ROBINSON, FARMER, COX ASSOCIATES

Transcription

1 ROBINSON, FARMER, COX ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS A PROFESSIONAL LIMITED LIABILITY COMPANY Communication with Those Charged with Governance To The Board of Directors of Building Goodness Foundation We have audited the financial statements of Building Goodness Foundation for the year ended December 31, 2010, and have issued our report thereon dated June 24, Professional standards require that we provide you with the following information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated March 16, Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Building Goodness Foundation are described in Note 2 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during We noted no transactions entered into by Building Goodness Foundation during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were Management s estimate of the useful lives of fixed assets and the functional allocation of expenses. We evaluated the key factors and assumptions used to develop the useful life of fixed assets and the functional allocation of expenses in determining that the criteria used for those items are reasonable in relation to the financial statements taken as a whole. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole.

2 Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated June 24, Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a second opinion on certain situations. If a consultation involves application of an accounting principle to the Organization s financial statements or a determination of the type of auditor s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Organization s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the board of directors and management of Building Goodness Foundation and is not intended to be and should not be used by anyone other than these specified parties. Charlottesville, Virginia June 24, Communication with Those Charged with Governance -

3 CHARLOTTESVILLE, VIRGINIA FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2010 ROBINSON, FARMER, COX ASSOCIATES A PROFESSIONAL LIMITED LIABILITY COMPANY CERTIFIED PUBLIC ACCOUNTANTS CHARLOTTESVILLE RICHMOND FREDERICKSBURG VERONA CHRISTIANSBURG

4 CHARLOTTESVILLE, VIRGINIA FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2010 Table of Contents Page Independent Auditors Report... 1 Financial Statements: Statement of Financial Position... 2 Statement of Activities... 3 Statement of Cash Flows... 4 Statement of Functional Expenses... 5 Notes to Financial Statements Supplemental Information: Combining Schedule of Financial Position Combining Statement of Activities... 11

5 ROBINSON, FARMER, COX ASSOCIATES CERTIFIED PUBLIC ACCOUNTANTS A PROFESSIONAL LIMITED LIABILITY COMPANY INDEPENDENT AUDITORS REPORT BOARD OF DIRECTORS BUILDING GOODNESS FOUNDATION CHARLOTTESVILLE, VIRGINIA We have audited the accompanying statement of financial position of Building Goodness Foundation (a nonprofit organization), as of December 31, 2010, and the related statements of activities, cash flows, and functional expenses 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. 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 Building Goodness Foundation as of December 31, 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 basic financial statements taken as a whole. The supplemental information as listed in the table of contents is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Charlottesville, Virginia June 24,

6 - Financial Statements -

7 Statement of Financial Position At December 31, 2010 Assets Current assets: Cash and cash equivalents $ 676,849 Accounts receivable 1,221 Unconditional promises to give 500,000 Prepaid expenses 1,000 Total current assets $ 1,179,070 Equipment: Office equipment $ 8,356 Less: accumulated depreciation (8,356) Net equipment $ - Other assets: Unconditional promises to give - noncurrent $ 500,000 Total assets $ 1,679,070 Liabilities and Net Assets Current liabilities: Accounts payable $ 20,600 Payroll liabilities 10,153 Total liabilities $ 30,753 Net assets: Unrestricted $ 246,272 Temporarily restricted 1,381,962 Permanently restricted 20,083 Total net assets $ 1,648,317 Total liabilities and net assets $ 1,679,070 The accompanying notes to financial statements are an integral part of this statement. 2

