National Council on Aging, Inc. & Affiliates

Transcription

1 NATIONAL COUNCIL ON AGING, INC. & AFFILIATES Audited Consolidated Financial Statements June 30, 2010 and

2 Contents Independent Auditor s Report 1 Audited Consolidated Financial Statements Consolidated Statements of Financial Position 2 Consolidated Statements of Activities and Changes in Net Assets 3 Consolidated Statements of Cash Flows

3 Independent Auditor s Report Board of Directors National Council on Aging, Inc. and Affiliates Washington, D.C. We have audited the accompanying Consolidated Statements of Financial Position of National Council on Aging, Inc. and Affiliates as of June 30, 2010 and 2009, and the related Consolidated Statements of Activities and Changes in Net Assets and Cash Flows for the years then ended. These consolidated financial statements are the responsibility of the National Council on Aging, Inc. and Affiliates management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. 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 National Council on Aging, Inc. and Affiliates internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of National Council on Aging, Inc. and Affiliates as of June 30, 2010 and 2009, and the consolidated changes in their net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. As more fully described in notes 2 and 3, the financial statements include investments valued at approximately $2,340,000 (28.5% of net assets) at June 30, 2010, and $2,260,000 (30.4% of net assets) at June 30, 2009, whose fair values have been estimated by management in the absence of readily determinable fair values. Management s estimates are based on information provided by the investment fund managers. Rockville, Maryland March 7,

4 Consolidated Statements of Financial Position June 30, Assets Cash and cash equivalents $ 1,191,236 $ 1,680,927 Cash restricted for grants and contracts 440, ,160 Investments 3,475,992 3,995,032 Grants and contributions receivable, net 6,004,394 4,606,063 Amounts due from subgrantees and federal agencies 3,478,518 2,430,731 Other receivables 459, ,665 Prepaid expenses and other assets 478, ,132 Property and equipment, net 724, ,672 Total assets $ 16,253,362 $ 14,784,382 Liabilities and Net Assets Liabilities Accounts payable and accrued expenses $ 5,114,125 $ 3,775,735 Deferred revenue 272, ,174 Accrued pension cost 2,500,136 2,747,204 Total liabilities 7,886,877 7,188,113 Net assets Unrestricted 1,349,116 1,324,289 Temporarily restricted 7,015,763 6,270,001 Retained earnings 1,606 1,979 Total net assets 8,366,485 7,596,269 Total liabilities and net assets $ 16,253,362 $ 14,784,382 The accompanying are an integral part of these financial statements

5 Consolidated Statements of Activities and Changes in Net Assets Years Ended June 30, Unrestricted activities Revenue and other support Government grants and contracts $ 49,841,021 $ 38,980,700 Foundation and corporate grants and contracts 1,902,676 1,169,910 Contributions 1,078,725 1,232,116 Membership services and conferences 446, ,398 Investment income 52, ,685 Other revenue 156, ,500 Net assets released from restrictions 5,042,129 6,886,070 Total unrestricted revenue and other support 58,520,622 49,138,379 Expenses Program services Workforce development 43,756,636 33,926,051 Access to benefits 2,474,651 3,539,979 Healthy aging programs 2,936,679 3,663,280 Civic engagement 1,710,336 2,768,822 Shared services 1,869,459 1,609,392 Long-term services & support 1,562, ,278 Public policy and advocacy 958, ,579 Innovations & incubator programs 61, ,286 Healthy aging social enterprises 429, ,392 Total program services 55,760,275 46,764,059 Supporting services Management and general 2,543,340 2,119,318 Fundraising 274,572 29,430 Total expenses 58,578,187 48,912,807 Change in unrestricted net assets before pension related charges (57,565) 225,572 Pension-related charges other than net periodic cost 82,019 (1,055,740) Change in unrestricted net assets 24,454 (830,168) Temporarily restricted activities Contributions 5,787,891 3,438,531 Net assets released from restriction (5,042,129) (6,886,070) Change in temporarily restricted net assets 745,762 (3,447,539) Change in net assets 770,216 (4,277,707) Net assets, beginning of year 7,596,269 11,873,976 Net assets, end of year $ 8,366,485 $ 7,596,269 The accompanying are an integral part of these financial statements

