The 410 Bridge, Inc. Alpharetta, Georgia. Independent Auditors Report. Financial Statements

Transcription

1 The 410 Bridge, Inc. Alpharetta, Georgia Independent Auditors Report Financial Statements

2 CONTENTS INDEPENDENT AUDITORS REPORT Exhibit STATEMENTS OF FINANCIAL POSITION, December 31, 2012 and 2011 STATEMENTS OF ACTIVITIES, STATEMENTS OF FUNCTIONAL EXPENSES, STATEMENTS OF CASH FLOWS, A B C D Pages NOTES TO FINANCIAL STATEMENTS 1-5

3 BARNES BROYLES & ASSOCIATES LLP CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS REPORT Board of Directors The 410 Bridge, Inc. Alpharetta, GA We have audited the accompanying financial statements of The 410 Bridge, Inc. which comprise the statements of financial position as of December 31, 2012 and 2011, and the related statements of activities, functional expenses, 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. Auditor s 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 audit 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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The 410 Bridge, Inc. as of December 31, 2012 and 2011, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Atlanta, Georgia November 11, 2013 MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

4 Exhibit A The 410 Bridge, Inc. STATEMENTS OF FINANCIAL POSITION December 31, 2012 and 2011 Assets: Current assets: Cash $ 1,157,068 $ 1,303,233 Accounts receivable-net 224, ,833 Prepaid expenses 115, ,226 Total current assets 1,497,437 1,697,292 Non-current assets: Property and equipment-net (Note C) Total assets 35, ,741 $ 1,533,029 $ 1,825,033 Liabilities: Current liabilities: Accounts payable $ 53,223 $ 11,554 Prepaid trips 279, ,870 Notes payable - current - 15,591 Total current liabilities 332, ,015 Non-current liabilities: Notes payable - long-term Total liabilities - 42, , ,075 Net assets: Unrestricted 458, ,446 Temporarily restricted 742, ,512 Total net assets 1,200,173 1,553,958 Total liabilities and net assets $ 1,533,029 $ 1,825,033 The accompanying notes are an integral part of this exhibit.

5 Exhibit B Page 1 of 2 The 410 Bridge, Inc. STATEMENT OF ACTIVITIES For year ended December 31, 2012 Temporarily Permanently Unrestricted Restricted Restricted Total Changes in net assets: Revenues, gains (losses) and other support: Private gifts and grants $ 630,696 $ 4,546,649 $ - $ 5,177,345 Interest income Gain (loss) on sale of asset (14,050) - - (14,050) Net assets released from restrictions: Satisfaction of restrictions 4,672,114 (4,672,114) - - Total revenue and other support 5,289,094 (125,465) - 5,163,629 Operating expenses: Program services: Program services 4,712, ,712,505 Supporting services: Administrative services 377, ,779 Fundraising activities 427, ,130 Total supporting services 804, ,909 Total operating expenses 5,517, ,517,414 Changes in net assets (228,320) (125,465) - (353,785) Net assets, beginning of year 686, ,512-1,553,958 Net assets, end of year $ 458, ,047 $ - $ 1,200,173 The accompanying notes are an integral part of this exhibit.

6 Exhibit B Page 2 of 2 The 410 Bridge, Inc. STATEMENT OF ACTIVITIES Year ended December 31, 2011 Temporarily Permanently Unrestricted Restricted Restricted Total Changes in net assets: Revenues, gains (losses) and other support: Private gifts and grants $ 533,366 $ 4,496,387 $ - $ 5,029,753 Product Sales 6, ,822 Interest income Gain (loss) on sale of asset (981) - - (981) Net assets released from restrictions: Satisfaction of restrictions 4,661,637 (4,661,637) - - Total revenue and other support 5,201,321 (165,250) - 5,036,071 Operating expenses: Program services: Program services 3,936, ,936,854 Supporting services: Administrative services 354, ,897 Fundraising activities 467, ,423 Total supporting services 822, ,320 Total operating expenses 4,759, ,759,174 Changes in net assets 442,147 (165,250) - 276,897 Net assets, beginning of year 244,299 1,032,762-1,277,061 Net assets, end of year $ 686, ,512 $ - $ 1,553,958 The accompanying notes are an integral part of this exhibit.

