TURNING POINT FOR GOD. Consolidated Financial Statements With Independent Auditors' Report. June 30, 2017 and 2016

Transcription

1 Consolidated Financial Statements With Independent Auditors' Report

2 Table of Contents CbXYdYbXYbh ;ix]hcfgp LYdcfh 1 Consolidated Financial Statements Consolidated Statements of Financial Position 3 Consolidated Statements of Activities 4 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 Supplementary Schedule CbXYdYbXYbh ;ix]hcfgp LYdcfh cb Midd`YaYbhUfm MW\YXi`Y 18 Consolidated Schedule of Functional Expenses 19 Page

3 ,/'(1(/'(/4 %5',4023L 2(1024 Board of Directors Turning Point for God Lakeside, California We have audited the accompanying consolidated financial statements of Turning Point for God (Turning Point), which comprise the consolidated statements of financial position as of, and the related consolidated statements of activities and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to Turning Point's preparation and fair presentation of the consolidated 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 Turning Point'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 consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Board of Directors Turning Point for God Lakeside, California Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Turning Point for God, as of, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Colorado Springs, Colorado October 12,

5 Consolidated Statements of Financial Position June 30, ASSETS: Current assets: Cash and cash equivalents $ 4,409,802 $ 5,190,031 Accounts receivable 358, ,366 Jfca]gYg+hc+[]jYobYh 2,235,061 2,981,054 Prepaid expenses and other assets 794, ,922 CbjYbhcfmobYh 3,725,581 3,012,324 11,524,108 12,339,697 Promises-to-give receivable, net of current portion 1,235,500 1,489,797 Investments 1, ,114 Land held for investment 3,000,000 2,050,000 Life insurance cash surrender value 1,476,514 1,288,857 JfcdYfhm* Yei]daYbh* UbX `cb[+`]jyx UggYhgobYh 7,569,970 7,891,968 Total Assets $ 24,807,164 $ 25,329,433 LIABILITIES AND NET ASSETS: Liabilities: Current liabilities: Accounts payable $ 3,942,480 $ 5,603,409 Accrued expenses and other liabilities 1,059,367 1,073,873 Long-term debt, current portion 1,920, ,293 6,922,010 6,930,575 Long-term debt, net of current portion 3,207,522 5,183,884 10,129,532 12,114,459 Net assets: Unrestricted: Undesignated 6,446,805 5,739,200 Net investment in land held for investment 3,000,000 2,050,000 HYh ]bjyghaybh ]b dfcdyfhm* Yei]daYbh* UbX `cb[+`]jyx UggYhgobYh 2,592,070 2,454,791 12,038,875 10,243,991 Temporarily restricted 2,638,757 2,970,983 14,677,632 13,214,974 Total Liabilities and Net Assets $ 24,807,164 $ 25,329,433 See notes to consolidated financial statements -3-

6 Consolidated Statements of Activities Year Ended June 30, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total SUPPORT, REVENUE, AND RECLASSIFICATIONS: Contributions $ 48,978,841 $ 1,551,468 $ 50,530,309 $ 47,417,734 $ 2,445,041 $ 49,862,775 Revenue: Sales, net of discounts 2,742,225-2,742,225 2,627,713-2,627,713 Special events 232, , , ,450 Interest, investment, and other (60,502) - (60,502) 55,245-55,245 2,914,373-2,914,373 3,490,408-3,490,408 Net assets released from: Satisfaction of program restrictions 1,883,694 (1,883,694) - 1,872,989 (1,872,989) - Total Support, Revenue, and Reclassifications 53,776,908 (332,226) 53,444,682 52,781, ,052 53,353,183 EXPENSES: Program activities: Broadcasting and related costs 36,449,717-36,449,717 37,725,591-37,725,591 Books, study guides, and other publications 7,710,292-7,710,292 8,424,744-8,424,744 44,160,009-44,160,009 46,150,335-46,150,335 (continued) See notes to consolidated financial statements -4-

