SAINT PATRICK ROMAN CATHOLIC CHURCH Financial Statements For the Years Ended June 30, 2014 and 2013

Transcription

1 SAINT PATRICK ROMAN CATHOLIC CHURCH Financial Statements For the Years Ended June 30, 2014 and

2 TABLE OF CONTENTS Independent Accountants' Review Report Statements of Financial Position Statements of Activities and Changes in Net Assets Statements of Cash Flows Notes to Financial Statements

3 INDEPENDENT ACCOUNTANTS' REVIEW REPORT Parish Pastor and Finance Council Saint Patrick Roman Catholic Church Colorado Springs, Colorado We have reviewed the accompanying statements of financial position of Saint Patrick Roman Catholic Church (a nonprofit organization) as of June 30, 2014 & 2013, and the related statements of activities and cash flows for the years then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of Organization management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. Waugh & Goodwin, LLP Colorado Springs, Colorado August 18, Garden of the Gods Road, Suite 150 Colorado Springs, CO (719) Fax: (719)

4 SAINT PATRICK ROMAN CATHOLIC CHURCH Statements of Financial Position June 30, 2013 and 2012 (See Independent Accountants' Review Report) ASSETS ASSETS: Cash and cash equivalents $ 790,994 $ 554,633 Prepaid expenses 2,250 Restricted interest in the net assets of the Catholic Foundation of the Diocese of Colorado Springs, Inc. 90,590 84,717 Stabilized patrimony - land, building and equipment, less accumulated depreciation of $2,781,919 and $2,564,963 5,036,123 5,201,855 TOTAL ASSETS $ 5,917,707 $ 5,843,455 LIABILITIES AND NET ASSETS LIABILITIES: Accounts payable $ 12,865 $ 9,559 Accrued liabilities 34,263 33,059 Accounts payable, Diocese 12, Funds held in trust for others 70,293 57,582 Note payable 19,769 Total liabilities 129, ,727 NET ASSETS: Unrestricted 5,191,819 5,272,109 Unrestricted - Board designated 424, ,711 Temporarily restricted 87,820 73,223 Permanently restricted 83,769 83,685 Total net assets 5,787,801 5,722,728 TOTAL LIABILITIES AND NET ASSETS $ 5,917,707 $ 5,843,455 See Notes to Financial Statements 2

5 SAINT PATRICK ROMAN CATHOLIC CHURCH Statements of Activities and Changes in Net Assets For the Years Ended June 30, 2013 and 2012 (See Independent Accountants' Review Report) Temporarily Permanently Unrestricted Restricted Restricted Totals Totals REVENUE: Offertory $ 1,525,714 $ $ $ 1,525,714 $ 1,394,333 Gifts 82,269 82,269 45,687 Bequests 15,985 Contributed services 16,275 Fundraising 36,270 36, ,064 Interest and other investment income Auxiliary activities 1,380 1,380 2,080 Other revenue 47,740 47,740 46,177 Change in net assets of the Catholic Foundation of the Diocese of Colorado Springs, Inc. 4,993 4,993 (3,195) Satisfied program restrictions 108,935 (108,935) Total revenue 1,683,842 14, ,698,523 1,850,468 EXPENSES: Program services: Charity/social concerns 246, , ,887 Faith formation 185, , ,484 Worship 90,015 90,015 79,822 Parish life 10,295 10,295 10,653 Total program services 532, , ,846

6 Supporting services: General and administrative 631, , ,412 Depreciation expense 216, , ,175 Facilities 252, , ,315 Interest expense 11,152 Total supporting services 1,101,427 1,101,427 1,106,054 Total expenses 1,633,450 1,633,450 1,521,900 CHANGE IN NET ASSETS 50,392 14, , ,568 NET ASSETS, beginning of year 5,565,820 73,223 83,685 5,722,728 5,394,160 NET ASSETS, end of year $ 5,616,212 $ 87,820 $ 83,769 $ 5,787,801 $ 5,722,728 See Notes to Financial Statements 3

7 SAINT PATRICK ROMAN CATHOLIC CHURCH Statements of Cash Flows For the Years Ended June 30, 2013 and 2012 (See Independent Accountants' Review Report) CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 65,073 $ 328,568 Adjustments to reconcile change in net assets to net cash provided by operating activities: Contributed services (16,275) Depreciation 216, ,175 (Increase) decrease in assets: Prepaid expenses 2,250 (2,250) Restricted interest in the net assets of the Catholic Foundation of the Diocese of Colorado Springs, Inc. (5,873) 3,195 Increase (decrease) in liabilities: Accounts payable and accrued liabilities 4,510 8,107 Accounts payable, Diocese 11, Funds held in trust 12,711 13,275 Total adjustments 242, ,769 Net cash provided by operating activities 307, ,337 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of stabilized patrimony - land, buildings and equipment (51,225) (139,324) Net cash used by investing activities (51,225) (139,324) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on note payable (19,769) (422,183) Net cash used by financing activities (19,769) (422,183) NET INCREASE IN CASH 236,361 34,830 CASH AND CASH EQUIVALENTS, beginning of year 554, ,803 CASH AND CASH EQUIVALENTS, end of year $ 790,994 $ 554,633 See Notes to Financial Statements 4

