Genesis Community Health (a nonprofit organization) Financial Statements Years Ended May 31, 2017 and 2016
TABLE OF CONTENTS Page Independent Auditors Report...3 Statements of Financial Position...5 Statements of Activities...6 Statements of Functional Expenses...8 Statements of Cash Flows... 12 Notes to Financial Statements... 13
INDEPENDENT AUDITORS REPORT To the Board of Directors Genesis Community Health Boise, Idaho We have audited the accompanying financial statements of Genesis Community Health (a nonprofit organization), which comprise the statements of financial position as of May 31, 2017 and 2016, and the related statements of activities, functional expenses and cash flows 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. Auditors 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 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. 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.
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Genesis Community Health and Affiliate as of May 31, 2017 and 2016 and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Meridian, Idaho November 16, 2017
STATEMENTS OF FINANCIAL POSITION May 31 ASSETS 2017 2016 CURRENT ASSETS Cash $ 63,720 $ 67,183 Grants and contributions receivable 4,698 1,886 Inventory 10,483 103,052 Total Current Assets 78,901 172,121 PROPERTY AND EQUIPMENT, net 503,451 507,280 Total Assets $ 582,352 $ 679,401 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Line of credit $ 12,136 $ 14,074 Accounts payable 3,203 1,562 Accrued liabilities 25,024 14,495 Current portion of long-term debt 6,043 5,785 Total Current Liabilities 46,406 35,916 LONG-TERM DEBT, net of current portion 164,522 170,510 Total Liabilities 210,928 206,426 NET ASSETS Unrestricted 354,332 375,355 Temporarily restricted 17,092 97,620 Total Net Assets 371,424 472,975 Total Liabilities and Net Assets $ 582,352 $ 679,401 See notes to financial statements. 5
STATEMENTS OF ACTIVITIES For the Years Ended May 31 Temporarily Unrestricted Restricted Total REVENUE AND OTHER SUPPORT Foundations and corporate grants $ 188,833 $ 176,978 $ 365,811 Pledges and contributions 58,430 58,430 Fundraising events 62,096 62,096 Contract revenue 9,432 9,432 In-kind contributions 168,865 168,865 Service income 4,107 4,107 Other 805 805 Total Revenue 492,568 176,978 669,546 Net assets released from restrictions 257,506 (257,506) 0 Total Revenue and Other Support 750,074 (80,528) 669,546 EXPENSES Program services Genesis Community Clinic 505,717 505,717 Volunteer physicians network 20,123 20,123 International medical missions 0 0 Community collaboration 49,938 49,938 Total Program Services 575,778 0 575,778 Support services Administration 87,616 87,616 Fundraising 107,703 107,703 Total Support Services 195,319 0 195,319 See notes to financial statements. 6 2017 Total Expenses 771,097 0 771,097 Increase (Decrease) in Net Assets (21,023) (80,528) (101,551) NET ASSETS, Beginning of Year 375,355 97,620 472,975 NET ASSETS, End of Year $ 354,332 $ 17,092 $ 371,424
2016 Temporarily Unrestricted Restricted Total $ 39,933 $ 221,642 $ 261,575 78,369 78,369 41,780 41,780 27,971 27,971 412,011 412,011 6,815 6,815 1,757 1,757 608,636 221,642 830,278 151,263 (151,263) 0 759,899 70,379 830,278 565,327 565,327 24,845 24,845 46,879 46,879 40,063 40,063 677,114 0 677,114 38,100 38,100 78,530 78,530 116,630 0 116,630 793,744 0 793,744 (33,845) 70,379 36,534 409,200 27,241 436,441 $ 375,355 $ 97,620 $ 472,975
STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended May 31, 2017 Genesis Volunteer International Community Physicians Medical Clinic Network Missions Personnel salaries and wages $ 320,921 $ 14,177 $ 0 Payroll taxes 14,372 1,322 Medications and supplies 112,853 Direct international Occupancy 16,148 2,174 Professional fees 7,680 778 Depreciation and amortization 13,965 635 Special events Interest expense 216 18 Office expenses 5,989 589 Travel 31 Insurance 3,716 153 Conferences and meetings 1,602 7 Advertising 2,774 270 Other 5,450 Total Functional Expenses $ 505,717 $ 20,123 $ 0 See notes to financial statements. 8
Community Collaboration Administration Fundraising Total $ 38,018 $ 52,027 $ 59,915 $ 485,058 3,450 4,583 5,293 29,020 3 112,856 0 2,933 4,606 4,133 29,994 1,007 12,305 2,836 24,606 1,270 2,328 2,962 21,160 218 25,150 25,368 46 37 60 377 956 1,373 1,899 10,806 22 7 60 372 1,753 489 6,483 142 649 627 3,027 615 7,945 3,168 14,772 889 1,171 7,510 $ 49,938 $ 87,616 $ 107,703 $ 771,097
STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended May 31, 2016 Genesis Volunteer International Community Physicians Medical Clinic Network Missions Personnel salaries and wages $ 446,017 $ 12,449 $ 15,347 Payroll taxes 10,404 1,203 1,365 Medications and supplies 48,319 Direct international 19,087 Occupancy 19,172 3,653 3,184 Professional fees 5,598 1,093 1,185 Depreciation and amortization 12,480 1,643 4,563 Special events 3 Interest expense 214 41 15 Office expenses 7,273 3,863 441 Travel 963 Insurance 3,568 452 257 Conferences and meetings 694 50 Advertising 9,129 146 97 Other 2,459 252 372 Total Functional Expenses $ 565,327 $ 24,845 $ 46,879 See notes to financial statements. 10
Domestic Development Administration Fundraising Total $ 30,592 $ 25,772 $ 40,019 $ 570,196 2,645 2,176 3,625 21,418 240 589 49,148 19,087 2,068 1,998 4,790 34,865 955 1,454 12,436 22,721 1,675 2,885 23,246 9,284 9,287 41 118 59 488 559 589 1,557 14,282 963 333 224 648 5,482 1,995 84 921 3,744 623 109 259 10,363 252 3,661 1,458 8,454 $ 40,063 $ 38,100 $ 78,530 $ 793,744