6 Consolidated Statements of Cash Flows Years Ended June 30, Cash flows from operating activities Change in net assets $ 770,216 $ (4,277,707) Adjustments to reconcile change in net assets to net cash used in operating activities Depreciation and amortization 110, ,595 Change in present value discount of receivables (30,329) (206,238) Provision for bad debts 30,000 - (Increase) decrease in Cash restricted for grants and contracts (71,573) (222,146) Grants and contributions receivable (1,398,002) 4,132,627 Amounts due from subgrantees and federal agencies (1,047,787) (201,708) Other receivables (142,424) (304,918) Prepaid expenses and other assets 129,519 (175,962) Increase (decrease) in Accounts payable and accrued expenses 1,338,390 (511,925) Deferred revenue (392,558) 79,321 Accrued pension cost (247,068) 959,562 Net cash used in operating activities (950,953) (604,499) Cash flows from investing activities Proceeds from sale of investments 623,123 1,972,225 Purchases of investments (104,083) (226,156) Purchases of property and equipment (57,778) (15,948) Net cash provided by investing activities 461,262 1,730,121 Net change in cash and cash equivalents (489,691) 1,125,622 Cash and cash equivalents, beginning of year 1,680, ,305 Cash and cash equivalents, end of year $ 1,191,236 $ 1,680,927 The accompanying are an integral part of these financial statements

7 1. Organization and significant accounting policies These consolidated financial statements include the accounts of National Council on Aging, Inc. (NCOA), the National Council on Aging Foundation, Inc. (the Foundation) and the National Council on Aging Development Corporation (the Corporation), herein referred to collectively as NCOA and its affiliates. NCOA s affiliates are controlled by essentially the same management and Board of Directors (the Board). NCOA was established in 1950 as a service and advocacy organization. NCOA is a national voice for older adults, especially those who are vulnerable and disadvantaged and the community organizations that serve them. NCOA brings together non-profit organizations, businesses and government to develop creative solutions that improve the lives of all older adults. NCOA works with thousands of organizations across the country to help seniors live independently, find jobs and benefits, improve their health, and remain active in their communities. The Foundation is a related nonprofit affiliate formed in 1992 to conduct certain programs of NCOA. The Corporation is a taxable subsidiary formed in 1995 to develop commercial computer applications and opportunities consistent with and growing out of the work of NCOA. NCOA and its affiliates serve as a national contractor to assist lower-income, older persons secure employment through the Senior Communities Service Employment Program (SCSEP) authorized under Title V of the Older Americans Act. Under the SCSEP, NCOA and its affiliates also trains subcontractors to help place older persons in part-time, subsidized jobs. The subcontractors also focus on improving the job skills of senior citizens with the intent of moving the individual to permanent, unsubsidized employment. NCOA and its affiliates operates the SCSEP through agencies in approximately 35 communities, with NCOA-run operations in California, New Jersey, Pennsylvania, Virginia, West Virginia, and Tennessee. NCOA also serves as a national resource for information, training, technical assistance, advocacy and research on various aspects of aging. NCOA s largest source of funding is provided through various contracts with the Department of Labor (DOL) under Title V of the Older Americans Act. In fiscal years 2010 and 2009, funding from the DOL contracts approximated 70% and 64% of NCOA s unrestricted revenue, respectively. The annual contract s funding normally expires each June 30 but is often extended a few months into the next fiscal year. During fiscal years 2009 and 2010 two additional allotments of funds for this program were provided through the American Recovery and Reinvestment Act of 2009 (ARRA or stimulus ) and the Consolidated Appropriations Act of The ARRA funding provided an add-on contract to NCOA of nearly $7 million to service additional slots for the period March 2009 through June The Appropriations Act funding provided an additional $15 million to service more slots for the period February 2010 through June The annual SCSEP award (approximately $34 million for fiscal year 2011) is renewable and expected to continue, but both of the add-on awards will end when those special legislative authorizations expire