7 Consolidated Statements of Activities (continued) Year Ended June 30, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total EXPENSES, continued: Supporting activities: Fund-raising 5,261,027-5,261,027 5,217,214-5,217,214 General and administrative 2,560,988-2,560,988 2,500,252-2,500,252 7,822,015-7,822,015 7,717,466-7,717,466 Total Expenses 51,982,024-51,982,024 53,867,801-53,867,801 Change in Net Assets 1,794,884 (332,226) 1,462,658 (1,086,670) 572,052 (514,618) Net Assets, Beginning of Year 10,243,991 2,970,983 13,214,974 11,330,661 2,398,931 13,729,592 Net Assets, End of Year $ 12,038,875 $ 2,638,757 $ 14,677,632 $ 10,243,991 $ 2,970,983 $ 13,214,974 See notes to consolidated financial statements -5-

8 Consolidated Statements of Cash Flows Year Ended June 30, CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 1,462,658 $ (514,618) Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 1,475,410 1,380,273 Net (gain) loss on investments 95,214 (36,676) Donated land held for investment (950,000) - Changes in operating assets and liabilities: Accounts receivable 6,613 53,004 Promises-to-give 1,000,290 (1,507,308) Prepaid expenses and other assets (3,989) 254,639 Inventory (713,257) (24,673) Accounts payable (1,675,565) 1,014,857 Accrued expenses and other liabilities (14,506) 219,607 Net Cash Provided by Operating Activities 682, ,105 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, equipment, and long-lived assets (928,776) (452,336) Proceeds from sale of investments 172,828 - Increase in life insurance cash surrender value (187,657) (189,004) Proceeds from payments on related party note receivable - 107,645 Net Cash Used in Investing Activities (943,605) (533,695) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt 200,000 - Payments on long-term debt (719,492) (241,550) Net Cash Used in Financing Activities (519,492) (241,550) Change in Cash and Cash Equivalents (780,229) 63,860 Cash and Cash Equivalents, Beginning of Year 5,190,031 5,126,171 Cash and Cash Equivalents, End of Year $ 4,409,802 $ 5,190,031 NON-CASH TRANSACTIONS AND SUPPLEMENTAL DISCLOSURE: Cash paid for interest (none capitalized) $ 253,766 $ 278,737 Property and equipment obtained through long-term debt $ 210,000 $ - Property and equipment obtained through accounts payable $ 14,636 $ - See notes to consolidated financial statements -6-

9 Notes to Consolidated Financial Statements 1. NATURE OF ORGANIZATION: Turning Point for God (the Organization) was incorporated in 1984 in California as a not-for-profit corporation exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (the Code). It is also exempt from state income taxes. The Organization has been classified as a publicly supported organization, which is not a private foundation, under Section 509(a) of the Code. The primary source of revenue for the Organization is contributions, which are tax-deductible for income tax purposes. The Organization is a religious organization dedicated to spreading the Gospel of Jesus Christ throughout the world through the use of radio, television, internet, mobile devices, and print. The Organization also offers Christian messages on =>pg* >P>pg* books, and related study materials as part of its exempt purpose. Substantially all of the above materials are produced by Dr. David Jeremiah, president and CEO of the Organization, who is also the senior pastor of Shadow Mountain Community Church. During the year ended June 30, 2013, Turning Point Support Foundation (the Foundation) was established to serve as a supporting organization to hold and invest assets on behalf of the Organization. Due to shared board members and economic control, this entity is required to be consolidated in the financial statements of Turning Point for God. During the year ended June 30, 2014, the Foundation become active. Land held for investment was transferred to the Foundation from a donor and is reported on the consolidated statements of financial position. The Organization and the Foundation are collectively referred to as Turning Point in the consolidated financial statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The consolidated financial statements of Turning Point have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The following summary of significant accounting policies are described below to enhance the usefulness of the consolidated financial statements to the reader. PRINCIPLES OF CONSOLIDATION Due to board of directors composition, the Foundation is a controlled affiliate of the Organization. The consolidated financial statements of Turning Point include the consolidated financial resources and activities of the Organization and the Foundation. All significant intercompany balances and transactions have been eliminated. -7-