8 Statement of Activities For the Year Ended December 31, 2010 Temporarily Permanently Unrestricted Restricted Restricted Total Revenues, gains and other support: Individual contributions $ 125,609 $ 1,139,926 $ - $ 1,265,535 Trip participation donations - 36,627-36,627 Foundation grants 24, , ,470 Governmental grants - 12,261-12,261 Corporate/Business contributions 77,299 11,311-88,610 Religious and community contributions 29,944 30,543-60,487 Gifts in kind 208,850 2, ,875 Program service income 2, ,530 Administrative service fees 11, ,000 Miscellaneous income Investment income Net assets released from restrictions 485,859 (485,859) - - Total revenues, gains and other support $ 966,687 $ 1,303,971 $ - $ 2,270,658 Expenses: Program $ 765,787 $ - $ - $ 765,787 Management and General 124, ,354 Fundraising 57, ,926 Total expenses $ 948,067 $ - $ - $ 948,067 Change in net assets $ 18,620 $ 1,303,971 $ - $ 1,322,591 Net assets at beginning of year 227,652 77,991 20, ,726 Net assets at end of year $ 246,272 $ 1,381,962 $ 20,083 $ 1,648,317 The accompanying notes to financial statements are an integral part of this statement. 3

9 Statement of Cash Flows For the Year Ended December 31, 2010 Cash flows from operating activities: Change in net assets $ 1,322,591 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: (Increase) decrease in assets: Accounts receivable 16,770 Contributions receivable 3,339 Unconditional promises to give (1,000,000) Prepaid expenses (969) Increase (decrease) in liabilities: Accounts payable 11,781 Accrued payroll (2,851) Payroll liabilities 3,948 Net cash provided by (used in) operating activities $ 354,609 Net increase (decrease) in cash and cash equivalents $ 354,609 Cash and cash equivalents at beginning of year 322,240 Cash and cash equivalents at end of year $ 676,849 The accompanying notes to financial statements are an integral part of this statement. 4

10 Statement of Functional Expenses For the Year Ended December 31, 2010 Management and Program General Fundraising Total Salaries and wages $ 132,478 $ 89,693 $ 13,799 $ 235,970 Payroll taxes 10,263 6,997 1,077 18,337 Gifts in kind 210, ,875 Dues and fees 1,783 1, ,403 Equipment purchases, maintenance and depreciation 1, ,386 Business insurance 11,250 2,323-13,573 Meetings and events 13,610-21,562 35,172 Miscellaneous expenses Occupancy expenses 6,221 2, ,127 Office supplies and expenses 4,487 2, ,819 Postage and shipping 2,358 1,488 2,302 6,148 Printing, copying and reproduction 6,714 4,307 4,307 15,328 Seminars and training 20, ,558 Professional services 10,438 10,439-20,877 Public education 5,775-13,732 19,507 Telephone/internet 1,741 1, ,112 Travel 17, ,594 Direct project expenses 308, ,283 Total $ 765,787 $ 124,354 $ 57,926 $ 948,067 The accompanying notes to financial statements are an integral part of this statement. 5

11 Notes to Financial Statements At December 31, 2010 NOTE 1 - NATURE OF ACTIVITIES: Building Goodness Foundation (BGF, the Organization) is a not-for-profit organization powered by skilled volunteers from the construction trades. BGF builds clinics, schools, shelters, and other structures for communities in need. The Organization builds for the local community of Charlottesville, Virginia, for impoverished and disaster-stricken areas such as the Gulf Coast, and developing countries like Haiti and Guatemala. Programs are supported primarily through contributions received from individuals, foundations, business, and religious organizations. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Accounting: The Organization s books are maintained and the accompanying financial statements are presented on the accrual basis of accounting. Financial Statement Presentation: Revenues, expenses, gains, and losses are classified based on existence or absence of donor-imposed restrictions. Accordingly, the net assets of the Organization and changes therein are classified and reported as follows: Unrestricted net assets - Net assets that are not subject to any donor-imposed stipulations. At December 31, 2010, the Organization had unrestricted net assets of $246,272. Temporarily restricted net assets - Net assets subject to donor-imposed restrictions on their use that may be met either by actions of the Organization or the passage of time. At December 31, 2010, the Organization had temporarily restricted net assets of $1,381,962. Permanently restricted net assets - Net assets subject to donor-imposed or other legal restrictions requiring that the principal be maintained permanently by the Organization. Generally, the donors permit the Organization to use all or part of the income earned for either general or donor-specific purposes. At December 31, 2010, the Organization had permanently restricted net assets of $20,083. Cash and Cash Equivalents: For the purposes of the statement of cash flows, the Organization considers demand deposits, money market funds held in banks, and all short-term investments purchased with a maturity of three months or less to be cash and cash equivalents. Receivables: Receivables are stated at the amount management expects to collect from outstanding balances. Management uses the direct write-off method for uncollectible accounts. Once management has determined that an account is uncollectible, receivables are charged to expenses. No bad debt expense was recorded for the year ended December 31, At December 31, 2010, there were no receivables greater than ninety days past due. 6

