Financial Statements Excelsior Youth Center
Table of Contents Independent Auditor s Report... 1 Financial Statements Statements of Financial Position... 3 Statements of Activities... 4 Statements of Functional Expenses... 5 Statements of Cash Flows... 6 Notes to Financial Statements... 7
Independent Auditor s Report Board of Directors Excelsior Youth Center Spokane, Washington Report on the Financial Statements We have audited the accompanying financial statements of Excelsior Youth Center, a non-profit organization, which comprise the statement of financial position as of December 31, 2015, and the related statements of activities, functional expenses, and cash flows for the year 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 audit. 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 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 Excelsior Youth Center as of December 31, 2015, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. www.eidebailly.com 1 999 W. Riverside Ave., Ste. 200 Spokane, WA 99201-1006 T 509.747.6154 F 509.838.0508 EOE
Other Matter The financial statements of Excelsior Youth Center as of December 31, 2014, were audited by other auditors, whose report dated April 6, 2015, expressed an unmodified opinion of those statements. Spokane, Washington May 25, 2016 2
Statements of Financial Position 2015 2014 Assets Cash and cash equivalents $ 573,409 $ 112,865 Investments 388,382 198,498 Accounts receivable 472,215 570,643 Other receivables 7,203 14,931 Prepaid expenses 72,292 62,905 Other assets 56,259 52,427 Property and equipment 1,235,796 1,251,103 Total assets $ 2,805,556 $ 2,263,372 Liabilities and Net Assets Line of credit $ - $ 110,000 Accounts payable 73,911 52,554 Accrued expenses 595,121 262,619 Long-term debt 13,070 19,693 Total liabilities 682,102 444,866 Net Assets Unrestricted 2,107,125 1,804,557 Temporarily restricted 16,329 13,949 Total net assets 2,123,454 1,818,506 Total liabilities and net assets $ 2,805,556 $ 2,263,372 See Notes to Financial Statements 3
Statements of Activities Years Ended 2015 2014 Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total Revenue, Support, and Gains Public support $ 6,669,072 $ - $ 6,669,072 $ 4,933,064 $ - $ 4,933,064 Private support 158,938 5,480 164,418 94,685 2,791 97,476 Net investment return (loss) (8,793) - (8,793) 4,439-4,439 Other 2,576-2,576 1,062-1,062 Loss on disposal of property and equipment (35,567) - (35,567) (500) - (500) Net assets released from restrictions 3,100 (3,100) - 1,669 (1,669) - Total revenue, support, and gains 6,789,326 2,380 6,791,706 5,034,419 1,122 5,035,541 Expenses Program services 6,259,832-6,259,832 4,940,078-4,940,078 Supporting services 226,926-226,926 189,066-189,066 Total expenses 6,486,758-6,486,758 5,129,144-5,129,144 Change in Net Assets 302,568 2,380 304,948 (94,725) 1,122 (93,603) Net Assets, Beginning of Year 1,804,557 13,949 1,818,506 1,899,282 12,827 1,912,109 Net Assets, End of Year $ 2,107,125 $ 16,329 $ 2,123,454 $ 1,804,557 $ 13,949 $ 1,818,506 See Notes to Financial Statements 4
Statements of Functional Expenses Years Ended 2015 2014 Program Supporting Program Supporting Services Services Total Services Services Total Salaries $ 4,214,075 $ 111,469 $ 4,325,544 $ 3,275,050 $ 79,817 $ 3,354,867 Employee benefits and payroll taxes 1,009,129 33,470 1,042,599 770,019 24,133 794,152 Professional fees 25,114 3,538 28,652 26,454 3,491 29,945 Supplies 376,802 15,303 392,105 354,959 6,846 361,805 Occupancy 310,000 40,051 350,051 257,784 49,004 306,788 Travel and conferences 68,023 3,531 71,554 46,148 3,853 50,001 Specific assistance 121,714-121,714 92,940-92,940 Depreciation 99,670 11,670 111,340 77,668 15,263 92,931 Other expenses 35,305 7,894 43,199 39,056 6,659 45,715 Total expenses $ 6,259,832 $ 226,926 $ 6,486,758 $ 4,940,078 $ 189,066 $ 5,129,144 See Notes to Financial Statements 5
Statements of Cash Flows Years Ended 2015 2014 Operating Activities Change in net assets $ 304,948 $ (93,603) Adjustments to reconcile change in net assets to net cash from (used for) operating activities Depreciation 111,340 92,931 Noncash donations of property and equipment (11,104) (637) Realized loss on disposal of property and equipment 35,567 500 Realized and unrealized loss on investments 23,435 4,946 Changes in operating assets and liabilities Accounts receivable 98,428 8,110 Other receivables 7,728 3,465 Prepaid expenses (9,387) (14,727) Other assets (3,832) (1,849) Accounts payable 21,357 7,816 Accrued expenses 332,502 (87,524) Net Cash from (used for) Operating Activities 910,982 (80,572) Investing Activities Purchase of investments (232,530) (8,558) Proceeds from sale of investments 19,211 - Purchases of property and equipment (120,496) (50,776) Proceeds from sale of property and equipment - 3,071 Net Cash used for Investing Activities (333,815) (56,263) Financing Activities Net change in line of credit (110,000) 69,000 Principal payments on long-term debt (6,623) (6,156) Net Cash from (used for) Financing Activities (116,623) 62,844 Net Change in Cash and Cash Equivalents 460,544 (73,991) Cash and Cash Equivalents, Beginning of Year 112,865 186,856 Cash and Cash Equivalents, End of Year $ 573,409 $ 112,865 Supplemental Disclosure of Cash Flow Information Cash paid for interest $ 8,323 $ 14,841 See Notes to Financial Statements 6
