FIRST CHURCH IN MARLBOROUGH (CONGREGATIONAL) UNITED CHURCH OF CHRIST. Financial Statements

Transcription

1 Financial Statements June 30, 2013

2 Table of Contents Report of the Audit Committee 1 Financial Statements Statement of Financial Position 2 Statement of Activities and Change in Net Assets 3 Statement of Cash Flows 4 Statement of Functional Expenses 5 Supplemental Statement of Actual vs. Budget Operating Revenue and Expenses 6 Page Notes to Financial Statements 7-12

3

4 Statement of Financial Position As of June 30, 2013 ASSETS: Cash and cash equivalents: Unrestricted $ 64,045 Designated 26,169 Restricted 59,373 Total cash and cash equivalents $ 149,587 Accounts receivable 150 Prepaid expenses 4,316 Investments: Unrestricted 645,901 Restricted 460,147 Total investments 1,106,048 Total assets $ 1,260,101 LIABILITIES AND NET ASSETS: Liabilities: Accounts payable $ 2,587 Refundable facility deposits 1,321 Total liabilities 3,908 Net assets: Unrestricted: Undesignated 710,504 Board designated 26,169 Total unrestricted 736,673 Temporarily restricted - purpose restriction 417,336 Permanently restricted 102,184 Total net assets 1,256,193 Total liabilities and net assets $ 1,260,101 The accompanying notes are an integral part of these financial statements

5 Statement of Activities and Changes in Net Assets For the Fiscal Year Ended June 30, 2013 Unrestricted Board Temporarily Permanently Undesignated Designated Restricted Restricted Total SUPPORT AND OPERATING REVENUE: Pledges $ 126,809 $ - $ - $ - $ 126,809 Loose offerings 20, ,286 Special offerings 7,611-3,490-11,101 Special gifts 2,276 2,135 2,338-6,749 Special fundraising 16,824 2, ,230 Facility rentals 25, ,124 Investment income 18, ,006-48,478 Total support and operating revenue 217,401 4,542 35, ,777 RECLASSIFICATIONS: Net assets released from designation 4,062 (4,062) Net assets released from restriction upon satisfaction of purpose 50,518 - (50,518) - - Total reclassifications 54,580 (4,062) (50,518) - - EXPENSES: Church personnel 161, ,292 Church operations 73, ,334 Education, Worship and Mission 45, ,502 Total expenses 280, ,128 Changes in net assets from operations (8,147) 480 (14,684) - (22,351) NON-OPERATING REVENUE: Realized gains and losses on investments (29,307) (29,307) Unrealized gains and losses on investments 123, , ,258 Total non-operating revenue 93, , ,951 Changes in net assets 85, , ,600 Net assets, beginning of year (as restated) 624,933 25, , ,184 1,078,593 Net assets, end of year $ 710,504 $ 26,169 $ 417,336 $ 102,184 $ 1,256,193 The accompanying notes are an integral part of these financial statements

6 Statement of Cash Flows For the Fiscal Year Ended June 30, 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Changes in net assets $ 177,600 Adjustments to reconcile change in net assets to net cash used in operating activities: Realized gains and losses on investments 29,307 Unrealized gains and losses on investments (229,258) Decrease in prepaid expenses 1,008 Decrease in accounts payable (1,108) Increase in refundable facility deposits 100 Net cash used in operating activities (22,351) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (161,547) Sales of marketable securities 176,090 Net cash provided by investing activites 14,543 Net change in cash and cash equivalents (7,808) Cash and cash equivalents, beginning of the year (as restated) 157,395 Cash and cash equivalents, end of the year $ 149,587 The accompanying notes are an integral part of these financial statements

7 Statement of Functional Expenses For the Fiscal Year Ended June 30, 2013 Education, Worship & Church Mission Operations Total Staff salaries and related expenses $ 121,680 $ 39,612 $ 161,292 Heating fuel - 20,214 20,214 Scholarships 17,000-17,000 Insurance - 15,861 15,861 Maintenance and repairs - 13,026 13,026 Office supplies and copier - 11,722 11,722 Utilities - 6,261 6,261 Christian Education 5,737-5,737 UCC mission 5,647-5,647 UCC dues 3,684-3,684 Other programs 3,296-3,296 Music ministry 3,246-3,246 Family support 2,516-2,516 Treasurer's office support and service fees - 2,255 2,255 Telephone and Internet - 2,077 2,077 Advertising and publicity - 1,388 1,388 Flowers 1,340-1,340 Diaconate 1,048-1,048 Multi-media 1,000-1,000 General supplies Christian Outreach Conferences and conventions Computer operations Stewardship Total expenses $ 166,612 $ 113,516 $ 280,128 The accompanying notes are an integral part of these financial statements