8 1. Organization and significant accounting policies (continued) NCOA also receives revenue from other government agencies including, but not limited to, the Department of Health and Human Services, the Environmental Protection Agency and the Department of Housing and Urban Development. Funding from these government agencies supports other aging-related programs and initiatives. Other sources of revenue include private and corporate grants, contracts and contributions, non-federal government grants and contracts, conferences and seminars, membership services, publication sales, and earnings on investments. Basis of accounting: The consolidated financial statements of NCOA and its affiliates are prepared on the accrual basis of accounting. Revenue is recognized when earned and expenses are recognized when obligations are incurred. All significant inter-company transactions have been eliminated during consolidation. Income taxes: NCOA and the Foundation are exempt from the payment of income taxes under Section 501(c)(3) and 501(c)(2), respectively, of the Internal Revenue Code. As such, NCOA and the Foundation are taxed only on their unrelated business income. No provision for income taxes was required for fiscal years 2010 and NCOA is classified as other than a private foundation by the Internal Revenue Service. The Corporation is a for-profit entity which had no significant income or loss for the fiscal years ended June 30, 2010 and Uncertainties in income taxes: NCOA and its affiliates evaluate uncertainty in income tax positions based on a more-likely-than-not recognition standard, effective July 1, 2009, with adoption of ASC If that threshold is met, the tax position is then measured at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. Prior to July 1, 2009, NCOA and its affiliates evaluated uncertain tax positions such that the effects of tax positions were generally recognized in the financial statements consistent with amounts reflected in returns filed, or expected to be filed, with taxing authorities. As of June 30, 2010, NCOA and its affiliates have evaluated its material tax positions and determined that no accruals for uncertain tax positions are required on NCOA and its affiliates financial statements. If applicable, NCOA and its affiliates record interest and penalties as a component of income tax expense. Tax years from 2007 through the current year remain open for examination by tax authorities Use of estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates

9 1. Organization and significant accounting policies (continued) Cash and cash equivalents: For consolidated financial statement purposes, NCOA and its affiliates considers all highly liquid, temporary investments purchased with an original maturity of three months or less, to be cash and cash equivalents. Additionally, cash and cash equivalents required to be held in a separate account are included in cash restricted for grants and contracts on the Consolidated Statements of Financial Position. NCOA and its affiliates maintain cash balances which may exceed federally insured limits. NCOA and its affiliates do not believe that this results in any significant risk. Investments: Investments consist primarily of money market funds and a FJC Agency loan fund. Money market funds are valued at cost which approximates fair value. The FJC Agency Loan Fund is a diversified portfolio of direct loans made to non-profit organizations and investments and is stated as fair value as discussed in Note 3. Fair value: NCOA and its affiliates value certain investments at fair value in accordance with a three-tier fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the entity to develop its own assumptions. A financial instrument s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement

10 1. Organization and significant accounting policies (continued) Grants and contributions receivable: Grants and contributions receivable represent unconditional promises to give and are recorded in the financial statements at the time the promises are made. Grants and contributions receivable, less an appropriate allowance, are recorded at their estimated fair value. The allowance for doubtful accounts reflects the best estimate of probable losses determined principally on the basis of historical experience. Amounts due more than one year later are recorded at the present value of the estimated future cash flows, discounted at rates applicable to the years in which the promises were received, which was 4.98% for both June 30, 2010 and Amortization of the discount is included in contribution revenue. Amounts due from subgrantees and federal agencies: These receivables consist of billed and unbilled receivables. Certain subgrantees receive cash advances on their contracted services. A receivable is recorded if the total amount of expenses incurred to date is less than the amount paid to the subgrantee. The allowance for doubtful accounts reflects the best estimate of probable losses determined principally on the basis of historical experience. All receivables are deemed by management to be fully collectible as of June 30, 2010 and Property and equipment: NCOA and its affiliates capitalized all acquisitions of property and equipment greater than $5,000. Property and equipment are carried at cost. Depreciation and amortization are computed using the straight-line method over estimated service lives of three to eight years for office furniture, computers, equipment and software. Amortization of leasehold improvements is computed over the shorter of the life of the lease or the useful life of the asset. Deferred revenue: Deferred revenue consists of cash received in advance of the provision of services for grants and contracts. Net assets: The net assets, revenues, expenses, gains and losses of NCOA and its affiliates are classified based on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of NCOA and its affiliates and changes therein are classified and reported as follows: Unrestricted: Net assets that are not subject to any donor-imposed stipulations or other legal limitations, and are therefore available for use in NCOA or the Foundation s general operations. Temporarily restricted: Net assets subject to donor-imposed stipulations on the use of the assets that may be met either by actions of NCOA or the Foundation or by the passage of time

