ALBERTA COLLEGE OF FAMILY PHYSICIANS OF CANADA - A CHAPTER OF THE COLLEGE OF FAMILY PHYSICIANS OF CANADA Financial Statements Year Ended December 31,

Transcription

1 ALBERTA COLLEGE OF FAMILY PHYSICIANS OF CANADA - A CHAPTER OF THE COLLEGE OF FAMILY PHYSICIANS OF CANADA Financial Statements

2 Index to Financial Statements INDEPENDENT AUDITORS' REPORT 1 Page FINANCIAL STATEMENTS Statement of Financial Position 2 Statement of Operations 3 Statement of Changes in Net Assets 4 Statement of Cash Flows 5 Notes to Financial Statements 6-11

3 Collins Barrow Edmonton LLP 2500 Bell Tower Avenue NW Edmonton, Alberta T5J 0H8 Canada T F INDEPENDENT AUDITORS' REPORT To the Members of Alberta College of Family Physicians of Canada - A Chapter of the College of Family Physicians of Canada We have audited the accompanying financial statements of Alberta College of Family Physicians of Canada - A Chapter of the College of Family Physicians of Canada, which comprise the statement of financial position as at December 31, 2016 and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the 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 from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements 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 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 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 Alberta College of Family Physicians of Canada - A Chapter of the College of Family Physicians of Canada as at December 31, 2016 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. Other Matters The financial statements for the year ended December 31, 2015 were audited by another auditor who expressed an unmodified opinion on those statements on February 22, Edmonton, Alberta February 13, 2017 Chartered Professional Accountants This office is independently owned and operated by Collins Barrow Edmonton LLP. The Collins Barrow trademarks are owned by Collins Barrow National Cooperative Incorporated and are used under license. 1

4 Statement of Financial Position December 31, ASSETS CURRENT Cash and cash equivalent (Note 3) $ 1,466,131 $ 1,230,969 Accounts receivable 116, ,866 Goods and services tax recoverable - 2,696 Prepaid expenses 43,136 35,288 1,625,654 1,371,819 PROPERTY AND EQUIPMENT (Note 4) 40,674 43,005 $ 1,666,328 $ 1,414,824 LIABILITIES AND NET ASSETS CURRENT Accounts payable and accrued liabilities $ 217,882 $ 222,095 Goods and services tax payable 5,612 - Deferred revenue (Note 5) 145, , , ,865 NET ASSETS Unrestricted operating fund 506, ,729 Internally restricted 750, ,234 Restricted AFPRN fund - 40,991 Invested in property and equipment 40,674 43,005 1,297,710 1,084,959 $ 1,666,328 $ 1,414,824 COMMITMENT (Note 7) APPROVED ON BEHALF OF THE BOARD Director Director See notes to financial statements 2

5 Statement of Operations REVENUES Membership fees (Note 6) $ 1,031,242 $ 858,918 Annual Scientific Assembly 351, ,228 Evidence Based Medical Conference 204, ,676 Grants (Note 6) 170, ,461 Continuing medical education - mainpro and ethical reviews 79,200 80,800 Family Physician Leadership Initiative 55,262 - Other 34,787 28,051 Evidence Based Medicine Programs 9,464 12,950 GoMainPro alliance and subscription fees 6,626 55,490 Interest 2,591 4,698 Seniors Care Conference - 51,598 1,946,132 1,656,870 EXPENSES Salaries and wages 436, ,187 Annual Scientific Assembly 346, ,981 Family Physician Leadership Initiative 281,313 83,973 Evidence Based Medical Conference 154, ,317 Office and telephone 115, ,599 Evidence Based Medicine Programs 110,418 47,553 Travel 84,179 83,684 Rent and occupancy costs 61,241 64,141 Honorariums 38,100 22,600 Professional fees 30,771 44,585 Student and resident support 29,936 30,555 Amortization 15,647 17,951 Special Projects 14,800 12,782 Goods and services tax 11,736 10,803 Sponsorships 1,425 4,646 Seniors Care Conference - 43,739 1,732,716 1,595,096 EXCESS OF REVENUES OVER EXPENSES BEFORE OTHER EXPENSES 213,416 61,774 OTHER EXPENSES Loss on disposal of property and equipment (665) - EXCESS OF REVENUES OVER EXPENSES $ 212,751 $ 61,774 See notes to financial statements 3

