KVCR EDUCATIONAL FOUNDATION, INC.

Transcription

1 KVCR EDUCATIONAL FOUNDATION, INC. FINANCIAL STATEMENTS WITH INDEPENDENT AUDITORS' REPORT JUNE 30, 2007

2 CONTENTS JUNE 30, 2007 PAGE Organization Data... 1 Independent Auditors' Report... 2 Financial Statements Statements of Financial Position... 3 Statements of Activities... 4 Statements of Functional Expenses... 6 Statements of Cash Flows... 8 Notes to Financial Statements... 9

3 ORGANIZATION DATA JUNE 30, 2007 KVCR Educational Foundation, Inc. is a nonprofit organization established to meet the funding requirements of KVCR, a wholly-owned broadcasting affiliate of the San Bernardino Community College District. Date of Incorporation:... July 15, 1999 Date of Exemption Letter:... September 11, 2000 Officers and Directors: Wilfrid C. Lemann... President Eugene Wood... Vice President Larry R. Ciecalone... Secretary Dr. Robert W. Percy... Treasurer Marie Alonzo... Director Donald F. Averill, Ed. D... Director Michael Bozick... Director Allen B. Gresham... Director Dr. Albert K. Karnig... Director Carleton W. Lockwood, Jr.... Director John M. Magness... Director Patrick J. O'Reilly... Director James Ramos... Director Ali Sahabi... Director Ronald Skipper... Director Robert J. Temple... Director Janet M. Weder... Director -1-

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5 STATEMENTS OF FINANCIAL POSITION JUNE 30, 2007 AND ASSETS Cash and cash equivalents $ 662,708 $ 695,399 Pledges receivable, less allowance for uncollectible pledges of $108,641 and $77,601, respectively 111, ,343 Other receivables 124,372 81,677 Inventory 132,931 67,351 Prepaid expenses TOTAL ASSETS $ 1,031,069 $ 1,484,570 LIABILITIES Accounts payable $ 257,961 $ 129,887 Deferred revenue 78,520 53,520 Total Liabilities 336, ,407 NET ASSETS Unrestricted 534, ,413 Temporarily restricted 160, ,750 Total Net Assets 694,588 1,301,163 TOTAL LIABILITIES AND NET ASSETS $ 1,031,069 $ 1,484,570 The accompanying notes are an integral part of the financial statements. -3-

6 STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2007 AND CHANGES IN UNRESTRICTED NET ASSETS Support and Revenue Contributions Television $ 1,294,496 $ 1,347,151 Radio 242, ,851 Grants Television 26,500 31,425 Radio 7,750 22,250 Underwriting Income Television 273,928 72,564 Radio 267, ,335 Automobile donation income 51,970 17,622 Interest income 3,410 3,521 Lease income 61,000 12,000 Premium and tape sales 13,177 14,963 Other income 93,813-2,336,105 1,913,682 Net Assets Released From Restrictions Satisfaction of programming restriction 125, ,000 Satisfaction of digital master control equipment restriction 497, ,750 Satisfaction of time restriction 12,650 12, , ,900 Total Unrestricted Support and Revenue 2,971,005 2,308,582 Expenses Program Services Television 1,128, ,919 Radio 488, ,686 General station 74, ,148 Total Program Services 1,691,187 1,004,753 Management and general 151, ,970 Fundraising 716, ,290 Costs of direct benefits to donors 461, ,652 Total Expenses 3,020,347 1,990,665 INCREASE (DECREASE) IN UNRESTRICTED NET ASSETS (49,342) 317,917-4-

7 STATEMENTS OF ACTIVITIES (Continued) CHANGES IN TEMPORARILY RESTRICTED NET ASSETS Contributions $ 77,667 $ 503,000 Net assets released from restrictions (634,900) (394,900) INCREASE (DECREASE) IN TEMPORARILY RESTRICTED NET ASSETS (557,233) 108,100 INCREASE (DECREASE) IN NET ASSETS (606,575) 426,017 NET ASSETS, BEGINNING OF YEAR 1,301, ,146 NET ASSETS, END OF YEAR $ 694,588 $ 1,301,163 The accompanying notes are an integral part of the financial statements. -5-

