Financial Statements Years Ended June 30, 2016 and 2015 The report accompanying these financial statements was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.
Financial Statements Years Ended June 30, 2016 and 2015
Contents Independent Auditor s Report 1-2 Financial Statements Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Statements of Functional Expenses For the Year Ended June 30, 2016 6 For the Year Ended June 30, 2015 7 Notes to Financial Statements 8-18
Tel: 210-342-8000 Fax: 210-342-0866 www.bdo.com 9901 IH-10, Suite 500 San Antonio, TX 78230 Independent Auditor s Report To the Board of Directors Unicorn Centers, Inc. San Antonio, Texas We have audited the accompanying financial statements of Unicorn Centers, Inc. (Unicorn), which comprise the statements of financial position as of June 30, 2016 and 2015, the related statements of activities, cash flows, and functional expenses for the years 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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. 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. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 1
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Unicorn Centers, Inc. as of June 30, 2016 and 2015, and the changes in its net assets, functional expenses, and cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America. October 26, 2016 2
Financial Statements
Statements of Financial Position June 30, 2016 2015 Assets Current Assets Cash $ 2,179,168 $ 1,902,969 Accounts receivable: Program fees and contracts 252,119 235,970 Affiliate receivable 13,897 22,025 Contributions receivable 7,600 42,500 Investments 994,485 1,029,842 Prepaid expenses and other assets 15,023 14,605 Total Current Assets 3,462,292 3,247,911 Land, buildings, and equipment - net 1,668,962 1,758,759 Construction in progress 87,855 87,855 Total Assets $ 5,219,109 $ 5,094,525 Liabilities and Net Assets Current Liabilities Accounts payable: Trade $ 34,683 $ 31,669 Affiliate 43,438 58,661 Accrued retirement plan contribution 10,000 10,000 Accrued salary expenses 53,094 61,339 Total Current Liabilities 141,215 161,669 Net Assets Unrestricted: General operations 2,985,165 2,750,636 Net investment in fixed assets 1,756,817 1,846,614 Temporarily restricted 335,912 335,606 Total Net Assets 5,077,894 4,932,856 Total Liabilities and Net Assets $ 5,219,109 $ 5,094,525 The accompanying notes are an integral part of these financial statements. 3
Statements of Activities For the Years Ended June 30, 2016 2015 Unrestricted Revenue, Gains, and Other Support Contributions: Individuals $ 7,290 $ 5,150 Corporations 138,787 9,714 Foundations 2,685 193,630 Affiliate 10,000 10,000 United Way allocation 113,540 117,218 Special Events: Gross revenue 112,099 171,763 Direct benefit to donors (14,435) (15,387) Governmental support - program service fees 142,575 155,205 Private program service fees, tuition, and contracts 1,712,265 1,685,639 Interest and dividends 33,822 63,399 Net investment realized and unrealized losses (66,190) (68,786) Miscellaneous 3,826 1,823 Loss on disposal of fixed assets - (2,896) Related agency revenue 5,554 9,795 Net assets released from restrictions 2,770 81,622 Total Revenue, Gains, and Other Support 2,204,588 2,417,889 Expenses: Program services - habilitation and care 1,832,997 1,906,388 Administrative 165,995 183,367 Fundraising 60,864 18,797 Total Expenses 2,059,856 2,108,552 Increase in Unrestricted Net Assets 144,732 309,337 Temporarily Restricted Contributions: Individuals 1,126 80 Corporations 1,350 3,572 Foundations 600 9,600 Net assets released from restrictions (2,770) (81,622) Increase (Decrease) in Temporarily Restricted Net Assets 306 (68,370) Change in Net Assets 145,038 240,967 Net assets, beginning of year 4,932,856 4,691,889 Net Assets, End of Year $ 5,077,894 $ 4,932,856 The accompanying notes are an integral part of these financial statements. 4
