THE FACULTY ASSOCIATION OF THE UNIVERSITY OF CALGARY

Transcription

1 THE FACULTY ASSOCIATION OF THE UNIVERSITY OF CALGARY Financial Statements June 30, 2016

2 TELEPHONE (403) FAX (403) SUITE 507, A STREET SW CALGARY, ALBERTA T2H OG3 McCallum and Company Chartered Accountants INDEPENDENT AUDITOR'S REPORT To the Members of the Faculty Association of The University of Calgary: Report on the financial statements We have audited the accompanying financial statements of The Faculty Association of The Un iversity of Calgary, which comprise the statement of financial position as at June 30, 2016 and the statements of operations, changes in net assets and cash flows for the year ended June 30, 2016 and a summary of significant accounting policies and other explanatory information. Management's responsibility for financial statements Management is responsible for the preparation and fair presentation of these financial stat ~ments 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 fr )m material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these financial statement's 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 audits to obtain reasonable assurance zbout whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and jisclosures 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. An audit al;o 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 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 financ al position of The Faculty Association of The University of Calgary as at June 30, 2016 and the results of its opera1ions and its cash flows for the years ended June 30, 2016 in accordance with the Canadian accounting standards for not-for-profit organizations. February 28, 2017 Calgary, Alberta, Canada McCallum and Company Chartered Accountants Page I

3 Index to the Financial Statements For the year ended June 30,2016 Page INDEPENDENT AUDITOR'S REPORT FINANCIAL STATEMENTS Statements of Financial Position Statements of Operations Statements of Changes in Net Assets Statements of Cash Flows Notes to the Financial Statements Schedule I Statement of Expenses 9

4 TELEPHONE (403) FAX (403) !>UITE 507, A STREET SW CALGARY, ALBERTA T2H OG3 McCallum and Company Chartered Accountants INDEPENDENT AUDITOR'S REPORT To the Members of the Faculty Association of The University of Calgary: Report on the financial statements We have audited the accompanying financial statements of The Faculty Association of fhe University of Calgary, which comprise the statement of financial position as at June 30, 2016 and the statements of operations, changes in net assets and cash flows for the year ended June 30, 2016 and a summary of signific~ nt accounting policies and other explanatory information. Management's responsibility for 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 fi om material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these financial statement's 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 audits 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 fi'aud 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. 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 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 The Faculty Association of The University of Calgary as at June 30, 2016 and the results of its oper~.tions and its cash flows for the years ended June 30, 2016 in accordance with the Canadian accounting s :andards for not-for-profit organizations. February 8, 2017 Calgary, Alberta, Canada McCallum and Company Chartered Accountants Page I

5 Statements of Financial Position As at June 30, 2016 and 2015 ASSETS Current assets: Cash and cash equivalents Investments in marketable securities (note 3) Accounts receivable Prepaid Expenses Property and equipment (note 4) Office renovation costs, net of accumulated amortization (note 5) 2016 $ 440,775 :!,075, ,889 9,441 :!,665,779 55,942 $ 2,721, $ 132,0 10 2,398, ,807 8,9 19 2,675,437 75,434 $ 2,750,871 LIABILITIES AN D NET ASSETS C urrent liabilities: Accounts payable and accrued liabil ities $ 102, ,590 Net Assets: Invested in property and equipment Internally restricted ( note 6) 55,942 l,562,961 Z,618,903 $ Z,72 1, ,434 2,6 10,847 2,686,281 $ 2,750,871 Approved on behalf of the Board: Director: Di rector: Page 2 The accompanying notes form an integral part or the fi nancial Sl<ltcmcnts

6 Statements of Operations For the Years Ended June 30,2016 and Revenue Faculty dues $ 1,691,177 $ 1,657,549 Employment insurance premium rebate 127, ,742 Release time recoveries 102, ,000 Investment income 100,804 93,837 Other income 2,011 2,023,502 1,980,128 Expenses Personnel (Schedule 1) 1,235,606 1,156,183 Governance (Schedule I) 518, ,835 Office (Schedule 1) 97,720 98,086 Professional fees (Schedule I) 63,082 40,456 1,9 14,781 I,793,560 Excess of revenue over expenses before the following 108, ,568 Amortization - Office renovation costs (Note 5) ( 177,754) Other reserve expenses (50,357) (63,873) Amortization (46,603) (43,019) Change to record investments at fair market value (note 2) (79,139) (5,262) Excess of expenses over revenues $ ~67,378) $ ( 103,340) Page 3 The accompanying notes fonn an integral pan of the financial state111cnts

