ALAN JEFF, CPA, PC INDEPENDENT AUDITOR'S REPORT

Transcription

1 ALAN JEFF, CPA, PC Certified Public Accountant 2978 Colvin Boulevard Tonawanda, New York (716) INDEPENDENT AUDITOR'S REPORT Board of Directors Maoz, Inc. Grand Prairie, Texas Report on the Financial Statements I have audited the accompanying financial statements of Maoz, Inc., a nonprofit organization (the Organization), which comprise the statement of financial position as of December 31, 2014, and the related statements of activities, and cash flows for the year then ended and the related notes to the financial statements. The prior year summarized comparative information has been derived from the Organization's 2013 financial statements and, in my report dated June 19, 2014, I expressed an unqualified opinion on those 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 My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that I 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, I 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.

2 I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of December 31, 2014, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Supplemental Information My audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information contained on pages 4 through 7 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and related directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Alan Jeff, CPA, PC Buffalo, New York June 4,2015

3 1 Statement of Financial Position ASSETS Current assets: Cash, USA, unrestricted, non-interest bearing $ 257,802 $ 127,396 Cash, USA, unrestricted, interest bearing 344, ,280 Cash, Israel, unrestricted, non-interest bearing 351, ,292 Annuities investments - USA 255, ,944 Annuities investments - Israel 148, ,889 Prepaid expenses 2,421 2,525 Total current assets 1,359,573 1,125,326 Property and equipment, net (Notes 2, 3 & 4) 366, ,926 LIABILITIES AND NET ASSETS $ 1,726,097 $ 1,509,252 Current liabilities: Accounts payable $ 3,927 $ 13,093 Accrued expenses 7,411 9,568 Current maturities of long-term debt (Notes 3 & 4) 4,050 5,400 Current portion of liability under annuity 17,472 19,622 Total current liabilities 32,860 47,683 Long-term liabilities: Liability under annuity 168, ,250 Long-term debt (Notes 3 & 4) -0-4,050 Total long-term liabilities 168, ,300 Net assets: (Notes 1, 2 & 5) Unrestricted: Undesignated 725, ,379 Represented by equipment 366, ,926 Total unrestricted 1,091, ,305 Temporarily restricted 433, ,964 Total net assets 1,525,106 1,273,269 $ 1,726,097 $ 1,509,252 The accompanying notes are an integral part of these financial statements.

4 2 Statement of Activities For the years ended Change in unrestricted net assets Public support and revenue: US general contributions $ 2,717,884 $ 2,173,825 Foreign general contributions 210, ,854 Total unrestricted contributions 2,928,198 2,444,679 Resource sales 7,011 26,284 Investment income 1,686 7,239 Market gain on securities -0-6,866 Total unrestricted public support and revenue 2,936,895 2,485,068 Net assets released from restrictions: Satisfaction of time and use restrictions 1,637,792 1,389,504 Total public support and revenue and net assets released from restrictions 4,574,687 3,874,572 Expenditures: Program services: Leadership development 1,206, ,976 Benevolence, support, and grants 1,089,979 1,014,133 Education 771, ,351 Publications 596, ,687 Congregational support 348, ,217 Total program services (pages 5 & 7) 4,012,642 3,627,364 Support services: Fund development (See Note 7) 192, ,534 General and administrative (See Note 7) 142, ,854 Total support services: 334, ,388 Other: Loss on retirements of capital assets 7,350 19,114 Market loss on securities 2, Total other 9,473 19,114 Total expenditures 4,356,852 3,875,866 Change in unrestricted net assets (decrease) 217,835 (1,294) Change in temporarily restricted net assets Contributions 1,671,794 1,393,676 Net assets released from time and use restrictions (1,637,792) (1,389,504) Change in temporarily restricted net assets 34,002 4,172 Change in net assets 251,837 2,878 Net assets, beginning of year 1,273,269 1,270,391 Net assets, end of year $ 1,525,106 $ 1,273,269 The accompanying notes are an integral part of these financial statements.