Statements of Cash Flows For the Years Ended June 30, 2016 2015 Cash Flows from Operating Activities Change in net assets $ 145,038 $ 240,967 Adjustments to reconcile change in net assets to net cash provided by operating activities: Bad debt 898 1,923 Depreciation 105,692 108,819 Loss on disposal of fixed assets - 2,896 Net investment realized and unrealized loss 66,190 68,786 Changes in operating assets and liabilities: Accounts receivable (17,047) 20,505 Affiliate receivable 8,128 (5,886) Pledges receivable 34,900 (26,000) Prepaid expenses and other assets (418) (3,758) Accounts payable - trade 3,014 (16,794) Accounts payable - affiliate (15,223) 6,656 Accrued salary expenses and retirement plan contributions (8,245) (23,259) Deferred revenue - (25,000) Net Cash Provided by Operating Activities 322,927 349,855 Cash Flows from Investing Activities Purchases of investments (33,821) (63,399) Proceeds from sales of investments 2,988 3,853 Purchase of fixed assets (15,895) (62,906) Net Cash (Used in) Investing Activities (46,728) (122,452) Net Increase in Cash 276,199 227,403 Cash, beginning of year 1,902,969 1,675,566 Cash, End of Year $ 2,179,168 $ 1,902,969 The accompanying notes are an integral part of these financial statements. 5
Statement of Functional Expenses Program Services Supporting Services Habilitation Adminis- Fund- For the Year Ended June 30, 2016 and Care trative raising Total Expenses Salary and Related: Salaries $ 931,031 $ 125,848 $ 44,506 $ 1,101,385 Employee health and welfare 61,338 7,797 1,141 70,276 Employee retirement 22,295 3,504 1,123 26,922 Payroll taxes 72,146 9,502 3,207 84,855 Workers compensation insurance 7,747 422 69 8,238 Total Salary and Related Expenses 1,094,557 147,073 50,046 1,291,676 Professional fees - accounting, legal, and other 22,651 6,505 104 29,260 Professional fees - program 113,500 - - 113,500 IT support service 56,464 2,633 2,800 61,897 Training - clients 242,082 - - 242,082 Supplies 52,124 1,810 293 54,227 Telephone 21,013 674 322 22,009 Postage and shipping 1,966 770 75 2,811 Occupancy 34,662 623-35,285 Utilities 49,173 856-50,029 Equipment rental - 246-246 Equipment maintenance 3,812 23 23 3,858 Corporate insurance 19,737 3,917-23,654 Printing and publications 4,039 242 460 4,741 Transportation 6,644 244 62 6,950 Meetings/conferences 2,260 167 166 2,593 Membership dues 669 84-753 Bad debt 898 - - 898 Promotional/fundraising 1,035 113 97 1,245 Special events - indirect - - 6,318 6,318 Bank/credit card fees 19 15 98 132 Total Expenses before Depreciation 1,727,305 165,995 60,864 1,954,164 Depreciation 105,692 - - 105,692 Total Expenses $ 1,832,997 $ 165,995 $ 60,864 $ 2,059,856 The accompanying notes are an integral part of these financial statements. 6
Statement of Functional Expenses Program Services Supporting Services Habilitation Adminis- Fund- For the Year Ended June 30, 2015 and Care trative raising Total Expenses Salary and Related: Salaries $ 985,570 $ 136,469 $ 19,898 $ 1,141,937 Employee health and welfare 52,752 8,919 (3,471) 58,200 Employee retirement 27,232 3,443 794 31,469 Payroll taxes 76,279 10,546 1,516 88,341 Workers compensation insurance 12,035 405 60 12,500 Total Salary and Related Expenses 1,153,868 159,782 18,797 1,332,447 Professional fees - accounting, legal, and other 21,844 7,923-29,767 Professional fees - program 104,400 - - 104,400 IT support service 67,320 3,546-70,866 Training - clients 245,307 - - 245,307 Supplies 42,554 2,415-44,969 Telephone 23,106 887-23,993 Postage and shipping 2,744 694-3,438 Occupancy 34,834 746-35,580 Utilities 49,613 979-50,592 Equipment rental - 282-282 Equipment maintenance 7,678 34-7,712 Corporate insurance 18,501 3,834-22,335 Printing and publications 1,749 396-2,145 Transportation 10,140 58-10,198 Meetings/conferences 3,628 158-3,786 Membership dues 818 139-957 Miscellaneous 1 1,458-1,459 Bad debt 1,923 - - 1,923 Promotional/fundraising 855 - - 855 Special events - indirect 6,325 - - 6,325 Bank/credit card fees 361 36-397 Total Expenses before Depreciation 1,797,569 183,367 18,797 1,999,733 Depreciation 108,819 - - 108,819 Total Expenses $ 1,906,388 $ 183,367 $ 18,797 $ 2,108,552 The accompanying notes are an integral part of these financial statements. 7
Notes to Financial Statements 1. Reporting Entity Founded in 1985, Unicorn Centers, Inc. (Unicorn) is a not-for-profit organization whose mission is to provide life skills and vocational training in San Antonio, Texas for adults with intellectual and other developmental disabilities. Services include, but are not limited to job and life skills training, supported employment and job coaching and day activity. Unicorn is supported primarily through program fees, contracts, contributions, grants, and the United Way. On July 1, 2000, Unicorn became affiliated with a newly formed Texas corporation, Mission Road Ministries, Inc. (MRM), a not-for-profit corporation under Internal Revenue Code (the Code) Section 501(c)(3). MRM was formed for the purpose of governance and oversight of affiliated 501(c)(3) non-profit agencies which