CONNECTICUT ASSOCIATION OF NONPROFITS, INC. Independent Auditors' Report Financial Statements

Transcription

1 Independent Auditors' Report Financial Statements June 30,2014 and 2013

2 Table of Contents June 30, 2014 and 2013 Independent Auditors' Report..., FINANCIAL STATEMENTS: Statements of Financial Position... 3 Statements of Activities and Changes in Net Assets... 4 Statements of Functional Expenses Statements of Cash Flows Notes to Financial Statements

3 WHITTLESEY & HADLEY, P.C. Certified Public Accountants/Consultants 280 Trumbull Street, 24th Floor Hartford, Connecticut (voice) (fax) INDEPENDENT AUDITORS' REPORT To the Board of Directors Connecticut Association ofnonprofits, Inc. Report on the Financial Statements We have audited the accompanying fmancial statements of Connecticut Association of Nonprofits, Inc. which comprise the statements of fmancial position as of June 30, 2014 and 2013, and the related statements of activities and changes in net assets, functional expenses and cash flows for the years then ended, and the related notes to the fmancial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these fmancial 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 the fmancial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these fmancial 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fmancial statements. The procedures selected depend on the auditors' 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 fmancial 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 fmancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Offices in Hartford, Connecticut & Holyoke, Massachusetts 1

4 Opinion In our opinion, the financial statements referred to above present fairly in all material respects, the fmancial position of Connecticut Association ofnonprofits, Inc. as of June 30, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Hartford, Connecticut January 15,

5 Statements of Financial Position June 30, 2014 and 2013 ASSETS 2014 Current assets Cash (Note 1) 221,594 Dues and revenues receivable (net of reserve) (Note 3) Grants receivable (Note 4) Prepaid expenses Total current assets 66, ,260 16, , ,157 71,266 27,182 24, ,018 Furniture and equipment (net) (Note 1) 16,920 30,483 Security deposit 13,408 Total assets 585, ,909 LIABILITIES AND NET ASSETS Current liabilities Accounts payable Accrued payroll Deferred revenue Capital lease obligation- current portion (Note 2) Total current liabilities 65,209 16,258 18,323 9, ,257 43,870 1,065 17,459 9,950 72,344 Long-term liabilities Capital lease obligation -less current portion (Note 2) 9,468 Total liabilities 109,257 81,812 Net assets Unrestricted Temporarily restricted (Note 5) Total net assets 212, , , , ,097 Total liabilities and net assets 585, ,909 The accompanying notes are an integral part of the financial statements. 3

6 Statements of Activities and Changes in Net Assets For the Years Ended June 30,2014 and Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total Revenue and Other Support Grants and contracts 59, , ,989 81,301 81,301 Memberships (net of discounts) 622, , , ,165 Products (Note 7) 163, , , ,050 Contributions and sponsor fees 55,527 55,527 59,002 59,002 Annual conference 56,984 56,984 38,887 38,887 Training - general 92,831 92, , ,551 Advertising 18,475 18,475 15,302 15,302 Other income 1,000 1, Total revenue and other support 1,070, ,608 1,334,873 1,044,962 1,044,962 Expenses Programs 931, , , ,031 Management and general 151, , , ,400 Total expenses 1,083,260 1,083,260 1,043,431 1,043,431 Changes in Net Assets (12,995) 264, ,613 1,531 1,531 Net assets -beginning of year 225, , , ,566 Net assets -end of year 212, , , , ,097 The accompanying notes are an integral part of the fmancial statements. 4

7 Statement of Functional Expenses For the Year Ended June 30,2014 Program Management Total Services & General 2014 Salaries 450, , ,600 Fringe benefits 105,668 19, ,576 Contract services 38,825 3,105 41,930 Rent 80,495 13,039 93,534 Conferences and meetings 100, ,250 Contract services - training 33,562 33,562 Copying and printing 12, ,750 Retirement plan contribution 19,407 19,407 Equipment repairs and supplies 17,710 2,014 19,724 Telephone 7,763 1,292 9,055 Dues and subscriptions 10,559 1,099 11,658 Travel 9, ,873 Postage 4, ,287 Depreciation 13,165 2,323 15,488 Professional fees 8,075 1,425 9,500 Insurance 7,446 1,314 8,760 Supplies 3, ,490 Bank charges, finance charges and fees 6, ,950 Training - staff development 644 1,102 1,746 Bad debt 2,120 2,120 Total Expenses 931, ,411 1,083,260 The accompanying notes are an integral part of the fmancial statements. 5

