Financial statements of. Sport Nova Scotia. March 31, 2017

Transcription

1 Financial statements of Sport Nova Scotia March 31, 2017

2 March 31, 2017 Table of contents Independent Auditor s Report..1 Statement of financial position..2 Statement of revenues and expenses.3 Statement of changes in net assets 4 Statement of cash flows. 5 Notes to the financial statements 6-9 Schedule of revenues - Schedule Schedule of operating expenses - Schedule Schedule of programs expenses - Schedule

3 Deloitte LLP 1969 Upper Water Street Suite 1500 Purdy's Wharf Tower II Halifax NS B3J 3R7 Canada Tel: Fax: Independent Auditor s Report To the Board of Directors of Sport Nova Scotia We have audited the accompanying financial statements of Sport Nova Scotia, which comprise the statement of financial position as at March 31, 2017, and the statements of revenues and expenses, and changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the organization's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Sport Nova Scotia as at March 31, 2017, and the results of its operations, and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. Chartered Professional Accountants June 9, 2017 Page 1

4 Statement of financial position as at March 31, $ $ Assets Current assets Cash and cash equivalents (Note 4) 2,483,299 4,152,271 Short-term investments (Note 5) 9,839,258 7,783,324 Accounts receivable 755, ,552 Deferred rent receivable 62,853 48,978 Prepaid expenses and inventory 46,215 47,324 13,186,788 12,826,449 Capital assets (Note 6) 974,978 1,026,386 14,161,766 13,852,835 Liabilities Current liabilities Accounts payable and accrued liabilities 216, ,141 Government remittances payable 161, ,896 Deferred revenue (Note 14) 10,510,996 10,106,546 10,888,827 10,546,583 Net assets Unrestricted 844, ,083 Internally restricted (Note 3) 1,453,908 1,459,786 Net investment in capital assets 974,975 1,026,383 3,272,939 3,306,252 14,161,766 13,852,835 Commitments (Note 8) Contingencies (Note 12) On behalf of the Board Director Page 2

5 Statement of revenue and expenses year ended March 31, $ $ Revenues Operating ( Schedule 1) 1,241,995 1,244,219 Programs ( Schedule 1) 5,858,460 5,864,591 7,100,455 7,108,810 Expenses Operating ( Schedule 2) 1,185,604 1,210,308 Programs ( Schedule 3) 5,826,982 5,678,897 7,012,586 6,889,205 Excess of revenues over expenses before amortization 87, ,605 Amortization 121, ,080 (Deficiency) excess of revenues over expenses (33,313) 103,525 Page 3

6 Statement of changes in net assets year ended March 31, 2017 Net investment in Internally capital assets restricted Unrestricted Total Total $ $ $ $ $ Beginning balance 1,026,383 1,459, ,083 3,306,252 3,202,727 (Deficiency) excess of revenues over expenses (121,182) 202,031 (114,162) (33,313) 103,525 Investment in capital assets 69,774 (66,524) (3,250) - - Interfund transfers Transfer Building Fund to General Fund - (310,000) 310, Rental revenue paid from General Fund to Building Fund - 191,860 (191,860) - - Building management fee - (23,245) 23, Closing balance 974,975 1,453, ,056 3,272,939 3,306,252 Page 4

7 Statement of cash flows year ended March 31, $ $ Operating activities (Deficiency) excess of revenues over expenses (33,313) 103,525 Item not affecting cash Amortization 121, ,080 Changes in non-cash working capital items (Note 10) 368, , ,736 1,056,832 Investing activities Acquisition of capital assets (69,774) (77,770) Acquisition of short-term investments (2,055,934) (126,701) (2,125,708) (204,471) Net cash (outflow) inflow (1,668,972) 852,361 Cash, beginning of year 4,152,271 3,299,910 Cash, end of year 2,483,299 4,152,271 Page 5