provide a continuum of care for persons with intellectual and other developmental disabilities. The affiliates of MRM who each play a role in providing the continuum of care are MRDC, Unicorn and three supervised living apartments subsidized by HUD and managed by a contracted apartment management company. These three apartments are Independence Square, Inc., 200 Oblate, Inc., and Meadow Brook Apartments. MRM was incorporated in 2000 with an oversight Board of Directors from MRDC and Unicorn Center, Inc. (Unicorn). The Clifford Craig Bledsoe Memorial Foundation was founded in 1967 to provide financial support to MRDC. Unicorn also coordinates with MRDC in order to provide services for persons with intellectual and other disabilities. MRDC provides residential, day activity and in-home services for both children and adults. (see note 10) While the reporting for these financial statements is solely for Unicorn, these financial statements have been included in the combined financial statements of MRM and its affiliates, as noted above. 2. Summary of Significant Accounting Policies Basis of Accounting Unicorn prepares its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP). Accordingly, Unicorn reports information regarding its financial position and activities according to three classes of net assets, as follows: Unrestricted Resources that are expendable at the discretion of the Board of Directors for conducting the operations of Unicorn. Unrestricted net assets may be designated by the Board of Directors for a specific purpose. Temporarily Restricted Resources that are limited by donor-imposed restrictions that either expire by the passage of time or can be fulfilled and otherwise removed by actions of Unicorn pursuant to those restrictions. Permanently Restricted Portion of the net assets resulting from contributions and other inflows of assets whose use by Unicorn is limited by donor-imposed restrictions that neither expire by the passage of time, nor can be fulfilled or otherwise removed by actions of Unicorn. 8
Notes to Financial Statements 2. Summary of Significant Accounting Policies (Continued) Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less are considered cash and cash equivalents for cash flow purposes. Accounts Receivable Accounts receivable primarily consist of tuition reimbursements from various individuals, organizations, and governmental agencies for program services provided by Unicorn (see note 5). Receivables are stated at the amount management expects to collect from balances outstanding. Management closely monitors outstanding balances throughout the year, and writes of all balances that are considered uncollectible. This method is not materially different than the allowance method. Contributions Receivable Contributions receivable consist of promises to give from individuals, corporations, foundations and other agencies. All receivables are due in less than one year; therefore no discount has been applied and management believes they are presented at their net realizable value. Investments Investments are carried at fair value at quoted market prices (see note 4). Depreciable Assets Depreciable assets are stated at cost when purchased, or at fair value on the date of donation when donated to Unicorn. For the years ended June 30, 2016 and 2015, acquisitions of capital assets over $1,000 were capitalized. The cost of maintenance and repairs is charged to operations as incurred; significant renewals and betterments are capitalized. Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method (see note 6). Depreciation is based on the following estimated useful lives: Years Buildings and improvements 5-30 Facility equipment 3 25 Furniture and fixtures 5 7 Office Equipment 5 7 Vehicles 5-7 9
Notes to Financial Statements 2. Summary of Significant Accounting Policies (Continued) Program Revenue and Revenue Recognition Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Program revenue is considered earned as services are provided to clients. Federal Income Taxes Unicorn is a not-for-profit corporation as described in Section 501(c)(3) of the Code, and is therefore exempt from federal income tax on related income pursuant to Section 501(a) of the Code. Unicorn follows the provisions of ASC 740-10 on Accounting for Uncertainty in Income Taxes, which require recognition and disclosure of uncertain tax positions in the financial statements. Under ASC 740-10, an organization must recognize the tax benefit associated