BROCKVILLE YOUNG MEN'S CHRISTIAN ASSOCIATION

Transcription

1 Financial Statements of BROCKVILLE YOUNG MEN'S CHRISTIAN ASSOCIATION Year ended December 31,2015 I,

2 MNR INDEPENDENT AUDITOR'S REPORT To the Members of Brockville Young Men's Christian Association We have audited the accompanying financial statements of Brockville Young Men's Christian Association, which comprise the statement of financial position as at December 31, 2015, and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation 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 Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 qualified audit opinion on the results of operations and cash flows, and our unmodified audit opinion on the financial position. JItJII. BESTEMPLOYER ACCOUNTING > CONSULTING > TAX KING STREET EAST, P.O. BOX 459, STN MAIN, BROCKVILLE, ON K6V 5V6 1 P: F: MNP.ca

3 Basis for Qual/fled Opinion on the Results of Operations and Cash Flows Effective for the 2015 fiscal year, the Association implemented new policies, procedures and internal controls over completeness of donalion revenue. Prior to the year ended December 31, 2015, the completeness of donation revenue was not susceptible to satisfactory audit verification. Accordingly, in prior periods, verification of these revenues was limited to the amounts recorded in the records of the Association. Therefore, we were not able to determine whether any adjustments might be necessary to current assets and net assets as at January 1, Since opening current assets affect the determination of the results of operations and cash flows, we were unable to determine whether adjustments to the results of operations and cash flows might be necessary for the year ended December 31, Our audit opinion on the financial statements for the year ended December 31,2014 was modified accordingly. Our opinion on the current year's financial statements is also modified because of the possible effects of this matter on the comparability of the current period's figures and the comparative information. Qualified Opinion on the Results of Operations and Cash Flows In our opinion, except for the possible effects on the comparative information of the matter described in the Basis for Qualified Opinion on the Results of Operations and Cash Flows paragraphs, the statements of operations, changes in net assets and cash flows present fairly, in all material respects, the results of operations and cash flows of Brockville Young Men's Christian Association for the year ended December 31, 2015 in accordance with Canadian accounting standards for not-for-profit organizations. Opinion on the Financial Position In our opinion, the statement of financial position presents fairly, in all material respects, the financiat position of Brockville Young Men's Christian Association as at December 31, 2015 in accordance with Canadian accounting standards for not-far-profit organizations. Chartered Professional Accountants, Licensed Public Accountants April25, 2016 Brockville, Canada 2

4 Statement of Financial Position December 31, 2015, wilh comparative figures for 2014 Assets Current assets: Cash Accounts receivable (note 2) Prepaid expenses Inventory Cap~al assets (note 3) Less accumulated amortization $ 281,138 $ 377, , ,176 26,855 24,466 1,948 4, , ,161 7,612,500 8,090,251 5,514,515 5,893,245 2,097,985 2,197,006 $ 2,535,005 $ 2,765,167 Liabilities and Net Assets Current liabilities: Accounts payable and accrued liabilities Govemment rem ittances payable Deferred membership and program fees Current portion oflong-terrn debt (note 4) Long term debt (note 4) Deferred contributions (note 5): Expenses of future years Capital assets Total liabilities Net assets: Investment in capilal assets (note 6) Internally restricted for building enhancements (note 7) Unrestricted $ 232,244 $ 254,074 33,423 25, , ,090 24,863 24, , ,226 51,798 76,661 41,452 61,700 1,157,598 1,343,1 35 1,199,050 1,404,835 1,675,202 1,909, , ,347 15,987 (3,923) 87, , ,445 Lease commitments (note 8) $ 2,535,005 $ 2,765,167 See accompanying notes to financial statements. 0/Mfther: / ~. ~ ~OiredOr ::..,1y./""<""t7~~="' --- Director 3

5 Statement of Operations Year ended December 31, 2015, with comparative figures for Revenue: Membership and program fees Licensed child care fees Camp fees Grants and sponsorships Donations and fundraising (note 9) Facility enhancement fees Amortization of deferred contributions related to capital assets Administration fees Expenses: Salaries, wages and benefits Contractors Professional fees Supplies (note 9(b) and (cll Telecommunications Leases and rents Repairs and maintenance Utilities Interest and bank charges Insurance Promotion Training Travel and meals Dues Amortization of capital assets Bad debts Excess of revenue over expenses $ $ 1,404,360 $ 1,437,806 1,143,033 1,453, , , , , , ,225 27,238 44, , ,597 74,784 83,746 3,756,779 4,063,232 2,073,797 2,225, , ,374 31,219 28, , ,237 17,084 20,097 66,919 46, , , , ,446 36,745 37,914 37,866 41,149 41,817 64,521 5,285 26,343 22,764 40,556 73,420 80, , ,120 2,780 5,451 3,752,421 4,014,888 4,358 $ 48,344 See accompanying notes to financial statements_ 4

