A CHANCE TO CHANGE FOUNDATION Financial Statements and Independent Auditor s Report For the Years Ended June 30, 2014 and 2013

Transcription

1 Financial Statements and Independent Auditor s Report For the Years Ended June 30, 2014 and 2013

2 A CHANGE TO CHANGE FOUNDATION JUNE 30, 2014 and 2013 CONTENTS Independent Auditor s Report 3 Financial Statements Statement of Financial Position 4 Statement of Activities 5 Statement of Functional Expenses 6 Statement of Cash Flows 7 Notes to the Financial Statements 8-11 Supplemental Information Schedule of Expenditures of State Awards 12 Report on Internal Control Over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

3 KEITH E. STINGLEY, CPA 5100 N. Brookline, Suite 715 Oklahoma City, Oklahoma (405) INDEPENDENT AUDITORS REPORT To the Board of Directors of A Chance to Change Foundation We have audited the accompanying statements of financial position of A Chance to Change Foundation (an Oklahoma not-for-profit corporation) as of June 30, 2014 and 2013 and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility or the Organization s management. 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of A Chance to Change Foundation as of June 30, 2014 and 2013 and its changes in net assets and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2014, on our consideration of A Chance to Change Foundation s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of the audits. Our audits were conducted for the purpose of forming an opinion on the basic financial statements of A Chance to Change Foundation taken as a whole. The accompanying schedule of expenditures of state awards is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Keith Stingley Oklahoma City, Oklahoma October 27,

4 STATEMENTS OF FINANCIAL POSITION JUNE 30, 2014 and 2013 ASSETS CURRENT ASSETS Cash 89, ,740 Short term investments 811, ,344 Pledges receivable 12,500 - Grants receivable 29,621 16,520 Accounts receivable, net of estimated uncollectible accounts of $9,797 ; $16,110 31,984 27,528 Prepaid expenses 47,714 30,310 TOTAL CURRENT ASSETS 1,021, ,442 PROPERTY AND EQUIPMENT, NET 10,235 13,730 OTHER ASSETS Investments 4,442 13,792 Refundable deposits TOTAL OTHER ASSETS 4,692 14,042 TOTAL ASSETS 1,036, ,214 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable 7,058 11,999 Accrued payroll tax liabilities 11,021 10,235 Accrued vacation 10,068 15,389 Deferred revenue 187,050 31,683 TOTAL CURRENT LIABILITIES 215,197 69,306 NET ASSETS Unrestricted 809, ,908 Temporarily restricted 12,500 - TOTAL NET ASSETS 821, ,908 TOTAL LIABILITIES AND NET ASSETS $ 1,036,889 $ 887,214 See accompanying notes and auditors report 4

5 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2014 and 2013 Temporarily Permanently Unrestricted Restricted Restricted Total Total PROGRAM SUPPORT & REVENUE Counseling services $ 379,572 $ 379,572 $ 483,632 Sublease Income 13,320 13,320 12,360 Tests and assessments Grants 407, , ,655 Donations 403,693 12, , ,267 Interest and royalties investment revenue 29,427 29,427 28,137 Workshop revenue 13,962 13,962 8,230 In-Kind donations Net assets released from restrictions ,247,255 12,500-1,259,755 1,353,281 EXPENSES Counseling services 918, , ,525 Education & prevention 151, , ,879 Management & general 79,076 79,076 90,740 Fundraising 106, , ,219 1,255, ,255,971 1,293,363 CHANGES IN NET ASSETS (8,716) 12,500-3,784 59,918 NET ASSETS AT BEGINNING OF YEAR 817, , ,990 NET ASSETS AT END OF YEAR $ 809,192 $ 12,500 $ 821,692 $ 817, See accompanying notes and auditors report 5

