National Center for Learning Disabilities, Inc.

Transcription

1 National Center for Learning Disabilities, Inc. Financial Report June 30, 2011

2 Contents Independent Auditor's Report 1 Financial Statements: Statements of Financial Position 2 Statements of Activities 3 Statements of Functional Expenses 4-5 Statements of Cash Flows 6 Notes to Financial Statements 7-12

3 Independent Auditor's Report To the Board of Directors National Center for Learning Disabilities, Inc. New York, New York We have audited the accompanying statements of financial position of the National Center for Learning Disabilities, Inc. ("NCLD") as of June 30, 2011 and 2010, and the related statements of activities, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of NCLD's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NCLD as of June 30, 2011 and 2010, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. New York, New York December 27,

4 Statements of Financial Position June 30, 2011 and Lead 2010 ASSETS Cash $ 2,421,419 ### $ 1,728,515 Contributions and Other Receivables 426,498 ### 391,250 Prepaid Expenses and Other Assets 48,228 ### 42,685 Investments (Note 3) 44,840 ### 34,080 Security Deposits 10,625 ### 10,625 Property and Equipment, net of accumulated depreciation and amortization of $574,401 and $466,132 for 2011 and 2010, respectively (Note 4) 282,417 ### 379,852 Total assets $ 3,234,027 $ 2,587,007 LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses $ 320,006 ### $ 132,861 Accrued vacation 117,180 ### 115,625 Deferred rent (Note 9) 112,107 ### 101,080 Total liabilities 549, ,566 Commitments and Contingencies (Note 9) Net Assets: Unrestricted 1,755,836 1,176,417 Temporarily restricted (Note 5) 928,898 1,061,024 Total net assets 2,684,734 2,237,441 Total liabilities and net assets $ 3,234,027 $ 2,587,007 See Notes to Financial Statements. 2

5 Statements of Activities Years Ended June 30, 2011 and Temporarily Temporarily Unrestricted Le Restricted Total Unrestricted Restricted Total Revenue, Gains and Other Support (Notes 2 and 10): Revenue from annual fund-raising event $ 2,129,107 $ - $ 2,129,107 $ 1,835,034 $ - $ 1,835,034 Direct costs of annual fund-raising event (179,420) - (179,420) (121,171) - (121,171) Net support from annual fund-raising event 1,949,687-1,949,687 1,713,863-1,713,863 Contributions 528,640 1,907,610 2,436, ,754 1,973,000 2,352,754 Investment income 13,992-13,992 5,105-5,105 Rental income (Note 9) 18,411-18,411 33,454-33,454 Net assets released from restrictions (Note 5) 2,039,736 (2,039,736) - 1,401,115 (1,401,115) - Total revenue, gains and other support 4,550,466 (132,126) 4,418,340 3,533, ,885 4,105,176 Expenses: Program services: Education programs 1,915,177-1,915,177 1,508,161-1,508,161 Essential information 905, , , ,481 Public policy 577, , , ,985 Total program services 3,398,348-3,398,348 2,579,627-2,579,627 Support services: Management and general 281, , , ,525 Fund-raising and development 290, , , ,784 Total support services 572, , , ,309 Total expenses 3,971,047-3,971,047 3,142,936-3,142,936 Change in net assets 579,419 (132,126) 447, , , ,240 Net Assets: Beginning 1,176,417 1,061,024 2,237, , ,139 1,275,201 Ending $ 1,755,836 $ 928,898 $ 2,684,734 $ 1,176,417 $ 1,061,024 $ 2,237,441 See Notes to Financial Statements. 3

6 Statement of Functional Expenses Year Ended June 30, 2011 Program Services Support Services Fund- Management Raising Education Essential Public and and Total Programs Information Policy General Development Expenses Payroll $ 618,090 $ 423,203 $ 249,157 $ 122,376 $ 149,471 $ 1,562,297 Program and evaluation 697, , , ,034,773 Website costs, equipment rental and repairs 73,511 67,552 14,417 5,569 6, ,880 Rent 131,652 65,507 38,562 18,952 23, ,811 Employee benefits 90,514 61,954 36,470 27,742 21, ,563 Travel 64,336 16,547 17,045 19,581 4, ,800 Payroll taxes 48,564 30,370 17,878 8,788 10, ,328 Depreciation and amortization 81,773 14,493 8,532 4,193 5, ,111 Printing and publication 6,738 21,803 1,350 7,206 5,007 42,104 Professional fees ,473 20,032 59,505 Meetings and conferences 43, ,973 6, ,804 Telephone and Internet 20,731 9,780 9,147 5,602 4,531 49,791 Direct mail ,295 15,295 Office supplies and expenses 10,997 5,406 4,825 1,854 2,020 25,102 Insurance 12,972 8,880 5,226 2,569 3,136 32,783 Dues and subscriptions 6,509 4,074 3,007 5,834 16,553 35,977 Bank and payroll fees 7,001 4,792 2,821 2,488 1,693 18,795 Miscellaneous , ,328 $ 1,915,177 $ 905,523 $ 577,648 $ 281,925 $ 290,774 $ 3,971,047 See Notes to Financial Statements. 4