12 Notes to Financial Statements At December 31, 2010 (continued) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) Use of Estimates: The preparation of financial statements in conformity with U.S. 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. Equipment: The Organization follows the practice of capitalizing all expenditures for fixed assets with a cost of more than $2,000. Donated fixed assets are capitalized at their fair market value at the date of donation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which generally approximates five years for equipment and furniture. There was no depreciation expense for the year. Contributions and Grants: Contributions are recognized as revenues in the period received. Conditional contributions are recorded when the conditions have been met. Contributions are considered to be unrestricted unless specifically restricted by the donor. BGF reports contributions in the temporarily or permanently restricted net asset class if they are received with donor or grant stipulations as to their use. When a restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are released to unrestricted net assets in the statement of activities. Restricted contributions are not reported in the temporarily restricted net asset class if it is anticipated such restrictions will be met in the current reporting period. Income Taxes: Building Goodness Foundation is a not-for-profit organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code, and has been classified as an organization that is not a private foundation under Section 509(a)(3) of the Internal Revenue Code. Contributions to Building Goodness Foundation qualify as tax deductible charitable contributions to the extent provided by Section 170 of the Internal Revenue Code. Functional Allocation of Expenses: The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Unconditional Promises to Give: Contributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. 7

13 Notes to Financial Statements At December 31, 2010 (continued) NOTE 3 - FUNDRAISING EXPENSE: Fundraising expense for fiscal year ending December 31, 2010 was 57,926. NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS: Net assets were released from grantor restrictions by incurring expenditures satisfying the following restricted purposes: Mattaponi $ 200 Blue Moon fund 4,000 Local projects 4,796 Haiti Earthquake Recovery Fund 408,865 Building Goodness in April 66,711 Other restricted accounts 1,287 Total $ 485,859 At December 31, 2010, temporarily restricted net assets are available for the following purposes: Scholarship funds $ 3,730 Pearlington project fund 1,700 Wardle Family Foundation for Villa Soleada 2,596 Mattaponi 4,400 Blue Moon fund 554 Local projects 7,454 Haiti Earthquake Recovery Fund 1,303,665 Building Goodness in April 56,800 Other restricted accounts 1,063 Total temporarily restricted net assets $ 1,381,962 NOTE 5 - PERMANENTLY RESTRICTED NET ASSETS: In January 2004, the Building Goodness Foundation received a donation of $20,083 for the purpose of establishing a scholarship fund. The income from this contribution is to be used to provide scholarships to BGF skilled craftspeople and participants who might not otherwise be able to participate in BGF international work trips. If the Board of Directors of the Building Goodness Foundation determines that any portion of the earned income is not spent for scholarships within a reasonable amount of time after a fiscal year, the Board may add the income to the principal of the scholarship fund or continue to hold it for future scholarships. At December 31, 2010, the scholarship fund was $20,083. 8

14 Notes to Financial Statements At December 31, 2010 (continued) NOTE 6 - FINANCIAL RISK: All cash in banks are in federally insured accounts. FDIC coverage extends to $250,000 per entity. At December 31, 2010, $36,139 of the Organization s bank balances were not covered by federal insurance. NOTE 7 INVESTMENT INCOME: Included in investment income for the year ended December 31, 2010 are: Interest and dividends $ 347 Total investment income $ 347 NOTE 8 UNCONDITIONAL PROMISES TO GIVE: In 2010 the Organization received an anonymous three-year unconditional promise to give totaling $1,500,000 for support of the Organization s earthquake related projects in Haiti. Receivables have been recorded without discount as such amount has been determined to be immaterial to the financial statements. Unconditional promises to give at December 31, 2010 are as follows: Receivable in less than one year $ 500,000 Receivable in one to two years 500,000 Total unconditional promises to give $ 1,000,000 NOTE 9 SUBSEQUENT EVENTS: In preparing these financial statements, management of the Organization has evaluated events and transactions for potential recognition or disclosure through June 24, 2011, the date the financial statements were available to be issued. 9

