PROMISE FOR HAITI, INC. Financial Statements. For the Years Ended December 31,2011 and (With Independent Auditor's Report Thereon)

Transcription

1 Financial Statements For the Years Ended December 31,2011 and 2010 (With Independent Auditor's Report Thereon)

2 Table of Contents Independent Auditor's Report..... Financial Statements: Statements offinancial Position... 2 Statements of Activities Statements of Functional Expenses Statements of Cash Flows...,;... 6 Notes to Financial Statements

3 Stephen M Maggart CPA, ABY, CFF J Nark AHen, CPA James M Lawson, CPA M Todd Maggart CPA, ABY, CFF MAGGART & ASSOCIATES, P.C. ~ Pet&k 1'1~ 1'17~?~~ 150 FOURTH AVENUE, NORTH SUITE 2150 NASHVILLE, TENNESSEE Telephone (615) Facsimile (615) Michael F. Nurplty, CPA P. Jason Hicciartli, CPA David B. von Dolt/en, CPA T. Keith Wilson, CPA INDEPENDENT AUDITOR'S REPORT The Board of Directors Promise For Haiti, Inc. Nashville, Tennessee We have audited the accompanying statements of financial position of Promise For Haiti, Inc. (a nonprofit organization) as of December 31, 2011 and 2010, and the related statements of activities, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of the Organization's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Promise For Haiti, Inc. as of December 31, 2011 and 2010, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. May 24, 2012

4 Statements of Financial Position December 31, 2011 and Assets Current assets: Cash $ 370, ,024 Prepaid expenses Total current assets 372, ,024 Noncurrent assets: Equipment, net Total assets $ Liabilities and Net Assets Current liabilities: Accounts payable $ 509 1,148 Deferred revenue - grant 30, Total liabilities 30, Net assets: Unrestricted 39,324 78,961 Temporarily restricted 304, ,396 Total net assets 343, ,357 COMMITMENTS AND CONTINGENCIES Total liabilities and net assets $ 373, ,505 See accompanying notes to financial statements. 2

5 Statements of Activities Unrestricted revenues: Contributions $ 34, ,432 Grant income 5,000 5,000 Interest 1,346 2,953 Net assets released from restrictions 773, ,327 Total unrestricted revenues 813, ,712 Expenses: Program services: Medical/health support 602, ,683 Educational support ,166 Total program services expenses 796, ,849 Administration 52,280 52,765 Fundraising 4,122 3,125 Total expenses 853, ,739 Increase (decrease) in unrestricted net assets (39,637) 38,973 Temporarily restricted revenues: Contributions 862, ,270 Net assets released from restrictions (773,093) (827,327) Increase (decrease) in temporarily restricted net assets 89,626 (19,057) Increase in net assets 49,989 19,916 Net assets at beginning of year 293, ,441 Net assets at end of year $ See accompanying notes to financial statements. 3

6 Statement of Functional Expenses For the Year Ended December 31, 2011 Program Services Supporting Services MedicaV Health Educational Administration Fundraising Total Agricultural project $ 2,160 2,160 Grant: HIV I Aids 5,000 5,000 Farm support 12,000 12,000 Compensation and related expenses: Field director support 66,000 66,000 Scholarship salary Executive director salary 11, ,000 Volunteer coordinator salary 8,400 3,600 12,000 Administrative salary 15,889 15,889 Payroll expenses , ,549 Construction: Supplies 2,122 4,910 7,032 Consultant/professional service fees 2, ,732 Customs 1,844 1,844 Funds for the poor 1,578 1,578 Hospital: Operating expenses 337, ,130 Dental services 28,252 28,252 Maternity Housing Program 11,654 11,654 Medical supplies 5,929 5,929 Food for hospitalized 2,700 2,700 Library expense 3,504 3,504 Office expense 1,186 12,184 13,370 Officers/directors liability insurance 5,182 5,182 Postage and shipping 19, , ,020 Printing and publications 3,154 2,368 5,522 Depreciation Scholarships: HASP 8,600 8,600 HELP 138, ,255 School lunches 28,350 28,350 Volunteer expenses: Airline expense 49,005 2,154 51,159 Dorm maintenance 5,679 5,679 Room and board 30,544 30,544 Other 12, ,893 Total expenses $ 602, ,444 52,280 4, ,381 See accompanying notes to financial statements. 4