8 Supplemental Statement of Actual vs. Budget Operating Revenue and Expenses For the Fiscal Year Ended June 30, 2013 Over/Under Actual Budget Budget SUPPORT AND OPERATING REVENUE: Pledges $ 126,809 $ 125,000 $ 1,809 Loose offerings 20,286 13,200 7,086 Special offerings 11,101 3,500 7,601 Special gifts 6,749-6,749 Special fundraising 19,230 10,000 9,230 Facility rentals 25,124 20,000 5,124 Investment income 48,478 56,605 (8,127) Total support and operating revenue 257, ,305 29,472 EXPENSES: Staff salaries and related expenses 161, ,675 4,383 Heating fuel 20,214 13,000 (7,214) Scholarships 17,000 17,000 - Insurance 15,861 12,600 (3,261) Maintenance and repairs 13,026 10,000 (3,026) Office supplies and copier 11,722 8,500 (3,222) Utilities 6,261 6,000 (261) Christian Education 5,737 4,200 (1,537) UCC mission 5,647 4,000 (1,647) UCC dues 3,684 3,608 (76) Other programs 3,296 - (3,296) Music ministry 3,246 1,300 (1,946) Family support 2,516 - (2,516) Treasurer's office support and service fees 2,255 1,100 (1,155) Telephone and Internet 2,077 1,800 (277) Advertising and publicity 1,388 1, Flowers 1,340 5 (1,335) Diaconate 1,048 1, Multi-media 1,000 1,000 - General supplies 773 1, Christian Outreach (118) Conferences and conventions Computer operations Stewardship New member recruitment/hospitality Total expenses 280, ,993 (25,135) Change in net assets from operations $ (22,351) $ (26,688) $ 4,

9 Notes to Financial Statements June 30, ORGANIZATION First Church in Marlborough (Congregational), United Church of Christ (the Church ), is a Commonwealth of Massachusetts not-for-profit organization established in 1666 for the purpose of organizing, operating and maintaining the Church as a place of worship, and for the mutual and spiritual benefit of its members, as it may be constituted from time to time. The Church has received a favorable determination letter from the Internal Revenue Service stating that it is exempt from tax under Section 501(a) of the U.S. Internal Revenue Code (the Code) as an organization described in Section 501(c)(3). Contributions to the Church are tax deductible within the limitations prescribed by the Code. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Church are prepared on the accrual basis of accounting. 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 and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include checking, money market and money fund accounts with maturities of less than 90 days. Cash and cash equivalents designated is the portion of cash and cash equivalents intended to support net assets designated by the Board of Trustees (Trustees) for specific purposes. Cash and cash equivalents restricted is the portion of cash and cash equivalents intended to be used to support temporarily restricted net assets. Prepaid Expenses Prepaid expenses consist primarily of prepaid benefits for the pastor of the Church. Investments Investments in marketable securities with readily determinable fair values are reported at their fair value in the statement of financial position. Unrealized gains and losses are included in the change in net assets. Investments restricted is the portion of investments intended to be used to support temporarily and permanently restricted net assets

10 Notes to Financial Statements (Continued) June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fixed Assets Fixed assets in excess of $5,000 and with a useful life of more than one year are capitalized at cost, or, if donated, at the fair market value on the date of the donation. Repairs and maintenance that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets ranging from seven to forty years. Refundable Facility Deposits Refundable facility deposits consist of rental deposits for leased space in the Church and deposits for keys to access the Church building. Classes of Net Assets The financial statements report amounts separately by classes of net assets: Unrestricted net assets are those currently available for all ministry and general purposes under the direction of Trustees, those designated by Trustees for a specific use, and those invested in fixed assets. Temporarily restricted net assets are those contributed with donor stipulations for specific operating purposes or programs. They are not currently available for use in the Church s ministries until commitments regarding their use have been fulfilled. Permanently restricted net assets are those contributed with donor stipulations that the principal amount of the contribution must be maintained permanently, but permits the use of the income generated by the contribution. Unless the donor has placed stipulations on its use, income generated from permanently restricted net assets is classified as unrestricted net assets. Revenues and Expenses Contributions are recognized when made. Gifts of cash and other assets are reported as restricted support if they are received with donor stipulations that limit the use of the donated assets. 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 reported on the statement of activities and change in net assets as net assets released from restriction