10 Notes to Consolidated Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: CASH AND CASH EQUIVALENTS For the purposes of the consolidated statements of financial position and cash flows, cash and cash equivalents include cash on hand, cash on deposit, and money market accounts. These accounts may, at times, exceed federally insured limits. Turning Point has not experienced any losses in such accounts. PROMISES-TO-GIVE Promises-to-give are recognized as income when made unconditionally, and recorded at fair value based upon estimated future cash flows. Promises-to-give that are expected to be collected within one year are recorded at net realizable value. Promises-to-give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. The discounts on these amounts are computed using riskadjusted interest rates applicable to the years in which the promises are expected to be received. Promises-togive are reported net of allowances for uncollectible accounts. INVENTORY Inventory represents duplicated media, study guides, books, raw material supplies, and other Bible resources. All inventory is stated at the lower of cost or market value using the first-in, first-out (FIFO) method. Management periodically evaluates the inventory for obsolete or slow moving inventory. See note 4 for further detail. INVESTMENTS Investments consist of mutual funds, investments in closely-held securities, and equity securities. Mutual funds and equity securities are reported at fair market value and have readily determinable fair value. Investments in closely-held securities are carried at the lower of cost or fair value. Donated securities are recorded at fair value on the date of the gift and are carried in accordance with the above policy. Donated securities are reported as purchases of investments on the consolidated statements of activities. Turning Point invested $150,000 to acquire a 1.55% interest in Orange Leap, LLC, a Delaware Limited Liability Company. Orange Leap, LLC develops and markets donor management software targeting Christian ministries. During the year ended June 30, 2012, the value of the investment was adjusted to $85,000 to reflect management's estimate of fair value. Effective January 31, 2016, Orange Leap merged with YourCause (a private organization). After the merger, Turning Jc]bhpg investment is 1.08% of OLeap Holdings. During the year ended June 30, 2017, based on future projections of OLeap Holdings, management determined the investment's value is $0. The loss on investment of $85,000 is recorded in interest and other income on the consolidated statements of activities. -8-

11 Notes to Consolidated Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: LAND HELD FOR INVESTMENT The Foundation owns land located in Virginia and it is not used in operations and has been classified as held for investment. During the year ended June 30, 2017, the Foundation received a donation of property in Idaho. The donated land held for investment, valuation of $950,000, is recorded within contributions in the consolidated statements of activities. Land held for investment is held at estimated fair value. PROPERTY, EQUIPMENT, AND LONG-LIVED ASSETS Expenditures over $500 for property, equipment, and long-lived assets are capitalized at cost. Donated items are recorded at fair market value on the date of the gift. Depreciation and amortization expense is computed on the straight-line method over the estimated useful lives of the assets ranging from 5 to 39 years. NET ASSETS The consolidated financial statements report amounts by classification of net assets as follows: Unrestricted net assets are those resources currently available at the discretion of management for use in Nifb]b[ Jc]bhpg cdyfuh]cbg UbX h\cgy fygcifwyg ]bjyghyx ]b dfcdyfhm* Yei]daYbh* UbX `cb[+`]jyx UggYhgobYh, Temporarily restricted net assets are those resources which are stipulated by donors for specific operating purposes or capital projects. Promises-to-give that are restricted for future periods are classified as temporarily restricted until they are collected. All contributions are considered available for unrestricted use, unless specifically restricted by the donor or subject to legal restrictions. Restrictions on contributions for the acquisition of property or other long-lived assets are considered to be met when the property or other long-lived asset is placed in service. SUPPORT, REVENUE, AND EXPENSES Contributions are recorded when cash or unconditional promises-to-give have been received or ownership of donated assets is transferred to Turning Point. Conditional promises-to-give are recognized when the conditions on which they depend are substantially met. Turning Point records contributions as temporarily restricted if they are received with donor stipulations that limit their use through purpose or time restrictions, or both. When donor restrictions expire, that is, when the purpose restriction is fulfilled or the time restriction expires, the net assets are reclassified from temporarily restricted to unrestricted net assets and reported in the consolidated statements of activities as net assets released from restrictions. Turning Point receives non-cash gifts that are recorded as support at the estimated fair market value on the date of the gift. Goods given to Turning Point that do not have an objective basis for valuation are not recorded. Turning Point received $331,110 and $245,499 of investment gifts for the years ended, respectively. -9-