with tax positions taken for tax return purposes when it is more-likely-than-not that the position will be sustained. Unicorn s management believes that it has appropriate support for any tax positions taken and that it has no material uncertain tax positions. For the years ended June 30, 2016 and 2015, Unicorn did not recognize any tax liability, interest or penalties. Tax years 2015-2013 remain open to examination by the taxing jurisdictions to which Unicorn is subject, and these periods have not been extended beyond the applicable statute of limitations. During fiscal year 2013, Unicorn voluntarily elected to file with the IRS Form 5768 (Election/Revocation of Election by an Eligible Section 501(c)(3) Organization to make expenditures to Influence Legislation). This Board-approved action was made to take advantage of IRS rules which set out spending limits for lobbying purposes with various levels of penalties, before loss of 501(c)(3) status. Without the election, the only sanction for lobbying violations was loss of the 501(c)(3) status. The election begins for the fiscal year in which the election was made, and is in force until revoked by Unicorn. There are no immediate plans for lobbying activities, but if there are in the future, they must be approved by affirmative Board action. This election provides a level of protection to the 501(c)(3) status not otherwise available. Functional Expenses The cost of providing the various programs and activities has been summarized on a functional basis in the statements of activities. Expenses related to more than one function are charged to programs and supporting services on the basis of periodic time and expense studies, number of staff, wages, square footage, or other appropriate allocation methods. Professional administrative and fundraising expenses are centralized under MRM to eliminate some redundancy at the affiliate level. MRM charges its affiliates a management fee to perform these functions. The total annual management fee expenditure has been allocated to various Unicorn expenses based on the actual administrative and fundraising expense activities of MRM. 10
Notes to Financial Statements 2. Summary of Significant Accounting Policies (Continued) Functional Expenses (Continued) For 2016, MRM provided both administrative and fundraising support. For 2015, Unicorn s fundraising expense consisted of an allocation of time spent by the executive director. MRM s management fee included both MRM administrative and fundraising expense in administrative expense. Advertising Expenses Advertising and similar expenses are expensed as incurred, and are not capitalized. Staff recruitment advertising expense for the years ended June 30, 2016 and 2015 were $2,210 and $1,100 respectively and is included in printing and publications expense in functional expenses. Fair Value of Financial Instruments The Fair Value Measurements and Disclosures Topic of the FASB, ASC 820-10, defines fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurements, and expands disclosures about fair value measurements. An instrument s categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 Inputs that utilize quoted prices (unadjusted) in active markets for identical assets that Unicorn has the ability to access. Level 2 Inputs that include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 3 Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity s own assumptions, as there is little, if any, related market activity. Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 11
Notes to Financial Statements 2. Summary of Significant Accounting Policies (Continued) Accounting Pronouncements issued but Not Yet Adopted Revenue from Contracts with Customers (Topic 606) In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), which is a comprehensive new revenue recognition standard that will supersede existing revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. FASB issued ASU 2015-14 that deferred the effective date until annual periods beginning after December 15, 2018. Earlier adoption is permitted subject to certain limitations. The amendments in this update are required to be applied retrospectively to each prior reporting period presented or with the cumulative effect being recognized at the date of initial application. Management is currently evaluating the impact of this ASU on its financial statements. This may impact Unicorn in fiscal year 2020. Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the statement of financial position and disclosing key information about leasing arrangements for lessees and lessors. The new standard applies a right-of-use (ROU) model that requires, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset for the lease term and a liability to make lease payments to be recorded. The ASU is effective for Unicorn s fiscal years beginning after December 15, 2019 with early adoption permitted. Management is currently evaluating the impact of this ASU on its financial statements. This may impact Unicorn in fiscal year 2021. 12
