KNOX UNITED CHURCH FINANCIAL STATEMENTS December 31, 2015

Transcription

1 FINANCIAL STATEMENTS

2 March 9, 2016 REVIEW ENGAGEMENT REPORT To the Members of Knox United Church: We have reviewed the statement of financial position of Knox United Church as at and the statements of operations and net assets and cash flows for the year then ended. Our review was made in accordance with Canadian generally accepted standards for review engagements and accordingly, consisted primarily of enquiry, analytical procedures and discussion related to information supplied to us by the church. A review does not constitute an audit and consequently we do not express an audit opinion on these financial statements. Based on our review, nothing has come to our attention that causes us to believe that these financial statements are not, in all material respects, in accordance with Canadian accounting standards for not-forprofit organizations. Chartered Accountants 1

3 Statement of Financial Position Property and Operating Equipment Reserve Fund Fund Fund Total Total ASSETS CURRENT Cash $ 142,112 $ - $ - $ 142,112 $ 220,953 Accounts receivable 6, ,225 8,171 Prepaid expenses 8, ,657 11, , , ,082 INVESTMENTS (Note 3) 5, ,810 10,538 PROPERTY, AND EQUIPMENT Land, church buildings and equipment acquired prior to 1973 at nominal value Acquired subsequent to January 1, 1973, at cost - 402, , ,022 INTERFUND BALANCE (154,249) - 154, $ 8,555 $ 402,023 $ 154,249 $ 564,827 $ 653,643 LIABILITIES AND NET ASSETS CURRENT Accounts payable and accrued liabilities $ 19,623 $ - $ - $ 19,623 $ 24,569 Deferred revenue , ,523 25,169 NET ASSETS Unrestricted (11,968) - - (11,968) (32,444) Invested in property, and equipment (Note 5) - 402, , ,023 Restricted (Schedule 1) , , ,895 (11,968) 402, , , ,474 $ 8,555 $ 402,023 $ 154,249 $ 564,827 $ 653,643 APPROVED BY THE BOARD: Director Director 2

4 Statement of Operations and Net Assets Year Ended Property and Operating Equipment Reserve Fund Fund Fund Total Total REVENUE Donations Envelopes and PAR $ 71,043 $ - $ - $ 71,043 $ 90,906 Open collection 11, ,231 8,371 Miscellaneous Donation 1, ,332 (1,342) Bequests (Note 11) 27, ,816 - Building Revenue Building - Casual 14, ,708 9,311 Building - Cost Sharing 39, ,140 47,795 Building - KEE program (Note 8) 19, ,885 18,240 Other Revenue KEE Program - Administration Cost (Note 8) 42, ,170 36,919 Lease income (Note 4) - 23,652-23,652 23,652 Interest income 2, ,074 3,729 Unrealized gain on investments Reserve fund receipts (Schedule 1) , ,746 62,781 Contributions from other charitable organizations 1, , ,039 23, , , ,155 EXPENDITURES Advertising and promotion ,077 Instrument repairs 2, ,191 1,254 Insurance 13, ,273 11,467 Interest and bank charges Ministry and office staff Benefits 23, ,843 26,939 KEE program benefits (Note 8) ,328 Salaries 163, , ,578 Travel 2, ,855 2,803 Music professionals 16, ,400 14,951 Office and administration 9, ,465 8,530 Presbytery assessment 11, ,144 10,837 Professional fees 3, ,866 4,940 Program costs and supplies 13, ,090 8,149 Property tax Repairs and maintenance 27, ,996 23,328 Reserve fund disbursements (Schedule 1) , , ,597 Telephone 2, ,485 2,172 Utilities 44, ,763 53, , , , ,380 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES BEFORE OTHER REVENUE (105,620) 23,652 (72,201) (154,169) (151,225) OTHER REVENUE The DuVal Foundation (Note 6) 70, ,000 70,000 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES FOR THE YEAR (35,620) 23,652 (72,201) (84,169) (81,225) NET ASSETS (DEFICIT) - BEGINNING OF YEAR (32,445) 402, , , ,699 INTERFUND TRANSFERS (Note 12) 56,097 (23,652) (32,445) - - NET ASSETS (DEFICIT) - END OF YEAR $ (11,968) $ 402,023 $ 154,249 $ 544,304 $ 628,474 3

