WILMINGTON DOWNTOWN, INC. Financial Statements For the Year Ended June 30, 2010 (With Comparative Totals for 2009)

Transcription

1 Financial Statements For the Year Ended June 30, 2010 (With Comparative Totals for 2009)

2 INDEPENDENT AUDITOR'S REPORT Board of Directors Wilmington Downtown, Inc. Wilmington, North Carolina We have audited the accompanying statement of financial position of Wilmington Downtown, Inc. (a nonprofit organization) as of June 30, 2010, and the related statements of activities, functional expenses, and cash flows for the year 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 comparative information has been derived from Wilmington Downtown, Inc. s 2009 financial statements and, in our report dated November 3, 2009, 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 Wilmington Downtown, Inc. as of June 30, 2010, 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. Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental budget to actual schedule presented in Schedule I on page 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for that portion marked unaudited on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial statements referred to above and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. Wilmington, North Carolina August 17, 2010 Mail: PO Box 410, Wrightsville Beach, NC Office: 710 Military Cutoff Rd., Ste. 250, Wilmington, NC Telephone: Fax:

3 STATEMENT OF FINANCIAL POSITION Assets as of June 30, 2010 Permanently 2009 Temporarily Restricted Comparative Unrestricted Restricted Loan Program Total Total Cash $ 35,767 $ - $ - $ 35,767 $ 45,369 Accounts receivable, net (Note 7) 6,878-6,497 13,375 7,129 Prepaids 11, ,350 7,825 Total Current Assets 53,995-6,497 60,492 60,323 Loan program investments (Note 5) , , ,382 Property and equipment 29, ,610 38,447 Less: accumulated depreciation (23,328) - - (23,328) (30,321) Property & Equipment, net 6, ,282 8,126 Total Assets $ 60,277 $ - $ 604,290 $ 664,567 $ 669,831 Liabilities Payroll and other payables $ 13,502 $ - $ - $ 13,502 $ 13,398 Agency payable-signs (Note 4) 10, ,023 10,204 Total Liabilities 23, ,525 23,602 Net Assets Permanently restricted , , ,290 Temporarily restricted Board designated 11, ,778 11,778 Unrestricted 24, ,974 30,161 Total Net Assets 36, , , ,229 Total Liabilities and Net Assets $ 60,277 $ - $ 604,290 $ 664,567 $ 669,831 The Accompanying Notes are an Integral Part of the Financial Statements - 2 -

4 STATEMENT OF ACTIVITIES For the Years Ended June 30, 2010 Permanently 2009 Temporarily Restricted Comparative Unrestricted Restricted Loan Program Total Total Support and Revenue Contributions $ 4,915 $ 500 $ - $ 5,415 $ 3,600 Fund-raising events, net (Note 6) 60, ,119 82,210 In kind contributions ,600 Miscellaneous 1, , , ,684 90,475 Grants from governmental units: City of Wilmington: - Operations - 60,979-60,979 60,979 New Hanover County - 21,086-21,086 21,086-82,065-82,065 82,065 - Assets released from restriction 82,565 (82,565) Interest income 19, ,120 22,311 Total Support and Revenue 167, , ,851 Expenses Program 126, , ,732 Administrative and general 31, ,155 31,361 Fund raising 15, ,067 18,781 Total Expenses 173, , ,874 Change in Net Assets (5,187) - - (5,187) 9,977 Net Assets: Beginning of Year 41, , , ,252 End of Year $ 36,752 $ - $ 604,290 $ 641,042 $ 646,229 The Accompanying Notes are an Integral Part of the Financial Statements - 3 -

5 STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, Administrative Fund Comparative Program and General Raising Total Total Salaries $ 68,030 $ 7,193 $ 13,081 $ 88,304 $ 98,541 Payroll taxes 5, ,001 6,822 7,758 Employee insurance and benefits 5, ,850 6,375 Total compensation 78,581 8,328 15, , ,674 Development & promotion 16, ,136 5,746 Dues & subscriptions - 3,709-3,709 2,651 Audit & legal 4, ,600 3,750 Office supplies & postage 2,139 2,139-4,278 3,214 Rent 9,000 9,000-18,000 18,000 Other office 4,349 4,348-8,697 12,306 Telephone 2,343 2,343-4,686 4,632 Contract labor 5, ,185 4,568 Miscellaneous ,065 In kind ,600 Bad debt - operating 2, ,860 6,150 46,964 21,539-68,503 69,682 Total operating expenses 125,545 29,867 15, , ,356 Depreciation 1,289 1,288-2,577 2,518 Total $ 126,834 $ 31,155 $ 15,067 $ 173,056 $ 184,874 The Accompanying Notes are an Integral Part of the Financial Statements - 4 -