8 Notes to the financial statements March 31, Basis of presentation Sport Nova Scotia (the Organization ) is a non-profit organization incorporated to assist and promote amateur sport in Nova Scotia. 2. Accounting policies The financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations in Part III of the CPA Canada Handbook and include the following significant accounting policies: Fund accounting The Organization maintains its accounts in accordance with the fund accounting method. This method observes limitations, if any, on the use of organization resources by maintaining separate accounts for each fund. Fund accounts are further classified as either unrestricted or restricted funds. Unrestricted funds are available to be used in their entirety at the discretion of the Organization. Restricted funds consist of those for which a specified application has been defined or upon which expenditure conditions have been set. The Sport Fund, KidSport Fund, the Building Fund and Canada Games Fund were segregated as separate funds with their own bank accounts and reported as internally restricted funds. Revenue recognition Revenue is recognized in accordance with the deferral method. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when they are received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Cash and cash equivalents Cash and cash equivalents comprise of cash and short-term investments with a term to maturity of three months or less at the date of acquisition. Capital assets Capital assets are recorded at cost and donated equipment is recorded at fair value. Capital assets are being amortized on the straight-line basis over their estimated useful lives as follows: Building 25 years Furniture and fixtures 10 years Medical equipment 5 years Computer hardware and software 3 years Use of estimates The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations 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 reporting date and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. Significant financial statement items that require the use of estimates are as follows: amortization of capital assets, deferred revenue and accrued liabilities. These estimates are reviewed periodically and adjustments are made, as appropriate, in the statement of operations in the year they become known. Impairment of long-lived assets Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized when their carrying value exceeds the total undiscounted cash flows expected from their use and eventual disposition. The amount of the impairment loss is determined as the excess of the carrying value of the asset over its fair value. Financial instruments The Organization initially measures its financial assets and financial liabilities at fair value. It subsequently measures all its financial assets and financial liabilities at amortized cost. Page 6

9 Notes to the financial statements March 31, Internally restricted net assets $ $ Building Fund 365, ,526 KidSport Fund 143, ,739 Sport Fund 917, ,428 Capital Asset Replacement Fund 27,093 27,093 1,453,908 1,459,786 Internally restricted funds represent board of directors approved appropriations from unrestricted net assets. The Organization may not use these internally restricted amounts for any other purpose without the approval of the board of directors. 4. Cash and cash equivalents The Organization administers bank accounts for KidSport Canada (Nova Scotia Chapter) and Sports & Recreation payroll. These bank accounts are held in the name of Sport Nova Scotia, but do not belong to the Organization and, therefore, these accounts are not included in these financial statements. 5. Short-term investments Short-term investments consist of GIC s with a combined value of $9,839,258 ( $7,783,324). Current year GIC s consist of $8,094,889 earning interest between 1.35% and 1.47% maturing on January 17, 2018, $26,949 earning interest at.90% maturing on April 16, 2017, $ 1,013,770 earning interest at 1.4% maturing April 6, 2017 and $ 703,650 earning interest at 1.35% maturing November 10, Investment income for each of the funds is reported within the total revenue of the respective funds on schedule Capital assets Accumulated Net book Net book Cost amotization value value $ $ $ $ Land 300, , ,000 Building 1,858,732 1,567, , ,499 Furniture and Fixtures 1,117, , , ,956 Medical Equipment 1, Computer Hardware and Software 275, ,683 6,707 7,011 3,553,356 2,578, ,978 1,026, Income taxes The Organization is registered under the Societies Act of the Province of Nova Scotia and is exempt from income tax on its operations. 8. Commitments The Organization entered into an office equipment lease agreement in March 2017 that replaced the existing agreement with a term ending June Future lease payments aggregate $54,400 and are payable over the next 48 months. Page 7