11 Notes to Financial Statements (Continued) June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenues and Expenses (Continued) Gifts of fixed assets are reported 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 are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. All other income is recorded when earned. All expenses are recorded when incurred in accordance with the accrual basis of accounting. Donated Services A substantial number of unpaid volunteers have made significant contributions of their time to the Church. These volunteers have a significant impact on making the Church s ministries effective. However, the value of these services is not reflected in the financial statements because it does not meet the definition of donated services required to be reported. 3. INVESTMENTS An investment committee consisting of two members of the Church oversees the Church s investments in conjunction with Trustees. The Church has six investment funds as of June 30, 2013: Pastoral Housing fund $ 449,145 Maebelle Baldwin fund 269,772 Earnshaw fund 192,223 Alice Blakely Scholarship fund 124,207 Bible fund 60,715 Congregational unrestricted fund 9,986 $1,106,048 As of June 30, 2013, each of these funds is 100% invested in equities. The investments are closely monitored by the investment committee and the Church s financial advisor in order to mitigate market risk associated with these investments. Interest, dividends, capital gains distributions, and partnership distributions are treated as operating income for the Church and are listed as investment income in the statement of activities and changes in net assets, while realized and unrealized gains and losses are treated as non-operating income

12 Notes to Financial Statements (Continued) June 30, FIXED ASSETS Fixed assets at June 30, 2013 consist of the following: Land $ -) Church building 1,000) 1,000) Less: accumulated depreciation (1,000) $ -) The original settlers of the colony of Massachusetts granted the land at 37 High Street, Marlborough, MA and its adjacent common to the Church, and its original granted value is not determinable. The original cost of the Church building is an estimate due to the absence of documentation. 5. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at June 30, 2013, are all purpose restricted and consist of the following: Pastoral housing $277,795 Bibles and related materials 61,523 Charles Lyons Trust (medical equipment for needy children) 35,678 Scholarships 25,897 Flower fund 8,279 New Orleans trip 4,667 Deacons fund 2,251 Temple room 1,246 $417,336 Of the total temporarily restricted net assets, $59,373 is included in cash and cash equivalents and $357,963 is included in investments in the statement of financial position

13 Notes to Financial Statements (Continued) June 30, PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets at June 30, 2013, consist of the following: Alice Blakely Scholarship fund $100,000 Bible fund 2,184 $102,184 Alice Blakely Scholarship fund The original donation from the estate of Alice Blakely stated the principal amount of the donation was not to be used, and any income generated from the donation was restricted to provide scholarships to college bound students. Scholarships paid out from the income of this fund were $17,000 in the year ended June 30, Bible fund The original donation consisted of 21 shares of Exxon stock (now ExxonMobil Corporation) valued at $104 per share on the date of donation. The donor stipulated that the principal amount of the donation was to be preserved, and any income generated from the donation was restricted to the purchase of Bibles and Bible-related materials. Purchases made from the income of this fund totaled $1,450 in the year ended June 30, OPERATING LEASE COMMITMENT The Church leases a piece of office equipment under a non-cancellable operating lease that extends through As of June 30, 2013, the total remaining operating lease payments are as follows: Year Payments 2014 $ 5, , , ,123 $20, COMMITMENTS The Church is liable for annual assessments paid to the Massachusetts Conference of the United Church of Christ as long as it is a UCC Church. The commitment for 2014 is approximately $3,

14 Notes to Financial Statements (Continued) June 30, PRIOR PERIOD ADJUSTMENTS Prior to the year ended June 30,2013, the financial statements of the Church were not maintained in compliance with Statement on Financial Accounting Standards No. 117, Financial Statements of Not-For-Profit Organizations, and its subsequent amendments. In order to bring the financial statements into compliance with the standards, prior period adjustments were made for all fiscal years from 1995 through As a result of these prior period adjustments, beginning net assets for the year ended June 30, 2013, have been restated in the statement of activities and changes in net assets, and beginning cash and cash equivalents have been restated in the statement of cash flows. 10. SUBSEQUENT EVENTS The Church has evaluated subsequent events through March 23, 2014 (the report date), the date the financial statements were available to be issued. Subsequent events after that date have not been evaluated. There were no subsequent events requiring disclosure through the report date