WOMEN ARE SAFE, INC. FINANCIAL STATEMENTS JUNE 30, 2017

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1 FINANCIAL STATEMENTS JOE OSTERFELD, CPA CERTIFIED PUBLIC ACCOUNTANT 710 NORTH MAIN STREET ~ SUITE A PO BOX 807 COLUMBIA, TN

2 FINANCIAL STATEMENTS AND AUDITOR S REPORTS TABLE OF CONTENTS Page Independent Auditor s Report 1 Financial Statements: Financial Position 2 Statement of Activities 3 Statements of Functional Expenses 4 Statement of Cash Flows 5 Notes to Financial Statements 6-10

3 Joe Osterfeld, CPA Certified Public Accountant 710 North Main Street ~ Suite A ~ PO Box 807 ~ Columbia, TN Telephone: ~ joeosterfeldcpa@att.net To the Board of Directors Women Are Safe, Inc. Centerville, Tennessee INDEPENDENT AUDITOR S REPORT We have audited the accompanying financial statements of Women Are Safe Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2017, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation 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 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 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 entity 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 entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant 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 is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Women Are Safe Inc. as of June 30, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Joe Osterfeld, CPA Columbia, Tennessee November 10,

4 STATEMENT OF FINANCIAL POSITION JUNE ASSETS Current Assets Cash and cash equivalents $ 13,100 Accounts receivable - grantor 20,036 Total Current Assets 33,136 Property and Equipment Land 6,809 Building 117,627 Leasehold improvements 7,020 Furniture and fixtures 11,810 Equipment 9, ,565 Less: accumulated depreciation 119,896 Total Property and Equipment 32,669 Other Assets Utility deposits 45 Total Assets $ 65,850 LIABLITIES AND NET ASSETS Current Liabilities Accounts payable $ 2,969 Sales tax payable 184 Payroll taxes payable 3,430 Line of Credit - First Farmers & Merchants 12,000 Total Current Liabilities 18,583 Net Assets Unrestricted 44,267 Board designated 3,000 Total Net Assets 47,267 Total Liabilities and Net Assets $ 65,850 See accompanying notes to the financial statements. 2

5 STATEMENT OF ACTIVITIES FOR THE YEARS ENDING Temporarily Unrestricted Restricted Total Revenues Grants $ - $ 202,553 $ 202,553 Contributions 88,707-88,707 In-kind donations 5,935-5,935 Interest income 3-3 Sales 59,338-59,338 Net assets released from restrictions 202,553 (202,553) - Total Revenues 356, ,536 Expenses Program services 305, ,591 Support services 57,844-57,844 Total Expenses 363, ,435 - Increase (derease) in net assets (6,899) - (6,899) Net assets - beginning (unaudited) 54,166-54,166 Net assets - ending $ 47,267 $ - $ 47,267 See accompanying notes to the financial statements. 3

6 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEARS ENDING Shop Til Supporting VOCA It Stops Services Total Expenses Salary, wages & benefits $ 170,812 $ 24,787 $ 22,958 $ 218,557 Taxes and benefits - 3,305 3,305 In-kind expenses 5, ,935 Occupancy - 22,036 4,279 26,315 Interest Expense Other Administrative Conferences and meetings - - 2,512 2,512 Depreciation - - 3,094 3,094 Insurance 7,000-1,637 8,637 Professional fees 21,458 1,300 1,937 24,695 Postage and shipping Supplies 36,565 2,143 7,664 46,372 Specific assistance - - 3,129 3,129 Telephone - 1,686 1,543 3,229 Travel 11, ,792 Fund raising - - 2,982 2,982 Total Expenses $ 253,639 $ 51,952 $ 57,844 $ 363,435 See accompanying notes to the financial statements. 4

7 STATEMENT OF CASH FLOWS FOR THE YEARS ENDING Cash Flows from Operating Activities: Increase (decrease) in net assets $ (6,899) Adjustments to reconcile increase (decrease) in net cash Depreciation 3,094 (Increase) decrease in operating assets Accounts receivable - grantor (3,101) Increase (decrease) in operating liabilities Accounts payable & accrued expenses 62 Payroll taxes payable 440 Cash Flows provided (used) by Operating Activities (6,404) Cash Flows from Financing Activities: Proceeds from Line of Credit 28,000 Payments on Line of Credit (20,043) Cash Flows provided (used) by Financing Activities 7,957 Increase (decrease) in cash 1,553 Cash and cash equivalents - beginning 11,547 Cash and cash equivalents - ending $ 13,100 See accompanying notes to the financial statements. 5

8 NOTES TO THE FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities Women Are Safe, Inc. (the Shelter) was organized in 1988 to assist victims of domestic violence and their children in establishing and maintaining a facility that will provide safe and temporary shelter to these individuals and their children. The Shelter began not only as a temporary refuge for individual victims of domestic violence, but also to challenge society to develop satisfactory alternatives to violent living. The Shelter also operates a thrift store, Shop Til It Stops, to generate income for the Shelter s activities. Supportive services include indirect, management and general expenses not directly identifiable to any program, but indispensable to these activities and to the Shelter s existence. The Shelter is governed by a board of directors. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles and accordingly, reflect all significant accounts receivable, accounts payable, and other liabilities. Basis of Presentation Financial statement presentation follows US generally accepted accounting principles which require Horton Haven 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. There were no permanently restricted assets at June 30, 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 action of the Shelter 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 as net assets released from restrictions. Permanently Restricted Net Assets Net assets subject to donor-imposed stipulations that must be maintained permanently by the Shelter. Generally, the donor of these assets permit the organization to use all or part of the income earned on any related investments for general or specific purposes. 6

