Mental Health America Allegheny County and Affiliate

Transcription

1 Mental Health America Allegheny County and Affiliate Financial Statements

2 Financial Statements Table of Contents Page Independent Auditor s Report 1 Statements of Financial Position 2 Statements of Activities 3-4 Statements of Functional Expenses 5-6 Statements of Cash Flows 7-8 Notes to the Financial Statements 9-17

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4 Consolidated Statements of Financial Position ASSETS Assets Cash and cash equivalents $ 60,097 $ 131,412 Receivables, Note 2 99, ,041 Investments, Note 3 64,689 57,669 Prepaid expenses 18,131 17,120 Property and equipment, net, Note 5 27,755 26,988 Total Assets $ 269,744 $ 496,230 LIABILITIES AND NET ASSETS Liabilities Line of credit, Note 6 $ 32,148 $ 25,058 Accounts payable and deferred revenue 17,567 50,925 Accrued expenses 100,538 83,767 Total Liabilities 150, ,750 Net Assets Unrestricted Board designated Endowment 64,689 57,669 Property and equipment 27,755 26,988 Undesignated (22,058) 144,298 Total Unrestricted 70, ,955 Temporarily restricted, Note 7 49, ,525 Total Net Assets 119, ,480 Total Liabilities and Net Assets $ 269,744 $ 496,230 The accompanying notes are an integral part of these consolidated financial statements 2

5 Consolidated Statements of Activities For the Year Ended June 30, 2010 Temporarily Unrestricted Restricted Total Support and Revenue Grant revenue $ 465,187 $ - $ 465,187 Contributions 16, , ,479 Special event fundraising 23,606-23,606 United Way allocation - 49,105 49,105 Investment income (loss) 8,256-8,256 Other income 4,245-4,245 Total Revenue 518, , ,878 Net assets released from restrictions Satisfaction of restrictions 274,048 (274,048) - Total Support and Revenue 792,298 (58,420) 733,878 Expenses Program services 870, ,881 General and administration 51,803-51,803 Fundraising 28,183-28,183 Total Expenses 950, ,867 Change in Net Assets (158,569) (58,420) (216,989) Net Assets - Beginning of year 228, , ,480 Net Assets - End of year $ 70,386 $ 49,105 $ 119,491 The accompanying notes are an integral part of these consolidated financial statements 3

6 Consolidated Statements of Activities For the Year Ended June 30, 2009 Temporarily Unrestricted Restricted Total Support and Revenue Grant revenue $ 553,629 $ - $ 553,629 Contributions 18, , ,156 Special event fundraising United Way allocation - 107, ,525 Investment income (loss) (12,157) - (12,157) Other income 17,702-17,702 Total Revenue 579, , ,770 Net assets released from restrictions Satisfaction of restrictions 342,115 (342,115) - Total Support and Revenue 921,138 (49,368) 871,770 Expenses Program services 726, ,696 General and administration 44,911-44,911 Fundraising 76,471-76,471 Total Expenses 848, ,078 Change in Net Assets 73,060 (49,368) 23,692 Net Assets - Beginning of year 155, , ,788 Net Assets - End of year $ 228,955 $ 107,525 $ 336,480 The accompanying notes are an integral part of these consolidated financial statements 4