Notes to Financial Statements 2. Summary of Significant Accounting Policies (Continued) Accounting Pronouncements issued but Not Yet Adopted (Continued) Not-for-Profit Entities (Topic 958) Presentation of Financial Statements of Not-for-Profit Entities In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Entities (Topic 958) Presentation of Financial Statements for Not-for-Profit Entities. The ASU amends the current reporting model for nonprofit organizations and enhances their required disclosures. The major changes include; (a) requiring the presentation of only two classes of net assets now entitled net assets without donor restrictions and net assets with donor restrictions, (b) modifying the presentation of underwater endowment funds and related disclosures, (c) requiring the use of the placed in service approach to recognize the expirations of restrictions on gifts used to acquire or construct long-lived assets absent explicit donor stipulations otherwise, (d) requiring that all nonprofits present an analysis of expenses by function and nature in either the statement of activities, a separate statement, or in the notes and disclose a summary of the allocation methods used to allocate costs, (e) requiring the disclosure of quantitative and qualitative information regarding liquidity and availability of resources, (f) presenting investment return net of external and direct expenses, and (g) modifying other financial statement reporting requirements and disclosures intended to increase the usefulness of nonprofit financial statements. The ASU is effective for Unicorn s financial statements for fiscal years beginning after December 15, 2017. Early adoption is permitted. The provisions of the ASU must be applied on a retrospective basis for all years presented although certain optional practical expedients are available for periods prior to adoption. Management is currently evaluating the impact of this ASU on their financial statements. This may impact Unicorn in fiscal year 2019. 3. Concentration of Credit and Business Risk Financial instruments which potentially subject Unicorn to a concentration of credit risk consist principally of cash, accounts receivable, and revenue. Unicorn maintains multiple bank accounts in San Antonio, Texas. All of a depositor s accounts at an insured depository institution, including all non-interest bearing transaction accounts, are insured by the FDIC up to the standard maximum deposit insurance amount of $250,000 for each deposit insurance ownership category. At various times during the year, balances may exceed the FDIC limit. 13
Notes to Financial Statements 4. Investments Major investment categories at fair value at June 30 were as follows: 2016 2015 Money market funds $ 36,207 $ 30,210 Mutual Funds by Class: Bond funds 329,633 375,421 Emerging market funds - 19,143 Foreign large growth funds 42,569 72,369 Large blend funds 134,411 73,969 Large value funds 84,377 95,650 Long-short equity funds 93,975 32,939 Market neutral funds 40,968 38,083 Small blend funds 28,998 32,852 World allocation funds 203,347 259,206 Total Investments $ 994,485 $ 1,029,842 All investments are considered Level 1 (see note 2 for classifications of fair value of financial instruments), as money market funds and mutual funds are valued at the fair value of shares, based on active markets. 5. Program Fees and Contracts Receivable Revenue is received primarily from individual families and from organizations other than affiliates (see Note 10), who utilize services provided by Unicorn. Accounts receivable consisted of the following at June 30: 2016 2015 Government agency fees $ 16,378 $ 19,093 Tuition and job coaching 165,227 157,084 Workshop contracts 70,514 59,793 Total Program fees and contracts receivable 252,119 235,970 14
