FINANCIAL STATEMENTS With Independent Auditors' Report. June 30, 2014 and 2013

Transcription

1 FINANCIAL STATEMENTS With Independent Auditors' Report June 30, 2014 and 2013

2 Table of Contents Independent Auditors' Report 1 Financial Statements Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 6 Notes to Financial Statements 8 Supplementary Schedule Independent Auditors' Report on Supplementary Schedule 18 Schedule of Operating Functional Expenses 19 Page

3 West Belleview Avenue, Suite 270 Littleton, CO INDEPENDENT AUDITORS' REPORT Board of Directors Denver Rescue Mission Denver, Colorado We have audited the accompanying financial statements of the Denver Rescue Mission, which comprise the statements of financial position as of June 30, 2014 and 2013, 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. Auditors' 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 audits 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. 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 Board of Directors Denver Rescue Mission Denver, Colorado Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Denver Rescue Mission as of June 30, 2014 and 2013, 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. Littleton, Colorado September 30,

5 Statements of Financial Position June 30, ASSETS: Cash and cash equivalents $ 2,968,370 $ 1,854,685 Restricted cash 1,472,363 - Investments 1,743,513 3,235,606 Contributions receivable net 1,035,027 - Grant receivable net 2,623,739 - Prepaid expenses and other assets 366, ,160 Gift-in-kind inventory 736, ,683 Property held for sale 496,292 - Loan origination fees net 138, ,669 Land, buildings, and equipment net 21,549,637 15,839,635 Total Assets $ 33,131,054 $ 22,112,438 LIABILITIES AND NET ASSETS: Liabilities: Accounts payable $ 639,859 $ 659,973 Construction accounts payable 207,822 - Accrued expenses 726, ,818 Deferred revenue and other liabilities 66,100 63,511 Notes payable 964, ,771 2,604,799 1,490,073 Net assets: Unrestricted: Operating 4,958,046 4,866,832 Equity in land, buildings, and equipment net 20,515,238 15,755,533 25,473,284 20,622,365 Temporarily restricted 5,052,971-30,526,255 20,622,365 Total Liabilities and Net Assets $ 33,131,054 $ 22,112,438 See notes to financial statements -3-

6 Statements of Activities Year Ended June 30, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total OPERATING: SUPPORT AND REVENUE: Contributions: Individuals, businesses, and others $ 13,259,111 $ 4,751,697 $ 18,010,808 $ 13,480,046 $ 3,966,730 $ 17,446,776 Gift-in-kind inventory 8,403,948-8,403,948 8,591,817-8,591,817 21,663,059 4,751,697 26,414,756 22,071,863 3,966,730 26,038,593 Program service and other revenue 1,398,631-1,398,631 1,154,316-1,154,316 Total Support and Revenue 23,061,690 4,751,697 27,813,387 23,226,179 3,966,730 27,192,909 NET ASSETS RELEASED: Purpose restrictions 4,548,279 (4,548,279) - 3,968,188 (3,968,188) - EXPENSES: Program services: Ministry Outreach Center 7,379,692-7,379,692 6,911,383-6,911,383 The Crossing 6,393,883-6,393,883 6,206,005-6,206,005 Lawrence Street 3,791,337-3,791,337 3,474,112-3,474,112 Harvest Farm 2,176,381-2,176,381 2,235,501-2,235,501 Fort Collins 796, , , ,033 Champa House 653, , , ,816 21,191,440-21,191,440 19,945,850-19,945,850 (continued) See notes to financial statements -4-

7 Statements of Activities (continued) Year Ended June 30, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total OPERATING, continued: EXPENSES, continued: Supporting activities: General and administrative 940, ,429 1,044,494-1,044,494 Fund-raising 4,601,714-4,601,714 4,348,225-4,348,225 5,542,143-5,542,143 5,392,719-5,392,719 Total Expenses 26,733,583-26,733,583 25,338,569-25,338,569 Change in Net Assets From Operations 876, ,418 1,079,804 1,855,798 (1,458) 1,854,340 NON-OPERATING: Contributions restricted for long-term purposes - 8,768,116 8,768, Gain on involuntary conversion of nonmonetary assets 162, , Loss on impairment of asset (866,710) - (866,710) Loss on disposal of land, buildings and equipment (106,167) - (106,167) Net assets released for capital projects 3,918,563 (3,918,563) - 383,528 (383,528) - Change in Net Assets From Non-Operating Activities 3,974,533 4,849,553 8,824,086 (483,182) (383,528) (866,710) Change in Net Assets 4,850,919 5,052,971 9,903,890 1,372,616 (384,986) 987,630 Net Assets, Beginning of Year 20,622,365-20,622,365 19,249, ,986 19,634,735 Net Assets, End of Year $ 25,473,284 $ 5,052,971 $ 30,526,255 $ 20,622,365 $ - $ 20,622,365 See notes to financial statements -5-