7 Mental Health Allegheny County and Affiliate Consolidated Statement of Functional Expenses For the Year Ended June 30, 2010 Program Services Adult Mental Health Education and Advocacy Program Children's Mental Health and Education Advocacy Program Total Administration Fundraising 2010 Totals Salaries $ 299,137 $ 141,882 $ 441,019 $ 11,953 $ 11,953 $ 464,925 Professional fees 66,750 27,253 94,003 5,919 2, ,736 Occupancy 35,162 18,156 53,318 1,410 1,410 56,138 Employee benefits 28,677 16,057 44,734 2,279 1,944 48,957 Payroll taxes 32,181 13,325 45,506 1,204 1,679 48,389 Travel 24,645 8,084 32,729 7, ,185 Office expenses 14,651 4,266 18,917 3, ,150 Conferences 27,262 6,444 33, ,796 Telephone 14,466 4,392 18,858 2, ,369 Membership dues 5,446 2,551 7, ,145 Insurance 3,710 8,435 12, ,974 Printing and publications 12,384 4,822 17, ,627 19,439 Technology 23,067 8,550 31,617 1, ,799 Miscellaneous 6,994 3,742 10,736 1, ,186 Advertising 1, , ,774 Depreciation and amortization ,895-8,895 Postage and shipping 2,701 1,248 3, ,932 6,089 Interest , ,742 Special event Equipment rental, repairs, and maintenance 928 1,336 2, ,377 Total Expenses $ 599,640 $ 271,241 $ 870,881 $ 51,803 $ 28,183 $ 950,867 The accompanying notes are an integral part of these consolidated financial statements 5

8 Consolidated Statement of Functional Expenses For the Year Ended June 30, 2009 Program Services Adult Mental Health Education and Advocacy Program Children's Mental Health and Education Advocacy Program Total Administration Fundraising 2009 Totals Salaries $ 264,236 $ 124,358 $ 388,594 $ 11,724 $ 44,216 $ 444,534 Professional fees 53,867 30,118 83,985 1,949 2,907 88,841 Occupancy 24,867 12,710 37,577 12,225 3,347 53,149 Employee benefits 24,864 16,317 41,181 1,293 6,937 49,411 Payroll taxes 23,712 12,367 36,079 1,179 4,697 41,955 Travel 3,382 5,721 9,103 3, ,961 Office expenses 11,199 5,176 16,375 1,244 1,464 19,083 Conferences 25,939 2,266 28, ,609 Telephone 16,162 7,580 23, ,931 27,430 Membership dues 2,797 1,446 4, ,774 Insurance 3,581 8,913 12, ,992 Printing and publications 15,239 2,941 18, ,349 23,766 Miscellaneous 9,414 3,228 12,642 1, ,582 Advertising 4,102 1,547 5, ,097 Depreciation and amortization ,076-7,076 Postage and shipping 3,378 1,468 4, ,481 Interest ,082 1, ,975 Special event ,565 1,565 Equipment rental, repairs, and maintenance 1,143 1,576 2, ,797 Total Expenses $ 488,639 $ 238,056 $ 726,696 $ 44,911 $ 76,471 $ 848,078 The accompanying notes are an integral part of these consolidated financial statements 6

9 Consolidated Statements of Cash Flows For the Years Ended Cash Flows From Operating Activities Change in net assets $ (216,989) $ 23,692 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: (Gain) loss on investments (7,020) 13,193 (Gain) loss on disposition of equipment - (400) Depreciation 8,895 7,076 (Increase) decrease in: Receivables 163,969 5,414 Prepaid expenses (1,011) (7,742) Increase (decrease) in: Accounts payable and accrued liabilities 9,280 86,922 Net Cash Provided by (Used in) Operating Activities (42,876) 128,155 Cash Flows From Investing Activities Purchase of equipment (9,662) (21,988) Proceeds from sales on assets Net Cash Provided by (Used in) Investing Activities (9,662) (21,588) Cash Flows From Financing Activities Net borrowings (repayments) on line of credit (18,777) (17,527) Net Cash Provided by (Used in) Financing Activities (18,777) (17,527) Net Increase (Decrease) in Cash (71,315) 89,040 Cash, Beginning of Year 131,412 42,372 Cash, End of Year $ 60,097 $ 131,412 The accompanying notes are an integral part of these consolidated financial statements 7