5 Statement of Cash Flows Year Ended Property and Operating Equipment Reserve Fund Fund Fund Total Total OPERATING ACTIVITIES Cash received from members and contributors $ 306,162 $ 23,652 $ 100,746 $ 430,560 $ 376,985 Cash paid to suppliers and staff (338,304) - (172,947) (511,251) (452,216) Interest paid (223) - - (223) (454) Interest received 2, ,073 3,691 Cash flow from (used by) operating activities (30,292) 23,652 (72,201) (78,841) (72,088) FINANCING ACTIVITY Proceeds from (repayments of) interfund balances (48,549) (23,652) 72, INCREASE (DECREASE) IN CASH (78,841) - - (78,841) (72,088) CASH - BEGINNING OF YEAR 220, , ,041 CASH - END OF YEAR $ 142,112 $ - $ - $ 142,112 $ 220,953 4

6 Notes to Financial Statements 1. NATURE AND PURPOSE OF ORGANIZATION Knox United Church is a congregation of The United Church of Canada, whose legal form is set out in the federal United Church of Canada Act of The Church is involved in providing pastoral care of parishioners and members of the community. Knox United Church work in partnership with Central Park resident s community services, newcomer & refugee organization, schools, government and other faith groups to build a stronger, more cohesive and resilient neighbourhood. Knox United Church is a charitable organization and as such is exempt from income tax under the Income Tax Act. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation These financial statements were prepared in accordance with Canadian accounting standards for notfor-profit organizations (ASNPO). These financial statements reflect only the regular operating accounts of the Church under the direct supervision of the General Board. The financial statements do not include other funds belonging to the Church nor the accounts of other church organizations. The Church follows the restricted fund method of accounting for contributions. Operating fund The operating fund relates to the day-to-day operations of the Church. Funds that are not designated for a specific purpose are included as part of the operating fund. Reserve fund The reserve fund consists of donations, bequests and other revenue that have been received for specific purposes. Property and equipment fund The Church property and equipment acquired prior to 1973 are shown on the statement of financial position at a nominal value of $1. Effective January 1, 1973, additions to these properties are reflected at cost. No amortization is recorded in the accounts. The property and equipment of the Church was appraised for insurance purposes in December 2014 at a value of $9,615,000. All other capital assets purchased are expensed in the year of acquisition. No new equipment was purchased or expensed during the year. 5

7 Notes to Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition Revenues and expenses related to religious and moral guidance, divine worship, social activities and administrative activities are reported when received or receivable if the amounts can be reasonably measured and collectability is reasonably assured. Revenues and expenses related to designated purposes, such as major renovations and maintenance of the Church, are deferred until utilized for the designated purpose. Lease income is recognized when the amount is due. Interest income is recognized when earned. Financial instruments The Church utilizes various financial instruments. Unless otherwise noted, it is management s opinion that the Church is not exposed to significant interest, currency or credit risks arising from these financial instruments and the carrying amounts approximate fair values. All financial instruments are initially recorded at fair value, with subsequent measurement as noted below. Transaction costs are expensed as incurred. Assets/Liability Cash Accounts receivable Investments Accounts payable and accrued liabilities Long-term debt Measurement Amortized cost Amortized cost Fair value Amortized cost Amortized cost Financial instruments carried at fair value are derived from market values at year end. Unrealized gains or losses are recognized in the statement of operations. All other financial instruments are carried at amortized cost, using the effective interest method. Measurement uncertainty The preparation of financial statements in conformity with Canadian accounting standards for not-forprofit 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. Such estimates are periodically reviewed and any adjustments necessary are reported in earnings in the period in which they become known. Actual results could differ from these estimates. 6

8 Notes to Financial Statements 3. INVESTMENTS The following is a summary of the investments held by Knox United Church valued at their market value: shares of San Antonio Gold Mines $ 1 $ shares of B.C.E. Inc. Co. 5,808 5, shares of Nortel Networks Inc. 1 1 CIBC G.I.C. 0.80% maturing on December 22, ,728 $ 5,810 $ 10,538 Market value of the equity investments is $5,810 ( $10,538). Values reported for G.I.C. investments are considered to be approximate market values. 4. LEASE INCOME The lease by Knox United Church to Manitoba Housing and Renewal Corporation is secured by way of a lease agreement which has annual lease payments totalling $23, PROPERTY AND EQUIPMENT FUND BALANCES Net funds received or appropriated since 1973 for expansion and development of property and equipment Donations re: Carillon $ 39,083 $ 39,083 Received from the DuVal Foundation Parking lots 111, ,656 Other capital expenditures 33,041 33,041 Appropriated from Operating Fund 218, ,243 $ 402,023 $ 402, RELATED PARTY TRANSACTIONS During the year, the Church received grants of $70,000 ( $70,000) from The DuVal Foundation. The Foundation provides for the management and control of donated assets and the annual income, subject to Board approval, is available for the maintenance of Knox United Church as a centre of Christian teaching and welfare work in the city of Winnipeg. 7