12 Notes to Consolidated Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: SUPPORT, REVENUE, AND EXPENSES, continued Books, study guides, and other publications are either sold or provided upon request as a contribution premium. The estimated fair market value of premiums distributed which are included in contribution income on the consolidated statements of activities total approximately $13,719,000 and $12,706,000 for the years ended June 30, 2017 and 2016, respectively. Special events revenue of approximately $233,700 and $807,000 for the years ended, respectively, includes amounts received from cruises and tours sponsored by Turning Point. Related special events costs of approximately $181,000 and $629,000 are included in program activities on the consolidated statements of activities for the years ended, respectively. Revenue is recorded when earned. Expenses are recorded when incurred, in accordance with the accrual basis of accounting. FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing the various program services and supporting activities have been summarized on a functional basis. Accordingly, certain costs, such as depreciation and payroll, have been allocated among the program and supporting activities. ALLOCATION OF JOINT COSTS Turning Point allocates all costs containing a fund-raising appeal to fund-raising unless all of the criteria of purpose, audience, and content are met. Joint cost allocations are: Year Ended June 30, Program activities $ 1,858,286 $ 2,008,581 Fund-raising 183, ,651 $ 2,042,073 $ 2,207,

13 Notes to Consolidated Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: UNCERTAIN TAX POSITIONS The consolidated financial statement effects of a tax position taken or expected to be taken are recognized in the consolidated financial statements when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Interest and penalties, if any, are included in expenses in the consolidated statements of activities. As of June 30, 2017, Turning Point had no uncertain tax positions that qualify for recognition or disclosure in the consolidated financial statements. RECLASSIFICATION Certain prior year amounts have been reclassified to conform with current year presentation. 3. PROMISES-TO-GIVE: Promises-to-give receivable consists of: June 30, Unconditional promises-to-give before discount for present value of cash flows $ 4,760,061 $ 5,699,851 Less discount for present value of cash flows (860,000) (839,000) Less allowance for uncollectible promises-to-give (429,500) (390,000) 3,470,561 4,470,851 Less current portion (2,235,061) (2,981,054) Promises-to-give, net of current portion $ 1,235,500 $ 1,489,797 Amounts as of June 30, 2017, are due in: Less than one year $ 2,235,061 One to five years 1,235,500 $ 3,470,

14 Notes to Consolidated Financial Statements 4. INVENTORY: Inventory consists of: June 30, Books and Bibles $ 2,973,861 $ 2,082,212 Bible resources 299, ,366 Study guides 339, ,455 CD's and videos 416, ,006 Inventory supplies 95,336 92,285 4,124,581 3,202,324 Less reserve for obsolete inventory (399,000) (190,000) 5. JLIJ?LNS*?KOCJG?HN* ;H> FIHA+FCP?> ;MM?NMoH?N8 JfcdYfhm* Yei]daYbh* UbX `cb[+`]jyx UggYhgobYh Wcbg]gh cz8 $ 3,725,581 $ 3,012,324 June 30, Land $ 1,273,651 $ 1,273,651 Buildings and improvements 6,810,193 6,800,025 Production equipment 6,550,861 6,528,253 Computer equipment and software 2,352,608 2,284,468 Furniture and office equipment 1,513,733 1,389,125 Vehicles and other 147, ,024 Website development 323, ,633 Airship Genesis 244,424-19,215,627 18,730,179 Less accumulated depreciation and amortization (12,313,620) (10,838,211) 6,902,007 7,891,968 Construction in progress 667,963 - $ 7,569,970 $ 7,891,

15 Notes to Consolidated Financial Statements 5. JLIJ?LNS*?KOCJG?HN* ;H> FIHA+FCP?> ;MM?NMoH?N* Wcbh]biYX8?ei]hm ]b dfcdyfhm* Yei]daYbh* UbX `cb[+`]jyx UggYhgobYh Wcbg]ghg cz8 June 30, JfcdYfhm* Yei]daYbh* UbX `cb[+`]jyx UggYhgobYh $ 7,569,970 $ 7,891,968 Less related long-term debt (4,977,900) (5,437,177) $ 2,592,070 $ 2,454,791 Depreciation expense was recorded in the amount of $1,445,452 and $1,377,697 for the years ended June 30, 2017 and 2016, respectively. Amortization expense, related to website development was $29,958 and $2,576 for the years ended, respectively. 6. LONG-TERM DEBT: Long-term debt consists of: June 30, Note payable to a financial institution, secured by property and equipment. Payable in monthly installments of $34,500, including interest of prime plus 0.50% (effectively 4.75% as of June 30, 2017), with a balloon payment due December Revolving $3,000,000 line of credit with a financial institution, secured by property and equipment, inventory, and accounts receivable. Interest rate of prime plus 0.25% (effectively 4.50% as of June 30, 2017). The line of credit matures January $ 3,383,900 $ 3,637,177 1,594,000 1,800,000 Unsecured note payable to an organization, due in monthly principal and interest installments of $6,389, with interest calculated at 6.00%. Note matures July ,785-5,127,685 5,437,177 Less current portion (1,920,163) (253,293) $ 3,207,522 $ 5,183,

