St. Vincent De Paul of Baltimore, Inc. and Subsidiaries

Transcription

1 St. Vincent De Paul of Baltimore, Inc. and Subsidiaries For the Fiscal Year Ended September 30, 2012 Financial Statements and Report of Independent Auditor JOHN C. WALSH & CO. CERTIFIED PUBLIC ACCOUNTANT

2 FINANCIAL STATEMENTS CONTENTS Independent Auditor's Report 1 Audited Consolidated Financial Statements Consolidated Statement of Financial Position 2 Consolidated Statements of Activities and Changes in Net Assets 3 Consolidated Statements of Cash Flows 4 Notes to Consolidated Financial Statements 5-12 Supplementary Information Independent Auditor's Report on Supplementary Financial Information 13 Consolidating Schedule of Financial Position 14 Consolidating Schedule of Activities and Changes in Net Assets 15 Stand-Alone Schedules of Financial Position of St. Vincent De Paul of Baltimore, Inc. 16 Stand-Alone Schedules of Activities and Changes in Net Assets of St. Vincent De Paul of Baltimore, Inc. 17 Stand-Alone Schedules of Functional Expenses of St. Vincent De Paul of Baltimore, Inc. 18

3 JOHN C. WALSH & CO., P. C. CERTIFIED PUBLIC ACCOUNTANT 1101 FIFTEENTH STREET, N. W. SUITE 207 WASHINGTON, D. C To the Board of Directors St. Vincent de Paul of Baltimore, Inc. and Subsidiaries Baltimore, Maryland INDEPENDENT AUDITOR'S REPORT We have audited the accompanying consolidated statements of financial position of St. Vincent de Paul of Baltimore, Inc. (a non-profit organization) and Subsidiaries as of September 30, 2012, and the consolidated related statements of activities and changes in net assets and cash flows for the years then ended. These financial statements are the responsibility of the Organization's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized financial statements for the year ended September 30, 2011 and, in our report dated February 7, 2013, we expressed an unqualified opinion. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of St. Vincent de Paul of Baltimore, Inc.'s internal control over financial reporting. 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 St. Vincent de Paul of Baltimore, Inc. as of September 30, 2012 and 2011, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 7, 2013 on our consideration of the St. Vincent de Paul of Baltimore, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. John C. Walsh & Co. February 7,

4 Consolidated Statement of Financial Position September 30, 2012 and 2011 Assets Cash and Cash Equivalents $ 640,989 $ 1,124,090 Accounts Receivable 1,688,652 1,947,294 Pledges Receivable (Note 3) 1,702,540 2,600,038 Investments (Note 4 and 5) 1,437,092 1,820,691 Security Deposit and Prepaid Expenses 112,090 55,320 Inventory 44,121 20,516 Buildings and Equipment, Net of Accumulated Depreciation (Notes 7 and 10) 7,357,214 4,515,968 Total Assets $ 12,982,698 $ 12,083,917 Liabilities and Net Assets Accounts Payable and Accrued Expenses $ 903,375 $ 739,210 Accrued Pension Liability (Note 15) 1,293, ,912 Deferred Revenues 1,019, ,812 Notes Payable (Note 10) 1,009,265 1,100,084 Total Liabilities $ 4,225,458 $ 3,449,018 Commitments (Notes 10, 13 and 15) Net Assets Unrestricted $ 6,928,426 $ 4,632,464 Temporarily Restricted (Note 12) 1,828,814 4,002,435 Total Net Assets $ 8,757,240 $ 8,634,899 Total Liabilities and Net Assets $ 12,982,698 $ 12,083,917 The Notes to Financial Statements are an integral part of these statements. 2

5 Consolidated Statement of Activities and Changes in Net Assets For the Year Ended September 30, 2012 (With Comparative Totals for 2011) Total Total Public Support Contributions and Grants $ 2,734,043 $ 3,102,951 Government Grants 9,543,773 8,678,155 Donated Food, Clothing and Services 4,414,663 3,556,042 Fundraising Events, Net (Note 9) 123,448 - Total Public Support $ 16,815,927 $ 15,337,148 Other Revenue Program Income and Sales $ 1,179,371 $ 537,150 Investment Income 1,889 13,201 Unrealized Gain or (Loss) in Fair Value of Investments - - Miscellaneous 15,713 13,238 Net Assets Released from Restriction (Note 12) - - Total Other Revenue $ 1,196,973 $ 563,589 Expenses Total Support and Revenue $ 18,012,900 $ 15,900,737 Program Services $ 16,522,857 $ 14,374,698 Administrative Services: Management and General 32, ,989 Fund Development 513, ,078 Total Direct Expenses $ 17,068,524 $ 14,960,765 Excess of Revenues Over Direct Expenses $ 944,376 $ 939,972 Unfunded Pension Liability (641,206) 414,502 Depreciation (271,648) (263,421) Change in Net Assets, Before Extraordinary Item $ 31,522 $ 1,091,053 Gain from Forgiveness of Debt (Note 10) 90, ,585 Change in Net Assets, After Extraordinary Item $ 122,341 $ 1,363,638 Net Assets, Beginning of Year 8,634,899 7,271,261 Net Assets, End of Year $ 8,757,240 $ 8,634,899 The Notes to Financial Statements are an integral part of these statements. 3