Notes to Financial Statements Note 1 - Principal Activity and Significant Accounting Policies Organization Excelsior Youth Center (Excelsior) is a private non-profit integrated healthcare and education organization, which was incorporated in the state of Washington in 1982. For over 30 years we have provided specialty education, healthcare and innovative behavioral health services to children, adolescents, young adults and their families. Education, Behavioral Health, Primary Care, and Recreation services are integrated to provide holistic and comprehensive services to those we serve. Mission Connecting Youth to Their Futures Vision Excelsior strives to connect youth to their futures. We serve a broad base of youth and families with the primary aim of identifying goals and making positive steps toward accomplishing them. In our community we are advocates for youth and hold fast to the belief that children and families have the potential to be safer, stronger, and more satisfied in the lives they lead. Excelsior provides comprehensive services to meet the holistic needs of those we serve. Our staff seeks formal and informal educational opportunities to develop skill sets that enhance the relationships we build with clients. We establish a professional environment marked by collaboration, respect, and unity. We are in the processes of continued self-evaluation and self-improvement. We cherish the privilege that we have been given to assist those in the search of better lives. Values Professionalism. Unity. Communication. Programs and Services Person centered recovery planning (PCRP) allows for flexibility and innovation in meeting needs of youth and their families. We recognize that individuals have unique needs and have the most crucial voice in their search for healthier lives. This voice is critical in directing service planning. State certified recovery support services are utilized across all programs and include peer support (family and youth supports), medication support, and WRAP services. Excelsior currently provides services through the following programs: School Program Excelsior has over 30 years of experience providing academic services through our fully accredited onsite elementary, middle and high school. The school does not suspend nor expel. Intervention specialists and behavior technicians provide therapeutic and crisis services to all students under the coordination of a campus manager and Mental Health Professional. The school provides special, experiential, and regular education services, GED, and credit retrieval services to ensure all educational opportunities are maximized. Medical Program Excelsior has over 30 years of experience providing onsite primary medical and specialty care services. Services include EPSDT, psychiatric assessment, and medication evaluation and management. Primary and specialty medical care coordination through long-standing community relationships with providers, including oral, vision and other specialists, help ensure we provide whole care for the individuals we serve. 7
Notes to Financial Statements Outpatient Behavioral Health Excelsior provides ambulatory care through a variety of outpatient and outreach services including Psychiatric Assessment and Evaluation; Substance Use Assessment; Medication Management; Individual/Group/Family Therapy; Case Management/Care Coordination; Intensive Outpatient (MH/ASAM 2.1); Crisis Services and Outreach; Community SUD Outreach; SUD Outpatient (ASAM 1.0); and Recovery Support Services which encompass Medication Support; Peer Support; Crisis Support; Wraparound Facilitation; and Least Restrictive Alternative (LRA) Support. Caregiver Respite Program Excelsior provides respite services to families who need a break from high-intensity caregiving, and youth who benefit from a therapeutic program and structured environment. Day Treatment Hospital Diversion Program The Day Treatment Program provides day treatment for adolescents with the goal to prevent out of home placement and/or hospitalization through a contract with the County Regional Support Network. In-Home Hospital Diversion Program Excelsior has developed the only children s Roads to Community Living program in our region of care. The program engages families with children, adolescents and young adults with chronic hospitalization, law enforcement interaction and CPS involvement. In 2014 this low cost program kept 100% of participants from returning to the hospital and several families from filing dependency with the state of Washington. LifePoint Transition and Hospital Diversion Program Excelsior provides a comprehensive transition service providing hospital diversion and step-down from acute institutional care settings. A multidisciplinary service team has a unique approach to address the variety and complexity of this population s needs. The program provides a structured residential setting with the flexibility for the independence desired in late adolescence and young adulthood, and with a plan to reduce or eliminate intensive stabilization services in adulthood. Behavior Rehabilitative Services Residential Program Excelsior provides the State s most intensive level of care for child welfare. These