8 Statements of Cash Flows Year Ended June 30, CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 9,903,890 $ 987,630 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation 1,150,095 1,002,436 Amortization of prepaid expenses 497, ,761 Accretion of contributions receivable - (16,472) Non-cash contributions of fixed assets (189,890) (290,944) Net change in non-operating contributions and grant receivable (3,628,766) - Net change in operating contributions receivable (30,000) - Cash received for long-term purposes (5,139,350) - Loss on disposal of land, buildings, and equipment 106,167 - Loss on impairment of asset - 866,710 Receipt of gift-in-kind inventory (8,403,948) (8,591,817) Distribution of gift-in-kind inventory 8,337,802 8,500,689 Changes in operating assets and liabilities: Prepaid expenses and other assets (490,613) (295,895) Accounts payable (20,114) 218,183 Accrued expenses 192,266 59,399 Deferred revenue and other liabilities 2, Net Cash Provided by Operating Activities 2,287,286 2,897,237 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of land, buildings, and equipment (6,329,249) (4,808,353) Proceeds from sale of investments 7,021,371 7,760,937 Purchases of investments (5,529,278) (10,514,385) Net Cash Used by Investing Activities (4,837,156) (7,561,801) (continued) See notes to financial statements -6-

9 Statements of Cash Flows (continued) Year Ended June 30, CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of notes payable - 132,771 Principal payments on notes payable (3,432) - Loan origination fees paid - (48,669) Cash received for long-term purposes 5,139,350 - Change in restricted cash (1,472,363) - Collections on contributions receivable - 400,000 Net Cash Provided by Financing Activities 3,663, ,102 Change in Cash and Cash Equivalents 1,113,685 (4,180,462) Cash and Cash Equivalents, Beginning of Year 1,854,685 6,035,147 Cash and Cash Equivalents, End of Year $ 2,968,370 $ 1,854,685 NON-CASH TRANSACTIONS AND SUPPLEMENTAL DISCLOSURE: Property, plant, and equipment capitalized but not yet paid for $ 207,822 $ - Assets acquired with notes payable proceeds $ 735,595 $ - Property held for sale transferred from property, plant, and equipment $ 496,292 $ - Cash paid for interest ($20,217 and $0 capitalized) $ 20,217 $ - Loan origination fees financed with notes payable $ - $ 100,000 See notes to financial statements -7-

10 Notes to Financial Statements June 30, 2014 and NATURE OF ORGANIZATION: The Denver Rescue Mission (the Mission), founded in 1892, is a Colorado corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (the Code) and is not a private foundation under Section 509(a) of the Code. The purpose of the Mission is to meet people at their physical and spiritual points of need. Through practical programs of education and life skills, shelter, food, and clothing distribution, and through Christian teaching and work disciplining, the Mission aims to return the poor, needy and homeless to society as productive selfsufficient citizens. The Mission s shelter at Lawrence and Park Avenue West sleeps 200 men, with the potential for sleeping 100 additional men during cold-weather or other emergency conditions. Up to 31 single women and children live at the Mission s transitional housing facility, Champa House, yearly. At Harvest Farm in rural Wellington, Colorado, up to 72 men participate in the long-term residential New Life Rehabilitation Program (NLP) and raise crops and livestock for the Mission's facilities. The Ministry Outreach Center in industrial Denver warehouses and distributes thousands of pounds of food, clothing, and furniture to the needy throughout the area. Family Services assists homeless families in transitioning to self-sufficiency. Approximately 130 men are housed at The Crossing and participate in NLP. In addition, The Crossing provides temporary living accommodations for families, seniors, and single men and women, with capacity for 342 people, and 28 others needing respite care. During the year ended June 30, 2013, the Mission acquired the assets of Open Door Ministry in Fort Collins, Colorado, which now operates as the Fort Collins Rescue Mission (FCRM). FCRM provides emergency services to the homeless, meals for the hungry, food boxes, clothing, and hygiene items for those in need, and includes a shelter for 75 men and women. FCRM also offers a "Steps to Success" program that helps people become productive, self-sufficient members of the community. In December 2012, the Mission purchased a 50,764 square foot warehouse building from a financially distressed non-profit organization for $2,522,000. The primary reason for the purchase was to replace its existing warehouse building condemned by the state of Colorado for a interstate highway expansion project. The Mission utilizes the space for ministry outreach program and vehicles and other in-kind donation storage and distribution operations. The Mission receives the majority of its support from individuals, businesses, churches, and others within the Denver metropolitan area. -8-

