10,800 2,159 3,057 5,216 16,016 22,734 Occupancy (Note 5) 37,772 7,565 11,096 18,661 56,433 48,656 Travel 102,980 7,788 25,075 32, , ,148 Telephone 9,784 1,251 1,852 3,103 12,887 10,831 Insurance 2, ,017 1,705 4,438 4,054 Office and general expense 9,121 3,879 14,044 17,923 27,044 25,298 Postage and shipping 2, ,463 5,274 8,176 6,211 Registration fees 967 8,671 5,183 13,854 14,821 3,541 Bank and credit card fees 1,563 18, ,600 20,163 15,818 Payroll processing fees - 2,845-2,845 2,845 1,803 Printing and printed materials 3,877 1,144 4,971 6,115 9,992 5,235 Depreciation and amortization 7,033 1,788 2,653 4,441 11,474 8,060 Moving costs ,767 Gala expenses ,969 78,969 78,969 89,049 Events 1, ,412 9,480 10,480 2,485 In-kind legal expenses (Note 4) - 73,302-73,302 73,302 49,666 Other 2,114 1, ,968 4,082 7,749 TOTAL $ 2,460,818 $ 285,470 $ 435,441 $ 720,911 $ 3,181,729 $ 2,657,128 See accompanying notes to financial statements. 5

7 EXHIBIT D WORLD EDUCATION AND DEVELOPMENT FUND STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2011 WITH SUMMARIZED FINANCIAL INFORMATION FOR 2010 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 405,423 $ 1,412,006 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 11,474 8,060 (Increase) decrease in: Grants and contributions receivable 148,619 (838,332) Other receivables (1,030) (1,210) Prepaid expenses 12,402 3,270 Increase (decrease) in: Accrued expenses 25, ,454 Accrued vacation 2,615 1,323 Net cash provided by operating activities 605, ,571 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (17,815) (15,852) Net cash used by investing activities (17,815) (15,852) Net increase in cash and cash equivalents 587, ,719 Cash and cash equivalents at beginning of year 1,053, ,506 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,640,457 $ 1,053,225 See accompanying notes to financial statements. 6

8 WORLD EDUCATION AND DEVELOPMENT FUND NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION Organization - The World Education and Development Fund (Worldfund) is a non-profit organization, incorporated in 2002, and located in the State of New York. Worldfund's mission is to support high-quality and results-driven education in Latin America. Its vision is for every child in Latin America to have access to a high-quality education and the tools to become a productive member of his or her local community. Through its teacher and principal training programs and investments in schools and after-school academic programs, Worldfund is impacting 340,000 impoverished students annually. Basis of presentation - The accompanying financial statements are presented on the accrual basis of accounting, and in accordance with FASB ASC 958, Not-for-Profit Entities. The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with Worldfund's financial statements for the year ended September 30, 2010, from which the summarized information was derived. Cash and cash equivalents - Worldfund considers all cash and other highly liquid investments with initial maturities of six months or less to be cash equivalents. At times during the year, Worldfund maintains cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) limits. Management believes the risk in these situations to be minimal. Worldfund had approximately $375,000 of cash and cash equivalents held in Mexico and Brazil at September 30, The majority of all funds held in foreign countries are uninsured. Such amounts are included in cash and cash equivalents in the accompanying Statement of Financial Position. Grants and contributions receivable - Grants and contributions receivable approximate fair value. Management considers all amounts to be fully collectible. Accordingly, an allowance for doubtful accounts has not been established. Fixed assets - Fixed assets in excess of $1,000 are capitalized and stated at cost. Fixed assets are depreciated on a straight-line basis over the estimated useful lives of the related assets, generally three to five. Leasehold improvements are amortized over the remaining life of the lease. The cost of maintenance and repairs is recorded as expenses are incurred. Income taxes - Worldfund is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been made in the accompanying financial statements. Worldfund is not a private foundation. 7