6 Consolidated Statement of Cash Flows For the Years Ended September 30, 2012 and 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Change in Net Assets $ 122,341 $ 1,363,638 Adjustments to Reconcile Change in Net Assets to Net Cash Provided by (Used in) Operating Activities: Depreciation 271, ,421 Unrealized (Gain) on Investments - - Gain from Forgiveness of Debt (90,819) (272,585) Decrease (Increase) In: Accounts and Pledges Receivable 1,156, ,925 Other Current Assets (80,375) (28,339) (Decrease) Increase In: Deferred Revenues 61,888 83,828 Accounts Payable and Accrued Expenses 805,371 (152,018) Net Cash Provided by (Used in) Operating Activities $ 2,246,194 $ 1,424,870 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property and Equipment $ (3,112,894) $ (258,918) Net Investment Activity 383,599 (1,217,430) Net Cash (Used in) Provided by Investing Activities $ (2,729,295) $ (1,476,348) Net Increase in Cash and Cash Equivalents $ (483,101) $ (51,478) Cash and Cash Equivalents, Beginning of Year 1,124,090 1,175,568 Cash and Cash Equivalents, End of Year $ 640,989 $ 1,124,090. NON-CASH FINANCING ACTIVITY: Forgiveness of Debt $ 90,819 $ 272,585 The Notes to Financial Statements are an integral part of these statements. 4

7 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 1 - Operations St. Vincent de Paul of Baltimore, Inc. (SVDP) is a charitable organization incorporated in the State of Maryland in Its purpose is to ensure that individuals and families in our community have the resources and opportunity to care for themselves and build a better future. SVDP maintains close ties to Catholic churches in the Archdiocese of Baltimore. The organization purchases certain goods and services from the Archdiocese of Baltimore, which includes archdiocesan employee benefits and insurance plans and rental of office space. The consolidated financial statements include the activity of St. Vincent De Paul of Baltimore, Inc. and St. Vincent De Paul Enterprises, Inc. which are collectively referred to herein as the Organization. All intercompany transactions have been eliminated. St. Vincent De Paul Enterprises, Inc. is a for profit corporation organized under the laws of the State of Maryland. The corporation provides meals and food to Headstart and other operations conducted by St. Vincent De Paul of Baltimore and other organizations. They began operations in September Note 2 - The Organization and Its Significant Accounting Policies Basis of Accounting: The accompanying financial statements are presented on the accrual basis of accounting, and in accordance with FASB ASC 958, Not -for Profit Entities. In June 2009, The Financial Accounting Standards Board (FASB) issued FASB ASC105, Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification as the sole source of authoritative generally accepted accounting principles. Pursuant to the provisions of FASB ASC 105, SVDP has updated references to GAAP in its financial statements issued for the year ended September 30, The adoption of FASB ASC 105 did not impact SVDP's financial position or result of operations. Certain amounts in the prior year's financial statements have been reclassified to conform to the current year's presentation. These reclassifications had no effect on the previously reported change in net assets. Net Assets: SVDP is required to report information regarding its financial position and activities according to the following classes of net assets. Unrestricted net assets are the net assets that are neither permanently restricted nor temporarily restricted by donorimposed stipulation. Temporarily restricted net assets result from contributions whose use is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the organization pursuant to these stipulations. Net assets may be temporarily restricted for various purposes, such as use in future periods or use for specific purposes. Cash and Cash Equivalents: Cash and cash equivalents consist of highly liquid investments with an initial maturity of three months or less. At times during the year, SVDP maintains cash balances at financial institutions in excess of the FDIC insurance limits. Management believes the risk in these situations to be minimal. 5