5 3 Statement of Cash Flow For the years ended Cash Flows from Operating Activities: Cash received from donors $ 4,599,992 $ 3,838,355 Resource sales 7,011 26,284 Cash paid to employees, suppliers, and donor preferenced recipients (4,353,226) (3,844,539) Net cash provided by operating activities 253,777 20,100 Cash Flows from Investing Activities: Investment income received 1,686 7,239 Cash paid for capital assets (23,146) (39,843) Market gain (loss) on investments (2,123) 6,866 Loss on retirements of capital assets (7,350) (19,114) Net cash used by investing activities (30,933) (44,852) Net Increase (Decrease) in Cash and Cash Equivalents 222,844 (24,752) Cash and Cash Equivalents: Beginning of year 730, ,720 End of year $ 953,812 $ 730,968 Reconciliation of Change in Net Assets to Net Cash from Operating Activities: Change in net assets $ 251,837 $ 2,878 Adjustments to reconcile change in net assets to net cash provided by operating activities: (Increase) in annuities investments (11,507) (50,001) (Increase) Decrease in prepaid expenses 104 (625) Increase (Decrease) in accounts payable (9,166) 277 (Increase) Decrease in accrued expenses (2,157) 4,053 (Decrease) in current maturities of long-term debt (1,350) -0- Increase (Decrease) in liability under annuity (18,269) 18,598 (Decrease) in long-term debt (4,050) (5,400) Depreciation 48,335 50,320 Net Cash Provided by Operating Activities $ 253,777 $ 20,100 The accompanying notes are an integral part of these financial statements.

6 4 MAOZ, INC. Schedule of Program Services Expenditures (cont.) For the year ended December 31, 2014 Leadership Benevolence, Congregational General Development Support, Grants Education Publications Support Total Israel Office $ 591,611 $ -0- $ 126,774 $ 126,773 $ -0- $ 845,158 Israel Media 114, , , ,792 US Education/Publications , ,800 Israel Congregation , ,029 US Administration ,743 25,077 8, ,179 Israel Giving , ,225 US General 10,195 10,195 50,975 30, ,950 Israel Staff 24,811 14,886 34,734 24, ,242 Israel Ministry Center 88, ,088 Israel General 57, ,972 8, ,886 Depreciation 2, ,610 17,835 20,881 43,501 Total general 888, , , , ,269 2,374,850 (see page 14) The accompanying notes are an integral part of these financial statements.

7 5 MAOZ, INC. Schedule of Program Services Expenditures (cont.) For the year ended December 31, 2014 Leadership Benevolence, Congregational Donor Preferenced Development Support, Grants Education Publications Support Total I Stand With Israel $ -0- $ 848,753 $ -0- $ -0- $ -0- $ 848,753 Ron Cantor 144,715 9,408 8,800 10, , ,170 Media Projects , ,040 Young Leaders USA trip 88, ,865 Publications , ,923 ELAV Conference 57, ,915 Equip 26, ,294 Benevolence -0-20, ,690 Arabs and Muslims -0-13, ,893 Aliyah Fund -0-10, ,896 Rami Danieli -0-5, ,581 Yeshua Israel -0-2, ,427 Espinosa , ,320 Tal Ellis -0-2, ,200 June Stone -0-1, ,825 Total donor preferenced 317, ,673 11, , ,715 1,637,792 Total program services $ 1,206,032 $ 1,089,979 $ 771,046 $ 596,601 $ 348,984 $ 4,012,642 (to Page 2) The accompanying notes are an integral part of these financial statements.

8 6 MAOZ, INC. Schedule of Program Services Expenditures For the year ended December 31, 2013 Benevolence, Leadership Congregational General Support, Grants Development Education Publications Support Total Israel Office $ -0- $ 515,334 $ 110,429 $ 110,429 $ -0- $ 736,192 Israel Media -0-45, ,819 91,364 45, ,547 US Education/Publications , ,693 Israel Congregation , ,181 US Administration ,968 27,181 9, ,210 Israel Giving 175, ,388 US General 11,025 11,025 55,124 33, ,248 Israel Staff 14,198 18,930 28,396 23,663 9,465 94,652 Israel General -0-61,425 23,625 9, ,500 Israel Ministry Center -0-63, ,961 Depreciation -0-2,264 2,717 18,568 21,739 45,288 Total general 200, , , , ,128 2,237,860 (see page 15) The accompanying notes are an integral part of these financial statements.

9 7 MAOZ, INC. Schedule of Program Services Expenditures (cont.) For the year ended December 31, 2013 Benevolence, Leadership Congregational Donor Preferenced Support, Grants Development Education Publications Support Total I Stand With Israel $ 721,190 $ -0- $ -0- $ -0- $ -0- $ 721,190 Ron Cantor , , ,177 Publications , ,603 Equip -0-68, ,809 Young Leaders USA trip -0-63, ,324 Media Projects , ,162 Benevolence 31, ,456 Aliyah Fund 22, ,049 Israel Tour -0-21, ,134 Espinosa ,580 4, ,773 Rami Danieli 13, ,149 Joseph Haddad 13, ,140 June Stone 7, ,293 Yeshua Israel 4, ,945 Tal Ellis Total donor preferenced 813, ,355 12, , ,089 1,389,504 Total program services $ 1,014,133 $ 992,976 $ 729,351 $ 481,687 $ 409,217 $ 3,627,364 (to Page 2) The accompanying notes are an integral part of these financial statements.

