financial Sia i&n wnia MANA-SOTA LIGHTHOUSE FOR THE BLIND, INC. (D/B/A LIGHTHOUSE OF MANASOTA) SEPTEMBER 30, 2010

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1 financial Sia i&n wnia MANA-SOTA LIGHTHOUSE FOR THE BLIND, INC. (D/B/A LIGHTHOUSE OF MANASOTA) SEPTEMBER 30, 2010

2 CONTENTS Page INDEPENDENT AUDITORS'REPORT FINANCIAL STATEMENTS: Statement of Financial Position 1 Statement of Activities and Changes in Net Assets 2 Statement of Functional Expenses 3 Statement of Cash Flows 4 NOTES TO FINANCIAL STATEMENTS 5-8

3 CAVANAUGH & CO. LLP CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To The Board of Directors Mana-sota Lighthouse for the Blind, Inc. We have audited the accompanying statement of financial position of Mana-sota Lighthouse for the Blind, Inc. as of September 30, 2010, and the related statements of activities and changes in net assets, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of the Mana-sota Lighthouse for the Blind, Inc.'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 Mana-sota Lighthouse for the Blind, Inc.'s 2009 financial statements, which were audited by other auditors whose report dated December 1, 2009, 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Mana-sota Lighthouse for the Blind, Inc. as of September 30, 2010, and the changes in their net assets and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Sarasota, Florida December 2, 2010

4 Statement of Financial Position September 30, 2010 ASSETS 2009 Total (For Comparative 2010 Purposes Only) Current assets: Cash and cash equivalents $ 188, ,219 Inventory 5,875 Grants receivable 90,219 29,020 Prepaid expenses 15,665 9,712 Total current assets 299, ,951 Property and equipment, net 289, ,119 Beneficial interest in a split interest agreement 2,450, ,428 Total assets $ 3,040,183 1,803,498 Current liabilities: Accounts payable Accrued expenses Total current liabilities Net assets: Unrestricted Unrestricted - board deisgnated Total unrestricted Temporarily restricted Total net assets Total liabilities and net assets LIABILITIES AND NET ASSETS 10,006 91, , ,727 48, ,397 2,450,997 2,938,394 $ 3,040,183 22,768 54,922 77, ,380 10, ,380 1,311,428 1,725,808 1,803,498 See accompanying notes to financial statements. -1 -

5 Statement of Activities Year Ended September 30, Total (For Comparative 2010 Purposes Onlv) Temporarily Support and revenue: Unrestricted Restricted Total Public support: State and federal grants and contracts $ 648, , ,726 Contributions and other public support 125, , ,843 Wills and estates 4,086 1,068,000 1,072, ,586 County grants and contracts 18,006-18,006 20,007 Other grants 76,432-76,432 19,200 Total public support 872,856 1,068,000 1,940, ,362 Support from special events: Revenue 134, , ,056 Expense (19.779) - (19,779) (20.633) Net support from special events 115, , ,423 Investment income: Interest and dividends 49,738-49,738 29,364 Realized and unrealized gain ,569 2,497 Total investment income 49,738 71, ,307 31,861 Total support and revenue 1,037,606 1,139,569 2,177, ,646 Expenses: Program services: Independent living adult program 485, , ,587 Independent living stimulus 120, ,983 36,670 Vocational rehabilitation 149, ,739 68,245 Assistive technology 102, ,438 69,477 Public education 11,298-11,298 38,099 Total progam services 869, , ,078 Support services: Management and general 67,390-67,390 47,220 Fundraising 27,391-27,391 30,806 Total support services 94,781-94,781 78,026 Total expenses 964, , ,104 Change in net assets 73,017 1,139,569 1,212, ,542 Net assets - beginning of year 414,380 1,311,428 1,725,808 1,537,266 Net assets, end of year $ 487,397 2,450,997 2,938,394 1,725,808 See accompanying notes to financial statements. -2-