8 Statement of Functional Expenses For the Year Ended June 30,2013 Program Management Total Services & General 2013 Salaries 421,431 96, ,961 Fringe benefits 97,598 22, ,845 Contract services 59,303 8,372 67,675 Rent 71,549 13,670 85,219 Conferences and meetings 82,172 1,320 83,492 Contract services - training 28,645 28,645 Copying and printing 14,944 3,287 18,231 Retirement plan contribution 19,393 19,393 Equipment repairs and supplies 9,797 1,711 11,508 Telephone 8,393 1,496 9,889 Dues and subscriptions 8,040 1,545 9,585 Travel 9,340 1,007 10,347 Postage 6, ,351 Depreciation 15,826 2,124 17,950 Professional fees 7,820 1,380 9,200 Insurance 6,762 1,193 7,955 Supplies 3, ,756 Bank charges, finance charges and fees 7, ,974 Training - staff development 1, ,185 Bad debt 7,270 7,270 Total Expenses 886, ,400 1,043,431 The accompanying notes are an integral part of the financial statements. 6

9 Statements of Cash Flows For the Years Ended June 30,2014 and Cash flows from operating activities Change in net assets 251,613 1,531 Adjustments to reconcile change in net assets to net change in cash from operating activities: Depreciation 15,488 17,950 Change in assets and liabilities: Dues and revenues receivable 4,621 28,756 Grants receivable (237,078) 4,430 Prepaid expenses 7,865 (11,891) Security deposit 13,408 (386) Accounts payable 21,339 (19,378) Accrued payroll 15, Deferred revenue 864 (39,941) Net change in cash from operating activities 93,313 (18,582) Cash flows from investing activities Redeem certificate of deposit 60,023 Capital expenditures (1,925) (5,345) Change in cash from investing activities (1,925) 54,678 Cash flows from financing activities Capital lease obligation (9,951) (8,610) Net change in cash 81,437 27,486 Cash - beginning of year 140, ,671 Cash - end of year 221, ,157 Supplemental disclosure of cash flow information: Non-cash program activities: Public relations 7,500 7,500 The accompanying notes are an integral part of the fmancial statements. 7

10 Notes to Financial Statements June 30, 2014 and 2013 NOTE 1-ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES Organization The Connecticut Association of Nonprofits, Inc. (the "Association") is a nonprofit corporation formed to provide supportive services to other not-for-profit organizations in the State of Connecticut. The Association is exempt from federal and state income taxes as a public charity under Section 501(c)(3) of the Internal Revenue Code. Consequently, no provision for income taxes has been made in the accompanying financial statements. In fiscal year 2014, the Association opened its CT Nonprofit Center (The "Center") in Hartford, Connecticut. The facility will help enforce the Association's mission to strengthen the efficiency, effectiveness and capacity of their nonprofit member tenants by providing affordable office space, stateof-the-art technology, shared meeting space and shared services. The Center is designed to build a collaborative nonprofit community with lasting impact beyond the physical structure. Management and General Expenditures Management has determined that management and general expenditures approximate 14.0% and 15.1% for the years ended June 30, 2014 and 2013, respectively, of the related line items with respect to salaries, related fringes and certain other administrative costs. For the years ended June 30, 2014 and 2013, management and general expenses totaled 151,411 and 157,400, respectively. Donated Materials and Services The Association receives, at times, donated materials and volunteer assistance from various sources. The donated materials would be reflected as contributions in the accompanying statements at their estimated values at the date of their receipt. No amounts for volunteer assistance have been recognized in the statement of activities because the criteria for recognition under accounting standards have not been satisfied. For the years ended June 30, 2014 and 2013, the Association received advertising and supplies valued at 7,500 and 7,500 respectively, which are included in contributions and sponsor fees and expenses in the statement of activities. Association also received furnishings valued at 1,142 and -0- for years ended June 30, 2014 and 2013, respectively, which are included in contributions and equipment expenses on the statement of activities. Depreciation Furniture and equipment owned by the Association have been capitalized at cost, and are being depreciated over five and six years, utilizing the straight-line method. This includes equipment acquired with restricted grant revenues for respective program purposes. Expenditures for additions and improvements are capitalized, and costs for repairs and maintenance are charged to expense as incurred. The Association maintains a capital depreciation account for Association office equipment and furnishings valued above 1,000 and for Nonprofit Center office equipment and furnishings above 5,000. The Executive Director approves all purchases for office equipment and furnishings. Property assets in excess of 1,000 are depreciated over their useful lives, normally considered to be five years for office equipment and five ten years for office furnishings. The depreciation of property assets acquired by sale, loan or gift requires written documentation and approval by the Executive Director. 8

11 NOTE 1-ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES- (CONTINUED) For the years ended June 30, 2014 and 2013, depreciation was recorded in the amount of 15,488 and 17,950, respectively. The total cost and related accumulated depreciation for the years ended June 30, 2014 and 2013 are as follows: Cost of furniture and equipment Less: Accumulated depreciation Furniture and equipment (net) 136, ,402 (119,457) (113,919) 16,920 30,483 ======== Recognition of Restricted Grant Revenues Revenues restricted by the donor, grantor, board of directors or any other outside party for particular operating purposes, are deemed to be earned and are reported as revenues currently. Use of 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. Basis ofpresentation The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Association and changes therein, are classified and reported as unrestricted net assets - net assets that are not subject to donor-imposed stipulations. The Association reports information regarding its fmancial p~sition and activities according to the following three classes of net assets: Unrestricted - Unrestricted net assets represent available resources other than donor-restricted contributions. Temporarily restricted- Temporarily restricted net assets represent contributions that are restricted either as to purpose or as to time of expenditure. Permanently restricted- Net assets subject to donor-imposed stipulations that they be maintained permanently by the Association. Cash and Cash Equivalents The Association holds all of its cash in accounts that are subject to immediate withdrawal. The Association considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. During the period covered by these financial statements, the Association did not invest in financial instruments classified as cash equivalents. 9