6 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED JUNE 30, 2014 and PROGRAM SUPPORTING Education and Management Counseling Prevention and General Fundraising Total Total Salaries $ 606,791 $ 99,375 $ 45,698 $ 45,124 $ 796,988 $ 795,739 Benefits 56,593 11,245 5,093 6,778 79,709 79,012 Payroll Taxes 48,325 7,927 3,606 3,565 63,423 64,099 Bad Debts 15, ,924 17,506 Consulting & Contract Labor 54,198 3,278 3,842 3,842 65,160 76,071 Continuing Professional Education 7, ,769 10,956 Contract Services Affilliates ,429 Dues, Subscriptions & Publications 1, ,613 1,646 Equipment 4,287 4, ,984 6,982 Insurance 8,819 1,590 2,024 2,024 14,457 14,680 Marketing 8, ,199 8,206 Postage 1, ,198 2,791 2,665 Rent & Utilities 51,552 12,986 11,946 11,946 88,430 86,206 Supplies & Materials 19,342 6,349 3,452 28,681 57,824 54,399 Telephone 3, ,889 5,689 Transportation 5,202 2,360 1, ,114 8,246 Workshop Expenses 7, , Write-off 14, ,158 32,247 Non-billable Service Miscellaneous 2, ,985 3,085 Loss on Investment ,443 In-Kind Donations Expense Depreciation/Amortization 2, ,495 5,175 $ 918,857 $ 151,424 $ 79,076 $ 106,614 $ 1,255,971 $ 1,293,363 See accompanying notes and auditors report 6

7 STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2014 and 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Increase in net assets $ 3,784 $ 59,918 Adjustments needed to reconcile change in net assets to net cash provided by operating activities: Depreciation and Amortization 3,495 5,175 Allowance for doubtful accounts increase (decrease) (6,313) 7,561 Unrealized (gains)/losses (772) (551) (Increase) decrease in: Pledges receivable (12,500) 13,080 Grants receivable (13,101) (8,682) Accounts receivable 1,856 (11,467) Prepaid expenses (17,404) (5,993) Increase (decrease) in: Accounts payable (4,940) 1,926 Accrued payroll tax liabilities 786 2,305 Accrued vacation (5,321) (763) Deferred revenue 155,367 (222,752) Net cash provided by (used in) operating activities 104,937 (160,243) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of depreciable assets - (1,548) Other Investment 10,122 (10,122) Purchase of certificates of deposits (199,703) 175,770 Net cash provided by (used in) investing activities (189,581) 164,100 Net increase (decrease) in cash (84,644) 3,857 Cash - Beginning of year 173, ,883 Cash - End of year $ 89,096 $ 173,740 NON CASH INVESTING AND FINANCING ACTIVITY: Increase (decrease) in fair value of investments $ 772 $ 551 See accompanying notes and auditors report 7

8 NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2014 and 2013 NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities A Chance to Change Foundation (the Organization ) provides prevention, education, and behavioral counseling services to children and adults whose lives are affected by addictions and related disorders. The Organization s support and revenues come from federal and state grants, individual and corporate contributions, fundraising activities, and counseling fees. The Organization provides school based prevention, education and early intervention programs for youth and families. It provides counseling and education for substance abuse, problem gambling, trauma, and other issues. Revenue Recognition Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. All donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Investment earnings from permanently restricted investments are recorded in unrestricted net assets; unrealized gains/losses from these investments are recorded in permanently restricted net assets. Donated Services The Organization receives a significant amount of donated services from unpaid volunteers who assist in fundraising and program services. No amounts have been recognized in the statement of activities because the criteria for recognition under Statement of Financial Standards No. 116 have not been satisfied. Cash Flows For purposes of the statements of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. Investments The Organization has adopted SFAS No. 124, Accounting for Certain Investments Held by Notfor-Profit Organizations. Under SFAS No. 124, investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the statement of financial position. Unrealized gains and losses are included in the change of net assets. Investment income and gains restricted by a donor are reported as increases in unrestricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized. 8