6 Statement of Functional Expenses Year ended September 30, 2010 Program Services ~ Supporting Services Independent Independent Total Management Total 2009 Total Living Living Vocational Assistive Public Program and Supporting Total (For Comparative Adult Proaram Stimulus Rehabilitation Technoloav Education Services General Fundraisina Services Expenses Purposes OnM Salaries $ 291,948 81, ,580 64,402 5, ,261 41,049 18,024 59, , ,742 Health insurance 44,735 12,783 12,795 9,889 1,141 81,343 5,455 2,246 7,701 89,044 57,659 Payroll taxes 22,802 4,310 5,975 5, ,602 3,399 1,321 4,720 44,322 28,365 Life insurance , ,789 1,112 Retirement 15,637 3,948 4,725 3, ,009 2, ,078 31,087 21,032 Workers' compensation 1, , ,815 2,178 Total salaries and related expenses 377, , ,560 84,118 7, ,352 52,379 22,660 75, , ,088 Advertising 298 Bank Charges Continuing education , , Dues/subscriptions 2, , ,902 8,085 Electric 3, ,861 1, ,579 7,440 7,214 Liability insurance 10,274 2,430 2,102 1, ,009 1, ,329 19,338 26,455 Miscellaneous 1, , ,995 - Occupancy - Annex - - 5, , ,047 - Office supplies 8,603 1,349 2,913 1, , ,313 15,702 8,635 Program expense 8, , , ,557 r 6,553 Postage 1, , ,311 1,513 Printing Professional 16,496 3,217 3,242 4, ,082 3,660 1,084 4, ,337 Public relations 7,394 1, ,816 1, ,524 12,340 4,389 Repair and maintenance 2,418 1,639 1,409 2, , ,459 9,587 16,943 Taxes and licenses 1, , ,426 1,249 Telephone 2, , ,131 5,909 4,013 Travel 12, , ,304 7,322 Water and sewer 1, , ,310 1,960 Veterans administration Vision Aid 11, , ,712 24,426 Total expenses before depreciation 469, , ,959 98,932 10, ,806 65,159 26,754 91, , ,546 Depreciation 16,254 4,143 4,780 3, ,002 2, ,868 31,870 26,558 Total expenses $ 485, , , ,438 11, ,808 67,390 27,391 94, , ,104 See accompanying notes to financial statements

7 Statement of Cash Flows Year Ended September 30, 2010 Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash flows from operating activities: Depreciation Realized and unrealized loss (gain) Change in value of beneficial interest (Increase) decrease in: Inventory Grants receivable Prepaid expenses Increase (decrease) in: Accounts payable Accrued expenses Total adjustments Net cash flows from operating activities Cash flows from investing activities: Purchase of property and equipment Purchase of investments Proceeds from sale of investments Net cash flows from investing activities 2010 $ 1,212,586 31,870 (71,569) (1,068,000) (5,875) (61,199) (5,953) (12,762) 36,861 (1,156,627) 55,959 (43,976) (43,976) 2009 Total (For Comparative Purposes Only) 188,542 26, ,042 (1,311,428) 8, ,810 25,608 (1,090,716) (902,174) (19,988) (117,220) 1,086, ,848 Increase in cash and cash equivalents Cash and cash equivalents - beginning of year Cash and cash equivalents - end of year 11, , ,202 46, , ,219 See accompanying notes to financial statements. -4 -

8 Notes to Financial Statements September 30, 2010 Note 1 - Organization and Summary of Significant Accounting Policies: Organization Mana-sota Lighthouse for the Blind, Inc. ("the Organization") was established to promote the individual growth and dignity of visually impaired and blind adults and children in Manatee and Sarasota County, Florida. The Organization also extends its educational and training resources to the families of the clients and acts as their voice in the community. Financial Statement Presentation The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. If donor-imposed restrictions are met in the same period as the gift or investment income is received, the amount is reported as unrestricted revenues. Accordingly, net assets of the Organization and changes therein are classified and reported as follows: Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. Temporarily restricted net assets - Net assets that are available for use, but expendable only for those purposes specified by the grantor. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. Income Tax Status The Organization has been determined to be an organization exempt from income tax under Section 501 (c)(3) of the Internal Revenue Code. Income from certain activities not directly related to the Organization's tax-exempt purpose is subject to taxation as unrelated business income. Property and Equipment Purchased property and equipment are stated at cost. Donated property and equipment are recorded at their fair value at the date of the gift. Expenditures for repairs which do not materially prolong the useful lives of the related assets are charged to operating expenses as incurred. Depreciation expense is calculated under the straight-line method over the estimated useful lives as follows: Buildings and improvements Computer software/equipment Furniture and fixtures years 3-5 years 5-7 years Estimates The preparation of 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. Accordingly, actual results could differ from those estimates