9 Notes to Financial Statements 7. PENSION PLAN Retirement benefits for employees of the Church are provided through the pension plan of The United Church of Canada ( the Plan ). The Plan is a multi-employer pension plan which provides pensions for members of the Ministry Personnel and lay employees of the Offices of the General Council and any Presbytery, Conference or Pastoral Charge of The United Church of Canada. The Plan is a contributory defined benefit pension plan which is financed by contributions from participating employers and employees, and by the investment earnings of the Plan. The Plan is registered under the Pension Benefits Act, (Ontario), Registration # Plan benefits are funded by contributions and investment earnings. The determination of the value of benefits and required contributions is made on the basis of periodic actuarial valuations. The cost of funding the Plan is shared by employee and employer. The rate of employer contributions to the Fund is 7% of the pensionable earnings. The practice of the United Church is to use the net actuarial gains to improve the benefits of Plan members and their dependants. The normal retirement age is 65 years for all Plan members. The normal retirement pension is calculated on the basis of length of service and pensionable earnings on which contributions are calculated. In addition to the normal retirement benefit, benefit coverage for early retirement, death, disability, termination and survivors is available for members who meet the Plan requirements. At the date of the last actuarial valuations, December 31, 2008, there were no unfunded liabilities related to either past service or to amendments to the Plan. 8. KNOX EMPLOYMENT ENTRY PROGRAM The Knox Employment Entry program is an employment assistance program funded by the Manitoba Government and is administered by Knox United Church with four full-time staff members. The staff conducts interviews with potential employment candidates and work with its industry liaisons to place the candidates in retail, hospitality and commercial sector job opportunities. The program has a high success rate in providing its candidates with jobs and thereby contributing to the overall improvement of their economic conditions. The Knox Employment Entry Program accounts are maintained separately, and the assets, liabilities, revenue and expenses of the program are not included in the financial statements of the Church. Funding for these program activities (received from Province of Manitoba) is used exclusively for the program s activities and staff. 8

10 Notes to Financial Statements 9. KNOX COMMUNITY KITCHEN Knox United Church would like to acknowledge the grants received from The Winnipeg Foundation for the support of the Knox Community Kitchen: March 31, 2015 $ 11,000 October 31, ,000 $ 16,000 Total Grants received from the Winnipeg Foundation were transferred directly to Knox Centre Winnipeg Inc. which is the organization responsible for the Knox Community Kitchen. Knox Centre Winnipeg Inc. maintains its financial records separately from Knox United Church. 10. RESERVE FUNDS The breakdown of the $126,204 used from the Reserve Building Repair Fund for the year ended is as follows: I. Women s Basement Washroom Renovations $ 44,364 II. Second Floor Office Space and Kitchen Renovations 27,365 III. Café Room Renovations 26,926 IV. Rooftop Air Conditioner Repair 4,070 V. Electrical Room Repair 4,633 VI. Kitchen Steam Pipe Replacement 14,092 VII. 406 Edmonton Legal Fees 2,567 VIII. Water Softener Replacement for Boiler 2,188 $ 126, BEQUESTS Donations received by Knox United Church included in estates consist of the following: I. Estate George Mann $ 25,000 II. Estate Gertrude Ritchot 2,816 $ 27, INTERFUND TRANSFERS During the year the Board of Directors approved a motion to transfer the accumulated operating deficit of $32, from prior years to the Building Repair Fund. 9

11 Notes to Financial Statements 13. GRANTS RECEIVED FOR BUILDING REPAIRS The breakdown of the $63,000 for grants received is the following: I. Manitoba Infrastructure Secretariat $ 50,000 II. Manitoba Housing & Community Development 13,000 $ 63, JAI MASHI MINISTRY FUNDS The breakdown of the $26,270 for the Jai Mashi Ministry Fund received is the following: I. Received from the United Church of Canada $ 25,000 II. Donations 1,270 $ 26,270 10

12 Schedule of Reserve Fund Balances Year Ended Schedule Balance Receipts Disbursements Transfers Balance Assisted Audio System Fund $ 82 $ - $ (82) - $ - Building Repair Fund (Note 10, 12 & 13) 233,893 63,000 (126,204) (32,445) 138,244 Carpet Project Fund 14, ,924 Christmas Hamper (234) 1,540 (1,100) John Kobayashi Children's Fund (129) Funding Youth Activities (247) - - Jai Mashi Intercultural Ministry Fund (Note 14) 9,237 26,270 (35,507) - - Outreach & Community Fund Mission & Service Fund - 3,561 (3,561) - - African Community Support Fund - 2,000 (2,000) - - Sound System Funds - 1,523 (1,523) - - Designated Emergency Funds (400) - - Designated Nepal Earthquake Relief Funds - 2,323 (2,323) - - $ 258,895 $ 100,746 $ (172,947) $ (32,445) $ 154,249 11