FAMILY RESOURCE CENTER

Transcription

1 FINANCIAL STATEMENTS SEPTEMBER 30, 2013

2 TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT FINANCIAL STATEMENTS Statements of Financial Position... 5 Statements of Activities... 6 Statements of Functional Expenses... 7 Statements of Cash Flows... 8 Notes to Financial Statements

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5 STATEMENTS OF FINANCIAL POSITION FAMILY RESOURCE CENTER As of September ASSETS CURRENT ASSETS Cash $ 646,720 $ 654,999 Accounts Receivable 4,385 5,385 Prepaid Expenses 9,744 13,365 Total Current Assets 660, ,749 PROPERTY AND EQUIPMENT, net 441, ,213 INTANGIBLE ASSETS, NET 50,749 LIABILITIES AND NET ASSETS $ 1,153,224 $ 1,147,962 CURRENT LIABILITIES Current Portion of Mortgage Payable $ 15,232 $ 15,232 Accounts Payable 35,825 11,699 Accrued Payroll and Benefits 29,872 25,855 Accrued Vacation 11,144 4,432 Accrued Pension Expense 15,569 16,109 Other Accrued Expenses 14,270 9,520 Deferred Revenue 32,200 48,010 Total Current Liabilities 154, ,857 LONG-TERM LIABILITIES Mortgage Payable, net of Current Portion 433, ,530 Total Liabilities 587, ,387 NET ASSETS Unrestricted 562, ,540 Temporarily Restricted 3,133 2,035 Total Net Assets 565, ,575 $ 1,153,224 $ 1,147,962 See accompanying notes. 5

6 STATEMENTS OF ACTIVITIES For the Years Ended September FAMILY RESOURCE CENTER 2012 Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total REVENUES Public Support Contributions and Grants Adoptive Parents and Others $ 130,628 $ 6,410 $ 137,038 $ 180,302 $ 5,423 $ 185,725 Special Event Income 196, , , ,845 Donated Goods and Services 8,100 8,100 Total Public Support 334,807 6, , ,147 5, ,570 Program Revenue Fee Income 1,131,739 1,131,739 1,329,175 1,329,175 Other Revenues Interest and Dividends Rental Income 28,800 28,800 31,800 31,800 Miscellaneous Income Total Other Revenues 29,094 29,094 31,982 31,982 Net Assets Released from Restriction 5,312 (5,312) 5,297 (5,297) Total Revenue and Other Support 1,500,952 1,098 1,502,050 1,732, ,732,727 EXPENSES Program Services Adoption Services 880, , , ,175 Supporting Services Management and General 419, , , ,479 Fundraising 141, , , ,213 Special Events 66,704 66,704 54,037 54,037 Total Supporting Services 628, , , ,729 Total Expenses 1,508,854 1,508,854 1,504,904 1,504,904 NET INCREASE (DECREASE) IN NET ASSETS (7,902) 1,098 (6,804) 227, ,823 Net Assets, Beginning 570,540 2, , ,843 1, ,752 NET ASSETS, ENDING $ 562,638 $ 3,133 $ 565,771 $ 570,540 $ 2,035 $ 572,575 See accompanying notes. 6

