BRUSH COLLEGE, LLC A COMPONENT UNIT OF RICHLAND COMMUNITY COLLEGE ANNUAL FINANCIAL REPORT. For the Years Ending June 30, 2015 and 2014

Transcription

1 A COMPONENT UNIT OF RICHLAND COMMUNITY COLLEGE ANNUAL FINANCIAL REPORT For the Years Ending June 30, 2015 and 2014

2 TABLE OF CONTENTS Page(s) Independent Auditor s Report Statements of Financial Position... 3 Statements of Activities... 4 Statements of Cash Flows... 5 Notes to Financial Statements

3 INDEPENDENT AUDITOR S REPORT Board of Directors Brush College, LLC Decatur, IL We have audited the accompanying financial statements of Brush College, LLC (a not-for-profit organization), a component unit of Richland Community College, which comprise the statements of financial position as of June 30, 2015 and 2014, and the related statements of activities and cash flows for the years 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 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 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 information 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

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brush College, LLC, as of June 30, 2015 and 2014, and changes in net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Sikich LLP October 15,

5 STATEMENTS OF FINANCIAL POSITION June 30, 2015 and ASSETS Current Assets: Cash and cash equivalents $ 346,916 $ 320,235 Investments 102, ,936 Pledges receivable, net of discount of $2,698, ( $2,698) 28,302 38,302 Prepaid expenses 38,000 24,718 Total Current Assets 515, ,191 Property, Plant and Equipment Property, plant and equipment 1,762,817 1,762,817 Less accumulated depreciation (874,605) (783,987) Net property, plant and equipment 888, ,830 TOTAL ASSETS $ 1,403,468 $ 1,464,021 LIABILITIES AND NET ASSETS Liabilities Current liabilities: Accounts payable $ 4,916 $ 6,576 Total liabilities 4,916 6,576 Unrestricted net assets 1,398,552 1,457,445 TOTAL LIABILITIES AND NET ASSETS $ 1,403,468 $ 1,464,021 See Notes to Financial Statements

6 STATEMENTS OF ACTIVITIES For the Years Ending June 30, 2015 and Support and Revenues: Contributions $ - $ 106,621 Farm revenue 24,292 17,768 Miscellaneous 63,565 84,899 In-kind contributions 24,468 - Interest income Total support and revenues 112, ,466 Expenses Accounting services 4,400 4,800 Administrative service - related party 27,216 40,211 Audit - 3,550 Contractual services - 61,794 Depreciation 90,618 90,953 Dues and publications Insurance 24,580 39,190 Legal Materials and supplies ,494 Meeting expense Registration fees 250 1,101 Travel 1,305 - Utilities 21,904 33,167 Total expenses 171, ,602 Increase (decrease) in unrestricted net assets (58,893) (180,136) Net assets, beginning 1,457,445 1,637,581 Net assets, ending $ 1,398,552 $ 1,457,445 See Notes to Financial Statements

7 STATEMENTS OF CASH FLOWS For the Years Ending June 30, 2015 and RECONCILIATION OF NET INCOME TO NET CASH FROM OPERATING ACTIVITIES Increase (decrease) in unrestricted net assets $ (58,893) $ (180,136) Adjustment to reconcile change in net assets to net cash from operating activities: Depreciation 90,618 90,953 (Increase) Decrease in assets: Pledges receivable 10,000 29,379 Prepaid expenses (13,282) 15,472 Increase(Decrease) in liabilities: Accounts payable (1,660) 759 Net cash flows from operating activities 26,783 (43,573) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments (102) (101) Purchase of property, plant and equipment - (15,086) Net cash flows from investing activities (102) (15,187) Net increase (decrease) in cash and cash equivalents 26,681 (58,760) Cash and cash equivalents at beginning of year 320, ,995 Cash and cash equivalents at end of year $ 346,916 $ 320,235 NONCASH INVESTING, CAPTIAL AND FINANCING ACTIVITIES: Related party in-kind contributions $ 24,468 $ - See Notes to Financial Statements