10 Notes to the financial statements March 31, Contributed goods and services During the year, the Organization recorded $281,093 ( $375,860) in donated goods and services. The majority of these contributions relate to public awareness campaigns, program promotion, Canada Games and fundraising. These contributions have been recorded at their fair value on the date of contribution. 10. Changes in non-cash working capital items $ $ Decrease / (increase) in accounts receivable 39,389 (90,186) (Increase) in deferred rent receivable (13,875) (31,666) Decrease / (increase) in prepaid expences and inventory 1,109 (4,680) (Decrease) in accounts payable and accrued liabilities (69,385) (52,551) Increase in government remittances payable 7,179 41,336 Increase in deferred revenue 404, , , , Related party transactions The Organization is a member of the Canadian Council of Provincial and Territorial Sport Federations Inc. As such, the Organization administers the Nova Scotia Amateur Sport Fund, a provincial fund established under the National Sport Trust Fund. Sport Nova Scotia is a licensee of KidSport Canada and as such administers a provincial fund. 12. Contingencies NPO status review The Organization is currently being reviewed by the Canada Revenue Agency to assess its eligibility to continue to have its earnings from its real estate property held under the Building Fund considered to be non-taxable. The outcome of this review remains uncertain as at the date of the financial statements, and as such was not provided for as at March 31, Harmonized Sales Tax audit The Organization was reassessed by Revenue Canada for the HST input tax credits for the period January, 2010 to March, 2011 in the amount of $100,874. After applying interest, penalties and a public service body rebate the Organization paid $62,549 in March, The Organization filed a notice of objection with Revenue Canada on June 13, 2014 appealing the reassessment. The net potential gain is $62,549 should the Organization be successful with the appeal. Page 8

11 Notes to the financial statements March 31, Financial instruments The Organization is exposed to various risks through its financial instruments. Liquidity risk Liquidity risk is the risk that an Organization will not be able to meet its financial obligations as they become due. The Organization is exposed to liquidity risk in its ability to finance its working capital requirements and meet its cash flow needs. Given the Organization s currently available liquid resources, from both financial assets and on-going operations, as compared to its contractual obligations, management assesses the Organization s liquidity risk to be low. Credit risk Credit risk arises with uncertainties of predicting financial difficulties tenants may experience which could cause them to be unable to fulfil their lease requirements. The Organization mitigates this risk by having a diversified mix of tenants thereby limiting the exposure to a single tenant. Interest rate risk The Organization is exposed to interest rate risk on its fixed and floating interest rate financial instruments. Fixedrate instruments subject the Organization to a fair value risk while the floating rate instruments subject it to a cash flow risk. The Organization is exposed to this type of risk as a result of investments in GIC s. However, the risk associated with investments is reduced to a minimum since these assets are invested in low interest instruments. 14. Deferred revenue Sport Canada General Kidsport Fund Games Building Total $ $ $ $ $ $ Balance, beginning of year 497,104 26,940 9,273, ,063 44,688 10,106,545 Less: amount recognized as revenue in the year (2,084,587) (667,506) (3,732,299) (18,345) (597,718) (7,100,455) Plus: amount received 2,144, ,547 3,892, , ,396 7,504,906 Balance, end of year 556,972 63,981 9,433, ,221 52,366 10,510, Budget figures The Company s annual budget is approved by the Board of Directors and membership. The budget figures are not subject to audit procedures. Page 9