7 STATEMENTS OF FUNCTIONAL EXPENSES FAMILY RESOURCE CENTER For the Years Ended September Adoption Management Special Adoption Management Special Services and General Fundraising Events Total Services and General Fundraising Events Total Payroll $ 357,949 $ 237,072 $ 66,280 $ $ 661,301 $ 401,194 $ 200,314 $ 72,781 $ $ 674,289 Fringe Benefits and Payroll Taxes 70, ,894 5, ,346 75, ,921 5, ,309 Medical, Prenatal and Other Living Expenses 50,016 50,016 54,722 54,722 Occupancy 23,174 7,000 3,926 34,100 16,030 3, ,855 Insurance 18,432 4,612 3,198 26,242 21,465 4,923 1,295 27,683 Telephone 14,195 1,988 1,762 17,945 16,999 2, ,706 Supplies 7, ,554 11,255 1, ,577 Distribution 4, ,303 6, ,150 Travel and Housing 42, ,707 43,954 41, ,615 43,363 Equipment Rental, Repairs and Maintenance 8,322 1,564 1,386 11,272 10,042 2, ,827 Professional Service Fees 35,893 19,050 10,099 65,042 36,124 7,714 2,030 45,868 Education and Research 3, ,778 7,323 1, ,841 Humanitarian Aid and Special Assistance 47,300 47,300 59,850 59,850 Meeting Expense 5, ,441 5, ,538 Communications 143,318 14,142 28, , ,611 14,854 15, ,000 Auction and Raffle Expenses 53,616 53,616 43,076 43,076 Spring Picnic Expense 9,069 9,069 6,049 6,049 Other Event Expenses 1,614 1,614 1,893 1,893 Promotional Expense 2,405 2,405 3,019 3,019 Depreciation 22,950 9,559 3,888 36,397 31,518 5,917 1,557 38,992 Investment and Banking Fees 2,779 1,544 5,940 10,263 5,949 1, ,796 Interest and Refinance Fees 15,791 7,178 2,675 25,644 20,904 3, ,390 Miscellaneous 6,811 1,134 5,593 13,538 11,277 2,423 7,411 21,111 TOTALS $ 880,833 $ 419,837 $ 141,480 $ 66,704 $ 1,508,854 $ 960,175 $ 378,479 $ 112,213 $ 54,037 $ 1,504,904 See accompanying notes. 7

8 STATEMENTS OF CASH FLOWS FAMILY RESOURCE CENTER For the Years Ended September CASH FLOWS FROM OPERATING ACTIVITIES Net Increase (Decrease) in Net Assets $ (6,804) $ 227,823 Adjustments to Reconcile Net Increase (Decrease) in Net Assets to Net Cash Provided by Operating Activities Depreciation 36,397 38,992 Decrease in Accounts Receivable 1,000 6,992 Decrease in Pledges Receivable 1,100 (Increase) Decrease in Prepaid Expenses 3,621 (3,670) Increase (Decrease) in Accounts Payable 24,126 (3,054) Increase (Decrease) in Accrued Expenses 14,939 (15,935) Increase (Decrease) in Deferred Revenue (15,810) 4,100 Total Adjustments 64,273 28,525 Net Cash Provided by Operating Activities 57, ,348 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Property and Equipment (3,810) (14,590) Website Design and Rebranding Costs (50,749) Net Cash Used by Investing Activities (54,559) (14,590) CASH FLOWS FROM FINANCING ACTIVITIES Principal Payments on Long-Term Debt (11,189) (14,010) NET INCREASE (DECREASE) IN CASH (8,279) 227,748 Cash, Beginning 654, ,251 CASH, ENDING $ 646,720 $ 654,999 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest $ 25,622 $ 25,359 Noncash Activities Donated Goods and Services $ 12,713 $ 4,339 See accompanying notes. 8

9 NOTES TO FINANCIAL STATEMENTS ORGANIZATION ACTIVITIES Family Resource Center ( FRC ) was founded in 1987 as a not-for-profit organization. FRC is a licensed child welfare agency in Illinois committed to facilitating and improving the adoptive and foster care process by providing traditional adoption and foster care services. FRC is accredited as a Hague accredited Adoption Service Provider by the Council on Accreditation. As a Hague Outgoing case provider, FRC is approved to place children with non-u.s. resident adoptive families. FRC is also approved to work with and place children for adoption with parents in the states of New York and Connecticut. In addition, FRC is approved by the China Center of Child Welfare and Adoption to place Chinese orphans with qualified individuals and couples, although FRC is no longer accepting new applicants into this program. NOTE 1 SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to assist in understanding the financial statements of FRC. The financial statements and notes are representations of management which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. USE OF 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 and disclosure of contingent 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. RECEIVABLES Receivables consist primarily of adoption fees and are reported at net realizable value, which is the amount management expects to collect from balances outstanding at year-end. Based on management's assessment of the credit history of individuals having outstanding balances and taking into consideration the age of past due accounts, an assessment of the ability to pay, as well as current relationships, management considers receivables to be fully collectible at September 30, 2013 and Accordingly, no allowances for doubtful accounts are required. Individual accounts are written off when collection appears doubtful. PROPERTY AND EQUIPMENT Property and equipment purchases of $500 or more are recorded at cost and depreciated over their estimated useful lives on a straight-line basis. Major renewals and betterments, which extend the useful life of an asset, are capitalized while routine maintenance and repairs are expensed as incurred. The estimated useful lives for determining depreciation of the various classes of assets are as follows: Asset Building and Building Improvements... Equipment... Furniture and Fixtures... Software... Useful Life years 5 12 years 5 7 years 3 years 9

