Young Audiences, Inc. of Houston

Transcription

1 FINANCIAL STATEMENTS JUNE 30, 2015

2 Table of Contents June 30, 2015 REPORT Independent Auditor s Report 1 FINANCIAL STATEMENTS Statement of Financial Position 3 Statement of Activities and Changes in Net Assets 4 Statement of Cash Flows 5 Notes to Financial Statements 6

3 INDEPENDENT AUDITOR S REPORT To the Board of Directors Young Audiences, Inc. of Houston Houston, Texas We have audited the accompanying financial statements of Young Audiences, Inc. of Houston (the Organization ), which comprise the statement of financial position as of June 30, 2015, and the related statements of activities and changes in net assets and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Young Audiences, Inc. of Houston as of June 30, 2015, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Houston, Texas September 15,

5 Statement of Financial Position June 30, 2015 Assets Current assets Cash and cash equivalents $ 850,414 Pledges receivable 343,762 Accounts receivable 82,204 Prepaid expenses 2,645 Total current assets 1,279,025 Pledges receivable, noncurrent 120,000 Fixed assets, net 1,921 Total noncurrent assets 121,921 Total assets $ 1,400,946 Liabilities and net assets Accounts payable $ 19,269 Commitments and contingencies Net assets Unrestricted Unrestricted net assets 406,677 Board Designated reserve fund 600,000 Total unrestricted 1,006,677 Temporarily restricted 375,000 Total net assets 1,381,677 Total liabilities and net assets $ 1,400,946 The accompanying notes are an integral part of these financial statements. 3

6 Statement of Activities and Changes in Net Assets For the year ended June 30, 2015 Unrestricted Temporarily Restricted Total Revenue Program fees $ 458,426 $ $ 458,426 Contributions 703, ,000 1,078,778 Fundraising revenue 134, ,795 Donated services 28,186 28,186 Other income 71,468 71,468 Total support and revenue 1,396, ,000 1,771,653 Expenses Program services 546, ,620 Salaries and related expenses 306, ,469 Office expenses 61,622 61,622 Fundraising expenses 38,054 38,054 Miscellaneous expenses 20,951 20,951 Outside services expenses 18,104 18,104 Travel expenses 6,160 6,160 Event and meeting expenses 1,731 1,731 Bank fee expenses Depreciation expense Total expenses 1,001,239 1,001,239 Change in net assets 395, , ,414 Net assets at beginning of year 611, ,263 Net assets at end of year $ 1,006,677 $ 375,000 $ 1,381,677 The accompanying notes are an integral part of these financial statements. 4

7 Statement of Cash Flows For the year ended June 30, 2015 Operating activities Change in net assets $ 770,414 Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 616 Changes in operating assets and liabilities: Pledges and accounts receivable (421,231) Prepaid expenses (56) Accounts payable (7,692) Net cash provided by operating activities 342,051 Investing activities Purchase of fixed assets (2,537) Net change in cash and cash equivalents 339,514 Cash and cash equivalents at beginning of year 510,900 Cash and cash equivalents at end of year $ 850,414 The accompanying notes are an integral part of these financial statements. 5

8 Notes to Financial Statements NOTE 1: ORGANIZATION Young Audiences, Inc. of Houston (the Organization ) a Texas nonprofit corporation founded in 1957, is an independent organization that is an affiliate of a national network of Young Audiences affiliates coordinated by the national office. The Organization pays an affiliation fee to be part of the network and receives support from the national network headquarters in the form of grants, promotion, and education. The mission of the Organization is to educate and inspire children through the arts, to make the arts an integral part of the school curriculum, and to advance the field of arts in education through professional development and community partnerships. The Organization offers dynamic arts programming by a roster of nationally recognized artists tailored for pre K through 12 th grade students in school and public venues. The Organization s programs include performances, workshops, and residencies in the fine arts, as well as teacher professional development training. These highly participatory programs are uniquely designed to reinforce core curriculum classroom instruction, provide positive role models, enhance students selfesteem, foster creative and critical thinking skills, awaken interest in learning, and broaden the understanding of the world s arts and cultures. The Organization is primarily funded by program fees and contributions. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of Financial Statements The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Organization is required to report information regarding its financial position and activates according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Cash and Cash Equivalents For purposes of the statements of cash flows, the Organization considers all highly liquid investments purchased with initial maturities of three months or less to be cash equivalents. Accounts Receivable Accounts receivable represents amounts owed to the Organization from schools and are considered to be fully collectible; accordingly, no allowance for doubtful accounts has been established. If amounts become uncollectible, they will be charged to operations when the determination is made. Pledges Receivable Pledges receivable consist of unconditional promises to give. Unconditional promises to give expected to be collected within one year are recorded at net realizable value. Unconditional promises to give expected to be collected in future years (multi year pledges) are recorded at the present value of their estimated future cash flows, if material. The Organization expects its noncurrent pledge receivable of $120,000 to be received in