6 Statement of Changes in Net Assets Year ended December 31, 2015, with comparative figures for 2014 Investment in Internally 2015 capital assets restricted Unrestricted Total Balance, beginning of year $ 752,347 $ 15,987 $ 87,111 $ 855,445 Excess (deficiency) of revenue over expenses (note 6(b» (97,104) 101,462 4,358 Net change in investment in capital assets (note 6(b» 208,483 (208,483) Internal restriction for building enhancements (note 7) (15,987) 15,987 Balance, end of year $ 863,726 $ $ (3,923) $ 859,803 Investment in Internally 2014 capital assets restricted Unrestricted Total Balance, beginning of year $ 666,686 $ $ 140,415 $ 807,101 Excess (deficiency) of revenue over expenses (note 6(b» (111,523) 159,867 48,344 Net change in investment in capital assets (note 6(b» 197,184 (197,184) Internal restriction for building enhancements (note 7) 15,987 (15,987) Balance, end of year $ 752,347 $ 15,987 $ 87,111 $ 855,445 See accompanying notes to financial statements. 5

7 Statement of Cash Flows Year ended December 31, 2015, with comparative figures for 2014 Cash provided by (used for): Operations: Excess of revenue over expenses Items not involving cash: $ 4,358 $ 48,344 Deferred contributions for expenses of future years recognized as revenue (61,200) Amortization of deferred contributions related (59,857) to capital assets (188,731) (188,597) Amortization of capital assets 285, ,120 40, ,010 Changes in non-cash operating working capital: Accounts receivable 34,097 (47,839) Prepaid expenses (2,389) 14,464 Inventory 2,758 7,374 Accounts payable and accrued liabilities (21,830) 35,836 Government remittances payable 8,224 (8,554) Deferred membership and program fees 9,734 (2,757) Increase in deferred contributions for expenses of future years 40,952 61, , ,734 Financing and investing activities. Additions to capital assets (186,814) (209,420) Bank loan 124,315 Principal repayment of bank loan (24,863) (22,791) Deferred contributions related to capital assets 3,194 (208,483) (107,896) Increase (decrease) in cash (96,675) 51,838 Cash, beginning of year 377, ,975 Cash, end of year S 281,1 38 $ 377,813 See accompanying notes to financial statements. 6

8 Notes to Financial Statements Year ended December 31,2015 The Brockville Young Men's Christian Association ("Association") is an independent association of volunteers and professionals whose purpose is to offer people opportunities for personal growth and service to others through its fitness and child care facilities. The Association is Incorporated under the Ontario Corporations Act as a not-for-profit corporation and is a registered charity under the Income Tax Act (Canada) and is exempt from income taxes, providing certain requirements of the Act are met. 1. Summary of significant accounting policies: (a) General: The financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations. (b) Revenue recognition: Revenue from memberships Is recognized as revenue on a daily pro-rata basis over the term of the membership. Revenue from child care services is recognized when the services are provided. Revenue from programs and other services is recognized when the related activities are commenced. The Association follows the deferral method of accounting for contributions which includes government funding. The Association receives funding from the United Counties of Leeds and Grenville pursuant to service contract arrangements established by the Umted Counties. Government funding is recorded as revenue in the period to which it relates. Where a portion of government funding relates to a future period, it is deferred and recognized in that subsequent period.. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions (including pledges) are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Externally restricted contributions utilized for the purchase of capital assets are deferred and amortized into revenue on a straight-line basis at rates corresponding with the amortization rates used for the related capital assets. Sales of break-open tickets are recognized in revenue when the sales occur. (c) Capital assets' Purchased capital assets are recorded at cost. AmortIzation is provided on a straight-line basis over the estimated useful lives of the capital assets as follows: Buildings Paving Tennis courts Equipment Computer equipment 25 years 25 years 25 years 5 years 3 years 7