16 Notes to Consolidated Financial Statements 6. LONG-TERM DEBT, continued: Future minimum payments are: Year Ending June 30, 2018 $ 1,920, , ,866,185 $ 5,127,685 Turning Point was in compliance with all financial and reporting covenants as of June 30, TEMPORARILY RESTRICTED NET ASSETS: Temporarily restricted net assets consist of: June 30, Time restricted $ 1,060,000 $ 1,147,000 Global outreach 767,172 1,111,969 Studio equipment 479, ,100 Airship Genesis 235,544 - Other program restrictions 75,701 98,518 Broadcast and teaching support 11,240 79,396 Event rallies 10,000 55,000 $ 2,638,757 $ 2,970, FAIR VALUE MEASUREMENTS: Turning Point uses appropriate valuation techniques to determine fair value based on inputs available. When available, Turning Point measures fair value using Level 1 inputs because they generally provide the most reliable evidence for fair value. Level 3 inputs are only used when Level 1 or Level 2 inputs are not available. -14-

17 Notes to Consolidated Financial Statements 8. FAIR VALUE MEASUREMENTS, continued: The following table presents the fair value measurements of assets and liabilities recognized in the accompanying consolidated statements of financial position, when are measured at the fair value on a recurring basis, and the level within the fair value measurement hierarchy in which the fair value measurements fall: Fair Value Measurements Using: Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) June 30, 2017: Life insurance cash surrender value $ 1,476,514 $ - $ 1,476,514 $ - Investments: Equities 1,072 1, June 30, 2016: Life insurance cash surrender value $ 1,288,857 $ - $ 1,288,857 $ - Investments: Equity mutual funds 184, , Investment in closely-held securities 85, ,000 Valuation techniques: Level 1 measures the fair values for mutual funds and equities. They are determined by reference to quoted market prices and other relevant information generated by market transactions. Level 2 measures the fair value for life insurance cash surrender value. It is based on Turning Point's share of the cash surrender value of the respective life insurance policies as represented by the insurance company. Level 3 measures investments in closely-held securities which is valued using management's internal valuation of the company's market value derived from operating performance and financial position from its last reported fiscal year. Changes in valuation techniques: None. -15-

18 Notes to Consolidated Financial Statements 8. FAIR VALUE MEASUREMENTS, continued: The following table provides further details of the Level 3 fair value measurements for the investment in closely-held securities: Year Ended June 30, Beginning balance $ 85,000 $ 85,000 Total unrealized losses (85,000) - Ending balance $ - $ 85, RETIREMENT PLAN: Turning Point maintains a 403(b) and 457(b) defined contribution retirement program (the Program) with Guidestone Financial Resources of the Southern Baptist Convention for the benefit of its full-time and permanent part-time employees. Turning Point contributed 5% of gross wages to all eligible participants of the Program, vesting at 5 years. All employees of Turning Point may make voluntary contributions to the Program by way of elective salary deferrals. Total retirement expense was $361,235 and $311,470 for the years ended, respectively. 10. RELATED PARTY TRANSACTIONS: The president/ceo of Turning Point is also the senior pastor of Shadow Mountain Community Church (the Church) in El Cajon, California. Various materials produced and sold by Turning Point are derived from sermons conducted on the premises of the Church. For the years ended, the following transactions occurred between Turning Point and the Church: contributions to the Church were $25,000 and $500,000, respectively; support of Spanish programming aired by Turning Point from the Church totaled $17,500 and $30,000, respectively; and product purchases and other costs used by the Church purchased from Turning Point were $63,164 and $28,885, respectively. Amounts owed to Turning Point by the Church were $5,200 and $881 as of June 30, 2017 and 2016, respectively. Turning Point spent $0 and $43,176 for services from Orange Leap, LLC for the years ended June 30, 2017 and 2016, respectively. Turning Point owns a minority interest in the company, as previously stated in note