12 Schedule of revenues - Schedule 1 year ended March 31, 2017 Programs and Administrative Budget management centre Total (unaudited) $ $ $ $ Operating Grant - Province of Nova Scotia 227, , , ,000 Building 597, , ,815 Membership 9,000 9,200 18,200 18,450 Rent income 20,598 33,002 53,600 53,597 Amortization of deferred capital grant Interest 15,375-15,375 14, , ,304 1,241,995 1,263,862 Programs Sport fund 3,732,299-3,732,299 3,980,460 KidSport 667, , ,160 Canada games 18,345-18, ,000 Advocacy sponsorship 117, , ,479 Provincial government funding - sport fair 20,000-20,000 20,000 Sport fairs 82,328-82,328 85,407 Sportsweep (Spring/Summer) 118, ,452 88,326 Sportsweep (Fall/Winter) 100, , ,826 Sport awards 76,656-76,656 82,555 Provincial government funding - sport futures 490, , ,600 Provincial government funding - multisport campaign 19,049-19,049 - NSTF (RBC Grant) - multisport campaign 25,000-25,000 - Postage/courier - 22,501 22,501 28,000 Printing/supplies - 22,583 22,583 21,000 PSO contribution administrative support 54,538-54,538 48,000 Network services ,619 44,459 42,840 Telecommunications - 16,489 16,489 18,000 Sponsorship 14,354-14,354 15,850 Dragon boat 10,000-10,000 10,000 PSO sponsor program 5,000-5,000 5,000 Athlete & volunteer recognition 3,223-3,223 5,300 Prov. Gov't funding - PSO professional development PSO Professional Development Day 2,727-2,727 - Merchandise sales 1,524-1,524 - Prov. Gov't funding - PSO development initiatives 30,325-30,325 35,000 Contracted services 36,866 48,656 85,522 86,445 Corporate games 77,222-77,222 91,687 5,704, ,848 5,858,460 6,344,935 Page 10

13 Schedule of operating expenses Schedule 2 year ended March 31, 2017 Programs and Administrative Budget management centre Total (unaudited) $ $ $ $ Salaries 482, , , ,185 Benefits 67,407 32,571 99, ,485 Building 353, , ,750 Office supplies 6,158 2,406 8,564 9,650 Professional fees 6,957 3,500 10,457 12,700 Advertising and public relations (2,679) - (2,679) 1,950 Annual meeting/reports 6,211-6,211 6,000 Professional development ,000 Board travel/meetings 4,275-4,275 7,000 Travel/meetings 3, ,345 7,700 Telecommunications 4,212-4,212 5,200 Parking 2,291-2,291 2,291 Postage/courier ,850 Temporary help 3, ,354 4,080 Printing 1, ,264 2,750 Interest and bank charges 1,116-1,116 1,850 Membership fees 1,798-1,798 2,800 PSO meetings CCPTSF administrative expenses Donations Insurance 1,600-1,600 1,000 Unrecoverable HST - Apr to Mar ,827 4,083 19,910 5, , ,696 1,185,604 1,243,291 Page 11

14 Schedule of programs expenses Schedule 3 year ended March 31, 2017 Programs and Administrative Budget Management Centre Total (unaudited) $ $ $ $ Sport fund 3,643,210-3,643,210 3,893,460 KidSport 799, , ,800 Canada Games 18,345-18, ,000 Advocacy 106, , ,400 Sport futures 490, , ,600 LTAD multisport campaign 44,049-44,049 - Sport fairs 83,609-83,609 91,874 PSO administrative staff support 54,538-54,538 48,000 PSO Professional Development 2,752-2, Sportsweep ( Spring /Summer) 104, ,439 79,969 Sportsweep ( Fall /Winter) 92,047-92, ,891 Sport awards 77,165-77,165 84,823 Sport quarterly 57,993-57,993 58,760 Printing/supplies - 45,069 45,069 46,500 Postage/courier - 22,500 22,500 28,000 Management information system 1,342 41,674 43,016 44,540 Telecommunications (1) 15,732 15,731 18,000 Sponsor/member servicing 12,064-12,064 13,350 Dragonboat 10,000-10,000 10,000 PSO sponsor program 3,500-3,500 5,500 East coast classic Athlete recognition 1,871-1,871 4,000 Merchandise cost of sales 1,591-1,591 - Volunteer recognition awards PSO development initiatives 30,325-30,325 35,000 Health and safety program Corporate games 66,661-66,661 67,220 5,702, ,975 5,826,982 6,197,287 Page 12