7 Exhibit C Page 1 of 2 The 410 Bridge, Inc. STATEMENT OF FUNCTIONAL EXPENSES Year ended December 31, 2012 Program Administrative Fundraising Services Services Activities Total Accounting and legal $ 20,190 $ 57,952 $ 55 $ 78,197 Administrative service fee Advertising ,719 12,719 Automobile/vehicle 5, ,336 Bank charges 15, ,631 Contract labor 59, ,521 Depreciation 7,734 7,052 7,962 22,748 Dues and subscriptions Fundraising ,166 23,166 Insurance - general 133 9,438-9,571 Insurance - medical 13,010 11,863 13,393 38,266 Interest Meals and lodging 2,855 3,422 8,855 15,132 Miscellaneous 7,273-2,164 9,437 Office 5,324 3,650 6,236 15,210 Payroll taxes 19,310 17,606 19,878 56,794 Postage 2, ,151 4,203 Printing ,586 8,918 Professional development 3, ,623 Project costs 4,236, ,236,026 Rent 20,072 18,301 20,663 59,036 Repairs and maintenance Salaries 255, , , ,552 Supplies 6, ,414 15,531 Taxes - licenses Telecom and internet 8,624 4,313 7,446 20,383 Travel 12,442 8,810 9,576 30,828 Video production 8,059-11,668 19,727 Website 1, ,201 2,729 Total $ 4,712,505 $ 377,779 $ 427,130 $ 5,517,414 Percent of total 85% 7% 8% 100% The accompanying notes are an integral part of this exhibit.

8 Exhibit C Page 2 of 2 The 410 Bridge, Inc. STATEMENT OF FUNCTIONAL EXPENSES Year ended December 31, 2011 Program Administrative Fundraising Services Services Activities Total Accounting and legal $ 5,228 $ 38,468 $ - 43,696 Administrative service fee 86 1, ,280 Advertising 37, ,609 Automobile/vehicle 2, ,106 Bank charges 15,965 2,826-18,791 Contract labor 32, ,116 Depreciation 22,918 7,580-30,498 Dues and subscriptions ,520 1,924 Fundraising Insurance - general - 6,107-6,107 Insurance - medical 13,790 9,958 14,557 38,305 Meals and lodging 2,322 7,298 6,500 16,120 Miscellaneous 2, ,573 20,134 Office ,621 2,398 21,470 Payroll taxes 22,051 15,925 23,276 61,252 Postage 2,299 1,148 2,761 6,208 Printing 8,903 5,975 6,650 21,528 Professional development 2, ,219 Project costs 3,384, ,384,736 Rent 17,622 12,728 18,600 48,950 Repairs and maintenance Salaries 296, , , ,340 Supplies 4,245 2,673 23,400 30,318 Taxes - licenses Telecom and internet 7,424 3,087 9,977 20,488 Travel 31,595 1,151 17,247 49,993 Video production 19,058-8,168 27,226 Website 5, ,278 6,725 Total $ 3,936,854 $ 354,897 $ 467,423 $ 4,759,174 Percent of total 83% 7% 10% 100% The accompanying notes are an integral part of this exhibit.

9 Exhibit D The 410 Bridge, Inc. STATEMENTS OF CASH FLOWS For years ended December 31, 2012 and Cash flows from operating activities: Changes in net assets: $ (353,785) $ 276,897 Adjustments to reconcile changes in net assets to net cash provided by (used for) operating activities: Depreciation 22,748 30,498 Loss on sale of assets 14, (Increase) decrease in operating assets Accounts receivable 6,439 (227,959) Prepaid expenses 47,251 (163,226) Pledges and grants receivable Increase (decrease) in operating liabilities Accounts payable 41,669 (34,217) Prepaid trips 77, ,870 Notes payable (57,651) (14,452) Net cash provided by operating activities (201,516) 71,065 Cash flows from investing activities: Proceeds from sale of assets 57,447 - Purchase of assets (2,096) (22,215) Net cash used for investing activities 55,351 (22,215) Net increase in cash (146,165) 48,850 Cash, beginning of year 1,303,233 1,254,383 Cash, end of year $ 1,157,068 $ 1,303,233 The accompanying notes are an integral part of this exhibit.

10 The 410 Bridge, Inc. NOTES TO FINANCIAL STATEMENTS Note A-Summary of significant accounting policies: Nature of activities: The 410 Bridge, Inc. (the Organization ) is a not-for-profit organization which provides the people of American churches, communities and families with a bridge to the churches, communities and families of the nations of Kenya, Haiti and Uganda, nations with grave physical, economic, educational and spiritual needs. It provides a way to answer the calling to serve and to make a difference in God s kingdom. The Organization creates, directs and coordinates mission trips and experiences, allowing people to get involved in the Organization s projects and activities in Kenya, Haiti and Uganda, as well as in those of other ministries that share the Organization s ethos. It has a sister not-for-profit organization, The 410 Bridge-Kenya, Inc., which helps coordinate, direct and supervise activities and projects in Kenya. The Organization is an affiliate of Youth Ministry Resources, Inc. of Alpharetta, Georgia. It is independently funded through corporate and individual contributions and mission participant contributions. Method of accounting: The Organization maintains its accounting records on the accrual basis of accounting. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Financial statement presentation: The financial statements follow the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards No. 116, Accounting for Contributions Received and Contributions Made, and Statement No. 117, Financial Statements for Not-For-Profit Organizations. Under Statement of Financial Accounting Standards No. 117, the net assets and revenues, expenses, gains, and losses are classified 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 not subject to donor imposed restrictions. Temporarily restricted net assets-net assets subject to donor imposed restrictions that may or will be met either by actions of the Organization and/or the passage of time. Page 1 of 5