11 Notes to Financial Statements June 30, 2014 and SIGNIFICANT ACCOUNTING POLICIES: The Mission maintains its accounts and prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of any contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could differ from the estimates. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader. NON-OPERATING ACTIVITIES During the year ended June 30, 2014, the Mission started a new building project called the Lawrence Street Community Center (LSCC). The LSCC will be a day-time facility for the homeless to access emergency and rehabilitation services in a safe and controlled environment off the streets of Denver. A substantial part of the project was funded through a grant from a local municipality (the municipality). Specifically, the Mission received grant contributions of $3,666,000 to purchase land and a grant receivable of $2,623,739 to cover construction costs. The grant receivable is reported net of a $2,266,000 obligation that the Mission will reimburse to the municipality upon completion of the project. The municipality will fund the grant receivable as construction costs are incurred by the Mission. While the Mission has entered into a $145,409 preliminary contract with a general contractor for the early phases of the project, construction has not started as of June 30, The Mission recognized $6,289,739 of grant contributions from the municipality for the LSCC project during the year ended June 30, 2014, in the non-operating section of the statements of activities for this project. As of June 30, 2014, $2,623,739 of this amount is reported as a grant receivable on the statements of financial position. In addition to the grant contributions from the municipality, the Mission also received $2,478,377 of contributions from other donors for the project during the year ended June 30, 2014, of which $1,005,027 is included in contributions receivable as of June 30, 2014, on the statements of financial position. In total, the Mission received $8,768,116 of support from the municipality and donors for the LSCC project. CASH AND CASH EQUIVALENTS Cash and cash equivalents include checking, savings, money market accounts, and certificates of deposit with original maturities of three months or less that are not held for long-term purposes. These accounts from time to time exceed federally insured limits; however, the Mission has not experienced any losses on these accounts and does not believe it is exposed to any significant risk. Management has established an operating reserve, consisting of cash and cash equivalents and investments, as of June 30, 2014 and 2013 in the amount of $3,750,000; these amounts are at the discretion of management and are not designated by the board of directors. -9-

12 Notes to Financial Statements June 30, 2014 and SIGNIFICANT ACCOUNTING POLICIES, continued: RESTRICTED CASH During the year ended June 30, 2014, the Mission received amounts restricted by a donor to be held in a separate bank account and are only to be used for the LSCC project. Upon completion of the project, the amount will no longer be restricted. INVESTMENTS Investments consist of certificates of deposit with original maturities of longer than three months and are carried at fair value based on quoted prices in active markets for identical assets, which is Level 1 of the fair value hierarchy established under the Fair Value Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Investments received by gift are carried at market value on the date of donation and, thereafter, reported in accordance with the above provisions. Unrealized gains or losses in fair value, interest, and dividends are recognized in program service and other revenue on the statements of activities in the year in which they occur. CONTRIBUTIONS RECEIVABLE Unconditional promises to give are recorded at net realizable value if, at the time the promise is received, the Mission expects to receive payment in one year or less. Unconditional promises to give that the Mission expects to receive in more than one year are recorded at fair value initially and discounted using present value techniques subsequent to initial recognition. Allowances are recorded for estimated uncollectible promises. GRANT RECEIVABLE The Mission received a grant receivable from a local municipality for the LSCC project. The grant receivable is reported net of a $2,266,000 obligation that the Mission will reimburse to the municipality upon completion of the project. The municipality will fund the grant receivable as construction costs are incurred by the Mission. The project is expected to be completed in the fall of GIFT-IN-KIND INVENTORY Gift-in-kind inventory consists of donated merchandise, such as food, clothing, and miscellaneous items, used in the operation of the Mission's programs. All such inventory is recorded at its estimated fair value at the date of donation and reported at its carrying amount thereafter. LOAN ORIGINATION FEES Loan origination fees are recorded at cost and are amortized over the term of the loan agreement using the straight-line method which approximates the effective-interest method. Accumulated amortization for the years ended June 30, 2014 and 2013, was $10,312 and $0, respectively. -10-