8 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2007 COSTS OF PROGRAM SERVICES TOTAL DIRECT GENERAL PROGRAM MANAGEMENT BENEFITS TOTAL TELEVISION RADIO STATION SERVICES AND GENERAL FUNDRAISING TO DONORS EXPENSES Advertising and outreach $ 45,961 $ 38,677 $ 84,638 $ 6,060 $ 90,698 Bad debt expense 1,050 1,050 $ 135, ,966 Broadcast long lines - DBS 13,951 13,951 13,951 Broadcast programming 131,745 32, , ,807 Capital expenditures 194,965 63,667 $ 32, , ,910 Concerts and events $ 295, ,643 Development supplies 112, ,179 Dues and memberships 9, ,396 10,396 Freelance labor 155 5, , , ,621 General supplies and expenses 19,279 12,186 16,520 47,985 11,000 58,985 Guide expense 31,646 31,646 Outside services 51,766 28,562 10,651 90,979 4, , ,918 Postage and freight 47,416 47,416 Printing 83,434 83,434 Telephone and utilities 4,415 4,415 7,505 11,920 Thank you gifts 166, ,114 Transfer in support of KVCR 620, , , ,407 Transmitter site lease 11,710 11,710 11,710 Travel and conferences 28,419 1,986 14,221 44,626 44,626 TOTAL EXPENSES $ 1,128,114 $ 488,636 $ 74,437 $ 1,691,187 $ 151,285 $ 716,118 $ 461,757 $ 3,020,347 The accompanying notes are an integral part of the financial statements. -6-

9 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2006 COSTS OF PROGRAM SERVICES TOTAL DIRECT GENERAL PROGRAM MANAGEMENT BENEFITS TOTAL TELEVISION RADIO STATION SERVICES AND GENERAL FUNDRAISING TO DONORS EXPENSES Advertising $ 47,467 $ 43,236 $ 90,703 $ 557 $ 91,260 Bad debt expense 5,578 5,578 $ 89,450 95,028 Broadcast long lines - DBS Broadcast programming 89,736 31, , ,860 Capital expenditures 65,606 2,755 $ 7,863 76,224 76,224 Development - 77,680 77,680 Dues and memberships 6, ,520 7,520 Freelance labor 1,828 4,837 11,177 17,842 13,342 31,184 General supplies and expenses 9,549 1,306 19,697 30,552 7,301 37,853 Guide expense 34,404 34,404 34,404 Outside services 1, ,555 4,585 11,578 16,163 Postage and freight 2, ,566 23,918 23,918 Printing - 29,872 29,872 Professional fees 4, ,220 11, , ,504 Special events - 39,607 39,607 Telephone and utilities 3,194 3,194 9,589 12,783 Thank you gifts - $ 397, ,652 Transfer in support of KVCR 255, , , ,750 Transmitter site lease 1,680 1,680 1,680 Travel 10,298 5,552 14,786 30,636 30,636 TOTAL EXPENSES $ 496,919 $ 395,686 $ 112,148 $ 1,004,753 $ 100,970 $ 487,290 $ 397,652 $ 1,990,665 The accompanying notes are an integral part of the financial statements. -7-

10 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2007 AND CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ (606,575) $ 426,017 Adjustments to Reconcile Change in Net Assets to Net Cash Provided By (Used In) Operating Activities (Increase) Decrease in Operating Assets Pledges receivable 528,285 (248,750) Other receivables (42,695) (46,579) Inventory (65,580) (39,692) Prepaid expenses Increase in Operating Liabilities Accounts payable 128,074 69,350 Deferred revenue 25,000 8,000 Net Cash Provided By (Used In) Operating Activities (32,691) 169,171 NET CHANGE IN CASH (32,691) 169,171 CASH, BEGINNING OF YEAR 695, ,228 CASH, END OF YEAR $ 662,708 $ 695,399 The accompanying notes are an integral part of the financial statements. -8-

11 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 AND NATURE OF ORGANIZATION AND ACTIVITIES KVCR Educational Foundation, Inc. (Foundation) is a nonprofit public benefit corporation organized under the Nonprofit Public Benefit Corporation Law, the Implementing Regulations of the San Bernardino Community College District, and the Master Agreement of the San Bernardino Community College District. The purpose of the corporation is to be an auxiliary organization of the San Bernardino Community College District (District), subject to applicable provisions of the California Educational Code and Title V of the California Administrations Code. The primary mission of the corporation is to meet the funding requirements of KVCR, a wholly-owned broadcasting affiliate of the San Bernardino Community College District. The Foundation is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Accounting The Foundation maintains its records on the accrual basis for financial reporting purposes and, accordingly, includes all significant receivables, payables, and other liabilities. The Foundation is required to report information regarding its financial position and activities in three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. The Foundation had no permanently restricted net assets as of June 30, B. 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 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. C. Cash and Cash Equivalents The Foundation considers all highly liquid debt instruments with an initial maturity of three months or less to be cash equivalents. -9-