19 Notes to Consolidated Financial Statements 10. RELATED PARTY TRANSACTIONS, continued: The president/ceo and COO of Turning Point also holds a position on the board of directors of Turning Point of Canada (the Canadian Charity). The Canadian Charity broadcasts religious programs provided by Turning Point, USA throughout Canada. Turning Point provides fund-raising consulting, programming, product fulfillment, and general business consulting as needed by the Canadian Charity throughout the year. For the years ended, Turning Point invoiced $761,878 and $892,269, respectively, for goods and services to the Canadian Charity. Accounts receivable from the Canadian Charity were $342,191 and $357,381 as of, respectively. The president/ceo of Turning Point holds a position on the board of directors for Turning Point for God of Great Britain. Turning Point for God of Great Britain broadcasts religious programs provided by Turning Point, USA in Great Britain. Turning Point provides fundraising consulting, programming, product fulfillment, and general business consulting as needed by Turning Point of United Kingdom. For the years ended June 30, 2017 and 2016, Turning Point contributed $125,624 and $148,630, respectively, in goods and services to Turning Point for God of Great Britain. The president/ceo of Turning Point also holds a position on the board of directors for the Christian Unified School District. Contributions to the Christian Unified School District from Turning Point totaled $100,000 and $0 during the years ended, respectively. For the years ended, Turning Point purchased published books in the amount of $0 and $13,356 from the secretary of the Organization. Turning Point purchases books authored by the president and CEO from various publishers at a discounted price negotiated by Turning Point, exclusive of any royalty. In addition, a designated amount of books are acquired and distributed through retail channels for ministry purposes once each year. Books acquired and distributed through retail channels result in standard royalties and agent fees for Dr. Jeremiah and his agent, who is also a board member. A member of the board of directors owns a furniture company. During the years ended, Turning Point purchased furniture in the total amount of $87,568 and $36,351, respectively. 11. SUBSEQUENT EVENT: Subsequent events have been evaluated through October 12, 2017, which is the date the financial statements were available to be issued. -17-

20 SUPPLEMENTARY SCHEDULE

21 INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY SCHEDULE Board of Directors Turning Point for God Lakeside, California We have audited the consolidated financial statements of Turning Point for God as of and for the year ended June 30, 2017, and have issued our report thereon dated October 12, 2017, which contained an unmodified opinion on those consolidated financial statements. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The consolidated schedule of functional expenses is presented for the purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole. The prior year summarized comparative information on page 20 has been derived from Turning Point's 2016 consolidated financial statements and, in our report dated October 5, 2016, we expressed an unmodified opinion on those consolidated financial statements. Colorado Springs, Colorado October 12, 2017

22 Consolidated Schedule of Functional Expenses Year Ended June 30, 2017 (with comparative information for the year ended June 30, 2016) Supporting Activities Ministries General and and Programs Administrative Fund-raising Total 2016 Television airtime and production costs $ 12,811,293 $ - $ - $ 12,811,293 $ 12,215,981 Radio airtime and production costs 9,677, ,677,405 9,600,241 Salaries and benefits 6,293,000 1,543,626 1,593,615 9,430,241 8,842,916 Product shipping and fulfillment costs 7,031, ,862 52,864 7,445,130 7,796,222 Ministry events and conferences 2,179, ,050 2,336,267 4,751,457 Direct mail costs 21,727-2,873,740 2,895,467 3,044,694 Biblical resource development and distribution 2,124, ,134 2,306,685 2,414,229 Administrative costs 1,815, ,349 3,401 2,135,027 2,114,954 Technology and web site costs 806,833 58,595 29, , ,057 Facilities costs 547,165 62,128 12, , ,770 Donor development 3, , , ,068 Insurance and risk management 109, , , ,418 Interest expense 241,395 12, , ,831 Pledge and receivable allowances 372, , ,963 Contributions 125, , ,000 Total expenses $ 44,160,009 $ 2,560,988 $ 5,261,027 $ 51,982, : Total expenses $ 46,150,335 $ 2,500,252 $ 5,217,214 $ 53,867,