12 NOTE 1-ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES- (Continued) Fair Value Measurements The Association adopted the Financial Accounting Standards Board Accounting Standards Codification for "Fair Value Measurements". This defmes fair value and establishes a framework for measuring fair value in generally accepted accounting principles. It defmes fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standards board also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values: Levell- Level2- Level3- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Significant unobservable inputs that reflect the Association's own assumptions about the assumptions that market participants would use in pricing an asset or liability. Valuation techniques based on unobservable inputs are highly subjective and require judgments regarding significant matters such as the amount and timing of future cash flows and the selection of discount rates that may appropriately reflect market and credit risks. Changes in these judgments often have a material impact on the fair value estimates. In addition, since these estimates are as of a specific point in time, they are susceptible to material near-term changes. Income Taxes The Association has received a determination letter from the Internal Revenue Service granting it exemption from federal income taxes under Section 50l(c)(3) ofthe Internal Revenue Code. The Association implemented the accounting guidance for uncertainty in income taxes. Tax positions initially need to be recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by tax authorities. As of June 30, 2014 and 2013, the Association has no uncertain tax positions that qualify for either recognition or disclosure in the fmancial statements and believes that it has appropriate support for income tax positions taken in its tax returns. Currently, the Association's federal informational returns for fiscal years remain open to inspection by the IRS with 2013 to be filed in Reclassifications Certain reclassifications were made to June 30, 2013 amounts to compare with June 30, 2014 presentation. Subsequent Event Measurement Date The Association monitored and evaluated any subsequent events for footnote disclosures or adjustments required in its financial statements for the fiscal year ended June 30, 2014 through January 15, 2015, the date on which the financial statements were available to be issued. 10

13 NOTE 2-LEASE COMMITMENTS Operating The Association leases 5,726 square feet of office space at 75 Charter Oak Avenue with the intention of sharing 3,500 square feet with nonprofit organizations residing in the building(s) through December Resident nonprofits will pay an annual fee to the Association to help offset the future minimum lease payments outlined below. At June 30, 2014, future minimum lease payments over the term of the leases are as follows for June 30: Capital , , , , ,436 The Association acquired two copiers under a capital lease agreement which requires monthly payments of 1,011 through April At June 30, 2014, future minimum lease payments over the term of the lease are as follows: Year ending June 30: 2015 Less amounts representing interest NOTE 3-DUES AND REVENUES RECEIVABLE 10,110 (643) 9,467 At June 30, 2014 and 2013, the accounts receivable balances were 66,645 and 71,266, respectively, shown as follows: Membership dues Insurance products Group purchasing Unemployment services Advertising Other Total 30,617 14,446 3,959 16, ,645 36,691 11,669 6,037 16, ,266 The Association determined that membership dues totaling 2,120 and 7,270 were uncollectible as of June 30, 2014 and 2013, respectively. At June 30, 2014 and 2013, the reserve for bad debts was 5,000. The reserve for bad debt method of valuing accounts receivable is based on historical experience, coupled with a review of the current status of accounts receivable. 11

14 NOTE 4-GRANTS RECEIVABLE Included in grants receivable atjune 30, 2014 and 2013 was as follows: The Hartford Foundation For Public Giving 254,260 27,182 The Fund For Greater Hartford 10,000 Total 264,260 ======= 27,182 NOTE 5-TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets that are to be utilized in future years for the infrastructure and start-up expenses of the CT Nonprofit Center are 264,608 for the year ended June 30, NOTE 6-RETIREMENT PLAN The Association maintains a retirement plan utilizing the Association's fiscal year. Under this plan, contributions are at the discretion of management. Eligible participants include full-time and part-time emj'loyees who have completed at least 750 hours of service during the year and are employed on June 30. Total contributions the plan were 19,407 and 19,393 for the years ended June 30, 2014 and 2013, respectively. NOTE 7 -PRODUCTS At June 30, 2014 and 2013, Products were 163,800 and 158,050, respectively, shown as follows: Unemployment trust Group purchasing Insurance royalties Publications and other Total 68,135 63,966 44,545 23,398 47,537 68,380 3,583 2, ,800 =====15=8=,0=50= NOTE 8-CONCENTRATIONS AND CONTINGENCIES Approximately 20% of revenue came from one funder. Some grants require the fulfillment of certain conditions. Failure to fulfill the conditions could result in the return of funds. The Association does not believe any funds will need to be returned, because the stipulated conditions are being met. 12