11 1. Organization and significant accounting policies (continued) Revenue recognition: Revenue and expenses are recognized in the period in which services or benefits are provided or received. NCOA receives grants and enters into contracts with the U.S. Government, state and local governments, foundations, and corporations that primarily provide for cost reimbursement to NCOA. Revenue from these grants and contracts are deemed to be exchange transactions recognized as reimbursable expenditures are incurred. Contributions received by NCOA and the Foundation, which include unconditional promises to give (pledges), are recognized as revenue in the period received at their estimated fair value. Contributions are considered to be unrestricted unless specifically restricted by the donor. Contributions with donor-imposed restrictions that are met in the same reporting period as received are reported as unrestricted revenues. Contributions receivable are reported net of any estimated uncollectible amounts. Contributions expected to be collected beyond one year are discounted to present value. Conditional contributions are not recorded until material conditions have been met. Functional allocation of expenses: The costs of providing the various services and other activities have been summarized on a program basis in the consolidated statements of activities and changes in net assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Reclassifications: Certain 2009 balances have been reclassified to conform with the 2010 presentation. Subsequent events: Management has evaluated subsequent events for disclosure in these financial statements through March 7, 2011, which is the date the financial statements are available to be issued. 2. Investments Investments are recorded at fair value and money market funds are recorded at cost which approximates fair value. Investments consist of the following at June 30: FJC Agency Loan Fund $ 2,343,788 $ 2,261,238 Money market funds 1,132,204 1,733,794 Total investments $ 3,475,992 $ 3,995,032 Investment income was as follows for the years ended June 30: Interest, dividends, and realized gains $ 109,838 $ 162,205 Less: investment management fees (56,957) (31,520) Total investment income $ 52,881 $ 130,

12 3. Fair value The fair value of assets as of June 30 is as follows: Fair Value Measurements at Reporting Date Using: Quoted prices in active markets for identical assets (Level 1) Significant unobservable inputs (Level 3) 2010 Total FJC Agency Loan Fund $ 2,343,788 $ - $ 2,343,788 Money market funds 1,132,204 1,132,204 - Total $ 3,475,992 $ 1,132,204 $ 2,343, FJC Agency Loan Fund $ 2,261,238 $ - $ 2,261,238 Money market funds 1,733,794 1,733,794 - Total $ 3,995,032 $ 1,733,794 $ 2,261,238 The FJC Agency Loan Fund is an investment fund operated by FJC which is a public charity that provides total management of charitable giving. While typically operated as a donor advised fund, NCOA has chosen to maintain some of their investment funds with FJC to achieve investment returns and support the nonprofit community. The FJC Agency Loan Fund provides secured loans to credit qualified charitable organizations and also holds their own portfolio of investments. Amounts invested in the FJC Agency Loan Fund are valued based upon the internally calculated values of allocated underlying investments assigned to NCOA by the manager of the fund. As a result, the estimated fair value reported on the accompanying Consolidated Statements of Financial Position might differ from the values that would have been used had a ready market existed and there is at least a reasonable possibility that estimates may change by material amounts in the near term. NCOA measured changes in the fair value of investments valued using significant unobservable inputs (Level 3) for the years ended June 30 as follows: FJC Agency Loan Fund FJC Agency Loan Fund Beginning balance $ 2,261,238 $ 2,160,918 Total investment gain (realized & unrealized) 105, ,470 Purchases, sales, issuance, and settlements (23,046) (22,150) Ending balance $ 2,343,788 $ 2,261,