6 Cash Flows from Operating Activities Change in Net Assets (5,187) STATEMENT OF CASH FLOWS For the Year Ended June 30, 2010 Permanently 2009 Temporarily Restricted Comparative Unrestricted Restricted Loan Program Total Total $ $ - $ - $ (5,187) $ 9,977 Adjustments to reconcile to net cash provided by operating activities: Depreciation 2, ,577 2,518 Bad debt 2, ,860 6,150 Changes in assets and liabilities: (Increase) decrease in: Receivables & prepaids (9,042) - (9,042) (7,185) Increase (decrease) in: Accounts payable and other accruals (77) - - (77) (10,823) Net Cash Provided by (Used in) Operations (8,869) - - (8,869) 637 Cash Flows Used In Investing Activities Property and equipment additions (733) - - (733) (534) Cash Flows from Financing Activities Net Increase (Decrease) in Cash (9,602) - - (9,602) 103 Cash Beginning of the year 45, ,369 45,266 End of the year $ 35,767 $ - $ - $ 35,767 $ 45,369 Interest Paid - - The Accompanying Notes are an Integral Part of the Financial Statements - 5 -

7 NOTES TO FINANCIAL STATEMENTS June 30, ORGANIZATION Wilmington Downtown, Inc. was established in 1977 as a nonprofit corporation. Wilmington Downtown, Inc. s mission is to establish Wilmington, North Carolina as the region s economic, cultural and governmental center. It also facilitates and coordinates activities to enhance the quality of life for people who live, work, play, and visit this historic central river area. The Organization receives a substantial amount of its support from the City of Wilmington and New Hanover County. A significant reduction in the level of this support, if this were to occur, would have a significant effect on the Organization's programs and activities. Current agreements are scheduled for renewal in June Wilmington Downtown, Inc. qualifies under Internal Revenue Code Sec. 501(c) (3) as an organization exempt from income taxation. Accordingly, income related to its exempt purpose is not subject to income tax and contributions may be deductible by donors. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Wilmington Downtown, Inc. have been prepared on the accrual basis. Income is recognized when earned and expenses are recognized when incurred. Accordingly, revenue from fund-raising events is recognized when the event is held. The significant accounting policies are described below to enhance the usefulness of the financial statements to the reader. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates

8 Classes of Net Assets The financial statements report amounts separately by class of net assets. a) Unrestricted amounts are those resources currently available at the discretion of the board for use in the organization's operations and invested in equipment. b) Temporarily restricted amounts are those resources stipulated by donors for specific operating purposes or for the acquisition of equipment. c) Board Designated includes cash and equivalents designated by the Board of Directors for future operations or contingencies. d) Permanently restricted loan amounts are resources available for collateral to qualified borrowers for renovation loans. Should the Organization cease operations, these net assets would revert back to the City of Wilmington. (See Note 5) Cash and Cash Equivalents Cash and cash equivalents consist of cash held in checking, savings, and money market accounts and certificates of deposits with original maturities of less than 90 days. Revenues and Expenses Cash Petty cash $ 51 $ 51 Operations checking 3,349 25,422 Sign checking 5,841 5,186 Table host savings Board designated 25th CD 25,670 11,778 Loan program CD interest - 2,076 Total Cash $ 35,767 $ 45,369 All contributions are recognized when cash or ownership of donated assets is unconditionally promised to the organization. Temporarily restricted contributions are released to the unrestricted fund when expenses have been incurred in satisfaction of those restrictions. The organization reports gifts of land, buildings, and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are recorded as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, the organization reports expirations of donor restrictions when the donated or acquired longlived assets are placed in service