8 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 2 - Organization and Significant Accounting Policies (Continued) Comparative Financial Information: The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation of the prior year summarized financial statements in conformity with generally accepted accounting principles. Accordingly, such summarized information should be read in conjunction with SVDP's financial statements for the year ended September 30, 2010 from which the summarized information was derived. The prior year summarized total have been adjusted to include the one month of operations of St. Vincent De Paul Enterprises, Inc. 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 of assets and liabilities and 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. Program Services: There are fourteen main programs: Beans and Bread, Home Connections, Frederick Ozanam House, Camp St. Vincent, Mobile Clothing Bank, Parish Conferences/Samaritan Center, Learn to Earn, Youthplace, Cottage Avenue Community, Adelante Familia, Head Start-Northwest, Head Start-Southeast, Food Share and Sarah's Hope. Beans and Bread is a homeless day resource center that provides meals six days a week, and an array of services for homeless persons including counseling, information and referral, employment and housing referral, health services, legal advice, and other services. Home Connections, which started in July of 2006, provides permanent housing and intensive support services to chronically homeless single adults. Frederick Ozanam House provides transitional housing and supportive services for homeless men. Camp St. Vincent provides over 600 free camperships each summer to disadvantaged children at its camp located in Baltimore, Maryland. Mobile Clothing Bank assists homeless individuals & families with used clothing, as well as personal hygiene items and blankets. The Parish Conferences and Samaritan Center programs provide assistance for eviction prevention, medical needs, transportation, home heating, burial, and other emergency aid to the needy, and outreach to persons who are incarcerated. The Learn to Earn at St. Ambrose is a comprehensive workforce development program that helps both unemployed and underemployed individuals find and retain jobs. The Youth Place at St. Ambrose offers after-school and evening development and academic services to youth and teens ages Cottage Avenue Community is a transitional housing and support program for homeless families in a neighborhood setting. Adelante Familia (formerly St. Michael Outreach Center) is a bi-lingual program that provides domestic violence intervention and prevention services to the Latino population. The program ceased operations as part of SVDP during the fiscal year September 30,

9 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 2 - Organization and Significant Accounting Policies (Continued) Head Start is a comprehensive Federal program for pre-school children that works in partnership with parents, other family, and members of the community to offer developmentally appropriate educational, health and social services to children and their families. SVDP operates the programs at the Northwest and Southeast site locations. Food Share is an Emergency Food Share program that distributes federal surplus food for city soup kitchens and food pantries. Sarah's Hope is a overnight shelter and resource center for families in Baltimore City. Donated Services and Materials: SVDP receives donated services from a variety of unpaid volunteers assisting SVDP in its mission to provide relief to the poor through its Beans and Bread, Mobile Clothing Bank, Adelante Familia (formerly St. Michael's Outreach), Frederick Ozanam House, St. Ambrose Center Learn to Earn and Youthplace, Head Start Programs Northwest and Southeast, Camp St. Vincent, and Sarah's Hope. SVDP receives donations of food provided by various individuals and parishes as well as the government surplus food distribution by its Food Share program. The approximate fair value of the donations is $1,203,257 and $1,666,965 for the years ended September 30, 2011 and 2010, respectively, and is included in contributions and expenses in the Statement of Activities. SVDP receives donations of clothing and other items for the Mobile Clothing Bank program. Excess clothing is sold for income to support program expenses. Income Tax Status: SVDP is exempt from Federal and State income taxes under Section 501(c)(3) of the Internal Revenue Code. Uncertain Tax Positions In June 2006, The Financial Accounting Standards Board (FASB) released ASC , Income Taxes, that provides guidance for reporting uncertainty in come taxes. For the year ended September 30, 2011, SVDP has considered FASB ASC and determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. Functional Allocation of Expenses The cost of providing the various programs and other activities have been summarized on a functional basis in the Statement of Activities and Change in Net Assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Note 3 - Pledges Receivable The Pledges Receivable in the amount of $1,702,540 are detailed below. The total pledges receivable are $1,722,540 less a future value discount of $20,000. Pledges Receivable $ 1,722,540 $ 2,643,498 Due within One Year 1,322, ,200 Due within Two to Six Years $ 400,000 $ 1,774,298 Discount 20,000 43,460 Net Long-Term Receivable $ 380,000 $ 1,730,838 7

10 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 4 - Investments Investments are stated at fair value and are as follows: Fair Fair Cost Market Value Cost Market Value T. Rowe Price Summit - General Money Market Fund and Other Securities 1,437,092 1,437,092 1,820,691 1,820,691 $ 1,437,092 $ 1,437,092 $ 1,820,691 $ 1,820,691 The PNC Institutional Investments pooled fund of fixed income and equities is SVDP's portion of the investments pooled with the investments of the Archdiocese of Baltimore. Note 5 - Fair Value Measurements In accordance with Statement of Financial Accounting Standards (SFAS) No. 157, SVDP has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Investments recorded in the Statement of Financial Position are categorized based on the inputs to valuation techniques as follows: Level 1. These are investments where values are based on unadjusted quoted prices for identical assets in an active market SVDP has the ability to access. Level 2. These are investments where values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full-term of the investments Level 3. These are investments where values are based on quoted prices or valuation techniques that require that are both unobservable and significant to the overall fair value measurement. These inputs reflect assumptions of management about assumptions market participants would use in pricing the investments. These investments include non-readily marketable securities that do no have an active market. Financial assets recorded on the Statement of Financial Position are categorized based on the inputs to the valuation technique as follows for the year ended September 30, 2010: Level 1 Level 2 Level 3 Total Asset Category Investments $ 1,437,092 $ - $ - $ 1,437,092 8