8 SAINT PATRICK ROMAN CATHOLIC CHURCH Notes to Financial Statements For the Years Ended June 30, 2014 and 2013 (See Independent Accountants' Review Report) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Saint Patrick Roman Catholic Church is a Parish within the geographical boundaries of the Diocese of Colorado Springs. The Parish is supported primarily through contributions from parishioners in Colorado Springs, Colorado. The Parish provides religious worship, faith formation and sacramental preparation for all ages, Parish life activities, pastoral care, and social ministries. Method of Accounting The financial statements of the Parish have been prepared on the accrual basis of accounting. Cash and Cash Equivalents Cash and cash equivalents consist of the Parish's checking, petty cash and money market accounts. The Parish maintains its cash and cash equivalents in a commercial bank and brokerage firm. In the unlikely event of a bank or brokerage firm failure, the Parish could suffer a loss to the extent its deposits exceed the respective insurance limits. Stabilized Patrimony Land, Buildings and Equipment Land, buildings and equipment are recorded at cost or, in the case of donated property, fair value at date of gift. Additions to property and equipment, with a cost greater than $1,000, are capitalized at cost if purchased or fair market value, if donated. Depreciation is recorded using the straight-line method over estimated useful lives as follows: Buildings and improvements Furniture and equipment 7-40 years 5-10 years Depreciation expense for the years ended June 30, 2014 and 2013 amounted to $228,854 and $216,957, respectively. 5

9 Notes to Financial Statements A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Contributions Gifts of cash and other assets are reported as restricted support if they are received with donor stipulations that limit the use of donated assets. When a restriction expires, that is, when a stipulated time restriction ends or a purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Contributed Services The Parish recognizes contributed services which create or enhance non-financial assets or which require specialized skills and would typically need to be purchased if not provided by donation. A substantial number of volunteers donated time to the Parish's program services; however, the estimated value was not recorded, because they did not meet the criteria described above. Supplemental Cash Flow Disclosures Cash flows from operating activities reflect no interest or income taxes paid for the years ended June 30, 2014 and Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Income Taxes The Parish qualifies as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code and, accordingly, is not subject to federal income tax. Accordingly, no income tax provision has been recorded. Management of the Parish believes that it does not have any uncertain tax positions that are material to the financial statements. 6

10 Notes to Financial Statements A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Prior-Year Comparisons The financial statements include certain prior-year summarized comparative information in total but not by the net asset or functional expense class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Parish's financial statements for the year ended June 30, 2013, from which the summarized information was derived. Certain reclassifications have been made to the prior-year amounts in order to conform to the current year financial statement format. Date of Management's Review In preparing the financial statements, the Parish has evaluated events and transactions for potential recognition or disclosure through August 18, 2014, the date that the financial statements were available to be issued. B. PROMISES TO GIVE Contributions are recognized when the donor makes a promise to give to the Parish that is, in substance, unconditional. In management's opinion, there were no outstanding receivables relating to unconditional promises to give at June 30, 2014 and C. FAIR VALUE MEASUREMENTS The Parish applies Generally Accepted Accounting Principles (GAAP) for fair value measurements of financial assets that are recognized or disclosed at fair value in the financial statements on a recurring basis. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are as follows: 7

11 Notes to Financial Statements C. FAIR VALUE MEASUREMENTS - Continued Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Parish has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The following tables present assets that are measured at fair value on a recurring basis at June 30, 2014 and 2013: Assets at Fair Value as of June 30, 2014 Level 1 Level 2 Level 3 Total - Catholic Foundation $ $ $ 99,529 $ 99,529 $ $ 0 $ 99,529 $ 99,529 Assets at Fair Value as of June 30, 2013 Level 1 Level 2 Level 3 Total - Catholic Foundation $ $ $ 90,590 $ 90,590 $ $ 0 $ 90,590 $ 90,590 Below is a reconciliation of the beginning and ending balance of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended June 30, 2014: Beginning balance $ 90,590 Withdrawals (4,530) Net realized and unrealized gains included in the statement of activities 13,469 Ending balance $ 99,529 Gain included in the statement of activities attributable to the change in unrealized gains relating to assets still held at June 30, 2014 $ 13,469 8