9 BROCKVlllE YOUNG MEN'S CHRISTIAN ASSOCIATION Notes to Financial Statements, Page 2 Year ended December 31, Summary of significant accounting policies (continued): (d) Contributed goods and services: The Association records contributions of services and materials in the financial statements when: (i) the fair value of the contributions can be reasonably estimated; (ii) the contributed services and materials are used in the normal course of operations; and (iii) the Association would have purchased the services and materials if they had not been contributed. Volunteers contribute a substantial number of hours each year to assist the Association in carrying out its activities. Due to the difficulty in measuring the fair value of these services, volunteer services are not recognized in the financial statements. (e) Use of estimates: The preparation of financial statements in conformity with Canadian accounting standards for non-for-profit organizations 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 revenue and expenses for the reporting period. Actual results could differ from those estimates. Estimates are used in determining the amortization of capital assets and the amortization of deferred contributions related to capital assets. (f) Financial instruments: Initial measurement The Association initially measures its financial assets and financial liabilities at fair value. Subsequent measurement The Association subsequently measures all its financial assets and financial liabilities at amortized cost. Financial assets subsequently measured at amortized cost include cash and accounts receivable. Financial liabilities subsequently measured at amortized cost include accounts payable and accrued liabilities and long term debt. Impairment Financial assets measured at amortized cost are tested for impaimnent when there are indicators of impaimnent. The amount of the impairment is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the recovery. The amount of any reversal is recognized In net income. 8

10 Notes to Financial Statements, Page 3 Year ended December 31, Accounts receivable: Accounts receivable consist of the following : Amounts due from government agencies Licensed child care fees Membership fees Amounts due from not for profit organizations Pledges receivable Other Allowance for doubtful accounts $ 90,014 $ 107,614 21,153 43,761 10,521 6,980 5,244 4,886 6, ,882 1,150 (8,000) (4,000) $ 127,079 $ 161, Capital assets: 2015 Cost Accumulated Amortization Net Book Value Land Buildings Paving Equipment Computer equipment Tennis courts $ 296,742 6,262, , , ,806 94,206 $ 7, $ $ 296,742 4,621,913 1,640,652 46,569 54, ,546 96, ,879 8,927 93, $ 5.514,515 $ 2,097, Cost Accumulated Amortization Net Book Value Land Buildings Paving Equipment Computer equipment Tennis courts $ 296,742 6,094, ,693 1,275, ,252 94,206 $ 8,090,251 $ $ 296,742 4,410,099 1,684,215 43,345 57,348 1,152, , ,921 33,331 91,790 2,416 $ 5,893,245 $ 2,197,006 During the year, capital assets that are fully amortized and no longer in use were written off. Cost and accumulated amortization written off for equipment and computer equipment were $614,913 and $49,653 respectively. 9

11 Notes to Financiat Statements, Page 4 Year ended December 31, , Long-term debt: Bank loan, payable $2,072 monthly plus interest at Toronto-Dominion Bank prime rate plus 0.25%, due January, 2019 and secured by a second charge on all equipment $ 76,661 $ 101,524 Less current portion 24,863 24,863 $ 51,798 $ 76,661 Principal of $24,863 is due In each of the next three years with $2,072 due in The Association has negotiated a $100,000 demand operating loan facility with the Royal Bank of Canada which is secured by a general security agreement and bears interest at the bank's prime rate plus.80% per annum. As at December 31,2015 there were no amounts advanced under this loan facility. 5. Deferred contributions: (a) Expenses of future years: Deferred contributions related to expenses of future years represent unspent government funding that will be used in future years Balance, beginning of year $ 61,700 $ 95,384 Amount recognized as revenue in the year (61,200) (59,857) Amount allocated to capital assets (35,027) Amount received related to future years 40,952 61,200 Balance, end of year $ 41,452 $ 61,700 (b) Capital assets: Deferred capital contributions related to capital assets represents the unamortized amount and unspent amount of donations and grants received for the purchase of capital assets. The amortization of deferred capital contributions is recorded as revenue in the statement of operations Balance, beginning of year Contributions received during the year Allocated from deferred contributions for expenses of future years Amount amortized to revenue Balance, end of year $ 1,343,135 $ 1,496,705 3,194 35,027 (188,731) (1 88,597) $ 1,157,598 $ 1,343,135 10

12 Notes to Financial Statements, Page 5 Year ended December 31,2015 6, Investment In capital assets: (a) The investment in capital assets is calculated as follows; Capital assets Deferred capital contributions Bank loan received in January, $ 2,097,985 (1,157,598) (76,661 ) $ 863, $ 2,197,006 (1,343,135) (101,524) $ 752,347 (b) Change in investment in capital assets is calculated as follows; Excess of expenses over revenue: Amortization of deferred contributions related to capital assets Amortization of capital assets 2015 $ 188,731 (285,835) $ (97,104) 2014 $ 188,597 (300,120) $ (111,523) Net change in investment in capital assets; Additions to capital assets Additions financed by deferred capital contributions Principal payments on bank loan $ 186,814 (3,194) 24,863 $ 208,483 $ 209,420 (35,027) 22,791 $ 197,1 84 7, Restriction on net assets: During 2014 the Board of Directors established a reserve for building enhancements. An amount of $15,987 was internally restricted representing 10% of the current year's excess of revenue over expenses before amortization of capital assets and deferred contributions. For 2015 the Board of Directors allocated those funds to the acquisition of capital asset and approved a motion to reduce the reserve to Nil. 8. Lease commitments: The Association leases certain office equipment and an automobile under non-cancellable operating leases which expire between March and May, Future minimum lease payments for the 2016 fiscal year are $4,