10 Consolidated Statements of Cash Flows (Continued) For the Years Ended Supplemental Disclosures Accounting Policies For the purposes of these statements, cash and cash equivalents include cash on hand, demand deposits at local banks and highly liquid investments with a maturity of three months or less when purchased. Interest Paid Interest paid was $1,742 and $2,975 for the years ended, respectively. Income Taxes Paid The Internal Revenue Service has determined that Mental Health America Allegheny County is an organization as described in Internal Revenue Code Section 501(c)(3). As such, the Organization is exempt from federal and state income taxes. The accompanying notes are an integral part of these consolidated financial statements 8

11 1. Summary of Significant Accounting Policies Organization Mental Health America Allegheny County and Affiliate Notes to the Financial Statements Mental Health America Allegheny County (MHAAC or the Organization ) (which changed its name from Mental Health Association of Allegheny County during 2007) is a private, not-for-profit organization that provides programs and services that support the health of mind and body and works to eliminate the stigma of mental illness and addiction for all. MHAAC is the sole member of Mental Health Association Legal Services, Inc. (MHALS). MHALS was incorporated on March 28, 2005 as a Pennsylvania not-for-profit membership organization. MHALS' mission is to establish, operate, maintain, sponsor, and promote services, activities and programs to enable individuals living with a mental illness to receive free or low-cost legal services and legal advice. The consolidated financial statements include the accounts of MHAAC and MHALS, collectively referred to as the Organization. All significant intercompany transactions and balances are eliminated. Both MHAAC and MHALS are exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. To fulfill this mission, MHAAC provides the following programs and services in Allegheny County. Children's Mental Health and Education Advocacy Program provides assistance to families who have children with emotional/behavioral disorders and/or a mental illness to access quality mental health treatment, support services and the necessary educational services that are both appropriate and culturally sensitive. The Child/Adolescent Advocates provide direct individual information, referral, consultation and advocacy services regarding development of Individualized Education Programs, Service Agreements and Behavior Plans. Adult Mental Health Education and Advocacy Program provides information, education, advocacy and referral services to consumers of mental health services, families, friends and human service professionals. The program includes: The Patient Advocacy Program at Mayview State Hospital works to ensure the rights of patients, as well as to inform staff, friends, and family members about patients' rights and the relationship and importance of these rights to the overall treatment and recovery process. The Community Advocacy Program works with consumers of mental health services, their families and providers of mental health services to provide appropriate information, referral, education and advocacy services. The Community Outreach and Education Program links individuals in underserved and unserved communities to needed health information and services, and alerts those individuals of the importance of receiving accurate and adequate information so they can make informed decisions concerning their families' health. MHALS provides legal consultation to consumers of mental health services as well as representation on civil matters. 9

12 Notes to the Financial Statements 1. Summary of Significant Accounting Policies (Continued) Organization (Continued) The Consumer Empowerment Project works to strengthen the consumer advocacy system and consumer drop-in centers throughout western Pennsylvania. The Public Education Program provides training and educational workshops for consumers of mental health services to encourage interest and facilitate involvement in community activities that affect their lives. Substance Abuse Education and Advocacy Services Program provides individuals with consultations, referral and advocacy services so they may secure the needed help to cope with alcohol and other drug problems. Basis of Accounting The financial statements have been prepared on the accrual basis in accordance with generally accepted accounting principles. Support, revenue and expenses are recorded and presented in accordance with the Presentation of Financial Statements Topic within the Not-for-Profit Entities Industry section of the Financial Accounting Standards Board ( FASB ) Accounting Standards Codification. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue and Support Revenue is recognized when earned. The Organization recognizes revenue from grants based on the terms of the agreement, either when the corresponding disbursement for the purpose of the grant is made or when the conditional requirements have been satisfied. Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence or nature of any donor restrictions. 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 support, revenue and expenses as net assets released from restrictions. 10