7 Statements of Changes in Net Assets For the Years Ended June 30,2016 and 2015 Net assets, beginning of the year Excess of expenses over revenues Acquisitions of property and equipment Invested in property and e ui ment $ 75,434 (46,603) 27, $ 2,610,847 $ 2,686,281 $ 2,789,621 (20,775) (67,378) ( 103,340) (27,111) $ Net assets, end of year $ 55,942 $ 2,562,961 2_,6_ts _9o_~. $_ 2_._68_6_,2_8_1 _ Page 4 The accompanying notes lonn an integral part of the financial staten1ents

8 T he Faculty Association of the University of Calgary Statements of Cash Flows For the Years Ended June 30,2016 and OPERATING ACTIVlTIES Cash received from dues and other revenue $ 1,918,1116 $ I,889,370 Cash paid fo r programs, activities and administration (694,1)29) (722,968) Cash paid with respect to personnel ( I,234, ~ 1 IS) ( 1' 154,86 1) Investment income received IOO,ll04 93,823 89,:J INVESTING ACTIVITIES Purchase of property and equipment (27,"11 I) (68,350) Acquisition of marketable securities (587,645) Proceeds from redemption of marketable securities 246, , 174 2I8,a89 ( 118,821 ) Increase {decrease) in cash 308,'765 ( 13,457) Cash and cash equivalents, beginning of year 132, ,467 Cash and cash equivalents, end of year $ 440,775 $ 132,010 Page 5 The accompanying notes fom1 an integral part of the financial statc ncnts

9 Notes to the Financial Statements For the Years Ended June 30,2016 and 2015 I. PURPOSE OF ORGANIZATION The Faculty Association of the University of Calgary ("the Association") is an academic staff association that strives to promote the independence and freedom of teaching, of thojght, and of research within the University and to promote the joint interests and welfare of academic staff associations through the Canadian Association of University Teachers. The Association is incorporated under the Post-Secondary Learning Act of Alberta. The Association is a not-for-profit organization Jnder section 149 of the Income Tax Act and not subject to the payment of income taxes. 2. SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with Canadian accounting standards for notfor-profit organizations in Part Ill of the CICA Handbook, and in management's opinion, have been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below: a) Cash and cash equivalents The Association classifies the following as cash and cash equivalents: c.tsh on deposit at banks or other financial institutions in these accounts. b) Revenue Recognition The Assocjation follows the deferral method of accounting for contributions. Contributions are recognized as revenue in the period in which the related expenses are incurred. Operating revenues are recognized as revenue, either in the period rec<:ived or, when a portion of the revenue relates to a future period, it is deferred and recognized in the subsequent period. c) Fund Accounting The Association does not use fund accounting to record and report net assets, but refers to special funds as described in note 6. d) Property and Equipment Property and equipment is recorded at cost. Assets acquired over $500 are capitalized to the appropriate accounts. Amortization of property and equipment is provided on a sttaight line basis over the assets' estimated useful lives as follows: Office improvements Office furnishings and equipment Computer equipment Computer Software 5 yt:ars S years 3 years 3 years Page 6