12 Notes to Financial Statements D. RESTRICTED INTEREST IN THE NET ASSETS OF THE CATHOLIC FOUNDATION OF THE DIOCESE OF COLORADO SPRINGS, INC. The Diocese of Colorado Springs established the Catholic Foundation as a not-for-profit corporation separate from the Diocese. The Foundation was formed to accept donations made through planned giving arrangements. Investments consist of a pooled Church Endowment Fund at the Catholic Foundation of the Diocese of Colorado Springs, Inc. The Parish's portion of this endowment fund at June 30, 2014 and 2013 amounted to $99,529 and $90,590, respectively. In 2005 the Parish signed a new agreement with the Catholic Foundation limiting the amount available for the annual distribution to five percent of the total net assets held in the endowment fund at the Foundation. If no request is made by September 30, the earnings will remain part of the total net assets as temporarily restricted. E. STABILIZED PATRIMONY - LAND, BUILDINGS AND EQUIPMENT Stabilized patrimony land, buildings and equipment consisted of the following at June 30, 2014 and 2013: Land $ 593,698 $ 593,698 Buildings and improvements 6,476,070 6,358,845 Equipment 515, ,225 Furnishings and fixtures 375, ,274 7,960,296 7,818,042 Less accumulated depreciation (3,010,774) (2,781,919) Property and equipment - net $ 4,949,522 $ 5,036,123 F. ACCRUED LIABILITIES At June 30, 2014 and 2013, accrued liabilities include $23,699 and $19,326, respectively, for discretionary time off, which allows for paid time away from work for vacations, illnesses and other personal reasons. Employees earn discretionary time off based on the length of service and regularly scheduled hours. Also included in accrued liabilities at June 30, 2014 and 2013 is $11,252 and $13,282, respectively, which is the remaining balance of the required tithes to the Parish's charities. 9

13 Notes to Financial Statements G. BOARD DESIGNATED NET ASSETS As of June 30, 2014, the Board had designated $531,922 of the Parish's unrestricted net assets for capital replacements and a new parish dowry. H. TEMPORARILY RESTRICTED NET ASSETS As of June 30, 2014, the Parish had temporarily restricted net assets consisting of the following: Operation renovation $ 136,775 Capital campaign 27,269 Social ministry 13,709 Interest in Lemelin Fund 13,062 Church 12,389 Faith formation 11,578 Bequest Ester Leos 5,985 Memorial gifts 4,457 Interest in Catholic Foundation 2,782 Environment committee 925 Funeral dinners 916 Stephen ministry 828 Tithe donations 563 Music ministry 316 $ 231,554 Net assets are released from donor restrictions by incurring expenses that satisfy the restricted purpose. During the year ended June 30, 2014, temporarily restricted net assets were released from restrictions for the following programs: Operation renovation $ 97,755 Social ministry 20,011 Capital campaign 6,653 Music ministry 5,762 Bequest Ester Leos 5,000 Church 4,204 Memorial gifts 3,212 Funeral dinners 1,613 Environment committee 1,276 Tithe donations 951 Faith formation 687 Stephen Ministry 292 $ 147,416 10

14 Notes to Financial Statements I. PERMANENTLY RESTRICTED NET ASSETS As of June 30, 2014, the Parish had permanently restricted net assets of $83,769. These net assets are held by the Catholic Foundation. J. PENSION PLAN The Diocese sponsors a defined benefit lay retirement program for full-time employees. The Diocese makes annual contributions in order to maintain the plan on a sound basis and charges appropriate assessments to Saint Patrick Roman Catholic Church for reimbursement of costs related to personnel at the Parish. The amount contributed by the Parish to the lay retirement plan during the years ended June 30, 2014 and 2013 was $18,526 and $16,548, respectively. The Diocese also sponsors a separate defined benefit plan for clergy ordained within the Diocese of Colorado Springs. The Diocese makes annual contributions in order to maintain the plan on a sound basis and charges appropriate assessments to Saint Patrick Roman Catholic Church for reimbursement of costs related to clergy at the Parish. The amount contributed by Saint Patrick Roman Catholic Church to the clergy retirement plan during the years ended June 30, 2014 and 2013, was $18,000 each year. The future cost of the plan will depend on the actual benefits and expenses paid and on the investment return of the plan assets. The actuarial funding method, along with the other actuarial assumptions, affects when and at what rate this true cost will be paid. Saint Patrick Roman Catholic Church's portion of both accumulated vested benefits and net assets available for benefits is immaterial and, therefore, no adjustment has been included in these financial statements for over or under funding. K. RELATED PARTY TRANSACTIONS Saint Patrick Roman Catholic Church is located within the geographical boundaries of the Diocese of Colorado Springs. Saint Patrick Roman Catholic Church is required by the Diocese of Colorado Springs to pay twenty percent of its net distributable receipts to the Diocese each month. The amount submitted each month is an estimate and is adjusted to actual annually. As of June 30, 2014, the Diocese owed the Parish, $2,774. As of June 30, 2013, the Parish owed the Diocese $12,

15 Notes to Financial Statements L. COMMITMENTS AND CONTINGENCIES In prior years, the Diocese of Colorado Springs refinanced its loan portfolio and used the Parish's building as collateral. The Parish does not have any repayment obligation on this loan. 12