13 Notes to the Financial Statements 1. Summary of Significant Accounting Policies (Continued) Federal Income Tax Status The Internal Revenue Service has determined that Mental Health America Allegheny County is an organization as described in Internal Revenue Code Section 501(c)(3). As such, the Organization is exempt from federal and state income taxes. During the current year, certain provision of the Income Taxes topic of FASB Accounting Standards Codification became effective and applicable to the Organization. These new provisions require the Organization to quantify and record the estimated tax liability, including interest and penalties, related to uncertain tax positions taken and positions anticipated to be taken on income tax returns, as well as provide enhanced disclosures within the financial statements. Based on the evaluation of the Organizations tax positions, no tax positions were identified that resulted in a material liability, therefore no provision for the effects of uncertain tax positions has been recorded for the year ended June 30, Currently, the 2009, 2008, and 2007 tax years are open and subject to examination by the Internal Revenue Service (IRS). The Organization is not currently under audit, nor has the Organization been contacted by the IRS that it is subject to examination. Promises to Give Unconditional promises to give (pledges receivable) are recognized as revenue in the period the promise is received and as assets, decreases of liabilities or expenses, depending on the form of the benefits received. Conditional promises to give are recognized when the conditions on which they depend are substantially met. Unconditional promises to give (pledges receivable) are reflected in Note 2. There were no conditional promises to give at. The Organization provides an allowance for uncollectible promises to give based on management's evaluation of the outstanding balances. No allowance was considered necessary at. Investments Investments are carried at current fair value. Net appreciation or depreciation in the fair value of investments is reflected as unrestricted revenue. Depreciation Property and equipment in excess of $1,000 is recorded at cost, or fair value if contributed, and depreciated using the straight-line method over the estimated useful lives of the related assets. Functional Allocation of Expenses The costs or providing the various programs and activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated amount the programs and supporting services benefited. 11

14 Notes to the Financial Statements 1. Summary of Significant Accounting Policies (Continued) Reclassifications Certain amounts reported for 2009 have been reclassified to conform to the 2010 presentation. Such reclassifications had no effect on the change in net assets. Subsequent Events The Organization evaluated its June 30, 2010 financial statements for subsequent events through January 3, 2011, the date the financial statements were available to be issued. The Organization is not aware of any subsequent events which would require recognition or disclosure in the financial statements. 2. Receivables Receivables consist of the following at June 30: United Way pledge for next fiscal year $ 49,105 $ 107,525 Grants receivable 49, ,516 Total receivables $ 99,072 $ 263,041 All receivables are expected to be collected within the next fiscal year. 12

15 Notes to the Financial Statements 3. Investments The Organization transferred $50,000 to The Pittsburgh Foundation during 2002 to create an endowment fund. MHAAC is to be the sole beneficiary of any distributions from this fund. As defined in the agreement, the Board of Trustees (the Board) of The Pittsburgh Foundation has the power to modify any restriction or condition on the distribution of funds for any specified charitable purpose or to a specified organization, if in the sole judgment of the Board, such restriction or condition becomes in effect, unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community served. This investment is recorded as an asset in the statement of financial position and is valued based on the fair values of the investments, primarily various listed securities, held by The Pittsburgh Foundation in a separate fund for MHAAC. The Board of MHAAC has designated a portion of unrestricted net assets equal to the carrying value of the investment as an "endowment" balance. Endowment net asset composition by type of fund as of June 30, 2010 consisted of the following: Unrestricted Temporarily Restricted Total Donor-restricted funds $ - $ - $ - Board-designated funds 64,689-64,689 $ 64,689 $ - $ 64,689 Endowment net asset composition by type of fund as of June 30, 2009 consisted of the following: Unrestricted Temporarily Restricted Total Donor-restricted funds $ - $ - $ - Board-designated funds 57,669-57,669 $ 57,669 $ - $ 57,669 The investment s asset allocation, stated at market value, as provided by The Pittsburgh Foundation is comprised of the following: Equity $ 31,569 $ 41,637 Fixed Income 10,544 14,994 Alternative Assets 16,172 - Cash 6,404 1,038 $ 64,689 $ 57,669 13

