UNITED WAY OF PALM BEACH COUNTY, INC.

Transcription

1 UNITED WAY OF PALM BEACH COUNTY, INC. FINANCIAL STATEMENTS June 30, 2009 and 2008

2 UNITED WAY OF PALM BEACH COUNTY, INC. FINANCIAL STATEMENTS June 30, 2009 and 2008 TABLE OF CONTENTS FINANCIAL STATEMENTS: Independent Auditors Report... 3 Statements of Financial Position... 5 Statement of Activities... 6 Statement of Functional Expenses... 7 Statements of Cash Flows... 8 Notes to Financial Statements... 9

3 FINANCIAL STATEMENTS

4 INDEPENDENT AUDITORS REPORT To the Board of Directors United Way of Palm Beach County, Inc. Boynton Beach, Florida We have audited the accompanying statements of financial position of United Way of Palm Beach County, Inc. as of June 30, 2009, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of United Way of Palm Beach County, Inc. s management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from United Way of Palm Beach County, Inc., 2008 financial statements and, in our report dated November 20, 2008, we expressed an unqualified opinion on those financial statements. We conducted our audit 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 audit provides 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 United Way of Palm Beach County, Inc. as of June 30, 2009, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. November 30,

5 UNITED WAY OF PALM BEACH COUNTY, INC. Statements of Financial Position June 30, 2009 and Assets: Current assets: Cash and cash equivalents $ 3,436,195 $ 3,427,534 Receivables: Pledges receivable, net 3,522,616 3,617,632 Bequests 10,000 70,000 Grants 112, ,292 Other 7,132 8,765 Prepaid expenses 68,247 82,852 Total current assets 7,156,411 7,949,075 Noncurrent assets: Pledges receivable, less current portion 9,567 14,143 Investments 4,400,209 4,971,416 Deposits and other assets 1,500 - Property and equipment, net of accumulated depreciation 2,860,895 2,989,450 Total assets $ 14,428,582 $ 15,924,084 Liabilities and net assets: Liabilities: Current liabilities: Allocations payable $ 4,093,798 $ 4,139,655 Designations payable 2,099,528 2,106,536 Accounts payable and accrued expenses 264, ,211 Deferred revenue 1,353,725 1,472,018 Current portion of annuity obligations 40,150 40,150 Total current liabilities 7,852,111 8,733,570 Noncurrent liabilities: Note payable - 32,310 Annuity obligations, net of current portion 140, ,895 Total liabilities 7,992,399 8,914,775 Net assets: Unrestricted: Expended for property and equipment 2,860,895 2,989,450 Designated for supported programs 100, ,000 Other 2,032,633 2,324,619 Temporarily restricted 1,442,655 1,595,240 Total net assets 6,436,183 7,009,309 Total liabilities and net assets $ 14,428,582 $ 15,924,084 The accompanying notes are an integral part of these financial statements. 5

6 UNITED WAY OF PALM BEACH COUNTY, INC. Statement of Activities For the Year Ended June 30, 2009 with Comparative Totals for the Year Ended June 30, Temporarily Unrestricted Restricted Total Total Public support and revenues: Campaign contributions $ - $ 10,755,841 $ 10,755,841 $ 12,057,926 Donor advised fund contributions - 1,196,119 1,196, ,955 Less: Designations to other agencies - (3,960,063) (3,960,063) (4,126,175) Provision for uncollectible pledges - (541,460) (541,460) (528,443) Net campaign contributions - 7,450,437 7,450,437 7,756,263 Other contributions 86,815-86, ,345 In-kind contributions 39,147-39,147 90,406 Legacies and bequests 103, , ,624 Special events 75,294-75,294 68,136 Grants 1,758,429-1,758,429 1,950,898 Investment income (517,898) - (517,898) 20,543 Designation fees 585, , ,459 Change in value of charitable gift annuities (31,544) - (31,544) (31,835) Gain (loss) on disposal of equipment (683) Other Net assets released from restrictions 7,603,022 (7,603,022) - - Total public support and revenues 9,702,457 (152,585) 9,549,872 11,242,356 Expenses: Program expenses: Allocations and other programs 8,145,153-8,145,153 8,316,903 Support services: Fund raising 1,452,480-1,452,480 1,537,694 Management and general 525, , ,974 Total expenses 10,122,998-10,122,998 10,465,571 Change in net assets (420,541) (152,585) (573,126) 776,785 Net assets, beginning of year, as restated 5,414,069 1,595,240 7,009,309 6,232,524 Net assets, end of year $ 4,993,528 $ 1,442,655 $ 6,436,183 $ 7,009,309 The accompanying notes are an integral part of these financial statements. 6