children and adolescents aged 10-21 have a history of chronic and significant traumatizing experiences (Adverse Childhood Experiences ACEs) and often an absence of any familial support system resources. These youth receive holistic, traumainformed, and evidence-based care. Lengths of stay range from brief intervention to long-term psychiatric residential care. All residential services are integrated with onsite primary medical and education services. Substance Use Residential Program An Intensive Inpatient Residential Substance Abuse Program that serves males who are in need of a structured 24- hour setting in order to develop the necessary skills to achieve abstinence and understand the process of their substance use disorder. Once this program is complete, the adolescent will then complete a Recovery House Residential Program to focus on long-term recovery. Co-Occurring Intensive Outpatient Program Excelsior operates an innovative harm-reduction based child and adolescent co-occurring intensive outpatient program. The program serves males and females ages 10-21, and offers a variety of engaging services including crisis response, peer support, medication management, therapeutic recreation, in-home consultation and other non-traditional services. 90% of the program participants are assessed at meeting criteria for inpatient or residential, but for a variety of reasons may not be appropriate for, or willing to access those services. 8
Notes to Financial Statements Cash and Cash Equivalents Excelsior considers all cash and highly liquid financial instruments with original maturities of three months or less, and which are neither held for nor restricted by donors for long-term purposes, to be cash and cash equivalents. Investments Excelsior records investment purchases at cost, or if donated, at fair value on the date of donation. Thereafter, investments are reported at their fair values in the statements of financial position. Net investment return/(loss) is reported in the statements of activities and consists of interest and dividend income, and realized and unrealized capital gains and losses. Receivables and Credit Policies Accounts receivable consist primarily of noninterest-bearing amounts due on contracts with governmental agencies. Management determines the allowance for uncollectable accounts receivable based on historical experience, an assessment of economic conditions, and a review of subsequent collections. Accounts receivable are written off when deemed uncollectable. There was no allowance at. Property and Equipment Property and equipment additions over $1,500 are recorded at cost, or if donated, at fair value on the date of donation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging from two to forty years. When assets are sold or otherwise disposed of, the cost and related depreciation is removed from the accounts, and any remaining gain or loss is included in the statement of activities. Costs of maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed currently. Net Assets Net assets, revenues, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows: Unrestricted Net Assets Net assets available for use in general operations. Temporarily Restricted Net Assets Net assets subject to donor restrictions that may or will be met by expenditures or actions of the Center and/or the passage of time. Excelsior reports contributions restricted by donors as increases in unrestricted net assets if the restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished) in the reporting period in which the revenue is recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Permanently Restricted Net Assets Net assets whose use is limited by donor-imposed restrictions that neither expire by the passage of time nor can be fulfilled or otherwise removed by action of Excelsior. There were no permanently restricted net assets as of. 9
Notes to Financial Statements Revenue and Revenue Recognition Revenue is recognized when earned. Treatment is provided on a fee-for-service basis and contract revenue is recognized at time of service. Contributions are recognized when cash, securities or other assets, an unconditional promise to give, or notification of a beneficial interest is received. Conditional promises to give are not recognized until the conditions on which they depend have been substantially met. In-Kind Contributions Contributed goods are recorded at fair value at the date of donation. Excelsior records donated materials and services at the respective fair values at date of donation. Functional Allocation of Expenses The costs of program and supporting services activities have been summarized on a functional basis in the statements of activities. The statements of functional expenses present the natural classification detail of expenses by function. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Income Taxes Excelsior Youth Center is organized as a Washington nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3), qualifies for the charitable contribution deduction under Section 170(b)(1)(A)(vi), and has been determined not to be a private foundation under Section 509(a)(1). Excelsior is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, Excelsior is subject to income tax on net income that is derived from business activities that are unrelated to their exempt purposes. Excelsior has determined that it is not subject to unrelated business income tax. Excelsior believes it has appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. Excelsior would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. Financial Instruments and Credit Risk Excelsior manages deposit concentration risk by placing cash and money market accounts with financial institutions believed by management to be creditworthy. Amounts on deposit may exceed insured limits or include uninsured investments in money market mutual funds. Excelsior has not experienced losses in any of these accounts. Credit risk associated with accounts receivable is considered to be limited due to high historical collection rates and because substantial portions of the outstanding amounts are due from government agencies. 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 and those differences could be material. 10
Notes to Financial Statements Subsequent Events Excelsior has evaluated subsequent events through May 25, 2016, the date the financial statements were available to be issued. Note 2 - Fair Value Measurements and Disclosures Excelsior reports certain assets at fair value in the financial statements. Fair value is the price that would be received to sell an asset in an orderly transaction in the principal, or most advantageous, market at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. Inputs used to determine fair value refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available. A three-tier hierarchy categorizes the inputs as follows: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that Excelsior can access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and market-corroborated inputs. Level 3 Unobservable inputs for the asset or liability. In these situations, Excelsior develops inputs using the best information available in the circumstances. Excelsior s investments are classified within Level 1 because they are comprised of mutual funds, exchange traded funds, and stocks held by Morgan Stanley and Principal Financial with readily determinable fair values based on daily redemption values. The following table presents assets measured at fair value on a recurring basis at December 31, 2015: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Investments Mutual funds $ 295,691 $ 295,691 $ - $ - Exchange traded funds 85,764 85,764 - - Common stocks 6,927 6,927 - - $ 388,382 $ 388,382 $ - $ - 11
Notes to Financial Statements The following table presents assets measured at fair value on a recurring basis at December 31, 2014: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Investments Mutual funds $ 159,870 $ 159,870 $ - $ - Exchange traded funds 30,630 30,630 - - Common stocks 7,998 7,998 - - $ 198,498 $ 198,498 $ - $ - Note 3 - Net Investment Return Net investment return consists of the following for the years ended : 2015 2014 Interest and dividends $ 12,411 $ 9,385 Net realized and unrealized gain (loss) (21,204) (4,946) $ (8,793) $ 4,439 Note 4 - Property and Equipment Property and equipment consists of the following at : 2015 2014 Buildings and improvements $ 2,455,543 $ 2,463,993 Furniture and equipment 351,156 375,026 Vehicles 50,618 28,967 2,857,317 2,867,986 Less accumulated depreciation 1,995,171 1,990,533 862,146 877,453 Land 373,650 373,650 $ 1,235,796 $ 1,251,103 12
Notes to Financial Statements Note 5 - Line of Credit Excelsior has a revolving line of credit with Bank of America that provides for available borrowings of $150,000. The agreement matures on August 1, 2016. Borrowings under the line of credit bear interest at the Bank s prime rate plus 2.0% (5.5% at December 31, 2015). The balance as of December 31, 2014 was $110,000. There was no outstanding balance as of December 31, 2015. Note 6 - Long-term Debt Long-term debt consists of the following at : 2015 2014 Mortgage payable to Sisters of the Good Shepherd; due in monthly installments of $667 including interest at 8%, secured by deed of trust on land, matures November 2017 $ 13,070 $ 19,693 Future maturities of long-term debt are as follows: Years ending December 31, 2016 2017 $ $ 7,172 5,898 13,070 Note 7 - Leases Excelsior leases a copier under an operating lease agreement through December 2020. Rent expense for the years ended totaled $1,137 and $3,710, respectively. Future minimum lease payments are as follows: Years ending December 31, 2016 2017 2018 2019 2020 $ $ 4,549 4,549 4,549 4,549 4,549 22,745 13
Notes to Financial Statements Note 8 - Restricted Net Assets Temporarily restricted net assets at consist of: 2015 2014 KW memorial fund $ 6,963 $ 7,113 Christmas fund 3,261 3,238 Kitchen fund - 1,588 School 4,273 764 Church/Media room 294 294 Interview/Cooper Levy clothing fund 93 206 Grounds 35 35 Dental 500 - Other 910 711 $ 16,329 $ 13,949 Net assets released due to satisfaction of purpose restrictions were $3,100 and $1,669 for the years ended, respectively. Note 9 - Retirement Plan Excelsior sponsors a retirement plan that covers all employees who work more than 20 hours per week. Employer contributions are discretionary. There were employer contributions of $40,640 and $0 during the years ended, respectively. 14