11 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 6 - Investment and Note Receivable-Social Enterprise During the fiscal year ended September 30, 2010, SVDP formed and capitalized a social enterprise, St. Vincent de Paul Enterprises, Inc. to provide catering services, training and employment opportunities. St. Vincent de Paul of Baltimore, Inc. is the sole stockholder of the corporation. The corporation began operations in September 2010 and for the year ended September 30, 2011 and 2010 incurred a net operating loss in the amount of $18,567 and $7,801 respectively. The note receivable carries an interest rate of 5% with interest accrual beginning September 1, 2011 and quarterly payments in the amount of $2, beginning December 1, 2011 with the final payment due June, Capital Stock Note and Other Receivable Net Operating Income (Loss) Total Investment $ 10,000 $ 10,000 34,615 36,835 1,000 (26,368) $ 45,615 $ 20,467 Note 7 - Buildings and Equipment Buildings and equipment are recorded at acquisition cost or, if donated, at fair value at the date of donation. The land has been acquired through a series of donations. It is not practical to ascertain the fair value of the land at the date of donation and therefore no value has been assigned to the land. Depreciation is calculated on the straight-line method over estimated useful lives ranging from 5 to 40 years. Note 8 - Pension Plan Building and Improvements Furniture and Equipment Vehicles Accumulated Depreciation $ 9,517,159 $ 6,670,994 1,624,926 1,358, , ,545 $ 11,301,630 $ 8,188,736 (3,944,416) (3,672,768) $ 7,357,214 $ 4,515,968 Certain property and equipment used in the Frederick Ozanam House Transitional Housing Project, the St. Ambrose Center, and Cottage Avenue Community were acquired partially from U.S. Department of Housing and Urban Development (HUD) grants. These grants require that the facilities be used for transitional housing for homeless individuals for a minimum of 10 to 15 years or the property may revert to HUD. Certain property acquired for the Beans and Bread Center expansion was acquired with funds from a loan made by the Mayor and City Council of Baltimore. The loan will be converted to a grant if all the terms of the loan are met. SVDP's Pension Plan is part of the Retirement Plan for Lay Employees of the Archdiocese of Baltimore. This defined benefit plan, based on salary and years of service, covers all full-time employees who are at least 25 years old and who have completed one year of full-time service. The plan was closed to future contributions as of June 30, The cash contribution for the year ended September 30, 2011 was $255,266. The increase/(decrease) in the unfunded pension liability for the years ended September 30, 2012 and 2011 were $641,206 and $(414,502) respectively. The total pension fund costs for the years ended September 30, 2012 and 2011 were $ 641,206 and $(159,326), respectively. On October 1, 1999, SVDP established an independent 403(b) Retirement Plan. The Plan is available to full-time and part-time "A" employees as defined in the employer's employee handbook, who are at least 21 years old. Contributions by the employees are voluntary. SVDP may elect to provide a year-end match that is determined annually by the Board of Directors. The contributions for the years ended September 30, 2012 and were $264,457 and $108,963, respectively. During the current year, SVDP approved a supplemental Section 403(b) and Section 457 plan for contributions for certain personnel. The contributions for the year 2012 for all plans are included in the figures above. 9

