UNITED CEREBRAL PALSY ASSOCIATION OF SAN JOAQUIN, CALAVERAS, AMADOR COUNTIES (A NONPROFIT CORPORATION) FINANCIAL REPORT

Transcription

1 UNITED CEREBRAL PALSY ASSOCIATION OF SAN JOAQUIN, CALAVERAS, AMADOR COUNTIES (A NONPROFIT CORPORATION) FINANCIAL REPORT JUNE 30, 2014

2 TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT 1-2 PAGE FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities and Changes in Net Assets 4 Schedule of Functional Expenses 5 Statements of Cash Flows 6 Notes to Financial Statements 7-11

3 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS Board of Directors UNITED CEREBRAL PALSY ASSOCIATION OF (A NONPROFIT CORPORATION) Stockton, California Report on the Financial Statements We have audited the accompanying financial statements of United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties, which comprise the statements of financial position as of June 30, 2014, 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 audit. 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 of 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. -1-

4 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 statement referred to above presents fairly, in all material respects, the financial position of United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties as of June 30, 2014, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matter The financial statements of United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties, as of June 30, 2013, were audited by other auditors whose report dated October 24, 2013, expressed an unmodified opinion on those statements. Stockton, California December 16,

5 STATEMENTS OF FINANCIAL POSITION June 30, 2014 and 2013 ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,046,214 $ 1,042,190 Receivables (Note 5) 624, ,338 Prepaid expenses 91, ,970 Total current assets $ 1,762,013 $ 1,750,498 PROPERTY AND EQUIPMENT, NET (Note 3) 774, ,213 OTHER ASSETS Investment - Community Foundation of San Joaquin 13,521 10,985 Total assets $ 2,549,841 $ 2,484,696 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 19,510 $ 17,949 Accrued payroll 232, ,321 Accrued vacation 159, ,512 Note payable, current portion (Note 4) 56,445 52,444 Capital lease obligation, current portion - 19,169 Total current liabilities 468, ,395 LONG-TERM LIABILITIES Note payable, less current portion (Note 4) 117, ,942 Total liabilities 585, ,337 NET ASSETS Unrestricted 1,938,848 1,858,522 Temporarily restricted (Note 8) 25,372 25,837 Total net assets 1,964,220 1,884,359 Total liabilities and net assets $ 2,549,841 $ 2,484,696 See Notes to Financial Statements. -3-

6 STATEMENT OF ACTIVITIES Year Ended June 30, 2014 (With Comparative Totals For 2013) SUPPORT AND REVENUE Governmental grants and contract income (Note 5) 6,261,238 Temporarily Total Total Unrestricted Restricted June 30, 2014 June 30, 2013 $ $ 33,424 $ 6,294,662 $ 5,817,635 Contributions 44,876 3,635 48,511 39,598 Special events 56,131-56,131 61,086 Interest income 2,776-2,776 8,070 Net assets reclassified to restrictions-grants 37,524 (37,524) - - Total support and revenue $ 6,402,545 $ (465) $ 6,402,080 $ 5,926,389 EXPENSES Program services $ 5,462,183 $ - $ 5,462,183 $ 5,052,387 Supporting services Management and general 808, , ,097 Fundraising 51,802-51,802 38,823 Total expenses $ 6,322,219 $ - $ 6,322,219 $ 5,795,307 Change in net assets $ 80,326 $ (465) $ 79,861 $ 131,082 Net assets, beginning of year 1,858,522 25,837 1,884,359 1,753,277 Net assets, end of year $ 1,938,848 $ 25,372 $ 1,964,220 $ 1,884,359 See Notes to Financial Statements. -4-