6 Statement of Changes in Net Assets 2015 Balance Excess of revenues over expenses Interfund transfers 2016 Balance Unrestricted Operating Fund $ 790,729 $ 211,999 $ (495,788) $ 506,940 Internally Restricted Fund 210, , ,096 Restricted AFPRN Fund 40, (41,062) - Invested in Property and Equipment 43,005 - (2,331) 40,674 $ 1,084,959 $ 212,751 $ - $ 1,297, Balance Excess (deficiency) of revenues over expenses Interfund transfers 2015 Balance Unrestricted Operating Fund $ 724,527 $ 78,466 $ (12,264) $ 790,729 Internally Restricted Fund 209,126 1, ,234 Restricted AFPRN Fund 40, ,991 Invested in Property and Equipment 48,692 (17,951) 12,264 43,005 $ 1,023,185 $ 61,774 $ - $ 1,084,959 See notes to financial statements 4

7 Statement of Cash Flows CASH PROVIDED BY (USED IN): OPERATING ACTIVITIES Excess of revenues over expenses $ 212,751 $ 61,774 Items not affecting cash: Amortization 15,647 17,951 Loss on disposal of property and equipment ,063 79,725 Changes in non-cash working capital: Accounts receivable (13,521) (24,642) Accounts payable and accrued liabilities (4,213) 22,839 Deferred revenue 37,354 (33,917) Prepaid expenses (7,848) (7,613) Goods and services tax payable (recoverable) 8,308 (2,696) 20,080 (46,029) 249,143 33,696 INVESTING ACTIVITY Purchase of property and equipment (13,981) (12,264) INCREASE IN CASH AND CASH EQUIVALENTS 235,162 21,432 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 1,230,969 1,209,537 CASH AND CASH EQUIVALENTS - END OF YEAR $ 1,466,131 $ 1,230,969 See notes to financial statements 5

8 Notes to Financial Statements 1. PURPOSE OF THE COLLEGE The College of Family Physicians of Canada was founded nationally in 1954 and was incorporated in 1960 by a special act of Parliament. In 1968, the College was granted letters patent under the Canada Corporations Act. The College, along with its provincial chapters, acts to sustain and improve the professional qualifications of members of the medical profession who are engaged in general practice in Canada through education, research and publication of journals. The College and its provincial chapter are non-profit organizations and are exempt from income tax. On January 9, 1997, Alberta College of Family Physicians of Canada A Chapter of the College of Family Physicians of Canada was incorporated under the Societies Act of Alberta. On November 27, 2002 the Chapter changed its name to Alberta College of Family Physicians of Canada A Chapter of the College of Family Physicians of Canada. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Fund accounting Alberta College of Family Physicians of Canada A Chapter of the College of Family Physicians of Canada (the College ) prepares the financial statements in accordance with Canadian Accounting Standards for not-for-profit organizations as issued by the Accounting Standards Board in Canada. For financial reporting purposes, the statement of financial position, the statement of operations and the statement of cash flows combine the funds. The College s funds are as follows: 1. Unrestricted operating fund: This fund accounts for the revenue and expenses of the general operations of the College. 2. Restricted AFPRN fund: This fund accounts for the restricted contribution revenue and expenses related to the operation of the Alberta Family Practice Research Network. 3. Internally restricted fund: This fund was established by resolution of the Board of Directors for future operating contingencies. The fund balance increased by the amount of interest earned on the fund in the year. 4. Invested in property and equipment: This fund accounts for the revenue and expenses related to the purchase and disposal of property and equipment. (continues) 6

9 Notes to Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Revenue recognition Annual memberships expire at varying dates during the year. Membership revenue is recognized in the month when it is collected by The College of Family Physicians of Canada on behalf of the College. Continuing medical education fees, ethical review fees, program fees and other revenue are recognized as revenue when the course, review or event has occurred. Amounts received and paid relating to the Annual Scientific Assembly are deferred and recognized as revenue and expenses in the fiscal year in which the Assembly is held. Grant revenue is recognized as revenue in the period in which the related expenditures are incurred. (c) Property and equipment Property and equipment is stated at cost or deemed cost less accumulated amortization. Property and equipment is amortized over its estimated useful life on a declining balance basis at the following rates and methods: Computer software 50% declining balance Computer hardware 30% declining balance Leasehold improvements 50% straight-line Office furniture and equipment 30% declining balance (d) Employee future benefits The cost of pension and other post-retirement benefits earned by employees is actuarially determined using the more recently completed actuarial valuation prepared for funding purposes (but not one prepared using a solvency, wind-up, or similar valuation basis) for measuring its defined benefit plan obligations. A funding valuation is prepared in accordance with pension legislation and regulation, generally to determine required cash contributions to the plan. 1. The defined benefit obligation, net of the fair value of any plan assets, adjusted for any valuation allowance, in the Statement of Financial Position; and 2. The costs of the plans for the year. (e) Financial instruments Measurement of Financial Instruments Financial instruments are financial assets or liabilities of the College where, in general, the College has the right to receive cash or another financial asset from another party or the College has the obligation to pay another party cash or other financial assets. (continues) 7