8 NOTES TO FINANCIAL STATEMENTS June 30, 2015 and SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of Brush College LLC's (the Company) significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. Nature of Operations Brush College, LLC is a Limited Liability Company that was created for the purpose of supporting and servicing the educational goals of Richland Community College, Community College District #537 (the District). The District is the sole member of Brush College, LLC. Brush College, LLC is reported as a blended component unit in the District's financial statements. Basis of Accounting The Company maintains its accounts and prepares its financial statements on the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. Income Taxes The Company qualifies as a disregarded entity for federal tax purposes, which allows the Company to treat its activities as the activities of the member and, accordingly, is not subject to federal or state income taxes. The Company is not required to file an income tax form. Use of Estimates The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investment with a maturity of three months or less when purchased to be cash equivalents

9 NOTES TO FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments Investments consist of certificates of deposit carried at cost which approximates market. Pledges Unconditional promises to give are recognized as revenue when the promise is received. Promises to give are discounted to reflect the time value of money. Promises are evaluated as to collectability and allowed for when deemed necessary. As of June 30, 2015 and 2014, no allowances were deemed necessary. Fair Value of Financial Instruments Generally accepted accounting principles require disclosure of an estimate of fair value of certain financial instruments. Cash and other short term assets and liabilities are recorded at cost, which approximates fair value due to their short term nature. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally using straight-line methods. The estimated lives used in determining depreciation are: Equipment Buildings Buildings and leasehold improvements 10 years 20 years 20 years In-kind Services The Company received in-kind administrative services from Richland Community College. In-kind contributions are shown as support and expenses and are recorded at the fair market value of services at the time of donation. The amounts included in the financial statements are only those allowable under generally accepted accounting principles. 2. CONCENTRATIONS OF CREDIT RISK The Company maintains its cash balances and investments in one financial institution located in Decatur, Illinois which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. At June 30, 2015 and 2014, the Company had $121,959 and $92,578, respectively, in deposits exposed to credit risk by being uninsured and uncollateralized

10 NOTES TO FINANCIAL STATEMENTS (Continued) 3. PLEDGES RECEIVABLE Pledges at June 30, 2015 and 2014 are as follows: Pledges expected to be collected in: Less than one year $ 11,000 $ 37,000 One to five years 20,000 4,000 31,000 41,000 Less discount on pledges (2,698) (2,698) Net pledges receivable $28,302 $ 38,302 Pledges are receivable at June 30, 2015 and 2014 were discounted at a rate of 4.02% and 4.02%, respectively. 4. PROPERTY AND EQUIPMENT A summary of property and equipment follows: Buildings $1,016,947 $1,016,947 Buildings and leasehold improvements 722, ,938 Equipment 22,932 22,932 1,762,817 1,762,817 Accumulated depreciation (874,605) (783,987) $ 888,212 $ 978,830 Depreciation expense at June 30, 2015 and 2014 totaled $90,618 and $90,953, respectively. 5. RELATED PARTY TRANSACTIONS The Company is a Limited Liability Company with Richland Community College being the sole member. For the year ended June 30, 2015 and 2014, the Company incurred expenses for administrative services to Richland Community College totaling $2,748 and $40,211, respectively. In addition, for the year ended June 30, 2015, the Company received in-kind administrative services from Richland Community College totaling $24,468. At June 30, 2015 and 2014, the Company had $0 and $4,536, respectively, included in Accounts Payable as owed to Richland Community College

11 NOTES TO FINANCIAL STATEMENTS (Continued) 6. LEASE AGREEMENTS The Company has entered into agreements with various exhibitors in which the Company subleases small land lots. This allows the exhibitors to make improvements to the lot. Sublease payments are annual ($1 - $675) and terms are through December 30, 2023 with an option to extend. Some exhibitors have been sent new agreements but Brush College has not received the signed copy back to renew the agreement. The following schedule shows the aggregate future minimum lease payments to be received under the subleases: 7. SUBSEQUENT EVENTS 2016 $ 2, , , , , ,300 $ 18,683 Subsequent events are events or transactions that occur after the statement of financial position date but before financial statements are issued or are available to be issued. These events and transactions either provide additional evidence about conditions that existed at the date of the statement of financial position, including the estimates inherent in the process of preparing financial statements (that is, recognized subsequent events), or provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date (that is non-recognized subsequent events). The Company has evaluated subsequent events through October 15, 2015, which was the date that these financial statements were available for issuance, and determined that there were no significant non-recognized subsequent events through that date