7 STATEMENT OF FUNCTIONAL EXPENSES Year Ended June 30, 2014 (With Comparative Totals For 2013) Program Services Supporting Services Adult Stockton Manteca Supported Independent Early/Creative Total Total Day Adult Dev. Adult Dev. Employment Living Intervention Great San Andreas/ Program Management Fund Supporting Total Expenses Program Center Center Program Program Program Beginnings Respite Calaveras Tracy TRACS Services and General Raising Services Salaries $ 716,082 $ 458,331 $ 266,877 $ 236,957 $ 397,001 $ 779,050 $ 185,914 $ 162,430 $ 3,166 $ 127,668 $ 235,592 $ 3,569,068 $ 522,268 $ - $ 522,268 $ 4,091,336 $ 3,845,631 Payroll taxes 53,693 34,254 20,235 17,515 30,075 49,574 18,574 12, ,220 18, ,857 39,438-39, , ,782 Benefits 135,713 65,366 31,764 35,078 54,175 61,178 22,981 12, ,645 22, ,647 51,926-51, , ,806 Workers comp insurance 28,493 16,322 10,066 15,545 15,228 20,628 7,694 6, ,271 7, ,571 8,503-8, ,074 97,817 Total personnel costs $ 933,981 $ 574,273 $ 328,942 $ 305,095 $ 496,479 $ 910,430 $ 235,163 $ 194,301 $ 3,975 $ 159,804 $ 283,700 $ 4,426,143 $ 622,135 $ - $ 622,135 $ 5,048,278 $ 4,695,036 Contracted services 7,174 4,982 3,334 3,587 5,580 4,122 2,403 6, ,305 2,503 50,441 33,450 22,750 56, , ,899 Office expenses and supplies 45,371 22,510 13,013 3,762 7,496 15,474 8,807 1, ,956 24, ,047 29,732 24,490 54, , ,530 Telephone and utilities 29,345 21,812 13,412 4,615 6,558 7,014 2,115 1,115-9,281 2,972 98,239 11,469-11, ,708 84,508 Insurance 8,786 6,427 4,108 4,637 7,403 5,411 2,029 4, ,680 1,977 48,684 2,355-2,355 51,039 48,306 Licenses and fees 5,193 3,671 1, , , ,365 2,299 23,197 3, ,879 27,076 31,058 Postage , ,371 2,781 Rent 29,808 90,539 64, ,346 15, ,481 14, , , ,668 Printing and publications 3,062 1, , ,124 12,756 3,347 16,103 24,227 20,770 Rehabilitation and education 2,599 1, , ,499 8,010 17, ,115 10,293 Travel and conferences (891) 975 4,299 18,788 22,502 70,264 7,700 22,773 1,435 13,863 19, ,684 20, , , ,511 Equipment maintenance 9,515 5,418 (599) 2,490 2, (869) (93) ,339 9,615-9,615 29,954 30,907 Payments to National U.C.P ,996-39,996 39,996 39,996 Interest 7, , ,758 3,144-3,144 14,902 18,643 Other 2, , ,103 14, ,332 28,435 23,619 Total expenses before depreciation and amortization $ 1,083,927 $ 734,099 $ 440,445 $ 347,687 $ 553,530 $ 1,056,949 $ 274,742 $ 235,078 $ 5,812 $ 288,252 $ 362,822 $ 5,383,343 $ 804,357 $ 51,802 $ 856,159 $ 6,239,502 $ 5,744,525 Depreciation and amortization 15,509 10,770 6,893 7,755 12,063 8,912 3,342 8, ,723 3,255 78,840 3,877-3,877 82,717 50,782 Total expenses $ 1,099,436 $ 744,869 $ 447,338 $ 355,442 $ 565,593 $ 1,065,861 $ 278,084 $ 243,264 $ 6,243 $ 289,975 $ 366,077 $ 5,462,183 $ 808,234 $ 51,802 $ 860,036 $ 6,322,219 $ 5,795,307 See Notes to Financial Statements. -5-

8 STATEMENTS OF CASH FLOWS Years Ended June 30, 2014 and CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 79,861 $ 131,082 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 82,717 50,782 Changes in assets and liabilities: (Increase) decrease: Accounts receivable (19,197) (149,216) Prepaid expenses 11,104 (16,823) Deposits - (6,290) Increase (decrease): Accounts payable 1,561 9,471 Accrued payroll 67,863 9,846 Accrued vacation (12,534) 12,109 Net cash provided by operating activities $ 211,375 $ 40,961 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investment (2,536) (683) Purchases of property and equipment (133,209) (98,914) Net cash (used in) investing activities $ (135,745) $ (99,597) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on note payable (52,437) (48,696) Principal payments on capital lease (19,169) (14,074) Net cash (used in) financing activities $ (71,606) $ (62,770) Net increase (decrease) in cash $ 4,024 $ (121,406) CASH AT BEGINNING OF YEAR 1,042,190 1,163,596 CASH AT END OF YEAR $ 1,046,214 $ 1,042,190 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 14,902 $ 18,643 SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS Capital lease obligations incurred for use of equipment $ - $ 23,003 See Notes to Financial Statements. -6-

9 NOTES TO FINANCIAL STATEMENTS June 30, 2014 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL United Cerebral Palsy of San Joaquin, Calaveras, Amador Counties offers programs to affect positively the quality of life for persons with cerebral palsy, those with other severe disabilities and multiple service needs, and their families. Programs include job placement and training, family support network and activity centers where participants with cerebral palsy or related disabilities develop skills and receive training to assist them in experiencing life to its fullest. This summary of significant accounting policies of United Cerebral Palsy of San Joaquin, Calaveras, Amador Counties is presented to assist in understanding the Association's financial statements. The financial statements and notes are representations of the Association's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. ORGANIZATION The United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties is a nonprofit, voluntary health agency exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The Organization has also been classified as an entity that is not a private foundation. BASIS OF PRESENTATION The accompanying financial statement has been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. 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 Association and changes therein are classified and reported as follows: Unrestricted net assets - Net assets are not subject to donor-imposed stipulations. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may or will be met, either by actions of the Association and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Association. Generally, the donors of these assets permit the Association to use all or part of the income earned on any related investments for general or specific purposes. At June 30, 2014, there were no permanently restricted net assets. -7-