11 The 410 Bridge, Inc. NOTES TO FINANCIAL STATEMENTS-CONTINUED Note A-Summary of significant accounting policies-continued: Permanently restricted net assets-net assets subject to donor imposed restrictions which may be maintained by the Organization on a permanent basis. Generally, the donors of these assets permit the Organization to use all or part of the income earned on related investments for general or specific purposes. Concentration of credit risk: The Organization's cash balances in a financial institution exceed federally insured limits. At December 31, 2012 and 2011, the uninsured cash balances totaled $676,531 and $734,102, respectively. The Organization has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. Accounts receivables: Accounts receivable are considered fully collectible. Management has elected to record bad debts using the direct write-off method. Generally accepted accounting principles require that the allowance method be used to reflect bad debts. However, the effect of the direct write-off method is not materially different from the results that would have been obtained had the allowance method been followed. During the years 2012 and 2011, bad debts were determined to have conclusively occurred and were charged to operations when that determination was made. Pledges and grants receivable: Pledges, including unconditional promises to give, are recognized in the period received. The amounts, if any, less an appropriate allowance, are recorded at their estimated fair value. Management has elected to record bad debts using the direct write-off method. Generally accepted accounting principles require that the allowance method be used to reflect bad debts. However, the effect of the direct write-off method is not materially different from the results that would have been obtained had the allowance method been followed. Page 2 of 5

12 The 410 Bridge, Inc. NOTES TO FINANCIAL STATEMENTS-CONTINUED Note A-Summary of significant accounting policies-continued: Property and equipment: Property and equipment are stated at cost, or, if donated, at the approximate fair value at the date of donation. Acquisitions of property and equipment in excess of $250 are capitalized. Depreciation is provided over the estimated useful lives of the respected assets on a straight-line basis. A summary of depreciable lives follows: Asset Type Years Vehicles 5 Furniture and equipment 5-10 Income taxes: The Organization is recognized as exempt from Federal income tax under Internal Revenue Code Section 501(c) (3) whereby only the unrelated business income, as defined by Section 512(a) (1) of the Internal Revenue Code, is subject to Federal income tax. The Organization has been classified as an organization that is not a private foundation under IRC Section 509 (a). 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 assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Page 3 of 5

13 The 410 Bridge, Inc. NOTES TO FINANCIAL STATEMENTS-CONTINUED Note B-Property and equipment-net: Property and equipment-net at December 31, 2012 and 2011 is summarized as follows: Automobiles $ 10,000 $ 128,172 Furniture and equipment 58,946 60,346 Property and equipment 68, ,518 Less accumulated depreciation (33,354) (60,777) Property and equipment-net $ 35,592 $ 127,741 Depreciation expense related to property and equipment amounted to $22,748 and $30,498 for the years ended December 31, 2012 and 2011, respectively. Note C-Related party transactions: Lease: The Organization leases its operating facility from an entity of which the partners are the Organization s Founder/Chairman of the Board and his spouse (See Note D). Project Costs: The Organization funds certain special mission projects, and the administration thereof, in Kenya through its sister organization, The 410 Bridge International, Inc. Several of the Organization s board members also serve on the board of the Kenyan organization. Projects funded through the Kenyan organization amounted to $1,498,800 and $1,125,545 for the years ended December 31, 2012 and 2011, respectively. Page 4 of 5

14 The 410 Bridge, Inc. NOTES TO FINANCIAL STATEMENTS-CONTINUED Note D-Commitments: The Organization leases its office space under a one year lease agreement and storage space under a month-to-month agreement. Rent expense under these agreements was $59,036 and $48,950 for the years ended December 31, 2012 and Note E-Temporarily restricted net assets: Temporarily restricted net assets at December 31, 2012 and 2011 are to be used for the following purposes: Special mission projects $ 742,047 $ 867,512 Note F-Functional allocation of expenses: The costs of providing the various programs and other activities have been summarized on a functional basis in the accompanying statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Page 5 of 5