7 UNITED WAY OF PALM BEACH COUNTY, INC. Statement of Functional Expenses For the Year Ended June 30, 2009 with Comparative Totals for the Year Ended June 30, Support Services Allocations and Fund Management Other Programs Raising and General Total Total Allocations and grants: Allocations to agencies $ 4,614,186 $ - $ - $ 4,614,186 $ 4,533,157 Grants to others 1,147, ,147,238 1,126,583 Total allocations and grants 5,761, ,761,424 5,659,740 Salaries and related expenses: Salaries 1,411, , ,858 2,460,627 2,601,766 Employee benefits 243, ,373 55, , ,204 Payroll taxes 107,706 56,103 21, , ,037 Total salaries and related expenses 1,762, , ,796 3,093,033 3,201,007 Other expenses: Professional and consulting fees 66,607 33,048 40, , ,937 Occupancy 81,813 48,178 10, , ,719 Sponsored events and meetings 9,355 7,737 4,134 21,226 19,734 Printing and publications 77,616 97,585 6, , ,170 Conferences 12,929 14,294 6,907 34,130 96,183 National and state affiliation dues 67,309 23,044 5,941 96, ,065 Telephone 17,535 7,304 3,410 28,249 41,595 Supplies 38,990 11,182 2,545 52,717 48,972 Travel 22,635 21,489 9,278 53,402 56,794 Depreciation and amortization 100,320 47,021 12, , ,946 Insurance 47,665 22,826 6,028 76, ,807 Postage 8,469 53,480 1,157 63,106 68,402 Rental and maintenance of equipment 45,309 44,670 8,973 98,952 90,165 Recognition 6,349 5, ,636 20,790 Staff development 1,650 1,203 40,017 42,870 17,775 Subscriptions Special events 16,713 49, ,186 78,617 Interest ,230 Total other expenses 621, , ,569 1,268,541 1,604,824 Total functional expenses $ 8,145,153 $ 1,452,480 $ 525,365 $ 10,122,998 $ 10,465,571 The accompanying notes are an integral part of these financial statements. 7

8 UNITED WAY OF PALM BEACH COUNTY, INC. Statements of Cash Flows For the Years Ended June 30, 2009 and June 30, Cash flows from operating activities: Change in net assets $ (573,126) $ 776,785 Adjustments to reconcile change in net assets to net cash used in operating activities: Depreciation and amortization 159, ,946 Net realized and unrealized losses on investments 693, ,997 Loss on disposal of equipment Contribution of investment securities (958,927) (302,564) Donation of equipment Provision for pledge loss 90, ,293 Change in value of charitable gift annuities 31,544 31,835 Changes in operating assets and liabilities: (Increase) decrease in: Pledges receivable 9,533 38,277 Bequests receivable 60,000 18,112 Grants receivable 630,071 (550,214) Other receivables 1,633 14,600 Prepaid expenses 14,605 33,974 Deposits and other assets (1,500) 2,000 Increase (decrease) in: Allocations payable (45,857) (36,606) Designations payable (7,008) 191,145 Accounts payable and accrued expenses (710,301) (226,094) Deferred revenue (118,293) (2,333,510) Net cash used in operating activities (724,004) (1,695,658) Cash flows from investing activities: Purchase of investments (672,415) (863,511) Proceeds from sale of investments 1,508, ,564 Purchase of property and equpment (31,387) (113,634) Net cash provided by investing activities 805,125 20,419 Cash flows from financing activities: Payments of note payable (32,310) - Payments of annuity obligations (40,150) (40,150) Net cash used in financing activities (72,460) (40,150) Net increase (decrease) in cash and cash equivalents 8,661 (1,715,389) Cash, beginning of year 3,427,534 5,142,923 Cash, end of year $ 3,436,195 $ 3,427,534 Supplemental schedule of noncash investing and financing activities: In-kind contributions $ 39,147 $ 90,406 Interest expense 473 2,230 Contribution of investment securities 958, ,564 The accompanying notes are an integral part of these financial statements. 8