13 Notes to Financial Statements June 30, 2014 and SIGNIFICANT ACCOUNTING POLICIES, continued: PROPERTY HELD FOR SALE Property held for sale is recorded at the lower of historical cost or market value. During the year ended June 30, 2014, the Mission was notified that the administration building was to be purchased by the state of Colorado for an interstate highway expansion. The sale is expected to close during the year ended June 30, Subsequent to the year ended June 30, 2014, the Mission received $2,000,000 from the state of Colorado toward the sale of the property. During the year ended June 30, 2014, the Mission entered into a $6,552,118 agreement with a general contactor for the construction on a replacement administration building. As of June 30, 2014, $1,203,241 of the contract had been complete and is included in land, buildings, and equipment on the statements of financial position. LAND, BUILDINGS, AND EQUIPMENT Land, buildings, and equipment are recorded at cost or, if donated, at estimated fair value at the date of receipt. The Mission capitalizes fixed assets with a cost greater than $4,000. Depreciation is calculated based on the straight-line method over the following estimated useful lives: Land improvements Buildings and improvements Furniture and fixtures Machinery and equipment Vehicles 20 years years 5-10 years 3-10 years 3-5 years DEFERRED REVENUE Deferred revenue consists of prepaid rental income at The Crossing, as well as sponsorship and other revenue received for special events scheduled to be held in the next fiscal year. NET ASSETS Net assets include the following two classes: Unrestricted net assets include resources that are available to support operations and provide for the long-term needs of the Mission. -11-

14 Notes to Financial Statements June 30, 2014 and SIGNIFICANT ACCOUNTING POLICIES, continued: NET ASSETS, continued Temporarily restricted net assets include gifts which are restricted by the donor for various projects and contributions receivable which are time-period restricted. The Mission did not have temporarily restricted net assets as of June 30, Temporarily restricted net assets as of June 30, 2014, consist of: Capital campaign $ 4,849,553 Programs 203,418 $ 5,052,971 The assets related to the capital campaign include restricted cash, contributions receivable net, and grant receivable net. FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing various program services and supporting activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs, such as depreciation and salaries, have been allocated among the program services and supporting activities benefited. SUPPORT AND REVENUE Contributions, which include grant contributions, are recorded when made, which may be when cash or other assets are received or unconditionally promised. Contributions restricted by the donor for specified purposes are recorded as support in the temporarily restricted class of net assets until the funds have been expended for the purposes specified. Donated materials, including gifts-in-kind, are recorded at estimated fair value. The Mission records income and expense for contributed professional services valued at the providers' industry average hourly rates for the number of hours contributed to the Mission's program. Clothing contributed to the Mission in excess of requirements for the Mission's internal programs is distributed to other relief organizations and Indian reservations. Program service revenue and other income primarily consists of corn maze admissions income and product sales. Corn maze income is recognized when the tickets are sold at the maze. Product sales are recorded as income when the products are given or shipped to the customers. All other income is recognized when earned. EXPENSES Expenses are recognized when incurred in accordance with the accrual basis of accounting. ADVERTISING The Mission uses advertising to promote its programs among the audiences it serves and to raise funds. Advertising costs are expensed as incurred. Advertising expense for the years ended June 30, 2014 and 2013, was $413,148 and $364,667, respectively. -12-