12 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 9 - Notes Payable Notes payable consist of the following: City of Baltimore $ 45,170 $ 67,755 City of Baltimore - Bank Street 350, ,000 HUD/SHP 614, ,329 $ 1,009,265 $ 1,100,084 In April, 1999 SVDP received a loan, collateralized by a deed of trust, from the Mayor and City Council of Baltimore (City), Maryland for the renovations of the St. Ambrose Center. Under the loan agreement, if SVDP meets certain loan requirements, the City will forgive $22,585 of the debt annually, over the next 15 years. Interest shall accrue only in the event of default, at a rate of prime plus four percent. At the conclusion of the 15-year period, SVDP will have relieved its obligation under the note payable. During the fiscal years 2012 and 2011, $22,585 of the debt was forgiven for each fiscal year. In August, 2008 SVDP received a loan in the amount of $350,000, collateralized by a deed of trust, from the Mayor and City Council of Baltimore (City), Maryland for the acquisition of certain real property for the renovation and expansion of the Beans and Bread Center. Under the loan agreement, if SVDP meets all loan requirements by December 31, 2009 which was subsequently extended to December 31, 2011 and is not in material breach of any of the terms of the loan documents, the City will forgive the debt so the outstanding principal will be converted into a grant from the Lender to SVDP in accordance with the Grant Agreement of the even date. The note carries an interest rate of 0%. In October, 1999, SVDP received a grant from the City of Baltimore, as a pass-through from HUD (HUD/SHP), to be used for the rehabilitation of Cottage Avenue properties to be used as transitional housing facilities for homeless people of Baltimore City. The amount of the grant is not to exceed $739,180 and at September 30, 2002, SVDP had received $682,329 of funds. The entire amount of the grant proceeds received must be paid back to the City if the project ceases to be used as supportive housing for homeless persons within ten (10) years from the date of initial occupancy. If the project is used as supportive housing for more than 10 years, then the amount required to be repaid is reduced by 10% for each year in excess of the ten years the project is used as supportive housing. No interest accrues in the event of default. Also, in the event of default, property will be conveyed to another nonprofit organization. During the fiscal year 2012, $68,234 of the debt was forgiven. Note 11 - Line of Credit SVDP has established a $500,000 line of credit with the M & T Bank at the Overnight LIBOR plus 3% with an allin rate of 3.25%. The line was established in April 2011, with an on deand maturity. During the fiscal years ended September 30, 2012 and 2011, there were no advances under a line of credit. SVDP has established a $1,000,000 revolver line with M & T Bank at the Overnight LIBOR plus 2% with an all-in rate of 2.25%. The line was established in April 2011, with an expiration date of April The loan is to bridge collection of pledges to finance the renovations of the Beans and Bread Center. The agreement requires interest onluy during construction with principal payments to commence once construction has been completed. During the fiscal years ended September 30, 2012 and 2011, there were no advances under a line of credit. SVDP Enterprises, Inc. has established a $100,000 line of credit with the M & T Bank at the Overnight LIBOR plus 3% with an all-in rate of 3.19%. The line was established in August 2011, with an on deand maturity. During the fiscal years ended September 30, 2012 and 2011, there were no advances under a line of credit. 10

13 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 12 - Temporarily Restricted Net Assets and Satisfaction of Purpose Restrictions Temporarily restricted net assets are restricted for the following purposes: Satisfaction of purpose restrictions: Fiscal Year Operating Activities $ 95,561 $ 417,636 Capital Projects 1,700,521 3,584,799 SVDP Foundation Grants 32,732 - Total $ 1,828,814 $ 4,002,435 During 2012 and 2011, donor restricted designations were met and funds released for the following purposes: Fiscal Year Operating Activities $ 295,000 $ 399,053 Capital Projects 2,430, ,305 SVDP Foundation Grants - 10,590 Note 13 - Operating Leases Total $ 2,725,254 $ 666,948 SVDP entered into a lease with 2305 North Charles, LLC beginning July 1, 2008 for 3,260 square feet of office space. The original term of the lease was four years ending June 30, 2012 which was the extended until June 30, The base rent for future periods is as follows: September 30, 2013 $ 83,106 September 30, 2014 September 30, 2015 September 30, ,596 88,161 67,599 Total $ 324,462 SVDP entered into a lease with FRP Hollander95, LLC beginning July 1, 2012 for 10,852 square feet of office and warehouse facility space. The original term of the lease is ten years ending June 30, The base rent for future periods is as follows: September 30, 2013 $ 53,175 September 30, 2014 September 30, 2015 September 30, 2016 September 30, ,637 56,140 57, ,729 Total $ 672,364 SVDP leased warehouse space for operations of the Food Share and Mobile Clothing Bank programs beginning in July, On November 16, 2011, SVDP entered into a one year lease extension ending November 30, 2013 with an annual base rent of $50,058. SVDP entered into an agreement with Ryder Truck Rental, Inc. to lease three trucks for use in transporting goods for the Mobile Clothing Bank and Food Share Program. The base rent on the future periods is as follows: Note 14 - Subsequent Events September 30, ,308 September 30, 2014 and thereafter 55,374 Total $ 101,682 In preparing these financial statements, SVDP has evaluated events and transactions for potential recognition or disclosure through February 7, 2013, the date the financial statements were issued 11