7 Statement of Functional Expenses For the Year Ended December 31, 2010 Program Services SUEEOrting Services Medical/ Health Educational Administration Fundraising Total Agricultural project $ 1,200 1,200 Grant: HIV I Aids 5,000 5,000 Farm support 12,000 12,000 Compensation and related expenses: Field director support 66,000 66,000 Scholarship salary Executive director salary 15, ,000 Volunteer coordinator salary 7,700 3,300 11,000 Administrative salary 9,792 9,792 Payroll expenses , ,841 Construction: Rocky Mt. School 6,000 6,000 Supplies Consultant Customs 5,186 5,186 Funds for the poor 2,200 2,200 Hospital: Operating expenses 339, ,720 Earthquake relief 24,673 24,673 Worker support 4,300 4,300 Dental services 20,504 20,504 Hospital audit 17,897 17,897 Medical supplies 5,398 5,398 Food for hospitalized 3,000 3,000 Vehicle 22,815 22,815 Equipment 6,700 6,700 Library expense 2,155 2,155 Office expense 14,557 14,557 Officers/directors liability insurance 5,174 5,174 Postage and shipping 11,648 2, ,605 Printing and publications 2,882 1,334 4,216 Depreciation Scholarships: HASP 14,839 14,839 HELP 149, ,923 School lunches 34,600 34,600 Volunteer expenses: Airline expense 49,978 49,978 Dorm maintenance 5,268 5,268 Room and board 26,088 26,088 Other 16,719 16,719 Total expenses $ 660, ,166 52,165 3, ,132 See accompanying notes to financial statements. 5

8 Statements of Cash Flows Increase (Decrease) in Cash and Cash Equivalents Cash flows from operating activities: Contributions $ 894, ,702 Grant receipts 30,000 10,000 Interest income 1,346 2,953 Cash paid for program activities (797,081) (864,912) Cash paid for supporting services (55,766) (55,382) Net cash provided by operating activities 73, Cash flows from investing activities: Equipment purchase (1.539) Net cash used in investing activities (1,539) Net increase in cash and cash equivalents 73,372 24,822 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ Reconciliation of change in net assets to net cash provided by operating activities: Change in net assets $ 49,989 19,916 Adjustments: Depreciation Increase in prepaid expenses (1,614) Increase (decrease) in accounts payable (639) 937 Increase in deferred revenue - grant 25,000 5,000 Net cash provided by operating activities $ See accompanying notes to financial statements. 6

9 Notes to Financial Statements (1) Summary o(signiticant Accounting Policies The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader. (a) Organization Promise For Haiti, Inc. was founded in 1981 to provide healthcare, education and clean water to the people of Pignon, Haiti. The Organization's general administrative and financial operations are located in Nashville, Tennessee with its educational administration located in Pella, Iowa. Funding obtained through various sources within the United States is forwarded to organizations located in Pignon, Haiti as a means of satisfying the Organization's chosen goals. The Hopital de Bienfaisance (hospital), in Pignon, Haiti, is the primary beneficiary of these funding efforts. Previously, the Organization operated under the name Christian Mission of Pignon, Inc. On August 11, 2008, the Organization's name was changed to Promise for Haiti, Inc. The major programs administered by the Organization are classified as medical and educational. The medical program is administered by the executive director in the United States and through a field director who administers the day-to-day operations of various recipient organizations located in Pignon, Haiti. The field director is compensated through a contractual arrangement. The field director also serves as a director of the Organization's primary beneficiary, the Hopital de Bienfaisance The Hopital de Bienfaisance received funding from the Organization of $627,803 and $658,129 for the years ended December 31, 2011 and 2010, respectively, and is included within program services expenses. The various Haitian organizations provide medical and public health facilities and services in the North Central Plateau area of Haiti. The Organization's executive director is responsible for directing the stateside procurement of volunteers who provide services to the programs throughout the year. The educational program is administered through the Haitian Education & Literacy Program (HELP) Scholarship Program. This program is designed to connect Haitian students with sponsors in an effort to provide on-going educational opportunities to the children of Pignon, Haiti. This program supports the elementary and secondary educational levels. In addition, the Organization provides support to post-secondary education through the Haitian Advanced Scholarship Program (HASP). The majority of the students supported through the HASP Program attend Quisqueya University in Port au Prince, Haiti. Students chosen under this program are obligated to provide two years of service, for each year of education provided, in Pignon, Haiti upon completion of their educational requirements. 7