15 Notes to Financial Statements June 30, 2014 and SIGNIFICANT ACCOUNTING POLICIES, continued: UNCERTAIN TAX POSITIONS The financial statement effects of a tax position taken or expected to be taken are recognized in the 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 statements of activities. As of June 30, 2014, the Mission had no uncertain tax positions that qualify for recognition or disclosure in the financial statements. The Mission is generally no longer subject to U.S. federal and state income tax examinations by tax authorities for years before RECLASSIFICATION Certain prior period amounts have been reclassified in order to conform to current year presentation. 3. CONTRIBUTIONS RECEIVABLE NET: Contributions receivable net as of June 30, 2014, consist of: Due in less than one year $ 657,880 Due in one to five years 400,000 1,057,880 Unamortized discount (22,853) $ 1,035,027 The Mission did not have contributions receivable as of June 30, GIFT-IN-KIND PROGRAM: The Mission's gift-in-kind activity is summarized below: Year Ended June 30, 2014 Beginning Ending Inventory Contributions Distributions Inventory Food $ 228,419 $ 2,858,758 $ 2,932,419 $ 154,758 Furniture and equipment 232,923 1,590,955 1,416, ,597 Clothing 209,341 3,954,235 3,989, ,474 $ 670,683 $ 8,403,948 $ 8,337,802 $ 736,

16 Notes to Financial Statements June 30, 2014 and GIFT-IN-KIND PROGRAM, continued: The Mission's gift-in-kind activity is summarized below, continued: Year Ended June 30, 2013 Beginning Ending Inventory Contributions Distributions Inventory Food $ 237,534 $ 3,610,180 $ 3,619,295 $ 228,419 Furniture and equipment 321,701 1,151,571 1,240, ,923 Clothing 20,320 3,830,066 3,641, , LAND, BUILDINGS, AND EQUIPMENT NET: Land, buildings, and equipment net consists of: $ 579,555 $ 8,591,817 $ 8,500,689 $ 670,683 June 30, Land $ 6,762,576 $ 3,101,686 Land improvements 456, ,175 Buildings and improvements 15,965,996 15,542,526 Furniture and fixtures 328, ,948 Machinery and equipment 2,837,115 2,444,880 Vehicles 739, ,606 27,090,624 22,452,821 Accumulated depreciation (7,741,636) (6,613,186) 19,348,988 15,839,635 Construction in process 2,200,649 - $ 21,549,637 $ 15,839,

17 Notes to Financial Statements June 30, 2014 and LAND, BUILDINGS, AND EQUIPMENT NET, continued: Equity in land, buildings, and equipment consists of: June 30, Land, buildings, and equipment net $ 21,549,637 $ 15,839,635 Loan origination fees net 138, ,669 Less construction accounts payable (207,822) - Less notes payable (964,934) (232,771) $ 20,515,238 $ 15,755, NOTES PAYABLE: On April 26, 2013, the Mission borrowed funds generated from Colorado Educational and Cultural Facilities Authority (CECFA) Revenue Bond Series 2013 Bonds. The lender loaned the proceeds to the Mission pursuant to a financing agreement dated April 1, 2013, and a promissory note (CECFA note payable) dated April 26, Through the agreement, the Mission has access to a total of $7,000,000 of funding. The note may be prepaid in whole or in part at any time subject to the prepayment provisions set forth in the financing agreement. The CECFA note payable bears interest at a fixed rate of 2.94% and is collateralized by property and equipment. The note provides for monthly, interest-only payments until May 1, 2016, at which time principal and interest payments will be made according to a 25-year amortization schedule. The note matures on May 1, 2023, at which time a balloon payment will be due. As the future principal amount is yet to be determined, future minimum payment information for the CECFA note payable have not been disclosed. During the year ended June 30, 2014, the Mission obtained a note payable from a financial institution for $315,000, which is secured by property and equipment. Principal and interest payments for $1,851 are due monthly, with a fixed interest rate of 4.98%. The note payable matures in December 2023, at which time a balloon payment will be due. Future minimum principal payments for this note payable are: Year Ending June 30, 2015 $ 6, , , , ,788 Thereafter 273,196 $ 311,