10 Notes to the Financial Statements For the Years Ended Jl!lne 30, 2016 and 2015 e) Financiallnstruments The Association initially measures its financial assets and financial liabilit es at fair value. It subsequently measures all of its fina ncial assets and financial liabi lities at amortized cost, except for investments in marketable securities that are quoted in an active market, which are measw ed at fair value. Changes in fa ir value are recognized as unrealized gains or losses in the statement of opera1 ions. The financial assets measured at amortized cost include cash and acccunts receivable. The financial liabilities measured at amortized cost include accounts payable and accrued liabilities. The financial assets measured at fair value include marketable securities. 3. INVESTMENTS IN MARKETABLE SEC URITIES Fixed income securities, at fair market value Interest rates range from 5.763% to %, callable between December 31, 2016 to June 30, ,075, $ 2,398,701 Fixed income investments have been classifi ed as marketable securities due to their cashable nature. 4. PROPERTY A ND EQUIPMENT Accumulated Accumulated Cost Amortization Net Book Value Office furnishings and equipment $ 44,781 $ 47,651 $ 28,523 $ 23,014 $ 16,258 $ 24,637 Computer equipment I 10,101 99,274 73,662 48,612 36,439 50,662 Office improvements 5,683 1,626 2,438 1,491 3, $ 160,565 $ 149,256 $ 104,623 $ 73,822 $ 55,942 $ 75,434 Cost includes both the purchase price of the physical assets and other direct costs required to bring the asset into use. 5. OFFICE RENOVATION COSTS The association relocated to new premises within the University of Calgary. A:; part of the relocation, the Association provided $200,000 of funds to renovate the new facility. A ''Licen>e of Occupation" was signed between the Association and the University of Calgary providing for an initial term of occupation of 5 years commencing December 9, The fee for the initial term ofthe License of Occupation is $1. An option provides for an additional renewal term of five years with a cost to be determilll!d. Further, the License of Occupation Agreement may be cancelled by the University of Calgary at any time following the te1mination of the collective agreement between the Association and the Governors of the University of Calgary. This agreement shall continue to be in effect until a new agreement is concluded. The costs were fully amortized in the prior year.. Page 7

11 Notes to the Financial Statements For the Years Ended June 30, and INTERNALLY RESTRICTED NET ASSETS The Association's Budget Policy provides for a category of net assets called Special Funds that are internally restricted to cover expenditures which go beyond the yearly buc.getary cycle. Each of the three main special funds (General Reserve Fund; Capital Fund; Public Relations and Special Projects Fund) has a clearly defined set of guidelines for allocation of fu nds, a designated minimum funding formula, a specific set of spending thresholds and individual requirements for approving e>:penditures. A common set of guidelines govern investment of the funds, reporting requirements and signing authority. The funds are invested in marketable securities and can be accessed following approval by the Board of Directors for the established purposes, within the limits prescribed, by the Executive Director, the Treasurer or the Board of Directors. The General Reserve Fund also covers any opentional shortfalls. Net asset fund balances are as follows: General reserve funds Capital Fund Staff benefit reserve funds Special projects $ 2,379,531 $ 2,445, , ,026 36,516 28,884 17,176 13,069 $ 2,562, 961 $ 2,61 0, FINANCIAL INSTRUMENTS The Association's financial instruments consist of cash and cash equivalents, investments in marketable securities, accounts receivable, prepaid expenses, and accounts payable and accrued liabi lities. Unless otherwise noted, it is management's opinion that the Association is not exposed to significant interest, currency or credit risks arising from these fmancial instruments as they :tre held until maturity. Market risks are managed by the application of an approved investment pol icy that restricts the nature of investments held. 8. CONTINGENCY Certain employees of the Association participate in the University Academic Pension Plan, which is not fully funded. Although, unlikely, this ob ligation to its employees, could ultimately result in an actual legal liability to the Association. Page 8

12 Schedule I For the Years Ended June 30,2016 and 2015 Personnel Salaries Academic release Benefits Temporary services salaries Staff training Governance CAUT dues CAFA dues Travel, training and conferences Meetings and coffee supplies Election committee Discretionary fund President's discretionary fund Pension committee Policy support and other expenses Office Equipment maintenance and technical support Printing and photocopying Supplies and stationary Insurance Telephone and computer wireless Northwest storage Miscellaneous Bank charges Professional fees Legal and consulting Audit Bookkeeping $ 756,981 $ 697, , , , ,892 40,643 71,298 3,299 6,398 $ 1,235,606 s 1,156,183 $ 321,561 $ 315, , ,852 15,160 12,538 9,239 8,018 1,21 6 2,242 1,694 1,700 2,749 1,694 1, , $ 518,373 $ 498,835 $ 43,965 $ 38,883 16,504 18,720 15,970 16,674 7,651 7,300 6,090 5,856 5,617 5,717 1,923 4, $ 97,720 $ 98,086 $ 42,448 $ 17,088 13,877 12,623 6,757 10,745 $ 63,082 $ 40,456 Page 9