9 UNITED WAY OF PALM BEACH COUNTY, INC. Notes to Financial Statements June 30, 2009 and 2008 (1) NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Nature of Organization United Way of Palm Beach County, Inc. (the Organization ) is a not-for-profit corporation formed to assess the need for human services programs; seek the root causes of human problems through collaboration; create longterm solutions of human problems; expand and modify existing human services programs; promote preventative activities; and foster a cooperative effort among agencies serving the community. The Organization organizes an annual fund-raising drive for the benefit of funded-partners who especially demonstrate they have emergency needs. The annual campaign, as well as private and public grants, is the Organization s largest sources of support. Basis of Presentation The Organization s financial statements are presented in accordance with Statement of Financial Accounting Standards ( SFAS ) No. 117, Financial Statements of Not-for-Profit Organizations which prescribes standards for external financial statements for all not-for-profit organizations. The Statement requires the classification of an organization s net assets, its revenue and expenses, and gains and losses based on the existence or absence of donor-imposed restrictions. It requires the amounts for each of three classes of net assets (permanently restricted, temporarily restricted and unrestricted) be displayed in a statement of financial position and the amounts of the change in each of the three classes of net assets be displayed in a statement of activities. Net Assets Unrestricted net assets are presently available for use by the Organization at the discretion of the Board of Directors. Temporarily restricted net assets are expendable only for purposes and/or during time periods specified by the donor. The Organization does not have any donor-imposed permanently restricted net assets. 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of public support and revenue, and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Organization follows SFAS No. 116, Accounting for Contributions Received and Contributions Made. Contributions received are recognized at fair value, including unconditional promises to give when the promise is made. Contributions that are to be collected more than one year in the future are recorded at their discounted present value. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are restricted for future periods (time restriction) or are restricted by the donor for specific purposes (purpose restriction) are reported as temporarily restricted support. All amounts accounted for as campaign revenue, including donor advisory funds, are considered to be temporarily restricted since amounts are unconditional promises to give with payments due in future periods. When a donor 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 are reported in the statement of activities as net assets released from restrictions. The Organization is a beneficiary under various wills and trust agreements. Related amounts are recorded when either a will is declared valid by a probate court, or the Organization is notified as an irrevocable beneficiary of a trust, and the proceeds are measurable. 9

10 (1) NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) The Organization conducts a donor-advised fund program for large individual contributions. Under this program, contributors are permitted to provide recommendations on the use of the funds. However, contributions are held by the Organization until distributed pursuant to the Board of Directors approval. Designation fees are campaign revenues that are maintained by the Organization as administrative fees for processing designated pledges. Designated pledges include contributions that are allocated by the contributor to the Organization s affiliated agencies and non-affiliated agencies. The Organization receives various grants from state, local and private agencies for program and supporting services. These grants are generally on a cost reimbursement basis. Revenues from grants are recognized in the statement of activities when expenses are made for the purpose specified. Grant funds that have been received but have not yet been expended for the purposes specified are reported as deferred revenue. Special events revenue is recognized when the event occurs. Fair Value Measurement The Organization implemented SFAS No. 157, Fair Value Measurements in fiscal year This statement defines fair value and establishes a framework for measuring fair value of a position in a financial instrument. Donated Services The Organization recognizes the fair value of donated services received if such services: (a) create or enhance nonfinancial assets or (b) require specialized skills that are provided by individuals possessing those skills and would typically need to be purchased if not contributed. The Organization receives services from a number of volunteers who give significant amounts of their time to the Organization s programs, fund-raising campaigns, and management. Time donated by these volunteers is not recorded in the financial statements, as these services do not require specialized skills. As such, volunteer services do not meet the recognition criteria in accordance with SFAS No Allocations Payable to Agencies The Organization annually allocates funds to its affiliated agencies. The Board of Directors approves the total amount of allocations to be distributed for the next fiscal year. The amounts allocated to the individual agencies are determined by the Community Impact Committee. Once the Board approves the allocations, agreements are executed with the agencies prior to June 30 of each year. Allocations are recognized when communicated to the agencies. Designations Payable The Organization honors donor designations to other nonprofit agencies. To be eligible to receive a donation, the agency must be an active 501(c)(3) organization and comply with the Patriot Act. The Organization is also an approved Federation with the Combined Federal Campaign ( CFC ). As such, the Organization honors designations made to each member organization of CFC by distributing a proportionate share of receipts based on donor designations to each member. Functional Allocation of Expenses The costs of providing the various programs and other activities of the Organization have been summarized in the accompanying statement of activities on a functional basis. Accordingly, certain costs have been allocated among the program and support services based on time records and estimates made by management. Cash and Cash Equivalents The Organization considers money market funds, repurchase agreements and all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. United Way maintains separate interest bearing bank accounts for its Combined Federal Campaigns, as required by that national program. 10