10 8 Notes to Financial Statements Note 1 - Nature of Organization: Maoz, Inc. (the organization) is a multi-dimensional outreach organization to people living in Israel. The organization's primary activities are to promote better understanding of the Holy Scriptures among Jewish and non-jewish peoples; to inform the public about Messianic Judaism through publishing books in Hebrew and other forms of media; and to cooperate with Messianic congregations and outreach works which foster closer relations between Jews and non-jews who accept the validity of the Scriptures. The organization's primary source of revenue is free-will donations from supporters of the organization. The organization was incorporated under the laws of the District of Columbia on June 25, Maoz is exempt from income tax under Section 501(c)(3) of the U.S. Internal Revenue Code (the Code) and comparable state law, and therefore, contributions by the public are tax deductible within the limitations prescribed by the Code. The organization has been classified as a publicly supported organization, which is not a private foundation under Section 509(a) of the Code. The organization files an annual Internal Revenue Service Form 990, "Return of Organization Exempt from Income Tax," and is registered as a charitable organization in 20 states. The organizations administrative office is located in Grand Prairie, Texas and the organization has facilities and offices in Tel Aviv, Israel. The work of the organization is supported by the following affiliated organizations: Maoz Brazil, Maoz Canada, Maoz England, Maoz Ireland, and Maoz Germany. These organizations are principally fund raising organizations in their respective countries for the work of Maoz Israel.

11 9 Notes to Financial Statements (cont.) Note 2 - Summary of Significant Accounting Policies: The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader. The organization's accounts are maintained, and these financial statements are presented, on the accrual basis of accounting. Accordingly, revenues are recognized when earned and expenses are recorded when incurred. The accounts are maintained in accordance with the principles of net assets accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into categories established according to their nature and purposes. Maoz uses estimates and assumptions in preparing financial statements in accordance with U.S. generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, and the reported resources and expenditures. Actual results could vary from the estimates that were assumed in preparing the financial statements. Maoz pursues its objectives through the functions of seven major programs: Congregational support - Conduct congregational activities throughout the week, including Shabbat weekly meetings, children's classes, holiday fellowships, one-on-one Bible training, as well as group Bible studies, humanitarian aid and small group weekly meetings. Education - Write monthly publication educating both Jew and non-jew concerning events taking place in modern Israel and its relationship to Bible principles. Conduct training for children in the education of the Holy Scriptures and provide computer classrooms for Bible education. Leadership Development - Train and equip Hebrew-speaking pastors and leaders for the purpose of promoting Messianic Judaism. Publications - Translate, print and publish outreach and discipleship materials into the Hebrew language. Develop other forms of media exposure for the building of a foundation of believers in Israel, through internet website, books, and audio/video.

12 10 Notes to Financial Statements (cont.) Note 2 - Summary of Significant Accounting Policies (cont.): Benevolence, support, and grants - Contribute monetarily to individuals for basic needs, to terrorism victims and to other ministries and individuals who promote Messianic Judaism. Fund Development - Connect with partners and others to form a nucleus of prayer and financial support around the world for the express purpose of promoting Messianic Judaism in Israel and other countries. General and administrative - Support the general operations of the organization in Israel, United States and around the globe. Net Assets The financial statements report amounts separately by class of net assets as follows: Unrestricted net assets are those currently available for ministry purposes under the direction of the board of directors, and those invested in equipment. Temporarily restricted amounts are those which are stipulated by donors for specific operating purposes or by the acquisition of equipment. Support and Resources Contributions are recorded when made, which may be when cash is received, unconditionally promised, or ownership of donated assets is transferred. Maoz shows restricted contributions whose restrictions have been met in the reporting period as unrestricted support. If the restrictions are not satisfied in the same reporting period, the contributions are recorded as temporarily restricted. Upon satisfaction of the restriction, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from purpose restrictions. All contributions are considered available for the general program of the organization, unless specifically restricted by the donor or subject to other legal restrictions. Other income is recognized when earned. Expenses are recognized when incurred in accordance with the accrual basis of accounting.