9 NOTES TO THE FINANCIAL STATEMENTS Cash and Cash Equivalents For purposes of the statement of cash flows, the Shelter considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. There were no cash equivalents at June 30, Contributions All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor for specific purposes are reported as temporarily restricted or permanently restricted support that increases those net asset classes. When a temporary restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restriction. Contributions received with donor-imposed restrictions that are met in the same year in which the contributions are received are classified as unrestricted contributions. The Shelter did not have any temporarily restricted net assets at June 30, Donation of Property and Equipment Donations of property and equipment are recorded as support at their estimated fair value at the date of donation. The Shelter reports these donations as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. Absent donor stipulations regarding how these long-lived assets must be maintained, the Shelter reports expirations of donor restrictions when the donated assets are placed in service as instructed by the donor. The Shelter transfers temporarily restricted net assets to unrestricted net assets at that time. Donated Services The Shelter records donated services when they create or enhance a non-financial asset or for specialized skills provided by entities or persons possessing those skills that would be purchased if they were not donated. 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. 7

10 NOTES TO THE FINANCIAL STATEMENTS Fair Values of Financial Instruments Financial instruments of the Shelter include cash, accounts receivable, and trade accounts payable. Management estimates that the fair value of all financial instruments at fiscal year-end does not differ materially from the carrying values of the financial instruments recorded in the accompanying statement of financial position. 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 in the Statement of Functional Expenses. Accordingly, certain costs have been allocated among the program and supporting services benefited. Income Taxes The Shelter is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Service as other than a private foundation. Accordingly, no provision for income taxes has been made. The Shelter's Form Return of Organizations Exempt from Income Tax, for the years ending June 30, 2015, 2016 and 2017 are subject to examination by the IRS, generally for 3 years after they are filed. Property and Equipment The Shelter s policy is to capitalize property and equipment over $1,000. Lesser amounts are expensed. Purchased property and equipment is capitalized at cost.depreciation is calculated using the straight-line method over the useful life of the asset and is reflected as an expense in the Statement of Functional Expenses. Support and Revenues The Shelter receives its grant support primarily from the State of Tennessee, Department of Finance and Administration, Office of Criminal Justice Programs and the Tennessee Coalition against Domestic and Sexual Violence. NOTE 2 CASH AND CREDIT RISK All cash of the Shelter is deposited in FDIC insured banks. At June 30, 2017, the Shelter did not have any accounts in excess of FDIC insurance limits. 8

11 NOTES TO THE FINANCIAL STATEMENTS NOTE 3 ACCOUNTS RECEIVABLE At June 30, 2017, accounts receivable grantors were composed of the following: Program State of Tennessee VOCA $ 20,036 Accounts receivable are stated at their net realizable value. All receivables are considered collectable by management. NOTE 4 - LINE OF CREDIT As of June 30, 2017, the Shelter was indebted for the following: First Farmers and Merchants Bank - Revolving Line of Credit Credit limit $15,000, 6% interest, matures May 2, 2018, $12,000 outstanding NOTE 5 PROPERTY AND EQUIPMENT Property and equipment at June 30, 2017 consist of: Useful Life Land NA $ 6,809 Building ,627 Leasehold improvements 39 7,020 Furniture and fixtures 7 11,810 Equipment 10 9, ,565 Less: accumulated depreciation 119,896 $ 32,669 Depreciation expense for the years ended June 30, 2017 was $3094. The Shelter has no planned major maintenance activities planned. NOTE 6 RISK CONCENTRATIONS For the years ended June 30, 2017, approximately 57% of the Shelter s funding was provided by the State of Tennessee, Department of Finance and Administration, Office of Criminal Justice Programs. A major reduction of funds by the grantor, should this occur, could have a significant effect on future operations. 9

12 NOTES TO THE FINANCIAL STATEMENTS NOTE 7 COMPENSATED ABSENCES Employees are entitled to paid vacation depending on length of service and other factors. Any vacation time not used by June 30, 2017 is forfeited. Employees are also entitled to personal/sick leave. Personal/sick leave is not accrued because it does not accumulate or vest with employees. NOTE 8 GRANTS The Shelter received funding from the following grants: Grant Contract Grant Support Number Contract Period Recognized State of Tennessee Family Violence Shelter Edison /1/16 to 6/30/17 $ 202,553 NOTE 7 RELATED PARTY TRANSACTIONS WAS leases property owned by Molly Bates, Secretary of the Board of Directors, for the Shop Til It Stops thrift store located on the square in Centerville, Tennessee. The original lease expired on June 30, The lease payments for the year ended June 30, 2017 were $14,400. WAS continues to lease this property on a month-to-month basis. NOTE 8 - DATE OF MANAGEMENT S REVIEW Management has evaluated subsequent events through November 10, 2017 which is the financial statement issuance date. No material subsequent events have occurred that need to be disclosed. 10