10 Notes to Financial Statements, Continued (1) Summary of Significant Accounting Policies, Continued (b) Financial Statement Presentation The financial statements of the Organization have been prepared on the accrual basis. The Organization reports information regarding its financial position and activities according to three classes of net assets. A description of the three net asset categories follows: Unrestricted net assets represent those net assets that are not subject to donor imposed stipulations. Temporarily restricted net assets include net assets subject to donor-imposed stipulations that may or will be met either by actions of the Organization and/or the passage oftime. Permanently restricted net assets are those net assets subject to donor-imposed stipulations that require the net assets to be maintained permanently by the Organization. The Organization does not maintain any permanently restricted net assets. (c) Contributions Contributions received are recorded as increases in unrestricted, temporarily restricted, or permanently restricted net assets, depending on the existence and/or nature of any donor restrictions. Unconditional promises to give (pledges) are recorded as receivables and revenues and the Organization distinguishes between contributions received for each net asset category in accordance with donor imposed restrictions. Grants and other contributions of cash and other assets are reported as temporarily 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 in the statement of activities as net assets released from restrictions. Contributions of assets other than cash are recorded at their estimated current value. (d) Contributed Services Various members of the Board of Directors volunteer their time and effort to provide administrative services to the Organization through its various programs throughout the year on an as-needed basis. In addition, the Organization actively promotes recruitment of volunteers to facilitate the programs undertaken in the Pignon, Haiti locale. No amounts have been recognized in the accompanying financial statements for those services. 8

11 Notes to Financial Statements, Continued (1) Summary of Significant Accounting Policies, Continued (e) Equipment Items of equipment are stated at cost at date of acquisition or estimated fair market value at date of donation in the case of gifts. Depreciation of equipment is provided over the estimated useful lives of the respective assets on a straight-line basis. (/) Cash and Cash Equivalents For purposes of the statement of cash flows, the Organization considers all cash and all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Organization maintains balances in financial institutions that management considers to be financially sound. The balances held at the various financial institutions may at times exceed Federally insured limits. (g) Income Taxes The Organization is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code; accordingly, no provision for income taxes is included in the financial statements. In addition, the Organization is classified by the Internal Revenue Service as other than a private foundation. (h) Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Organization 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (i) Expense Allocation The costs of providing various program~ and other activities have been summarized on a functional basis in the Statement of Activities and in the Statement of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 9

12 Notes to Financial Statements, Continued (2) Major Contributor During the years ended December 31, 2011 and 2010, the Organization received cash contributions totaling $141,600 and $100,610, respectively, from a member ofthe Organization's Board of Directors. These contributed amounts represented 16 percent and 14 percent of total respective year's contributions. (3) Fundraising Costs Fundraising costs of $4,122 and $3,125 were incurred during the years ended December 31, 2011 and 2010, respectively, and expensed within the supporting services fundraising category as follows: Executive director salary Consultant/professional service fees Payroll expenses Postage and shipping Printing and publications $ $ (4) Commitments and Contingencies The Organization has a contractual obligation with one individual. Under this contract, the Organization is obligated to pay a monthly service fee to the Organization's field director for managerial services rendered in connection with the furthering of the Organization's objectives in Pignon, Haiti. In accordance with this agreement, an amount totaling $66,000 was expended during each of the years ended December 31, and and was categorized within the medical program activity. Executive director salary expense for 2011 and 2010 totaled $12,000 and $16,000, respectively, and was allocated to supporting services administration and fundraising in the amounts of $11,400 and $15,200; and $600 and $800, respectively, for each year. In recent years, Haiti has experienced a heightened degree of social and political unrest. Throughout 2010 and 2011, the U.S. Department of State issued travel warnings urging U.S. citizens to avoid travel to Haiti due to the volatile security situation. The missionary aspects of the Organization's mission have been temporarily hampered by the restricted access to Pignon, Haiti. The Organization's management contends that the current situation will improve in the near future, providing a more steady flow of volunteers thus allowing the Organization's program services to continue unabated. 10

13 Notes to Financial Statements, Continued (4) Commitments and Contingencies, Continued On January 12, 2010, a 7.0 magnitude earthquake was registered in Haiti near its capital Port-au Prince. Although the Organization provides program services in Pignon, Haiti, which is approximately eighty miles north of the earthquake epicenter, the Organization has been affected by overall supply shortages resulting from damages to the Country's main shipping port. In addition, demand for medical services has increased as earthquake victims relocate to unaffected areas in search of aid. (5) Certificate o(deposit Certificate of deposit totaling $100,000 at both December 31, 2011 and 2010 is included in cash. The certificate bears interest at 1.15% and has a maturity of January 8, Any penalties for early withdrawal would not have a material effect on the financial statements. (6) Restriction on Net Assets Substantially all bf the restrictions on net assets at the end of 2011 and 2010 relate to funds raised to support the medical and educational program services in future years. (7) Concentration of Credit Risk The Organization maintains cash balances at several financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to an established limit. At December 31, 2011, the Organization did not have any uninsured cash balances based on an established limit of $250,000. (8) Open Tax Years The Organization's Forms 990, Return of Organization Exempt from Income Tax; for the years ending December 31, 2008, 2009 and 2010 are subject to examination by the Internal Revenue Service, generally for three years after they were filed. (9) Subsequent Events The Organization has evaluated subsequent events through May 24, 2012, the date which the financial statements were available to be issued. 11