13 11 Notes to Financial Statements (cont.) Note 2 - Summary of Significant Accounting Policies (cont.): Contributions other than cash are recorded at the fair market value of the donated asset at the date of donation. In the absence of donor restrictions as to the period in which funds received from legacies and bequests are to be used, revenue is recorded when the award is received. Cash & Cash Equivalents Cash and investments include checking, savings, money market accounts, and marketable securities. These accounts at times may exceed federally insured limits. The organization, however, has not experienced any significant losses on these accounts and does not believe it is exposed to any significant credit risk. Property and Equipment Property and equipment are recorded at acquisition cost. The organization capitalizes assets with a cost greater than $500. Depreciation is computed using the straight-line method over the following estimated useful lives: Furniture and equipment Building and Improvements Transportation equipment 5-10 years 39 years 5 years The organization has removed certain capital assets from its books. These capital assets were determined by management to be out-of-service due to obsolescence or retirement. (See Note 3). Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Allocation of Expenditures The costs of providing the various program services and supporting activities of the organization have been summarized on a functional basis in the statement of activities. Accordingly certain costs have been allocated among the program services and supporting activities. (See Note 7).

14 12 Notes to Financial Statements (cont.) Note 3 - Property and Equipment: The following is a summary of property and equipment, at cost, less accumulated depreciation, at : Furniture, fixtures, and equipment $ 407,976 $ 425,592 Building 220, ,560 Building improvements 209, ,966 Land 134, ,992 Transportation equipment 99, ,875 Website 44,623 44,623 1,116,474 1,147,608 Less: accumulated depreciation (749,950) (763,682) Property and equipment, net $ 366,524 $ 383,926 Depreciation expense charged to operations on the above assets for the years ended was $48,335. and $50,320., respectively. (See Note 2). There is no depreciation provided for on land. The above equipment is encumbered by indebtedness of $4,050. and $9,450. at respectively. (See Note 4). The following capital assets were determined to be no longer in service as of December 31, 2014 and (See Note 2): Furniture, fixtures, and equipment $ 57,633 $ 112,492 Transportation equipment 11, Building improvements -0-3,900 $ 69,418 $ 116,392

15 13 Notes to Financial Statements (cont.) Note 4 - Long-term Debt: The following is a summary of long-term debt at : Ally Bank; non-interest bearing; monthly payments of $450.; last payment due 10/28/15; secured by transportation equipment. The entire amount is due within one year. (See Note 3) $ 4,050 $ 9,450 4,050 9,450 Less: current maturities included in current liabilities. 4,050 5,400 Long-term debt $ -0- $ 4,050 Note 5 - Donated Services: No amounts have been reflected in the financial statements for donated services as no objective basis is available to measure the value of such services; however, a substantial number of volunteers have donated significant amounts of their time in the organization's program services. Note 6 - Retirement Plan: Maoz offers its employees the opportunity to participate in a retirement plan, which would provide income to them after retirement. The plan is implemented through payroll deductions and employees may make voluntary contributions. Retirement expense for the years ended was $6,251. and $5,841., respectively.

16 14 Notes to Financial Statements (cont.) Note 7 - Schedule of Functional Expenditures: The following is a detail of functional expenditures for the year ended December 31, 2014: Program General and Fund- Services Administrative raising Total Israel Office $ 845,158 $ 3,448 $ -0- $ 848,606 Israel Media 380,792 2, ,303 US Administration 167, ,068 23, ,374 US Education/Publications 236, , ,258 Israel Congregation 175, ,029 Israel Giving 149, ,225 US General 101,950 30, ,669 US Development , ,000 Israel Staff 99, ,242 Israel General 87,886 1, ,748 Israel Ministry Center 88, ,088 Depreciation 43,501 2,417 2,417 48,335 Maoz Worldwide ,710 27,710 $ 2,374,850 $ 142,649 $ 192,088 $ 2,709,587 (to Page 5) (to Page 2) (to Page 2)

17 15 Notes to Financial Statements (cont.) Note 7 - Schedule of Functional Expenditures (cont.): The following is a detail of functional expenditures for the year ended December 31, 2013: Program General and Fund- Services Administrative raising Total Israel Office $ 736,192 $ 4,142 $ -0- $ 740,334 Israel Media 304, ,547 US Administration 181,210 78,010 21, ,510 US Education/Publications 229, ,693 Israel Congregation 202, ,181 Israel Giving 175, ,388 US General 110,248 25, ,810 Israel General 94,500 2, ,884 Israel Staff 94, ,652 US Development ,924 79,924 Israel Ministry Center 63, ,961 Depreciation 45,288 2,516 2,516 50,320 Maoz Worldwide ,044 12,044 $ 2,237,860 $ 112,854 $ 116,534 $ 2,467,248 (to Page 5) (to Page 2) (to Page 2)