7 Statement of Functional Expenses Year Ended June 30, 2010 Program Services Support Services Fund- Management Raising Education Essential Public and and Total Programs Information Policy General Development Expenses Payroll $ 621,901 $ 344,802 $ 185,197 $ 133,580 $ 128,616 $ 1,414,096 Program and evaluation 298,780 95,245 76, ,993 Rent 141,046 60,420 32,452 23,407 22, ,864 Website costs, equipment rental and repairs 133,304 73,350 18,972 8,862 8, ,023 Employee benefits 58,229 32,284 17,340 28,687 12, ,582 Depreciation and amortization 81,917 11,820 6,349 4,578 4, ,073 Payroll taxes 47,659 26,424 14,192 10,237 9, ,368 Travel 56,789 2,824 20,194 9,939 4,029 93,775 Professional fees ,420 3,763 38,183 Recruitment fees ,050-36,050 Telephone and Internet 14,483 5,726 6,467 5,550 2,572 34,798 Dues and subscriptions 1,878 3,084 1,224 6,428 14,356 26,970 Meetings and conferences 19, , ,069 Direct mail ,424 22,424 Printing and publication 4,082 12,165 1,361 1,684 2,295 21,587 Insurance 9,301 5,157 2,770 1,998 1,924 21,150 Office supplies and expenses 9,814 4,671 2,854 1,809 1,742 20,890 Bank and payroll fees 6,054 3,356 1,803 1,525 1,252 13,990 Consultants/temporary employees ,500 3,825 6,325 Miscellaneous 3, , ,226 Bad debt See Notes to Financial Statements. $ 1,508,161 $ 682,481 $ 388,985 $ 318,525 $ 244,784 $ 3,142,936 5

8 Statements of Cash Flows Years Ended June 30, 2011 and Cash Flows From Operating Activities: Change in net assets $ 447,293 $ 962,240 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 114, ,073 Net appreciation of investments (10,760) (3,828) Changes in assets and liabilities: Increase in contributions and other receivables (35,248) (371,589) (Increase) decrease in prepaid expenses and other assets (5,543) 1,001 Increase (decrease) in accounts payable and accrued expenses 187,145 (78,690) Increase (decrease) in accrued vacation 1,555 (13,431) Increase in deferred rent 11,027 17,227 Net cash provided by operating activities 709, ,003 Cash Flows From Investing Activities: Purchases of equipment (16,676) (43,799) Purchases of investments - (647) Net cash used in investing activities (16,676) (44,446) Net increase in cash 692, ,557 Cash: Beginning 1,728,515 1,150,958 Ending $ 2,421,419 $ 1,728,515 See Notes to Financial Statements. 6