11 (1) NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Pledges Receivable Pledges receivable, less a provision for estimated uncollectible amounts, are recorded as revenue when pledges are made. The provision for uncollectible pledges is based, among other things, on the Organization s past collection experience and the impact of changes in the current economic conditions. Pledges receivable with payment terms in excess of one year have been discounted using an interest rate of 3%. Amortization of the discounts related to pledges receivable are recognized over the period of the promise as contribution revenue. Investments Investments in marketable securities with readily determinable fair values are reported at their fair value based on quoted prices in active markets (all Level 1 measurements) in the Statement of Financial Position. Realized and unrealized gains and losses are recognized for changes in fair value between periods or when related securities are sold. Interest and dividend income are recognized when earned. Property and Equipment Property and equipment is stated at cost or, if donated, at fair value at the date of donation. The Organization capitalizes all expenditures for property and equipment whose cost is equal to or in excess of $1,000 and whose useful life is greater than one year. Depreciation is computed by the straight-line method over the following estimated useful lives of the assets: Years Building 40 Building improvements 7-30 Furniture and equipment 3-15 Income Taxes The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Organization has been classified as a publicly supported Organization that is not a private foundation under Section 509(a)(1) of the Code. Reclassifications Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements. Comparative Information The financial statements include certain summarized comparative information as of or for the year ended June 30, 2008, in total but not by net asset 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 Organization s financial statements as of or for the year ended June 30, 2008, from which the summarized information was derived. (2) SIGNIFICANT CONCENTRATIONS OF CREDIT RISK Financial instruments that are exposed to concentrations of credit risk consist of cash and investments. Investments in mutual funds are in high quality institutions with high credit ratings and are stated at market value. Cash balances are maintained with financial institutions in South Florida. Accounts with financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 and $100,000 respectively as of June 30, 2009 and In addition, as of June 30, 2009, deposits in non-interest bearing accounts are fully FDIC insured regardless of the amount of the deposit. At June 30, 2009 and 2008, the Organization s cash balances held at financial institutions exceeded FDIC uninsured limits by $0 and $3,515,107, respectively. 11

12 (2) SIGNIFICANT CONCENTRATIONS OF CREDIT RISK (Continued) Credit risk for pledges receivable is concentrated as well because substantially all of the balances are receivable from individuals located within the same geographic region. (3) INVESTMENTS Investments consist of mutual funds and are stated at fair value based on quoted prices in active markets (all Level 1 measurements), and are summarized as follows as of June 30: Mutual funds: Large Company Portfolio $ 1,180,210 $ 1,304,877 Global Fixed Income Portfolio 227, ,793 Intermediate Government Fixed Income Portfolio 1,724,929 1,979,519 Large Cap International Portfolio 860, ,855 U.S. Small Company Portfolio 406, ,372 State of Israel Bonds 1,000 1,000 Total investments $ 4,400,209 $ 4,971,416 Investment income as of June 30, consists of the following: Interest and dividends $ 175,723 $ 327,540 Net realized and unrealized loss on investments (693,621) (306,997) Total investment income (loss) $ (517,898) $ 20,543 (4) PLEDGES RECEIVABLE Unconditional promises to give as of June 30, consist of the following: Campaign pledges, undesignated $ 2,776,965 $ 2,765,901 Campaign pledges, designated 1,657,429 1,678,550 Amount due within one to five years, undesignated Amount due within one to five years, designated 45,000 45,000 4,479,494 4,489,451 Less: allowance for uncollectible pledges 946, ,819 Less: discount on deferred pledges Pledges receivable, net $ 3,532,183 $ 3,631,775 (5) PROPERTY AND EQUIPMENT Property and equipment as of June 30, consists of the following: Land $ 298,005 $ 298,005 Building 3,051,996 3,051,996 Building improvements 292, ,884 Furniture and equipment 416, ,959 4,058,915 4,051,844 Less: accumulated depreciation 1,198,020 1,062,394 Property and equipment, net $ 2,860,895 $ 2,989,450