14 Notes to Consolidated Financial Statements For the Year Ended September 30, 2012 Note 15 - Accrued Pension Liability SVDP's employees participate in the defined benefit pension plan of the Archdiocese of Baltimore covering substantially all of the full-time employees after a one year waiting period. The benefits are based on years of service and the employee's compensation during the term of service as defined in the plan. SVDP's funding policy is to make the required annual contribution as set forth by the Archdiocese. The following tables set forth information concerning the plan for the fiscal years ended June 30, 2012 and Change in Benefit Obligation Benefit Obligation at Beginning of Year $ 1,754,272 $ 2,065,285 Service Cost - 85,616 Interest Cost 106, ,202 Actuarial (Gain)/Loss 522,057 71,469 Benefits Paid (79,913) (65,207) Plan Assumptions and Curtailments - (301,171) Adjustment for Annual Participation Change 183,816 (205,923) Benefit Obligation at End of Year $ 2,486,666 $ 1,754,272 Accumulated Benefit Obligation $ 2,484,666 $ 1,754,272 Change in Plan Assets Fair Value Plan Assets at Beginning of Year $ 1,102,361 $ 998,871 Actual Return on Plan Assets 10, ,838 Employer Contributions 51,881 90,022 Benefits Paid (79,913) (65,207) Expenses Paid (7,198) (5,569) Adjustment for Annual Participation Change 114,253 (99,594) Fair Value Plan Assets at End of Year $ 1,191,552 $ 1,102,361 Information on Funded Status and Amounts Recognized Funded Status ($1,293,118) $ (651,912) Unrecognized Prior Service Cost - - Unrecognized Actuarial (Gain)/Loss 917, ,996 Net Amount Recognized $ (375,192) $ (354,916) Component of Net Periodic Pension Cost Service Cost $ - $ 85,616 Interest Cost 106, ,202 Expected Return on Plan Assets (87,004) (71,372) Net Amortization Deferral 15,943 47,626 Net Periodic Benefit Cost $ 35,372 $ 166,072 Weighted Average Assumptions Used to Determine Benefit Obligations at December 31 Discount Rate 5.48% 5.51% Rate of Compensation Increase 4.00% 4.00% Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost for the Year Ended June 30 Discount Rate 5.48% 5.51% Expected Long Term Rate of Return on Plan Asset 7.00% 7.00% Rate of Compensation Increase 4.00% 4.00% 12

15 JOHN C. WALSH & CO., P. C. CERTIFIED PUBLIC ACCOUNTANT 1101 FIFTEENTH STREET, N. W. SUITE 207 WASHINGTON, D. C INDEPENDENT AUDITOR'S REPORT To the Board of Directors St. Vincent de Paul of Baltimore, Inc. and Subsidiaries Baltimore, Maryland We have audited the consolidated financial statements of St. Vincent De Paul of Baltimore, Inc. and Subsidiaries as of and for the year September 30, 2012, and our report thereon dated February 7, 2013, which expressed an unqualified opinion on those financial statements appears on page 1. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The accompanying other financial information on pages is presented for the purposes of additional analysis and are not a required part of the consolidated 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 information 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 our opinion, the information is fairly states in all material respects in relation to the financial statements as a whole. John C. Walsh & Co. February 7,

16 Consolidating Statement of Financial Position September 30, 2012 and 2011 Assets SVDP SVDP Enterprises Eliminating Cash and Cash Equivalents $ 603,911 $ 37,078 $ - $ 640,989 $ 1,124,090 Accounts Receivable 1,609, ,766 (95,757) 1,688,652 1,947,294 Pledges Receivable (Note 3) 1,702, ,702,540 2,600,038 Investments (Note 4 and 5) 1,437, ,437,092 1,820,691 Security Deposit and Prepaid Expenses 71,503 40, ,090 55,320 Inventory - 44,121-44,121 20,516 Investments and Note Receivable-Social Enterprise (Note 6) 45,615 - (45,615) - - Buildings and Equipment, Net of Accumulated Depreciation (Notes 7 and 10) 7,353,504 3,710-7,357,214 4,515,968 Total Assets $ 12,823,808 $ 300,262 $ (141,372) $ 12,982,698 $ 12,083,917 Liabilities and Net Assets Accounts Payable and Accrued Expenses $ 744,485 $ 289,262 $ (130,372) $ 903,375 $ 739,210 Accrued Pension Liability (Note 15) 1,293, ,293, ,912 Deferred Revenues 1,019, ,019, ,812 Notes Payable (Note 10) 1,009, ,009,265 1,100,084 Total Liabilities $ 4,066,568 $ 289,262 $ (130,372) $ 4,225,458 $ 3,449,018 Commitments (Notes 10, 13 and 15) Net Assets and Owner's Equity Unrestricted $ 6,928,426 $ - $ - $ 6,928,426 $ 4,632,464 Temporarily Restricted (Note 12) 1,828,814 1,828,814 $ 4,002,435 Capital Stock and Paid in Capital $ 10,000 $ (10,000) - Retained Earnings 1,000 (1,000) - - Total Net Assets $ 8,757,240 $ 11,000 $ (11,000) $ 8,757,240 $ 8,634,899 Total Liabilities and Net Assets $ 12,823,808 $ 300,262 $ (141,372) $ 12,982,698 $ 12,083,917 - The Notes to Financial Statements are an integral part of these statements. 14