9 Notes to Financial Statements September 30, 2010 Note 1 - Organization and Summary of Significant Accounting Policies - Continued: Cash and Cash Equivalents For purposes of the statement of cash flows, the Organization considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Beneficial Interest The Organization has a beneficial interest in assets held by a community foundation. Organization's interest has been recorded at the respective fair value of the assets. The Donated Materials and Services All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Donated materials are reflected in the accompanying statements at their fair market value at the date of receipt. Directors, officers and volunteers have made a significant contribution of their time to develop the Organization and its programs. The value of these services is not reflected in the accompanying financial statement since they do not meet the criteria for recognition. Estimates The preparation of 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. Accordingly, actual results could differ from those estimates. Functional Allocation of Expenses The costs of providing the various programs and other activities have been detailed in the statement of functional expenses and summarized on a functional basis in the statement of activities. Most allocations were made by percentages of the expenses to be allocated between program and support services. Salaries and other expenses which are associated with a specific program are charged directly to that program. Salaries and other expenses which benefit more than one program are allocated to the various programs based on relative benefit provided. Administrative and general expenses are allocated to the various programs based on relative benefit provided. Summarized Comparative 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 accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organization's financial statements for the year ended September 30, 2009, from which the summarized information was derived. Note 2 - Concentration of Credit Risk: The Organization maintains its cash balances at local financial institutions. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per customer. At September 30, 2010, the Organization did not exceed the federally insured limit. -6-

10 Notes to Financial Statements September 30, 2010 Note 3 - Beneficial Interest in a Split Interest Agreement: The Organization entered into an agreement with the Community Foundation of Sarasota County, Inc. for the creation of the Lighthouse of Manasota Endowment Fund ("Fund"). This fund was established to provide current income and long term protection for the operations of Lighthouse of Manasota. The Fund is maintained by The Community Foundation of Sarasota County and is subject to restrictions set forth in the initial agreement, which include provisions for income and other distributions and provides variance power to the Foundation in the terms of gifts. Note 4 - Property and Eguipment: Property and equipment consist of the following: Land Building and improvements Furniture and fixtures Equipment Total property and equipment Less - accumulated depreciation Net property and equipment $ 60, ,900 37, , , ,340 $ Note 5 - Unrestricted Net Assets - Designated: The Board of Directors approved a designation of unrestricted net assets of $10,000 gift towards future capital improvements. As of September 30, 2010, the balance was $48,670. Note 6 - Temporarily Restricted Net Assets: Temporarily restricted net assets consist of the beneficial interest in the Lighthouse of Manasota Endowment Fund held by The Community Foundation on Sarasota County, Inc. As of September 30, 2010, the balance was $2,450,997. Note 7 - Simplified Employee Pension Plan: Effective June 16, 2005, the Organization created a simplified employee pension plan (SEP). The SEP is a written plan whereby the employer contributes to a qualified retirement plan for each eligible employee. Eligibility requirements include: one year of service with the Organization, employee is at least 21 years of age and the position is full time. Annual contributions are made at the option of the employer and if made, are done at the same percentage for all qualifying employees (up to a limit of 25%). All contributions vest with the employee. At September 30, 2010, an accrual of $31,087 was present to reflect the Organization's obligation to fund this payment for the year ending September 30, "

11 Notes to Financial Statements September 30, 2010 Note 8- Income Taxes: Management has evaluated the effect of a new accounting standard relating to accounting for uncertainty in income taxes that became effective in Management has determined that the Organization had no uncertain income tax positions that could have a significant effect on the financial statements for the year ended September 30, The Organization's federal income tax returns for the years ended September 30, 2009, 2008, and 2007 are subject to examination by the Internal Revenue Service, generally for three years after the federal income tax returns were filed. Note 9 - Subsequent Events: Subsequent events have been evaluated through December 2, 2010, which is the date the financial statements were available to be issued. Note 10 - Future Minimum Lease Payments: The Organization leases space for the operation of certain programs. The lease payments are fixed for the remaining lease term that expires in Future minimum lease payments required are as follows: Year Ended September $ 2012 Amount 7,056 3,528