9 WORLD EDUCATION AND DEVELOPMENT FUND NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Income taxes (continued) - The Federal Form 990, Return of Organization Exempt from Income Tax, is subject to examination by the Internal Revenue Service, generally for three years after it is filed. Uncertain tax positions - In June 2006, the Financial Accounting Standards Board (FASB) released FASB ASC , Income Taxes, that provides guidance for reporting uncertainty in income taxes. For the year ended September 30, 2011, Worldfund has documented its consideration of FASB ASC and determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. Net asset classification - The net assets are reported in three self-balancing groups as follows: Unrestricted net assets include unrestricted revenue and contributions received without donor-imposed restrictions. These net assets are available for the operation of Worldfund and include both internally designated and undesignated resources. Temporarily restricted net assets include revenue and contributions subject to donorimposed stipulations that will be met by the actions of Worldfund and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities and Change in Net Assets as net assets released from restrictions. Permanently restricted net assets represent funds restricted by the donor to be maintained in-perpetuity by Worldfund. As of September 30, 2011, there were no permanently restricted net assets. Contributions and grants - Unrestricted and temporarily restricted contributions and grants are recorded as revenue in the year notification is received from the donor. Temporarily restricted contributions and grants are recognized as unrestricted support only to the extent of actual expenses incurred in compliance with the donor-imposed restrictions and satisfaction of time restrictions. Temporarily restricted contributions and grants received in excess of expenses incurred are shown as temporarily restricted net assets in the accompanying financial statements. Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. 8

10 WORLD EDUCATION AND DEVELOPMENT FUND NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (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 Activities and Change in Net Assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 2. GRANTS AND CONTRIBUTIONS RECEIVABLE As of September 30, 2011, grants due in more than one year have been recorded at the present value of the estimated cash flows, using Treasury discount rates between 3.25% and 3.40%. Grants are due as follows at September 30, 2011: Year Ended June 30, 2012 $ 764, , , ,000 1,664,605 Less: Discount balance to present value (48,465) 1,616,140 Less: Current portion (764,605) TOTAL NON-CURRENT GRANTS AND CONTRIBUTIONS RECEIVABLE $ 851, TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following at September 30, 2011: Inter-American Partnership for Education (IAPE) $ 705,370 Principal Training Program (SLP/LISTO) 1,052,500 STEM Brasil 207,336 Schools and After-School Programs 154,596 $ 2,119,802 The following temporarily restricted net assets were released from donor restrictions by incurring expenses (or through the passage of time), which satisfied the restricted purposes specified by the donors: Inter-American Partnership for Education (IAPE) $ 601,687 Principal Training Program (SLP/LISTO) 482,071 STEM Brasil 254,807 Amiga Cartonera 19,700 Schools and After-School Programs 491,436 $ 1,849,701 9

11 WORLD EDUCATION AND DEVELOPMENT FUND NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, CONTRIBUTED SERVICES During the year ended September 30, 2011, Worldfund was the beneficiary of donated legal services. The value of the donated legal services ($73,302) was based upon the fair value at the date the services were provided. 5. OCCUPANCY Worldfund upgraded and executed its first extension for leased office space under a five-year agreement during The base rent is adjusted each January and July based upon the Cost of Living Index. The cost of living adjustments shall be based on 100% of the percentage difference between the Price Index for the preceding months of December and June, and the Price Index for the base year, respectively. The following is a schedule of the future minimum lease payments for the New York office space: Year Ended September 30, 2012 $ 50, , , ,697 $ 201,187 Rent expense, excluding real estate taxes and utilities, under the aforementioned lease agreement, was $44,400 for the year ended September 30, RETIREMENT PLAN Worldfund has adopted a defined contribution plan for all eligible employees, effective January 1, 2009, covering all full-time employees with six months of eligible experience and a minimum age requirement of 21 years. Matching employer contributions to the plan are on a discretionary basis. During the year ended September 30, 2011, no matching contributions were made. 7. SUBSEQUENT EVENTS In preparing these financial statements, Worldfund has evaluated events and transactions for potential recognition or disclosure through January 17, 2012, the date the financial statements were issued. 10