10 NOTES TO FINANCIAL STATEMENTS NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (Continued) FINANCIAL STATEMENT PRESENTATION The financial statement presentation follows the provisions of the Financial Accounting Standards Board (FASB) Codification topic related to Financial Statements of Not-for-Profit Organizations. This guidance requires the Organization to report information regarding its financial position and activities, based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows: Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations plus those resources for which temporarily donor-imposed stipulations have been satisfied. Unrestricted net assets may otherwise be designated for specific purposes by action of the Board of Directors. Temporarily restricted net assets represent assets subject to donor-imposed stipulations of both time and purpose which are to be satisfied by FRC s actions or satisfaction of time restrictions. Temporarily restricted net assets are reclassified to unrestricted net assets when the restrictions have been met. Contributions restricted as to time or purpose are recorded as temporarily restricted revenue. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that the resources be maintained permanently by the Organization. Investment income, including realized and unrealized gains and losses are classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by the Uniform Prudent Management of Institutional Funds Act (UPMIFA). The Organization had no permanently restricted net assets at September 30, 2013 and Revenues are reported as increases in unrestricted net assets unless use of the related asset is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. PUBLIC SUPPORT Public support consists primarily of cash received from donors. Donated materials reported as special event expense and support revenue in the statements of activities totaled $4,613 for 2013 and $4,339 for An additional $4,535 of donated goods and $3,565 of donated professional services are reported as support revenue for 2013, and allocated among the categories of functional expenses on the statements of activities. For the years ended September 30, 2013 and 2012, a substantial number of unpaid volunteers and members of the Board of Directors and Committees of FRC have made significant contributions of their time. The value of these services is not reflected in these financial statements since they do not meet the criteria for recognition under the FASB Codification topic related to contributions made and received. 10

11 NOTES TO FINANCIAL STATEMENTS NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (Continued) FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities. Expenses are charged directly to programs or supporting service categories based upon specific identification where possible. Accordingly, certain costs have been allocated among the programs and supporting services benefited, based on direct charges or appropriate methods determined by management. These costs include, among others, salaries and related taxes and fringe benefits, insurance, occupancy costs, telephone, supplies and professional fees. NOTE 2 CONCENTRATION OF CREDIT RISK The Organization maintains its cash balances at local financial institutions. Accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Organization periodically has deposits in excess of federally insured limits. From December 31, 2010 through December 31, 2012, deposits held in noninterest-bearing transaction accounts were fully insured. Management believes it is not exposed to any significant credit risk on cash. NOTE 3 PROPERTY AND EQUIPMENT Land... $ 125,000 $ 125,000 Building and Building Improvements , ,749 Equipment... 54,192 52,239 Furniture and Fixtures... 67,478 66,180 Software... 28,751 28, , ,360 Less Accumulated Depreciation and Amortization , ,147 $ 441,626 $ 474,213 Depreciation and Amortization Expense... $ 36,397 $ 38,992 NOTE 4 INTANGIBLE ASSETS Website Design... $ 37,588 $ Rebranding Costs... 13,161 $ 50,749 $ Amortization expense for the intangible assets is $-0- for the years ended September 30, 2013 and 2012, as the assets were not yet in service at September 30, These assets were put in service in October 2013, thus amortization expense will be $16,916 for each of the next three years. 11