17 Consolidating Statement of Activities and Changes in Net Assets September 30, 2012 and SVDP 2011 SVDP Enterprises Eliminating Total Total Public Support Contributions and Grants $ 2,182,410 $ - $ - $ 2,182,410 $ 2,197,170 Government Grants 9,543, ,543,773 8,678,155 Donated Food, Clothing and Services 4,414, ,414,663 3,556,042 Fundraising Events, Net (Note 9) 123, ,448 - Total Public Support $ 16,264,294 $ - $ - $ 16,264,294 $ 14,431,367 Other Revenue Program Income and Sales $ 589,855 $ 1,482,978 $ (893,462) $ 1,179,371 $ 537,150 Investment Income 1, ,889 13,201 Unrealized Gain or (Loss) in Fair Value of Investments Miscellaneous 99,713 - (84,000) 15,713 13,238 Net Assets Released from Restriction (Note 12) 2,725, ,725, ,948 Total Other Revenue $ 3,416,711 $ 1,482,978 $ (977,462) $ 3,922,227 $ 1,230,537 Expenses Total Support and Revenue $ 19,681,005 $ 1,482,978 $ (977,462) $ 20,186,521 $ 15,661,904 Program Services $ 16,045,389 $ 1,370,930 $ (893,462) $ 16,522,857 $ 14,374,698 Administrative Services: Management and General 31,674 84,680 (84,000) 32, ,989 Fund Development 513, , ,078 Total Direct Expenses $ 16,590,376 $ 1,455,610 $ (977,462) $ 17,068,524 $ 14,960,765 Excess of Revenues Over Direct Expenses $ 3,090,629 $ - $ - $ 3,090,629 $ 701,139 Unfunded Pension Liability (641,206) - - (641,206) 414,502 Social Enterprise Net Activity 27,368 (27,368) - - Depreciation (271,648) - - (271,648) (263,421) Changes in Unrestricted Net Assets $ 2,205,143 $ 27,368 $ (27,368) $ 2,205,143 $ 852,220 Changes in Temporarily Restricted Net Assets Contributions and Other 551, , ,781 Net Assets Released from Restrictions (2,725,254) - - (2,725,254) (666,948) Change in Net Assets, Before Extraordinary Item $ 31,522 $ 27,368 $ (27,368) $ 31,522 $ 1,091,053 Gain from Forgiveness of Debt (Note 10) 90, , ,585 Change in Net Assets, After Extraordinary Item $ 122,341 $ 27,368 $ (27,368) $ 122,341 $ 1,363,638 Net Assets, Beginning of Year 8,634,899 (26,368) 26,368 8,634,899 7,271,261 Net Assets, End of Year $ 8,757,240 $ 1,000 $ (1,000) $ 8,757,240 $ 8,634,899 The Notes to Financial Statements are an integral part of these statements. 15

18 St. Vincent de Paul of Baltimore, Inc. Stand Alone Statement of Financial Position September 30, 2012 and 2011 Assets Cash and Cash Equivalents $ 603,911 $ 1,115,512 Accounts Receivable 1,609,643 1,942,985 Pledges Receivable (Note 3) 1,702,540 2,600,038 Investments (Note 4 and 5) 1,437,092 1,820,691 Security Deposit and Prepaid Expenses 71,503 18,449 Investments and Note Receivable-Social Enterprise (Note 6) 45,615 20,467 Buildings and Equipment, Net of Accumulated Depreciation (Notes 7 and 10) 7,353,504 4,507,998 Total Assets $ 12,823,808 $ 12,026,140 Liabilities and Net Assets Accounts Payable and Accrued Expenses $ 744,485 $ 681,433 Accrued Pension Liability (Note 15) 1,293, ,912 Deferred Revenues 1,019, ,812 Notes Payable (Note 10) 1,009,265 1,100,084 Total Liabilities $ 4,066,568 $ 3,391,241 Commitments (Notes 10, 13 and 15) Net Assets Unrestricted $ 6,928,426 $ 4,632,464 Temporarily Restricted (Note 12) 1,828,814 4,002,435 Total Net Assets $ 8,757,240 $ 8,634,899 Total Liabilities and Net Assets $ 12,823,808 $ 12,026,140 The Notes to Financial Statements are an integral part of these statements. 16