STATEMENTS OF CASH FLOWS For the Years Ended May 31 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES Increase (Decrease) in net assets $ (101,551) $ 36,534 Adjustments to reconcile increase in net assets to net cash from operating activities: Depreciation and amortization 21,160 23,246 Forgiveness of debt 0 (10,000) Changes in operating assets and liabilities: Grants receivable (2,750) 739 Inventory 92,507 (23,351) Accounts payable 1,641 (848) Accrued liabilities 10,529 (1,379) Net Cash Provided by Operating Activities 21,536 24,941 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment (17,331) (9,843) CASH FLOWS FROM FINANCING ACTIVITIES Net change in line of credit (1,938) 13,924 Principal payments on long-term debt (5,730) (5,132) Net Cash Provided by (Used in) Financing Activities (7,668) 8,792 Net Increase (Decrease) in Cash (3,463) 23,890 CASH, Beginning of Year 67,183 43,293 CASH, End of Year $ 63,720 $ 67,183 See notes to financial statements. 12
NOTES TO FINANCIAL STATEMENTS May 31, 2017 and 2016 NOTE A - SIGNIFICANT ACCOUNTING POLICIES Nature of Organization Genesis Community Health, Inc. ("Organization") is a non-profit, faith based organization that provides free medical, dental, mental health and spiritual care to low-income and the uninsured individuals. Genesis also supports patients and their families by connecting them to other critical resources, such as food, shelter, and transportation. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Basis of Presentation The Organization reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Use of Estimates The Organization uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and reported revenues and expenses. Significant estimates used in preparing these financial statements include those assumed in determining the collectability of grants, pledges, and contributions receivable, the fair value of donated goods and services, and the estimated useful lives of property and equipment. It is at least reasonably possible that the significant estimates used will change within the next year. Cash The Organization considers its short-term, highly liquid investments purchased with a maturity of three months or less to be cash equivalents. 13
NOTES TO FINANCIAL STATEMENTS (Continued) May 31, 2017 and 2016 NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued) Contributions and Grants Receivable Contributions and grants receivable are stated at unpaid balances, less an allowance for uncollectible amounts. Balances are non-interest bearing. The allowance is based on experience. There was no allowance at May 31, 2017 and 2016 as all amounts are deemed collectible. Inventories Pharmaceutical and medical supplies are either donated or purchased. As of May 31, 2017 and 2016, the value of purchased and donated pharmaceutical and medical supplies has been capitalized as supplied inventory at the lower of cost or market. Medication inventory decreased significantly during 2017. This was due to writing off a large quantity of medication that was unusable by Genesis patients. Property and Equipment Property and equipment is stated at cost, or, if donated, at the estimated fair market value at the date of donation. All equipment with a fair market value in excess of $1,000 and a useful life of at least three years is capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to thirty years. Fair Value The Organization uses fair value for reporting financial assets and liabilities. A hierarchy for reporting the reliability of input measurements is used to assess fair value for all assets and liabilities. Fair value is defined as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous market on the measurement date. The hierarchy established prioritizes fair value measurements based on the types of inputs used in the valuation technique. Certain financial instruments are carried at cost on the balance sheet, which approximates fair value due to their short term, highly liquid nature. In-kind Contributions The Organization receives in-kind contributions consisting of equipment and medical supplies. Inkind contributions are recognized as revenue when received and as expenditures when the resources are consumed. 14
NOTES TO FINANCIAL STATEMENTS (Continued) May 31, 2017 and 2016 NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued) Patient Service Revenue The local projects of the organization (Genesis Community Clinic and Volunteer Physicians Network) provides medical care to patients who do not have third-party coverage. Eligibility is based on household size and income based on 200 percent or less of the Federal Poverty Guidelines. As a way to encourage personal responsibility and empower its patients, Genesis accepts voluntary donations from patients. The frequency and amounts of these donations are at the sole discretion of the patient; services are never withheld from patients who choose not to donate. Contributions Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and\or nature of any donor restrictions. All donor-restricted contributions are reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose of 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. Contributions and grants received with temporary restrictions that are met in the same reporting period are reported as unrestricted support and increase unrestricted net