10 Notes to Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The College initially measures its financial assets and liabilities at fair value, except for certain nonarm s length transactions that are measured at the exchange amount. The College subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity instruments that are quoted in an active market, which are measured at fair value. Changes in fair value are recognized in the statement of operations. Financial assets measured at amortized cost include cash and cash equivalents and accounts receivable. Financial liabilities measured at amortized cost include the accounts payable and accrued liabilities. Impairment Financial assets measured at cost or amortized cost are tested for impairment, at the end of each year, to determine whether there are indicators that the asset may be impaired. The amount of the write-down, if any, is recognized in the statement of operations. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account. The reversal may be recorded provided it is no greater than the amount that had been previously reported as a reduction in the asset and it does not exceed original cost. The amount of the reversal is recognized in the statement of operations. (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, bank balances, investment in money market funds and guaranteed investment certificates that readily convert into cash and have a maturity or less than three months at the time of purchase. (g) Use of Estimates The preparation of these financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates included in the financial statements are collectability of accounts receivable, useful lives of property and equipment for the purpose of calculating amortization, accrued liabilities and deferred revenue. Actual results could differ from these estimates. 8

11 Notes to Financial Statements 3. CASH AND CASH EQUIVALENTS Cash and short-term investments consist of the following: Operating funds: Current account $ 445,290 $ 384,524 Money market mutual funds 265, ,876 Guaranteed investment certificate 5,059 5, , ,431 Restricted funds: AFPRN - money market mutual funds - 27,305 Internally restricted operating reserve fund - money market mutual funds 750, , , ,538 $ 1,466,131 $ 1,230, PROPERTY AND EQUIPMENT Accumulated Net book Net book Cost amortization value value Computer hardware $ 49,789 $ 33,657 $ 16,132 $ 16,923 Computer software 10,756 8,830 1,926 2,142 Leasehold improvements 6,585 6, ,166 Office furniture and equipment 63,988 41,955 22,033 22,774 $ 131,118 $ 90,444 $ 40,674 $ 43,005 9

12 Notes to Financial Statements 5. DEFERRED REVENUE Deferred revenue represents amounts received for which the specific expenditures have not been incurred. The amounts will be recognized as revenue when the specific expenditures are incurred Details of deferred revenue are as follows: Annual Scientific Assembly $ 77,919 $ 39,575 Alberta Medical Association grant 24,000 25,000 GoMainPro Alliance and subscription fees 9,181 2,434 College of Family Physicians of Canada transfer payment 11,524 11,261 Alberta Health Services grant 22,500 25,000 Towards Optimized Practice grant - 4,500 $ 145,124 $ 107, RELATED PARTY TRANSACTIONS During the year, the College recorded revenue from its national organization for membership fees of $1,031,242 ( $858,918) and for other grants of $27,395 ( $26,931). Of the membership fees, $107,957 ( $92,971) was outstanding at year end and is recorded in accounts receivable. These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. 7. COMMITMENT The College is committed under an operating lease for the office rent, multi-functional device and telecommunications. Future minimum lease payments are as follows: 2017 $ 47, , , , ,596 Thereafter 86,250 $ 327,108 10

13 Notes to Financial Statements 8. COLLEGE OF FAMILY PHYSICIANS PENSION PLAN Certain employees of the College participate in the College of Family Physicians of Canada pension plan. It is financed by employer and employee contributions and investment earnings of the pension fund. The Alberta College of Family Physicians of Canada is required to make current service contributions to the plan of 3.5% of pensionable earnings up to the Canada Pension Plan year s maximum pensionable earnings of 5% of the excess. The total unfunded liability for the pension plan was determined by an actuarial valuation and allocated to the participating employers. As a result, the Alberta College of Family Physicians recorded a pension liability of $135,800 at December 31, 2016 ( $135,800) which is included in accounts payable and accrued liabilities. 9. FINANCIAL INSTRUMENTS The College is exposed to various risks through its financial instruments and has a comprehensive risk management framework to monitor, evaluate and manage these risks. The following analysis provides information about the College's risk exposure and concentration as of December 31, Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The College is exposed to credit risk on accounts receivable as approximately 93% ( %) is owing from the national organization as indicated in Note 6. In order to reduce its credit risk, the College provides for doubtful accounts based on the estimated realizable value of the accounts receivable. Interest rate risk Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. In seeking to minimize the risks from interest rate fluctuations, the College manages exposure through its normal operating and financing activities. The College is exposed to interest rate risk primarily through its guaranteed investment certificates. 11