Notes to Financial Statements 6. Land, Buildings, and Equipment At June 30, the carrying values of land, buildings, and equipment were as follows: 2016 2015 Land and land improvements $ 304,966 $ 304,966 Buildings and improvements 2,006,914 1,991,019 Facility equipment 141,292 141,292 Furniture and fixtures 29,038 29,038 Office equipment 64,440 64,440 Vehicles 81,298 81,298 Total Land, Buildings, and Equipment 2,627,948 2,612,053 Accumulated depreciation (958,986) (853,294) Net Land, Buildings, and Equipment $ 1,668,962 $ 1,758,759 Construction in progress $ 87,855 $ 87,855 7. Temporarily Restricted Net Assets Temporarily restricted net assets consisted of the following at June 30: 2016 2015 Purpose Restrictions: Unicorn expansion project $ 322,145 $ 322,145 Exercise room - 63 Forklift 260 1,130 Restroom renovations (redesignation) 8,835 8,835 Getting fit mind and body 3,200 2,455 Fiesta 322 322 Community Council Shirts 691 - Furniture 458 656 Total Temporarily Restricted Net Assets $ 335,912 $ 335,606 15
Notes to Financial Statements 8. Net Assets Released from Restrictions Net assets were released from temporary donor restrictions by incurring expenses satisfying the restricted purposes, or by occurrence of other events specified by donors as follows: 2016 2015 Purpose Restrictions Accomplished: Volunteer recognition $ 600 $ - Stereo system 1,350 - Driveway - 29,893 Workshop compressor - 2,000 Exercise room 63 1,268 Forklift 870 230 Unicorn expansion project - 40,412 Community council shirts 436 - Thanksgiving lunch - 4,600 Getting fit mind and body (747) 2,625 Furniture 198 594 Total Net Assets Released from Restrictions $ 2,770 $ 81,622 9. Special Event Unicorn has a special event fundraiser each fiscal year to help support program activities. Net proceeds are used in the Supported Employment program to assist individuals to seek and maintain employment in the community. Below is a summary for fiscal years 2016 and 2015 2016 2015 Special Event Gross Revenue $ 112,099 $ 171,763 Special Event Direct Expenses (14,435) (15,387) Special Event Indirect Expenses (in functional expenses) (6,318) (6,325) Net Revenue from Special Event $ 91,346 $ 150,051 10. Affiliate Organizations and Related Party Information Founded in 2000, MRM provides centralized focus and ongoing coordinated oversight of Unicorn and other affiliates, as well as cost benefits, as a result of common management. MRM charges a management fee to Unicorn and MRDC for these coordinated services. Unicorn and MRDC, mutually agreed to coordinate services for persons with intellectual and other disabilities. Unicorn charges MRDC for program services provided to MRDC residents. MRDC charges Unicorn for property maintenance, staff training and chaplain fees. 16
Notes to Financial Statements 10. Affiliate Organizations and Related Party Information (Continued) Unicorn billed MRDC $171,785 and $198,114 for program services for the years ended June 30, 2016 and 2015, respectively. MRDC paid Unicorn $5,554 in 2016 and $9,795 in 2015 for employee services at the ICF and HCS homes. Unicorn paid MRM $220,541 and $183,367 in management fees for the years ended June 30, 2016 and 2015, respectively. Unicorn paid MRDC $113,500 in 2016 and $104,400 in 2015 for staff training, property maintenance and chaplain fees. MRM made contributions to Unicorn of $10,000 in both 2016 and 2015. At June 30, the following affiliate amounts were owed by/to Unicorn: 2016 2015 Affiliate Accounts Receivable: MRM $ - $ 670 MRDC 13,897 21,355 Total Affiliate Accounts Receivable $ 13,897 $ 22,025 2016 2015 Affiliate Accounts Payable: MRM $ 23,566 $ 26,121 MRDC 19,872 32,540 Total Affiliate Accounts Payable $ 43,438 $ 58,661 Unicorn and its affiliates share pooled corporate insurance policies. The annual premiums for these insurance policies are paid proportionately by Unicorn and its affiliates. 17
Notes to Financial Statements 11. Employee Benefit Plan Unicorn subscribes to MRM s defined contribution retirement plan. This plan covers all Unicorn fulltime and non-excluded class employees who have attained age 21, and have completed three months of continuous service. Unicorn s portion of the retirement plan contributions for the years ended June 30, 2016 and 2015 was $17,573 and $23,884, respectively. 12. Reclassification Certain reclassifications have been made in the prior year s financial statements to conform to the current year s presentation. 13. Subsequent Events Management has evaluated events subsequent to June 30, 2016 and through October 26, 2016, which is the date the financial statements were available to be issued. 18