9 Allocation of Expenses The costs of providing the various programs and supporting activities of the organization have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program and supporting activities using objective bases such as time spent. Property Expenditures for the acquisition of equipment are capitalized at cost. The fair value of donated furniture and equipment is similarly capitalized. Depreciation is provided over the estimated useful lives of the assets using accelerated methods. Fixed assets consisted of the following at 2010: Accumulated Net Property Cost Depreciation 2010 Equipment $ 15,992 $ (12,986) $ 3,006 Furniture & fixtures 3,667 (3,667) - Dock 9,951 (6,675) 3,276 Total Property $ 29,610 $ (23,328) $ 6,282 Contributed Services A substantial number of volunteers have donated significant amounts of their time to the Center s program and supporting services. Most amounts have not been recognized in the accompanying statement of changes in net assets because the criteria for recognition of such volunteer efforts under GAAP have not been satisfied. In-kind donations of operating materials of $0 in 2010 and $4,600 in 2009, met the criteria and were recorded. Prior Year 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 in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the organization s financial statements for the year then ended, from which the summarized information was derived. Certain reclassifications of prior year comparative amounts have been made in order to conform to the current year presentation. Subsequent Events Wilmington Downtown, Inc. has evaluated its subsequent events (events occurring after June 30, 2010) through August 17, 2010, which represents the date the financial statements were issued

10 3. LEASE AGREEMENT Wilmington Downtown, Inc. leases its offices at Chandler s Wharf, 225 S. Water Street. The monthly rent is $1,500 and includes utilities except telephone. The lease is a 12 month lease up for renewal on December 31, AGENCY PAYABLES Wilmington Downtown, Inc. collects amounts from Wilmington merchants to facilitate sharing of costs on a sign project. Since the amount collected is contracted for specific expenditures, related activity is handled through agency liability accounts rather than operating revenues and expenses of Wilmington Downtown, Inc. 5. LOAN PROGRAM Wilmington Downtown, Inc. has received $604,290 from the City of Wilmington since 2004 for a continuing loan program to provide renovation loans to property owners in the central business district of Wilmington. Under the program, grant funds are invested in a certificate of deposit held in First Citizens Bank which serves as collateral for qualified loans made and serviced by First Citizens. Interest earned on the accounts can be used for operating purposes. Wilmington Downtown, Inc. is ultimately responsible for collection of any outstanding loan balance. As of June 30, 2010, nine Mixed Use Rehabilitation Loans totaling $211,712, were collateralized by the certificates of deposit

11 6. FUND-RAISING EVENTS A summary of activities in fundraising is as follows: 2010 Table Host Night in Summer Concert Event Vegas Series & Other Total Revenue $ 20,345 $ 19,029 $ 128,998 $ 168,372 Less: Direct Expenses (6,108) (19,743) (82,402) (108,253) Total $ 14,237 $ (714) $ 46,596 $ 60, Table Host Night in Summer Concert Event Vegas Series & Other Total Revenue $ 38,164 $ 27,974 $ 115,001 $ 181,139 Less: Direct Expenses (6,600) (24,108) (68,221) (98,929) Total $ 31,564 $ 3,866 $ 46,780 $ 82, ACCOUNTS RECEIVABLE Wilmington Downtown, Inc. records receivables for fundraising activities when confirmations are received and invoiced for each event. Management reviews accounts receivable and as appropriate, provides an allowance for doubtful accounts over 120 days past due. At June 30, 2010 and 2009 the balance of accounts receivable and the allowance for doubtful accounts were as follows: Accounts receivable - contributions $ 13,925 $ 8,675 Accounts receivable - loan program 6,547 2,908 Allowance for doubtful accounts (8,500) (5,500) $ 11,972 $ 6,083 Sales tax receivable and other 1,403 1,046 Total $ 13,375 $ 7,

12 ACTUAL VERSUS BUDGET - operating For the Year Ended June 30, 2010 Support and Revenue City of Wilmington - Operations 60,979 Favorable (Unfavorable) Actual Budget Variance (unaudited) $ $ 60,000 $ 979 New Hanover County 21,086 20,000 1,086 Private contributions & fund raising, net 66,684 98,770 (32,086) Other 19,120 20,000 (880) Total Support and Revenue 167, ,770 (30,901) Operating Expenses Salaries 88,304 99,000 10,696 Payroll taxes 6,822 9,500 2,678 Employee benefits 6,850 9,000 2,150 Development and promotion 16,136 24,500 8,364 Dues and subscriptions 3,709 3,000 (709) Audit & legal 4,600 4,000 (600) Office supplies and postage 4,278 4,270 (8) Rent 18,000 18,000 - Other office 11,274 10,750 (524) Telephone 4,686 5, Contract labor 5,185 6, Miscellaneous 352 5,750 5,398 Bad debt - operating 2,860 - (2,860) Total Operating Expenses 173, ,770 25,714 Operating Profit (Loss) Before Depreciation $ (5,187) $ - $ (5,187) Schedule 1