16 Notes to the Financial Statements 3. Investments (Continued) Changes in endowment net assets for the year ended June 30, 2010 were as follows: Unrestricted Temporarily Restricted Total Beginning endowment net assets $ 57,669 $ - $ 57,669 Investment income Net appreciation 7,058-7,058 Contributions Appropriation for expenditure (918) - (918) Transfers and reclassifications Ending endowment net assets $ 64,689 $ - $ 64,689 Changes in endowment net assets for the year ended June 30, 2009 were as follows: Unrestricted Temporarily Restricted Total Beginning endowment net assets $ 70,862 $ - $ 70,862 Investment income 1,658-1,658 Net depreciation (14,176) - (14,176) Contributions Appropriation for expenditure (675) - (675) Transfers and reclassifications Ending endowment net assets $ 57,669 $ - $ 57,669 Investment fees for the years ended were $854 and $675, respectively. 14

17 4. Fair Value of Financial Instruments Mental Health America Allegheny County and Affiliate Notes to the Financial Statements The Organization measures its financial instruments at fair value in accordance with the Fair Value Measurements and Disclosures topic of FASB Accounting Standards Codification. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Organization follows an established fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and lowest priority to unobservable inputs (Level 3 measurement). The three levels of fair value hierarchy are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Level 2 - Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management s best estimate of fair value. The Organization s assets subject to fair value accounting consist of investments held by The Pittsburgh Foundation. If available, quoted market prices are used to value such investments. In the absence of quoted market prices, investments held by The Pittsburgh Foundation are valued at the market value as reported by The Pittsburgh Foundation. The following tables present the fair value hierarchy tables for assets and liabilities measured at fair value, on a recurring basis as of : Assets Level 1 Level 2 Level 3 Total Carrying Value as of June 30, 2010 Investments The Pittsburgh Foundation $ - $ - $ 64,689 $ 64,689 Total Investments $ - $ - $ 64,689 $ 64,689 Assets Level 1 Level 2 Level 3 Total Carrying Value as of June 30, 2009 Investments The Pittsburgh Foundation $ - $ - $ 57,669 $ 57,669 Total Investments $ - $ - $ 57,669 $ 57,669 15

18 5. Property and Equipment Mental Health America Allegheny County and Affiliate Notes to the Financial Statements Property and equipment consists of the following at June 30: Equipment $ 66,969 $ 75,278 Furniture and fixtures 12,120 39,717 79, ,995 Accumulated depreciation 51,334 88,007 Property and equipment - net $ 27,755 $ 26, Line of Credit The Organization has a $60,000 line-of-credit arrangement. Under this agreement, the outstanding borrowings are payable on demand and bear interest at the prime rate plus 1% (4.25% at June 30, 2010). The outstanding borrowings have been collateralized by substantially all of the Organization's assets. 7. Restrictions on Net Assets Temporarily restricted net assets consist of funds restricted as follows: United Way - Time restricted $ 49,105 $ 107,525 16

19 Notes to the Financial Statements 8. Lease Obligation Prior to June 2010, MHAAC occupied facilities under an annual lease agreement, which expired June 30 each year. Total rent expense was approximately $56,138 and $53,149 in 2010 and 2009, respectively. Beginning June 1, 2010, the Organization entered into a seven year lease agreement on its Sheridan Square office space. Future annual minimum payments under this lease are as follows: Year Ending June 30: Minimum Payments 2011 $ 35, , , , ,680 Thereafter 78,114 Total Minimum Payments $ 267, Profit Sharing Plan MHAAC has a 401(k) profit sharing plan for the benefit of its employees. Under the plan, MHAAC matches up to 3% of employee contributions. Profit sharing expenses were $2,648 in 2010 and $5,869 in Related Party Transactions MHAAC is a member organization of the Mental Health Association in Pennsylvania (MHAPA). Grant revenue received from MHAPA was approximately $54,000 in 2010 and $165,000 in Grants receivable due from MHAPA was $16,535 and $69,391 at, respectively. 17