12 NOTES TO FINANCIAL STATEMENTS (Continued) D. Inventory Inventory is valued at cost using the first-in, first-out method. E. Promises to Give Unconditional promises to give are recognized as contributions in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefit received. Promises to give are recorded at net realizable value if they are expected to be collected within one year and at net present value if they are expected to be collected in more than one year. Conditional promises to give are recognized when the conditions on which they depend are substantially met. F. Contributions All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Contributions received that are designated for future periods or restricted by the donor for specific purposes are reported as temporarily restricted or permanently restricted support that increases those net asset classes. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Donor-restricted contributions whose restrictions are met in the same reporting period are reported as unrestricted support. G. Revenue Recognition The Foundation is financially interrelated with the District and KVCR. Therefore, income received by the Foundation on behalf of these entities is recognized as revenue when received. H. Donated Services Individuals have donated significant amounts of time in the advancement of the Foundation's programs and objectives. No amounts have been included in the financial statements because they do not meet the criteria for recognition. -10-

13 NOTES TO FINANCIAL STATEMENTS (Continued) 3. PLEDGES RECEIVABLE Pledges receivable consisted of the following: Unrestricted pledges $ 230,699 $ 229,944 Restricted for specific programming 125,000 Restricted for purchase of digital conversion equipment 375,000 Gross Pledges Receivable 230, ,944 Less: Unamortized discount (11,000) (13,000) Allowance for uncollectible pledges (108,641) (77,601) NET PLEDGES RECEIVABLE $ 111,058 $ 639,343 Amounts due in: Less than one year $ 160,065 $ 644,277 One to five years 55,634 65,667 More than five years 15,000 20,000 TOTAL PLEDGES RECEIVABLE $ 230,699 $ 729,944 Pledges receivable due in more than one year are reflected at the present value of estimated future cash flows using a discount rate of 5%. 4. DEFERRED REVENUE During 2004, the Foundation entered into an agreement with Journey Films, Inc. to collect funds raised for the production, distribution, and promotion of a television documentary to be produced by Journey Films, Inc. and aired by KVCR upon completion. All contributions were to be retained by the Foundation until a threshold of $250,000 had been raised. In the event that the project threshold of $250,000 was not met, the Foundation would contact the donors and ascertain the disposition of their donation. The project threshold has not been met, and the Foundation is in the process of contacting donors. Cumulative contributions collected by the Foundation as of June 30, 2007 and 2006 amounted to $53,520. During the year, the Foundation also received $25,000 for underwriting of Curiosity Quest productions for fiscal year ending June 30,

14 NOTES TO FINANCIAL STATEMENTS (Continued) 5. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes or periods: RELEASED JULY 1, FROM JUNE 30, 2006 CONTRIBUTIONS RESTRICTION 2007 Digital conversion equipment $ 497,250 $ (497,250) - Programming 125,000 (125,000) - For periods after June 30 95,500 $ 2,000 (12,650) $ 84,850 Sustainability initiative 75,667 75,667 TOTALS $ 717,750 $ 77,667 $ (634,900) $ 160,517 Contributions of $100,000 were received for the sustainability initiative in the current year; however, $24,333 was reported as unrestricted support since restrictions were met during the year. 6. RELATED-PARTY TRANSACTIONS The Foundation utilizes the services of a law firm in which a member of the Board of Directors has an ownership interest. Legal fees incurred by the Foundation with this firm for the years ended June 30, 2007 and 2006 amounted to $2,019 and $4,735, respectively. Amounts due to the law firm as of June 30, 2007 and 2006 were $0 and $668, respectively. The Foundation is financially interrelated with the District. Amounts due to the District as of June 30, 2007 were $160, CONCENTRATIONS OF CREDIT RISK The Foundation maintains its cash balances at one financial institution. The balances are insured by the Federal Deposit Insurance Corporation up to $100,000. At June 30, 2007, the uninsured cash balance was $657, SUBSEQUENT EVENT On August 22, 2007, the Foundation terminated its agreement with Journey Films, Inc. due to apparent inability of Journey Films, Inc. to raise the necessary funds. The Foundation is in the process of contacting donors to ascertain the disposition of their donations. -12-