15 - Supplemental Information -

16 Combining Schedule of Financial Position At December 31, 2010 Building Building Goodness Goodness Foundation in April Combined Assets Current assets: Cash and cash equivalents $ 620,049 $ 56,800 $ 676,849 Accounts receivable 1,221-1,221 Unconditional promises to give 500, ,000 Prepaid expenses 1,000-1,000 Total current assets $ 1,122,270 $ 56,800 $ 1,179,070 Equipment: Office equipment $ 8,356 $ - $ 8,356 Less: accumulated depreciation (8,356) - (8,356) Net equipment $ - $ - $ - Other assets: Unconditional promises to give - noncurrent $ 500,000 $ - $ 500,000 Total assets $ 1,622,270 $ 56,800 $ 1,679,070 Liabilities and Net Assets Current liabilities: Accounts payable $ 20,600 $ - $ 20,600 Payroll liabilities 10,153-10,153 Total liabilities $ 30,753 $ - $ 30,753 Net assets: Unrestricted $ 246,272 $ - $ 246,272 Temporarily restricted 1,325,162 56,800 1,381,962 Permanently restricted 20,083-20,083 Total net assets $ 1,591,517 $ 56,800 $ 1,648,317 Total liabilities and net assets $ 1,622,270 $ 56,800 $ 1,679,070 10

17 Combining Statement of Activities For the Year Ended December 31, Building Building Goodness Goodness Foundation in April Combined Unrestricted revenues, gains and other support: Individual contributions $ 125,609 $ - $ 125,609 Foundation grants 24,470-24,470 Corporate/Business contributions 77,299-77,299 Religious and community contributions 29,944-29,944 Gifts in kind 208, ,850 Program service income 2,530-2,530 Administrative service fees 11,000-11,000 Miscellaneous income Investment income Net assets released from restrictions 419,148 66, ,859 Total unrestricted revenues, gains and other support $ 899,976 $ 66,711 $ 966,687 Expenses: Salaries and wages $ 235,970 $ - $ 235,970 Payroll taxes 18,337-18,337 Gifts in kind 208,850 2, ,875 Dues and fees 3,403-3,403 Equipment purchases, maintenance and depreciation 1,386-1,386 Business insurance 13,573-13,573 Meetings and events 28,668 6,504 35,172 Miscellaneous expenses Occupancy expenses 6,600 2,527 9,127 Office supplies and expenses 7, ,819 Postage and shipping 6, ,148 Printing, copying and reproduction 12,922 2,406 15,328 Seminars and training 20,558-20,558 Professional services 20,877-20,877 Public education 19,507-19,507 Telephone/internet 3,112-3,112 Travel 17,594-17,594 Direct project expenses 255,957 52, ,283 Total expenses $ 881,356 $ 66,711 $ 948,067 Change in unrestricted net assets $ 18,620 $ - $ 18,620 Temporarily restricted net assets: Individual contributions $ 1,096,949 $ 42,977 $ 1,139,926 Trip participation donations 36,627-36,627 Corporate/Business contributions 11,311-11,311 Religious and community contributions 30,543-30,543 Foundation grants 557, ,000 Governmental grants - 12,261 12,261 Gifts in kind - 2,025 2,025 Investment income Net assets released from restrictions (419,148) (66,711) (485,859) Change in temporarily restricted net assets $ 1,313,282 $ (9,311) $ 1,303,971 Net assets at beginning of year 259,615 66, ,726 Net assets at end of year $ 1,591,517 $ 56,800 $ 1,648,317