9 Notes to Financial Statements Note 1. Organization and Operations The National Center for Learning Disabilities, Inc. ("NCLD") is a publicly supported not-for-profit organization headquartered in New York City. Established in 1977, NCLD's three primary program areas are: 1) education programs that develop, implement and promote research-based knowledge and educational programs to identify individuals at risk for learning failure and increase teachers' capacity to instruct and support them effectively. Current programs include Get Ready to Read, the RTI Action Network and Student Success Collaborative; 2) essential information that creates and disseminates information for parents and educators to enable them to make informed decisions about children who struggle to learn. Information is provided through NCLD's websites, online and print newsletters, and online interactive programs; and 3) public policy that provides national leadership in the shaping of public policy and federal legislation, working effectively with policymakers and families to ensure that the voices of individuals with learning disabilities are heard by those in government. Note 2. Summary of Significant Accounting Policies Basis of Presentation: The financial statements have been presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and include the accounts of NCLD's programs and support services. NCLD presents its financial statements in accordance with Accounting Standards Codification ("ASC") 958, Not-for-Profit Entities. ASC 958 requires that NCLD's financial statements distinguish between unrestricted, temporarily restricted and permanently restricted net assets and changes in net assets. NCLD had no permanently restricted net assets as of June 30, 2011 and NCLD's net assets consist of the following: Unrestricted: Net assets of NCLD that have not been restricted by an outside donor or by law and are therefore available for use in carrying out the operations of NCLD. Temporarily Restricted: Net assets of NCLD that include gifts of cash and other assets received with stipulations by the donor or by law that either expire with the passage of time or can be fulfilled and removed by the actions of NCLD pursuant to those stipulations. 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 statements of activities as net assets released from restrictions. Cash: Cash includes cash maintained in a checking account, money market fund and petty cash. Contributions and Other Receivables: Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are to be collected in future years are recorded at the present value of their estimated future cash flows. Discounts on those amounts were not material. Conditional promises to give are not included as support until the conditions are substantially met. As of June 30, 2011, except for a $50,000 pledge which will be received in fiscal 2012 as this was a 3-year pledge, all other contributions receivable are due within approximately one year. As of June 30, 2010, except for a $20,000 pledge which was received in October 2011, all other contributions receivable were due within approximately one year. Accordingly, no allowance for doubtful contributions and other receivables has been provided in the accompanying financial statements. 7

10 Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Property and Equipment: Property and equipment are capitalized at cost and are primarily comprised of office furniture and fixtures, computer and telephone equipment, leasehold improvements and software development costs. NCLD capitalizes all purchases of property and equipment in excess of $500. Property and equipment are depreciated using the straight-line method over the following estimated useful lives of the assets: Years Furniture and fixtures 3 to 5 Computer equipment 3 to 5 Telephone equipment 5 Leasehold improvements * Website development costs 12 * Lesser of the useful life or term of the lease Gifts of long-lived assets received without stipulations about how long the donated asset must be used are reported as support with an implied restriction that expires over the useful life of the donated asset. Contributions and Fund-Raising Support: Revenues from contributions and NCLD's fund-raising events are recorded upon receipt of cash or unconditional pledges, and are considered to be available for unrestricted use unless specifically restricted by donors. Amounts received that are designated for future periods or restricted by donors for specific purposes are reported as temporarily restricted support that increases this net asset class. Of NCLD's 2011 and 2010 total revenue, gains and other support, approximately 49% and 56%, respectively, were received from three contributors. Functional Expenses: NCLD allocates its expenses on a functional basis among its various programs and support services. Expenses that can be identified with a specific program and support services are allocated directly according to their natural expenditure classification. Other expenses that are common to several functions are allocated to each. Concentration of Credit Risk: NCLD maintains cash balances in certain financial institutions which, at times, may exceed federally insured limits and potentially subjects NCLD to a concentration of credit risk. NCLD manages this risk by placing its cash in high-quality financial institutions. NCLD has not experienced any losses in such accounts. Accounting Estimates: 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Income Taxes: The Internal Revenue Service has determined that NCLD is a publicly supported organization as defined in Section 509(a)(1) of the Internal Revenue Code (the "Code") and, as such, is exempt from federal income taxes under Section 501(c)(3) of the Code. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. NCLD is subject to taxes on unrelated business income, if any. 8

11 Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Management has evaluated NCLD's tax positions for all open tax years and has concluded that NCLD had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. Generally, NCLD is no longer subject to income tax examinations by U.S. federal, state or local tax authorities for years before fiscal 2008, which is the standard statute of limitations look-back period. Subsequent Events: NCLD evaluates events occurring after the date of the financial statements to consider whether or not the impact of such events needs to be reflected and/or disclosed in the financial statements. Such evaluation is performed through December 27, 2011, the date the financial statements are available for issuance. Note 3. Investments NCLD reports its investments under ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under ASC 820, fair value measurements are disclosed by level within that hierarchy. NCLD determines the fair values of its investments based on the fair value hierarchy established in ASC 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value, which are as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 1 investments are traded in an active exchange market. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets include investments whose value is determined using pricing models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. NCLD s investments as of June 30, 2011 and 2010 are in a large-cap blend mutual fund, which is considered a Level 1 investment, measured at fair value on a recurring basis based on quoted market prices for identical assets in active markets. 9