10 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ALLOWANCE FOR DOUBTFUL ACCOUNTS The Organization estimates doubtful accounts based on historical bad debts, factors related to the specific payer's ability to pay, and current economic trends. Receivable are written off when a balance is determined to be uncollectible. No allowance is established at June 30, 2014 as management believes all amounts are collectible. LAND, BUILDING AND EQUIPMENT Purchased property and equipment is recorded at cost and donated equipment at its fair market value at the date of donation. It is the Organization s policy to capitalize expenditures for these items in excess of $1,000. Lesser amounts are expensed. DEPRECIATION Depreciation of property and equipment is provided on the straight-line method over the estimated useful lives of the assets. CONTRIBUTIONS All contributions are considered available for unrestricted use, unless specifically restricted by donor. DONATED SERVICES A substantial number of volunteers donated significant amounts of their time in the organization's behalf; however, amounts have not been reflected in the statements for donated services since an objective basis is not available to measure the value of such services. ALLOCATED EXPENSES Expenses have been allocated by function among program and supporting services classifications on the basis of budget allocations and on estimates made by the organization's management. CASH AND CASH EQUIVALENTS Cash consists of amounts on deposit with commercial banks in interest bearing and noninterest bearing accounts. The accounts are insured by the FDIC up to $250,000 for each bank. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -8-

11 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ACCUMULATED VACATION AND SICK LEAVE Vacation Accumulated unpaid employee vacation benefits are recognized as liabilities of the Agency. The value of accumulated vacation at June 30, 2014 is $159,978. Sick Leave Sick leave benefits are accumulated for each employee, but the employees do not gain a vested right to the accumulated sick leave. Accumulated employee sick leave benefits are not recognized as liabilities of the Agency since payment of such benefits is not probable or estimable. Therefore, sick leave benefits are recorded as expenditures in the period sick leave is taken. INCOME TAX STATUS United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties is a not-forprofit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Organization has also been classified as an entity that is not a private foundation within the meaning of Section 509(a) and qualifies for deductible contributions as provided in Section 170(b)(1)(A)(vi). The Organization s tax filings are subject to audit by various taxing authorities. The Organization s federal tax returns for 2011, 2012 and 2013 remain open to examination by the Internal Revenue Service; state income tax returns for 2010, 2011, 2012 and 2013 are open to examination. In evaluating the Organization s tax provisions and accruals, the Organization believes that its estimates are appropriate based on current facts and circumstances. RECLASSIFICATIONS Certain reclassifications were made to the 2013 financial statement presentation in order to conform to the 2014 financial statement presentation. NOTE 2. DATE OF MANAGEMENT S REVIEW In preparing the financial statements, the Organization has evaluated events and transactions for potential recognition or disclosure through December 16, 2014, the date the financial statements were available to be issued. -9-

12 NOTE 3. FIXED ASSETS UNITED CEREBRAL PALSY ASSOCIATION OF NOTES TO FINANCIAL STATEMENTS Fixed assets are stated at cost and summarized as follows: June 30, 2014 Life Land $ 170, Building and improvements 978, Years Furniture and equipment 177, Years Vehicles 360,692 5 Years $ 1,687,287 Less: accumulated depreciation (912,980) $ 774,307 NOTE 4. NOTES PAYABLE Note payable to Bank of America, due April 10, 2017 in monthly installments of $5,612, including interest at the rate of 7.375%. This note is collateralized by real property. $ 173,949 Annual maturities for the next five years at June 30 are as follows: 2015 $ 56, , , Thereafter -0- $ 173,949 Total interest costs on all debt were $14,902 for the year ended June 30, NOTE 5. FEES FROM GOVERNMENT AGENCIES/CONCENTRATION United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties receives reimbursements from Valley Mountain Regional Center for providing services to their clients. During the fiscal year ending June 30, 2014 the United Cerebral Palsy Association of San Joaquin, Calaveras, Amador Counties (A Nonprofit Organization) received $5,308,605. These funds account for approximately 82% of the total revenue and 72% of its accounts receivable as of June 30, The programs continuation is dependent on the continuing support of Valley Mountain Regional Center and the California Department of Developmental Services. -10-

13 NOTES TO FINANCIAL STATEMENTS NOTE 6. LEASES The Association leases office equipment under an operating lease expiring in July 2015 with monthly payments of $891. United Cerebral Palsy also leases office space under five different lease agreements with expiration dates ranging from April 2016 to November 2018 and total monthly payments of $29,179. The approximate future minimum lease payments under all operating leases with an initial or remaining non-cancellable term of one year or more are as follows at June 30: For year ending June 30: NOTE 7. EMPLOYEE BENEFIT PLAN 2015 $ 350, , , , , $ 1,127,065 The Organization has a 401(k) defined contribution employee benefit plan which became effective in November All employees at least 21 years of age who have completed one year of service are eligible to participate. The plan was amended and restated on February 23, 2010, as a complete restatement of the prior plan, to be effective July 1, The plan s employer matching provision calls for an annual discretionary match. For the year ended June 30, 2014, the Organization did not match employee deferrals. Per board resolution, effective July 1, 2014, UCP will match employee contributions equal to 50% of the first 3% of gross wages. NOTE 8. TEMPORARILY RESTRICTED NET ASSETS At June 30, 2014, the Organization had $25,372 in temporarily restricted net assets which are to be used for the following: Equipment $ 22,422 Kitchen remodel 2,950 Total $ 25,