19 Stand Alone Statement of Activities and Changes in Net Assets September 30, 2012 and 2011 Temporarily Unrestricted Restricted Total Total Public Support Contributions and Grants $ 2,182,410 $ 551,482 $ 2,733,892 $ 3,102,951 Government Grants 9,951,194-9,951,194 8,678,155 Donated Food, Clothing and Services 4,007,242-4,007,242 3,556,042 Fundraising Events, Net (Note 9) 123, ,448 - Total Public Support $ 16,264,294 $ 551,482 $ 16,815,776 $ 15,337,148 Other Revenue Program Income and Sales $ 589,855 $ - $ 589,855 $ 532,906 Investment Income 1, ,040 13,201 Miscellaneous 99,713-99,713 45,230 Net Assets Released from Restriction (Note 12) 2,725,254 (2,725,254) - - Total Other Revenue $ 3,416,711 $ (2,725,103) $ 691,608 $ 591,337 Expenses Total Support and Revenue $ 19,681,005 $ (2,173,621) $ 17,507,384 $ 15,928,485 Program Services $ 16,045,389 $ - $ 16,045,389 $ 13,970,867 Administrative Services: Management and General 31,674-31, ,289 Fund Development 513, , ,066 Total Direct Expenses $ 16,590,376 $ - $ 16,590,376 $ 14,382,222 Excess of Revenues Over Direct Expenses $ 3,090,629 $ (2,173,621) $ 917,008 $ 1,546,263 Unfunded Pension Liability (641,206) - (641,206) (369,461) Net Operating Loss from Social Enterprises 27,368-27,368 (7,801) Depreciation (271,648) - (271,648) (281,925) Change in Net Assets, Before Extraordinary Item $ 2,205,143 $ (2,173,621) $ 31,522 $ 887,076 Gain from Forgiveness of Debt (Note 10) 90,819-90,819 22,585 Change in Net Assets, After Extraordinary Item $ 2,295,962 $ (2,173,621) $ 122,341 $ 909,661 Net Assets, Beginning of Year 4,632,464 4,002,435 8,634,899 6,849,222 Net Assets, End of Year $ 6,928,426 $ 1,828,814 $ 8,757,240 $ 7,758,883 The Notes to Financial Statements are an integral part of these statements. 17

20 St. Vincent de Paul of Baltimore, Inc. Stand-Alone Schedule of Functional Expense September 30, 2012 and 2011 Program Services Administrative Services Homeless Services & Child and Management Supportive Family Workforce Emergency and Fund Housing Services Development Assistance General Development Total Total Expenses Salaries $ 1,119,602 $ 4,096,374 $ 265,950 $ 215,546 $ 517,216 $ 217,558 $ 6,432,246 $ 4,980,000 Employee Benefits 263, ,348 68,279 35, ,378 58,440 1,482,465 1,653,873 Professional Fees 64, ,830 22,273 51, ,566 18,140 1,180, ,390 Supplies 112, ,532 24,490 10,271 10,974 19, , ,910 Telephone 13,630 43,487 2,978 3,951 2,924 1,973 68,943 51,846 Printing and Postage 9,231 63,818 2,238 4,783 27, , , ,592 Occupancy 768, ,223 23,109 79,239 98,090 15,089 1,547,877 1,986,996 Insurance 23,509 28,514 13,006 10,235 1,766 1,478 78, ,921 Transportation 5,071 79,920 1,678 51, , ,108 Conference Costs 8,072 69, ,915 33,212 2, ,935 84,494 WClient Assistance 212,655-9, , , ,247 Miscellaneous 8,894 55,846 3,520 8,654 70,908 10, , ,527 Total $ 2,608,629 $ 7,113,875 $ 437,835 $ 943,795 $ 1,009,445 $ 469,555 $ 12,583,134 $ 11,413,904 Indirect Costs 188, ,545 40,984 44,339 (977,771) 43, Total Program Expenses $ 2,796,774 $ 7,774,420 $ 478,819 $ 988,134 $ 31,674 $ 513,313 $ 12,583,134 $ 11,413,904 Donated Food and Services 902,772 1,831,584 49,346 1,223, ,007,242 3,556,042 Total Direct Expenses $ 3,699,546 $ 9,606,004 $ 528,165 $ 2,211,674 $ 31,674 $ 513,313 $ 16,590,376 $ 14,969,946 The Notes to Financial Statements are an integral part of these statements. 18