13 4. Grants and Grants and contributions receivable are as follows at June 30: contributions receivable Receivable in less than one year $ 4,768,038 $ 3,173,758 Receivable in one to five years 1,353,821 1,610,099 Contributions receivable, gross 6,121,859 4,783,857 Less discount to net present value (87,465) (117,794) Less allowance for uncollectible receivables (30,000) (60,000) Contributions receivable, net $ 6,004,394 $ 4,606, Property and equipment Property and equipment consisted of the following at June 30: Capitalized software $ 368,411 $ 368,411 Furniture and fixtures 174, ,360 Leasehold improvements 916, ,950 Office computers and equipment 232, ,485 1,691,984 1,634,206 Accumulated depreciation and amortization (967,197) (856,534) Property and equipment, net $ 724,787 $ 777,672 Depreciation and amortization expense for the years ended June 30, 2010 and 2009, was $110,663 and $124,595, respectively. 6. Employee benefits Pension Plan NCOA maintains a non-contributory defined benefit retirement plan covering fulltime salaried employees of NCOA hired before June 30, 2006, who were at least 21 years of age and have completed at least one year of employment, and have met certain minimum hour requirements. Benefits are based on years of service and final average earnings (highest average earnings during any 36 consecutive months out of the last 120 months of employment with NCOA and its affiliates). Plan participants fully vest at age 55 or after five years of service, whichever occurs first. Effective June 30, 2006, NCOA froze the accrual of additional benefits and no new participants were allowed. A measurement date of June 30 has been used. Authorized investments under the plan s investment policy consist of mutual funds with registered investment companies; pooled guaranteed investment contracts managed by outside fund managers and commingled funds. The plan s target asset allocation is 80% in equities (plus or minus 20%), 10% in fixed income investments (plus 15% or minus 10%) and 10% in cash-equivalent or money-market investments (plus or minus 10%). The plan s asset mix is reviewed quarterly and rebalanced as necessary

14 6. Employee benefits (continued) The following table sets forth the plan s funded status, the amounts recognized in NCOA s Consolidated Statements of Financial Position and the components of net pension cost at June 30: Accumulated benefit obligation $ 7,686,796 $ 7,326,050 Projected benefit obligation 7,686,796 7,326,050 Fair value of plan assets 5,186,660 4,578,846 Plan assets deficit in projected benefit obligation $ (2,500,136) $ (2,747,204) Accrued pension cost $ 2,500,136 $ 2,747,204 Assumptions used in the actuarial valuations were as follows: Discount rate 6.25% 6.75% Rate of increase in compensation N/A N/A Long-term rate of return on plan assets 7.5% 7.5% The following table details the net periodic pension cost, employer contributions and benefits paid for the years ended June 30: Net periodic pension cost $ 189,753 $ 30,639 Employer contribution $ 354,802 $ 126,510 Benefits paid $ 445,033 $ 388,820 NCOA s funding policy is to contribute annually based upon the actuarial cost method. Under the aggregate actuarial cost method, the scheduled contribution consists of the normal cost plus any additional amounts necessary to meet minimum funding requirements. Expected future plan disbursements for benefit payments are: Year Ending June 30, Amount 2011 $ 428, , , , , ,818,565 Total $ 5,196,

15 6. Employee benefits (continued) The changes in benefit obligations for the years ended June 30 are as follows: Benefit obligation, beginning of year $ 7,326,050 $ 7,510,355 Interest cost 472, ,051 Actuarial gain (35,356) (42,331) Benefit payments with interest (450,023) (401,457) (Gain) loss due to discount rate change 373,634 (190,568) Benefit obligation, end of year $ 7,686,796 $ 7,326,050 The changes in plan assets as of and for the years ended June 30 are as follows: Fair value of assets, beginning of year $ 4,578,846 $ 5,722,713 Actual return on assets 703,035 (881,557) Actual contributions 354, ,510 Benefits paid (445,033) (388,820) Benefit settlements (4,990) - Fair value of assets, end of year $ 5,186,660 $ 4,578,846 The components of net periodic benefit cost for the years ended June 30 are as follows: Interest cost $ 472,491 $ 450,051 Expected return on plan assets (341,301) (419,412) Amortization of net loss 58,563 - Net periodic benefit cost $ 189,753 $ 30,369 Weighted average assumptions used to determine net periodic benefit cost: Discount rate 6.75% 6.50% Expected long-term return on plan assets 7.50% 7.50% Rate of compensation increase N/A N/A Plan assets by category: Cash/short term account $ 132, % $ 559, % Certificate of deposit 101, % 200, % Equity investments 527, % - 0% Ishares bond fund 383, % - 0% Mutual funds bonds 2,330, % 226, % Mutual funds equities 1,245, % 3,108, % Mutual funds international 466, % 484, % Total plan assets $ 5,186, % $ 4,578, %