assets. The Organization does not have any permanently restricted funds. Contributed Services Donated services are reported as contributions when the services (a) create or enhance nonfinancial assets or (b) would be purchased if they had not been provided by contribution, require specialized skills and are provided by individuals possessing those skills. Donated services of approximately $154,522 and $227,893 have been reflected at fair value in the financial statements for the years ended May 31, 2017 and 2016, respectively. The majority of donated services received by the organization are from healthcare professionals, such as physicians and dentists. Additional support comes from other volunteers, such as nurses, student interns, and church groups.. During 2016 the Organization received donated administrative services. These services were not donated during 2017 because the Organization hired a CEO. 15
NOTES TO FINANCIAL STATEMENTS (Continued) May 31, 2017 and 2016 NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued) Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. General and administration expenses include those expenses that are not directly identifiable with any other specific function but provide for the overall support and direction of the Organization. Income Taxes The Organization is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and comparable state law. Accordingly, no provision for income taxes is made in the financial statements. Uncertain Tax Positions The accounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under that guidance, the Organization may recognize tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. There were no unrecognized tax benefits identified or recorded as liabilities for fiscal years 2017 or 2016. The Organization files Form 990 in the U.S. federal jurisdiction. The Organization is generally no longer subject to examination by the Internal Revenue Service for years before 2013. Subsequent Events The Organization has evaluated subsequent events through November 16, 2017, which is the date the financial statements were available to be issued. 16
NOTES TO FINANCIAL STATEMENTS (Continued) May 31, 2017 and 2016 NOTE B - PROPERTY AND EQUIPMENT At May 31, property and equipment consisted of the following: 2017 2016 Land $ 85,000 $ 85,000 Building and improvements 532,739 528,758 Furniture and equipment 138,884 125,534 756,623 739,292 Less accumulated depreciation 253,172 232,012 Total Property and Equipment $ 503,451 $ 507,280 NOTE C - LONG-TERM DEBT At May 31, long term debt consisted of the following: 2017 2016 Note payable to Northwest Christian Credit Union, $1,098 monthly, including interest at 4.25% per annum, maturing March 2031 with a balloon payment in the amount of $62,056. The note is secured by the Genesis Community Clinic property. $ 170,565 $ 176,295 Less current portion 6,043 5,785 $ 164,522 $ 170,510 17
NOTES TO FINANCIAL STATEMENTS (Continued) May 31, 2017 and 2016 NOTE C - LONG-TERM DEBT (Continued) Maturities of long-term debt as of May 31, 2017 are as follows: 2017 $ 6,043 2018 6,305 2019 6,561 2020 6,793 2021 6,761 Thereafter 138,102 $ 170,565 Cash paid during the year for interest for the years ended May 31, 2017 and 2016 was $8,136 and $11,156, respectively. Noncash financing consisted of $10,000 of debt forgiveness for the year ended May 31, 2016. NOTE D - TEMPORARILY RESTRICTED NET ASSETS The Organization had temporarily restricted net assets for the Genesis Community Clinic as noted below as of the years ended May 31: 2017 2016 Genesis Community Clinic programs $ 17,092 $ 41,605 Supplies, equipment and technology 0 56,015 Total $ 17,092 $ 97,620 NOTE E - LINES OF CREDIT PAYABLE At May 31, 2017, the Organization has a $15,000 line of credit with Key Bank. The line of credit bears interest at the prime rate plus 2.93%, and is due for renewal on May 15, 2018. The interest rate at May 31, 2017 was 6.93%. The line of credit is secured by the Company s assets. At May 31, 2017 and 2016, the outstanding balance was $0 and $8,801, respectively. 18
NOTES TO FINANCIAL STATEMENTS (Continued) May 31, 2017 and 2016 NOTE E - LINES OF CREDIT PAYABLE (Continued) At May 31, 2017, the Organization has a $77,643 line of credit with Northwest Christian Credit Union. The line of credit bears interest at 4.25%, and is due for renewal on March 1, 2031. The line of credit is secured by the Company s assets. At May 31, 2017 and 2016, the outstanding balance was $12,136 and $5,273, respectively. NOTE F - OPERATING LEASES The Organization signed a three year operating lease in May of 2017, expiring May 2020. This lease replaced the prior operating lease. The lease requires minimum monthly payments of $287. Rent expense under the operating lease was $2,874 for the years ended May 31, 2017 and 2016. Future minimum lease payments for the year ended May 31, 2017 are as follows: 2018 $ 3,442 2019 3,442 2020 3,442 Total $ 10,326 NOTE G - RELATED PARTY TRANSACTIONS The Organization has included the value of professional services donated by board members in the financial statements. The value of these services, as determined by management, was $0 and $44,216 for the years ended May 31, 2017 and 2016, respectively. The Organization also accepts donations from board members, employees, and their families. The Organization received donations totaling $7,589 and $22,589 during the years ended May 31, 2017 and 2016, respectively. 19