12 NOTES TO FINANCIAL STATEMENTS NOTE 5 NOTE PAYABLE FRC was obligated under a note payable, collateralized by the Organization s assets, subject to certain covenants, with an original principal amount of $480,000 to be amortized over five years and maturing March 15, Interest was fixed at 5.35% per annum. The outstanding balance of $456,105 was refinanced on January 8, 2013 with a note payable collateralized by the Organization s assets, subject to certain covenants, with which the Organization is in compliance at September 30, 2013, and to a prepayment penalty clause. The note is payable in monthly installments of $3,212 including interest at 5.25% per annum until January 15, 2023, when a balloon payment is due. Interest expense related to the mortgage was $25,645 for 2013 and $25,390 for Principal repayments due in each of the next five fiscal years are: Year Ending September $ 15, , , , ,929 Thereafter ,227 NOTE 6 RETIREMENT PLANS $ 448,573 FRC has adopted a qualified defined contribution retirement plan covering substantially all employees who meet certain eligibility requirements. Effective July 1, 2003, FRC amended the retirement plan and established a salary deferral plan under Section 401(k) of the Internal Revenue Code. FRC, at its option, may elect to match a portion of the employees contributions. The plan year was changed to a calendar year commencing January, For 2013 and 2012, FRC elected to make a fully-vested safe harbor matching contribution equal to 100% of employee s 401(k) contribution that does not exceed 3% of wages and 50% of contribution between 3% and 5% of wages. The maximum employer contribution for any employee is 4% of wages. The match totaled $18,538 for 2013 and $21,659 for The plan also provides a profit sharing component where FRC can make a discretionary contribution to the plan, which is allocated based on the compensation of eligible employees. FRC did not make a discretionary contribution to the plan in 2013 or NOTE 7 LEASES FRC maintains operating leases for certain office equipment. The leases have various expiration dates through June, Rental expense for operating leases was $8,329 for 2013 and $8,976 for 2012 which are included in equipment rental, repairs and maintenance on the statements of functional expenses. 12

13 NOTES TO FINANCIAL STATEMENTS NOTE 7 LEASES (Continued) Future minimum rental payments are as follows: Year Ending September $ 2, NOTE 8 RENTAL INCOME $ 4,005 During the years ended September 30, 2013 and 2012, FRC leased to individuals three apartments under leases with various expiration dates through August 31, Since their expiration in 2013 two of the three apartments are leased on a month-to-month basis. The agreements require monthly lease payments of $900. Rental income was $28,800 for the year ended September 30, 2013 and $31,800 for the year ended September 30, NOTE 9 TEMPORARILY RESTRICTED FUNDS During 2013, $6,410 of funds temporarily restricted for specific programs were received and $5,312 of funds were expended and released from restriction. During 2012, $5,423 of funds temporarily restricted for specific programs were received and $5,297 of funds were expended and released from restriction. Temporarily restricted net assets at September 30 are as follows: Toys for Tots... $ 270 $ 323 Auxiliary Board Birth Parent Related China Program... 1,000 Adoption Financial Aid Fourth Presbyterian Church Grant $ 3,133 $ 2,035 13

14 NOTES TO FINANCIAL STATEMENTS NOTE 10 TAX-EXEMPT STATUS The Organization is a not-for-profit organization and is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and is similarly classified by the State of Illinois. The Organization follows the guidance in the FASB Codification topic related to uncertainty in income taxes which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements uncertain tax positions that the Organization has taken or expects to take in its tax returns. Under the guidance, the Organization may recognize the tax benefit from an uncertain tax position only if it is "more likely than not that it is sustainable, based on its technical merits. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. The Organization believes that it has appropriate support for the positions taken on its returns. The Organization files its forms 990 in the federal jurisdiction and the office of the state's attorney general for the State of Illinois. The Organization is generally no longer subject to examination by the Internal Revenue Service or the State of Illinois for years before NOTE 11 RELATED PARTIES During the year ended September 30, 2013, board members and members of their families contributed $82,811 representing 24% of total public support. During the year ended September 30, 2012, board members and their family members contributed $167,019 representing 45% of total public support. One board member and his family members contributed $39,413 in 2013 and $118,534 in NOTE 12 SUBSEQUENT EVENTS Management has evaluated subsequent events through January 25, 2014, the date which the financial statements were available for issue. There are no subsequent events which require disclosure. 14