16 6. Employee Plan assets by fair value levels: benefits (continued) Quoted prices in active markets for identical assets (Level 1) Significant unobservable inputs (Level 3) June 30, 2010 Total Cash/short term account $ 132,851 $ 132,851 $ - Certificate of deposit 101, ,353 Equity investments 527, ,411 - Ishares bond fund 383, ,273 - Mutual funds bonds 2,330,415 2,330,415 - Mutual funds equities 1,245,235 1,245,235 - Mutual funds international 466, ,122 - Total plan assets $ 5,186,660 $ 5,085,307 $ 101,353 June 30, 2009 Cash/short term account $ 559,933 $ 559,933 $ - Certificate of deposit 200, ,000 Mutual funds bonds 226, ,534 - Mutual funds equities 3,108,214 3,108,214 - Mutual funds international 484, ,165 - Total plan assets $ 4,578,846 $ 4,378,846 $ 200,000 Level 2 fixed income values were developed utilizing current interest rates for certificates of deposit with similar maturity dates, discounting the future payments to present value at year end. 403(b) Retirement Savings Plan NCOA and its affiliates maintain a 403(b) retirement savings plan covering all employees. Assets of the Plan are held in trust by a third party retirement account custodian. Under the plan, employees may make elective salary-deferral contributions on a pre-tax basis. Additionally, NCOA makes discretionary employer contributions to eligible employees 403(b) accounts. Employer contributions have a required vesting period of two years from date of hire. NCOA and its affiliates made a discretionary employer contribution of 6% of salary to all eligible participants 403(b) accounts for the fiscal years ended June 30, 2010 and The associated retirement plan expense for this plan was $413,385 and $386,314 for the years ended June 30, 2010 and 2009, respectively

17 7. Temporarily restricted net As of June 30, temporarily restricted net assets are available for the following purposes: assets Workforce Development $ 525,315 $ - Access to Benefits $ 198,899 $ 449,279 Healthy Aging Programs 2,406,866 3,770,174 Civic Engagement 1,105,908 1,609,255 Shared Services - 156,903 Long-Term Services & Support 426,024 5,707 Public Policy and Advocacy 1,943, ,000 Innovations & Incubator Programs 71, ,683 Healthy Aging Social Enterprises 337,713 - Net temporarily restricted net assets $ 7,015,763 $ 6,270,001 For the years ended June 30, 2010 and 2009, temporarily restricted net asset releases by program were as follows: Workforce Development $ 465,786 $ - Access to Benefits $ 550,381 $ 2,053,984 Healthy Aging Programs 1,844,896 2,923,866 Civic Engagement 1,299,718 1,395,006 Shared Services 156, ,802 Long-Term Services & Support 128,309 10,000 Public Policy and Advocacy 335,884 - Innovations & Incubator Programs 66, ,412 Healthy Aging Social Enterprises 194,026 - Total $ 5,042,129 $ 6,886, Commitments and contingencies Operating leases: NCOA leases office space for its headquarters in Washington, DC under a non-cancelable lease expiring in December The lease provides for annual adjustments for rent and real estate taxes. There is a liability recorded for the incremental increase in rental payments in accrued expenses on the accompanying Consolidated Statements of Financial Position at June 30, 2010 and 2009, of $753,475 and $785,836, respectively. Future minimum rental payments under the operating leases are as follows: Year Ending June 30, Amount 2011 $ 891, , , , ,003,904 Thereafter 1,552,663 Total $ 6,308,

18 8. Commitments and contingencies (continued) In addition to the above lease, NCOA maintains office locations in various states. These offices support NCOA s SCSEP contract under the DOL grant. NCOA s lease payments under these leases are fully reimbursed by the DOL. NCOA s leases for these offices are generally cancelable in the event that the SCSEP contract is not renewed. Rent expense for all office leases was $1,043,502 and $1,058,944 for the years ended June 30, 2010 and 2009, respectively. Government Grants and Contracts: NCOA s contract with the DOL requires a 10% match of allowable expenses by NCOA or NCOA s subcontractors from nonfederal funds or in-kind contributions. NCOA has satisfied its matching commitment primarily from in-kind contributions provided by NCOA s subcontractors. NCOA receives funding or reimbursement from government agencies for various activities which are subject to audit by the awarding agencies