13 !,!otes to Financial Statements, Page 6 Year ended December 31,2015 9, Donations and fundralslng: (a) Donations revenue includes $40,752 ( $15,099) from the Brockville & Area Young Men's Chnstian Association Foundation. (b) In-kind contributions in the amount of $16,699 ( $34,916) were received with respect to the Annual Giving Campaign. These contributions are included in donation revenue and supplies expense. (c) Fundraising revenue includes proceeds from the sales of break open tickets totaling $29,666 ( $30,296). Costs of $17,838 ( ,618) related to the sales of these tickets are included in supplies expense. to. Pension costs and obligations: Employees with at least two years of continuous employment service with the Association may participate in a defined contribut;on pension plan (the 'Plan") and employees with at least three years continuous employment service must participate In the Plan. Under the Plan contributions of 5% of pensionable earnings are made by the members which are matched by the Association. Members are permitted to make voluntary contnbutions to the Plan which are not matched by the Association. Upon retirement, death or ceasing to be actively employed by the Association, the total accumutated entitlement for a Plan member or beneficiary is, subject to vesting requirements, equal to the amounts contributed on their behalf plus their pro-rata share of investment earnings including any unrealized fair value appreciation (depreciation) pertaining to the contributed funds. The Standard Life Insurance Company is the custodian of the Plan's funds. Contributions to the Plan made during the year by the Association on behalf of its' employees amounted to $34,592 ( $43,291). 11. Financial Instruments: The significant financial risks to which the ASSOCIation is exposed relating to its financial Instruments are interest rate, credit and liqu,dity risks. (a) Interest rate risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will flucluate due to changes in market interest rates. The bank loan bears interest at the bank prime rate plus 0.25%. Changes in the bank's prime interest rate can cause fluctuations in interest payments and future cash flows. It Is management's opinion that the Association is not exposed to a significant interest rate risk. 12

14 Notes to Financial Statements, Page 7 Year ended December 31, , Financial Instruments (continued): (b) Credit risk: Credit risk is the risk that one party to a financial Instrument will cause a financial loss for the other party to failing to discharge an obl igation, Credit risk associated with cash is minimized substantially since the Association ensures that cash is invested with major financial institutions. The Association provides credllto its members in the normal course of operations. The credit risk associated with accounts receivabte is managed through the ongoing monitoring of indivlduat receivable balances. It is management's opinion the Association does not have significant credit risk exposure to an individual member receivable. (c) liquidity risk: Liquidity risk is the risk that the Association will not be able to meet a demand for cash or fund its obligations as they become due. The Association meets its liquidity requirements by monitoring cash flows from operations and anticipating financing and investing activities. (d) Changes in risk: There have been no significant changes in the Association's risk exposures from the prior year. 13

15 Notes to Financial Statements, Page 6 Year ended December 31, , Financial information of the Brockville & Area Young Men's Christian Association Foundation: The Brockville & Area Young Men's Christian Association Foundation (the "Foundation") is incorporated without share capital under the Ontario Corporations Act. It is a non-profit corporation established for the purpose of receiving and maintaining a fund or funds and applying all or part of the principal and the income therefrom to the Brockville Young Men's Christian Association or such other organization, which in the judgement of the directors of the Foundation, will enhance, improve or otherwise advance the purposes of the Brockville Young Men's Christian Association. The Foundation qualifies for tax-exempt status as a registered charity under the Income Tax Act. The financial statements of the Association do not include the revenue, expenses, assets, liabilities and net assets of the Foundation. The Foundation and the Association follow the same significant accounting policies. The Foundation's mutual funds are measured at fair value. Pertinent financial information of the Foundation is as follows: As at December 31 Cash Mutual funds $ 10,664 $ 16, , ,665 $ 921,038 $ 456,385 Deferred contributions Unrestricted net assets $ 300,000 $ 300, ,036, 156,365 $ 921,036 $ 458,385 Year ended December 31 Gain on investments Donation revenue Interest revenue Donation to Brockville Young Men's Christian Association Bank fees Excess of revenue over expenses $ 3,269 $ 26, ,000 5, (40,752) (15,099) (32) (25) $ 462,653 $ 16,644 14

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