9 Notes to Financial Statements NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fixed Assets Fixed assets are recorded at cost, or if donated, at fair value. The Organization capitalizes expenditures in excess of $1,000 with useful lives of more than a year. Depreciation expense is computed using the straightline method over the useful lives of the assets which range from three to seven years. At June 30, 2015, furniture and equipment cost and accumulated depreciation totaled $2,537 and $616, respectively. For the year ended June 30, 2015, depreciation expense totaled $616. Contributions The Organization s contributions are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. Restricted net assets are reclassified to unrestricted net assets upon satisfaction of the time or purpose restrictions. Restricted contributions whose restrictions are met in the same reporting period are recorded as unrestricted contributions. Support that is restricted by the donor and is to be used in future periods or for specific purposes is reported as an increase in temporarily restricted net assets. When a restriction expires, temporarily restricted net assets are released to unrestricted net assets and reported in the statement of activities and changes in net assets as net assets released from restrictions. Program Fees Program fees are recognized when the related services are provided. Donated Services and Assets The Organization recognizes donated services and assets at their fair value in the period received if the services and/or assets received create or enhance nonfinancial assets or require specialized skills and are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. The Organization receives donated services and assets from third parties who assist with program services and operations. The value of the donated services is reflected in these statements at their estimated fair value. Federal Income Taxes The Organization is a non profit, charitable corporation as defined by Section 501(c)(3) of the Internal Revenue Code and, accordingly, is exempt from federal income taxes. The Organization accounts for uncertain tax positions, when it is more likely than not, that such an asset or a liability will be realized. As of June 30, 2015, management believes there were no uncertain tax positions. 7

10 Notes to Financial Statements NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value Considerations The Organization uses fair value to measure financial and certain nonmonetary financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability. The Organization s financial instruments (primarily cash and cash equivalents, receivables, and payables) are carried in the accompanying financial statements at amounts, which reasonably approximate fair value. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes these estimates and assumptions provide a reasonable basis for the fair presentation of the financial statements. Subsequent Events The Organization has evaluated subsequent events through the date the financial statements were available for issuance on September 15, No matters were identified affecting the accompanying financial statements or related disclosures. NOTE 3: CONCENTRATIONS OF CREDIT RISK The Organization is subject to concentration of credit risk relating primarily to cash. The Organization s cash deposits at times may exceed federal insured limits; however, management feels this risk has been mitigated by the financial strength of the financial institutions in which the deposits are held. For the year ended June 30, 2015, 30% of contributions were from one donor. As of June 30, 2015, 65% of accounts receivable is from one donor. NOTE 4: BOARD DESIGNATED RESERVE FUND The Board of Directors has designated $600,000 held in unrestricted net assets for the purpose of future growth. 8

11 Notes to Financial Statements NOTE 5: TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes: June 30, 2015 Timing restrictions for periods after June 30 $ 105,000 Equity gap in art access 270,000 Total $ 375,000 NOTE 6: COMMITMENTS The Organization leases an office space under a non cancellable operating lease agreement. The office lease expires in November Future minimum rental payments for this operating lease are as follows: 2015 $15,196. Rent incurred for the lease totaled $39,213 for the year ended June 30, NOTE 7: RELATED PARTY TRANSACTIONS The Organization receives contributions from members of the Board of Directors and advisors. For the year ended June 30, 2015, contribution from members of the Board of Directors and advisors totaled $39,615. 9