12 Notes to Financial Statements Note 4. Property and Equipment Property and equipment as of June 30, 2011 and 2010 consist of the following: Furniture and fixtures $ 52,710 $ 52,710 Computer equipment 193, ,281 Leasehold improvements 191, ,571 Telephone equipment 302, ,991 Website development costs 116, , , ,984 Less accumulated depreciation and amortization 574, ,132 $ 282,417 $ 379,852 During fiscal 2011 and 2010, NCLD retired fully depreciated computer equipment with an initial cost basis of approximately $5,800 and $176,000, respectively, representing assets acquired before fiscal Note 5. Temporarily Restricted Net Assets Temporarily restricted net assets are available for or relate to the following purposes: 2011 w/p 2010 Parents as Advocates $ 86,178 $ 370,534 Online Resource for Educators 34, ,955 Donated telephone equipment 131, ,895 RTI Action Network 460, ,000 "Get Ready to Read" Program 19,401 63,640 Rozelle Award Program 15,000 20,000 Public Policy Program - 5,000 Pre-K RTI 139,613 - Anne Ford and Allegra Ford Scholarship 2,548 - LD.org 39,500 - $ 928,898 $ 1,061,024 10

13 Notes to Financial Statements Note 5. Temporarily Restricted Net Assets (Continued) Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes or by the occurrence of other events, as follows: RTI Action Network $ 1,119,352 $ 880,000 Student Success Collaborative 244, ,825 Parents as Advocates 253, ,966 Donated telephone equipment 60,598 60,598 Pre-K RTI 110,387 35,000 Early Learning and Literacy Resources - 30,866 "Get Ready to Read" Program 44,239 26,360 Anne Ford and Allegra Ford Scholarship 10,000 12,000 Public Policy Program 26, LD.org 29,997 - NCLD LD Partnerships 74,849 - Outreach & Engagement 45,000 - Online Resource for Educators 15,500 - Rozelle Award Program 5,000 - $ 2,039,736 $ 1,401,115 Note 6. Benefit Plans NCLD maintains a noncontributory defined contribution retirement plan (the "Plan") which covers substantially all employees who satisfy the age and service requirements of the Plan. In accordance with the provisions of the Plan, employer contributions to the Plan are made based on a discretionary basis. Total Plan contributions recognized as expense for the Plan years ended June 30, 2011 and 2010 were $73,810 and $3,192, respectively. In addition, NCLD also provides a tax-deferred 403(b) plan funded solely by payroll deductions from eligible employees. NCLD does not contribute to this plan. Note 7. Donated Assets and Services NCLD recognizes contributions of services if they (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Contributed services and promises to give services that do not meet the above criteria are not recognized. There were no contributed services recognized during the years ended June 30, 2011 and Note 8. Joint Costs During the years ended June 30, 2011 and 2010, NCLD incurred joint costs of $265,070 and $183,498, respectively, for informational materials and activities that included fund-raising appeals in connection with NCLD's annual benefit and direct mail campaign. Of those costs, $57,093 and $39,903 were allocated to program services and $207,977 and $143,595 were allocated to fund-raising and development expenses, respectively. 11

14 Notes to Financial Statements Note 9. Commitments and Contingencies NCLD's operations are conducted at its offices located in New York City under a lease agreement with a lease term ending April 30, This lease is classified as an operating lease and is subject to customary escalation clauses for real estate taxes, electricity usage and building operating expenses. In May 2010, NCLD signed a one-year sublease agreement at a new location in Washington, D.C. with monthly lease payments of $2,990 in addition to applicable utility charges. Future minimum lease commitments (excluding escalations) under these leases in effect as of June 30, 2011 are as follows: Year ending June 30, 2012 $ 203, , , , ,000 Thereafter 204,000 $ 1,318,000 Deferred rent payable of $112,107 and $101,080 is the difference between the cumulative amounts recorded for rent expense on a straight-line basis over the term of the lease, as compared to the cumulative required amounts paid under the lease as of June 30, 2011 and 2010, respectively. Rent expense for the years ended June 30, 2011 and 2010 was approximately $278,000 and $280,000, respectively. In January 2009, NCLD signed a two-year license agreement to rent a portion of its New York City office space with an unrelated third party. This sublease agreement obligates the unrelated third party to make monthly payments of $2,750 in year one, and $2,833 in year two to NCLD. Note 10. Related Party Transactions NCLD received contributions of approximately $1,170,000 and $920,000 from its board members during fiscal 2011 and 2010, respectively. Contributions receivable from these board members were $3,300 and $26,500 as of June 30, 2011 and 2010, respectively. 12