18 Notes to Financial Statements June 30, 2014 and NOTES PAYABLE, continued: In summary, notes payable consists of: June 30, CECFA note payable $ 653,366 $ 232,771 Other note payable 311,568 - $ 964,934 $ 232,771 The Mission is required to meet certain covenants; as of June 30, 2014, the Mission was in compliance with the covenants. 7. LINE OF CREDIT: The Mission has access to a revolving line of credit, maturing November 1, 2014, in the amount of $600,000. The line of credit has a variable interest rate and is for seasonal cash flow management. The Mission did not make any draws during the years ended June 30, 2014 and CONTRIBUTED SERVICES: The Mission operates a medical clinic at its main facility in downtown Denver, Colorado. Local doctors, dentists, and chiropractors volunteer their time serving patients. Other professionals also provided services to the Mission's clients. Contributed services recognized in the financial statements totaled $646,193 and $466,800, for the years ended June 30, 2014 and 2013, respectively. The Mission also has a number of unpaid volunteers who have made contributions of their time performing various assignments. These contributed services have not been recognized, as they do not meet the requirements under current accounting standards. 9. RETIREMENT PLAN: The Mission has a defined contribution plan covering substantially all employees. To encourage employee retention, the Mission makes contributions to the plan based on employee length of service and also matches employee contributions dollar for dollar up to 5% of eligible compensation. Employees vest immediately in employer contributions. Employer contributions to the plan for the years ended June 30, 2014 and 2013, were $491,444 and $528,375, respectively. -16-

19 Notes to Financial Statements June 30, 2014 and CONCENTRATION: During the year ended June 30, 2014, the Mission received $6,289,739 of grant contributions restricted for longterm purposes from one source for the LSCC project. This amount represents approximately 17% of total support and revenue, including contributions restricted for long-term purposes. There was no such concentration during the year ended June 30, SUBSEQUENT EVENTS: Subsequent events have been evaluated through the report date, which represents the date the financial statements were available to be issued. Subsequent events after that date have not been evaluated. -17-

20 SUPPLEMENTARY SCHEDULE

21 West Belleview Avenue, Suite 270 Littleton, CO INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY SCHEDULE Board of Directors Denver Rescue Mission Denver, Colorado We have audited the financial statements of Denver Rescue Mission (the Mission) as of and for the year ended June 30, 2014, and have issued our report thereon dated September 30, 2014, which contained an unmodified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The schedule of functional expenses is presented for the purposes of additional analysis and is not a required part of the 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 financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole. The prior year summarized comparative information on page 19 has been derived from the Mission's 2013 financial statements and, in our report dated August 21, 2013, we expressed an unqualified opinion on those financial statements. Littleton, Colorado September 30, 2014

22 Schedule of Operating Functional Expenses Year Ended June 30, 2014 (with comparative information for the year ended June 30, 2013) Program Services Supporting Activities Ministry Program General and Supporting Outreach The Lawrence Harvest Fort Champa Services Adminis- Fund- Activities Center Crossing Street Farm Collins House Total trative Raising Total Total 2013 Salaries, wages, and benefits $ 913,290 $ 3,497,477 $ 1,180,975 $ 1,204,841 $ 391,190 $ 510,760 $ 7,698,533 $ 598,086 $ 1,076,297 $ 1,674,383 $ 9,372,916 $ 8,881,331 Gift-in-kind 5,536, ,241 1,448, , ,100 23,653 8,337, ,337,802 8,500,689 Printing and postage 3,764 12,344 2,031 4, ,343 9,196 2,599,987 2,609,183 2,632,526 2,285,846 Ministry to clients and others 100, , , ,468 15,486 10,166 1,404, ,404,004 1,244,633 Facility operations 304, , , ,259 79,251 32,627 1,200,737 65,407 39, ,937 1,305,674 1,174,623 Depreciation 220, , , ,533 37,488 40,918 1,076,819 21,170 52,106 73,276 1,150,095 1,002,436 Utilities 175, , , ,086 44,609 30, ,114 19,461 21,895 41, , ,250 Office and miscellaneous 100, ,018 9,817 63,215 9,531 2, , , , , , ,506 Media and marketing 20,646 7, , ,267 5, , , , ,862 Professional services 3,985 88, ,292-2, , , , , , ,393 Total Expenses $ 7,379,692 $ 6,393,883 $ 3,791,337 $ 2,176,381 $ 796,341 $ 653,806 $ 21,191,440 $ 940,429 $ 4,601,714 $ 5,542,143 $ 26,733,583 Percent of Total Expenses 28% 24% 14% 8% 3% 2% 79% 4% 17% 21% 100% 2013: Total Expenses $ 6,911,383 $ 6,206,005 $ 3,474,112 $ 2,235,501 $ 439,033 $ 679,816 $ 19,945,850 $ 1,044,494 $ 4,348,225 $ 5,392,719 $ 25,338,569 Percent of Total Expenses 27% 24% 14% 9% 2% 3% 79% 4% 17% 21% 100% -19-