13 (5) PROPERTY AND EQUIPMENT (Continued) Depreciation expense for the years ended June 30, 2009 and 2008 was $159,541 and $173,560, respectively. (6) TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets as of June 30, 2009 and 2008, consists of unconditional promises to give that have not been allocated or whose time restrictions have not been met and consist of the following: Pledges receivable, less designations payable $ 1,432,655 $ 1,525,240 Bequests receivable 10,000 70,000 Total $ 1,442,655 $ 1,595,240 Net assets were released from donor restrictions for pledges receivable by incurring expenses satisfying the restrictions totaling $7,603,022 during the year ended June 30, (7) CONTINGENCY The Organization receives grants from various sources to supplement its programs. Grant revenue represents 19% of total revenues. Any loss of funding could have a negative impact on community services provided by the Organization. These grants require the fulfillment of certain conditions as set forth in the instrument of a grant. Failure to fulfill the conditions, or failure to continue to fulfill them, could result in the return of the funds to grantors. Although this is a possibility, management believes that any potential loss will not have a material adverse effect on the financial statements. (8) RELATED PARTY TRANSACTIONS The Organization s Property, Casualty, Liability and Workers Compensation insurance is brokered through a company whose Chief Executive Officer is related to one of the Organization s Board Members. During the years ended June 30, 2009 and 2008, the Organization remitted insurance premiums to the insurance broker totaling approximately $61,000 and $84,000, respectively. (9) ANNUITY OBLIGATIONS The Organization has established a Planned Giving Program whereby donors may set up charitable gift annuities with the Organization. Under this program, donors can contribute cash, securities or property to the Organization and in return receive a guaranteed fixed income for life. Contribution revenue is recognized as the difference between the fair value of the cash or property received and the annuity liability. Liabilities were recognized for the life annuity payments at the present value of the expected future cash payments determined using actuarial assumptions, discounted using the applicable federal rate in effect at the date of the gift. The annuity liability is reduced as payments are made by the Organization to the donor. Upon death of the donor, any remaining annuity liability would be recognized as revenue in the current year. The present value of future payment liabilities of charitable gift annuities is $180,438 as of June 30, The annuity obligations are adjusted each year to reflect changes in the life expectancy of the beneficiaries. 13

14 (9) ANNUITY OBLIGATIONS (Continued) The Organization is licensed by the State of Florida to enter into annuity agreements with donors. Florida Statutes require entities with such a license to maintain assets equal to the sum of reserves on outstanding agreements and a surplus of 25% of such reserves. Assets shall be invested only in securities permitted under Part II of Chapter 625 of the Florida Statutes. (10) PENSION PLAN The Organization has a 401(k) plan which is available to all non-limited duration employees who have been with the Organization at least three months. After one year of service, the Organization contributes 5% of the employees total compensation and 50% of the employee s contribution up to a limit of 6% of compensation. Contributions totaled $154,100 for the year ended June 30, (11) OPERATING LEASES The Organization leases office equipment and a vehicle under various non-cancelable agreements which expire through May 2012 and which require various minimum annual rentals. The total minimum rental commitment as of June 30, 2009, is due in future years as follows: Years Ending June 30, Amount 2010 $ 23, , ,433 Rent expense on the leases for June 30, 2009 and 2008, totaled $23,414 and $22,286, respectively. 14