9 NOTES TO FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED JUNE 30, 2014 and 2013 NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and equipment It is the Organization s policy to capitalize property and equipment over $1,500. Lesser amounts are expensed. Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair market value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated asset to a specific purpose. Property and equipment are depreciated using the straight line method. 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. Accordingly, certain costs have been allocated among the programs and supporting services benefited based on an analysis of personnel time and space utilized for the related activities. Income Taxes The Organization 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. There was no unrelated business income for the year ended June 30, Estimates Preparing 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. NOTE B - INVESTMENTS Investments as of June 30, 2014 are summarized as follows: Unrealized Fair Appreciation Cost Value (Depreciation) Microsoft Corp (100 shares) $ 4,280 4,170 ( 110) Amer Intl Group Inc. (85 shares) 5, (4,749) $ 9,301 4,442 (4,859) NOTE C SHORT TERM INVESTMENTS The Organization held certificates of deposit at June 30, 2014 with original maturity date of greater than three months. Short-term investments are carried at cost that approximates fair value. 9

10 NOTES TO FINANCIAL STATEMENTS (Continued) FOR YEAR ENDED JUNE 30, 2014 and 2013 NOTE D PROPERTY AND EQUIPMENT The following is a summary of property and equipment as of June 30, 2014: Furniture and fixtures $ 76,103 Less: Accumulated Depreciation (75,587) $ 516 Leasehold improvements $ 32,054 Less: Accumulated Amortization (22,335) $ 9,719 NOTE E OBLIGATIONS UNDER OPERATING LEASES Minimum future rental payments under a real estate operating lease for next year ending June 30, 2014 is $67,200. In August of 2014 a maintenance agreement was signed for the copiers and printers with a yearly cost of $8,973. NOTE F NET ASSETS RELEASED FROM RESTRICTIONS There were no net assets released from program or donor restrictions by incurring expenses satisfying the restricted purposes specified by the donor: NOTE G OTHER MATTERS The Organization has a designated fund at the Oklahoma City Community Foundation ( OCCF ) from which they receive earnings annually. The Organization does not have access to these funds; therefore, no recognition of this account is on the accompanying financial statements. The fair market value of this fund as of June 30, 2014 was $176,480. NOTE H BOARD DESIGNATED ASSETS In June, 2008, the Board of Directors established the following reserve accounts: Operating and Emergency Reserve Fund and Capital Development Fund. As of June 30, 2014, the balances of these reserves are: Operating and Emergency-$300,000; Capital Development-$392,739. NOTE I CONCENTRATION OF CREDIT RISK The Organization maintains five bank accounts at various banks. The Federal Deposit Insurance Corporation (FDIC) up to $250,000 insures accounts at an institution. 10

11 SUPPLEMENTAL INFORMATION 11

12 SCHEDULE OF STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2014 Contract Audit Revenue Program State Grantor Period Period Recognized Expenditures Oklahoma Department of Mental Health Gambling 07/01/13 07/01/13 Through Through 06/30/14 06/30/14 88,159 88,159 Office of Juvenile Affairs 07/01/13 07/01/13 Through Through 06/30/14 06/30/14 33,454 33,454 Note A - Basis of Presentation The accompanying schedule of expenditures of state awards includes the state grant activity of A Chance to Change Foundation and is presented on the accrual basis of accounting. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. 12

13 KEITH E. STINGLEY, CPA 5100 N. Brookline, Suite 715 Oklahoma City, Oklahoma (405) REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors of A Chance to Change Foundation We have audited the financial statements of A Chance to Change Foundation as of and for the year ended June 30, 2014 and 2013, and have issued our report thereon dated October 27, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered A Chance to Change Foundation s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the A Chance to Change Foundation s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Organization s internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the organization s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the organization s financial statements that is more than inconsequential will not be prevented or detected by the organization s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the organization s internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 13

14 Compliance and Other Matters As part of obtaining reasonable assurance about whether A Chance to Change Foundation s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, others within the entity, the Board of Trustees, federal awarding agencies and pass-through entities, potential funders, and other organizations as required by law, and is not intended to be and should not be used by anyone other than these specified parties. Keith Stingley, CPA Oklahoma City, Oklahoma October 27,