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CRITICAL KNOWLEDGE PROACTIVE INSIGHT Financial Statements and Single Audit Information As of December 31, 2014 and 2013 and for the Years Then Ended Together with Independent Auditors Reports
INDEPENDENT AUDITORS REPORT To the Board of Directors Boys & Girls Clubs of Greater Salt Lake We have audited the accompanying financial statements of Boys & Girls Clubs of Greater Salt Lake (a nonprofit organization), which comprise the statements of financial position as of December 31, 2014 and 2013, 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 and, for 2014, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 auditors 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 Boys & Girls Clubs of Greater Salt Lake as of December 31, 2014 and 2013, 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. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards for the year ended December 31, 2014, as required by the Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for
purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, for the year ended December 31, 2014, we have also issued a report dated June 29, 2015, on our consideration of Boys & Girls Clubs of Greater Salt Lake s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Boys & Girls Clubs of Greater Salt Lake s internal control over financial reporting and compliance. June 29, 2015
Statements of Financial Position As of December 31, Assets 2014 2013 Cash and cash equivalents $ 293,183 $ 334,462 Investments 371,654 343,424 Grants and other receivables 188,724 83,226 Prepaid and other assets 27,252 12,612 Restricted cash and cash equivalents 5,000 5,000 Land, buildings and equipment, net 2,156,003 2,268,970 Total assets $ 3,041,816 $ 3,047,694 Liabilities and Net Assets Accounts payable $ 113,447 $ 78,264 Accrued liabilities 90,640 90,518 Deferred revenue 13,059 12,321 Notes payable 184,364 229,620 Line of credit 10,218 - Total liabilities 411,728 410,723 Commitments and contingencies Net assets: Unrestricted 2,594,983 2,574,129 Temporarily restricted 30,105 57,842 Permanently restricted 5,000 5,000 Total net assets 2,630,088 2,636,971 Total liabilities and net assets $ 3,041,816 $ 3,047,694 See accompanying notes to financial statements. 1
Statements of Activities For the Years Ended December 31, 2014 2013 Change in unrestricted net assets: Revenues and support: Government support $ 693,098 $ 653,849 Contributions 800,645 662,697 Fund raising - events 214,761 193,855 Sugarhouse facility 487,347 457,009 Capitol West facility 1,806 2,235 Lied facility 2,044 2,226 Tooele facility 19,754 20,199 Interest and net investment gain 26,922 49,977 Miscellaneous and rental income 2,142 19,355 Total unrestricted revenues and support 2,248,519 2,061,402 Net assets released from restrictions 57,842 48,262 Total unrestricted revenues and support and reclassifications 2,306,361 2,109,664 Expenses: Program services: Sugarhouse facility 737,064 674,915 Capitol West facility 410,763 372,506 South Salt Lake facility - 15,741 Lied facility 500,287 457,109 Tooele facility 273,109 272,907 Total program expenses 1,921,223 1,793,178 Supporting services: Management and general 223,180 223,040 Fundraising 141,104 151,456 Total supporting services expenses 364,284 374,496 Total expenses 2,285,507 2,167,674 Loss on sale of assets - (187,010) Increase (decrease) in unrestricted net assets $ 20,854 $ (245,020) See accompanying notes to financial statements. 2
Statements of Activities For the Years Ended December 31, 2014 2013 Change in temporarily restricted net assets: Contributions $ 30,105 $ 54,000 Net assets released from restrictions (57,842) (48,262) Increase (decrease) in temporarily restricted net assets (27,737) 5,738 Decrease in net assets (6,883) (239,282) Net assets, beginning of the year 2,636,971 2,876,253 Net assets, end of the year $ 2,630,088 $ 2,636,971 See accompanying notes to financial statements. 3
Statement of Functional Expenses For the Year Ended December 31, 2014 Program Services Supporting Services Sugarhouse Capitol West Lied Tooele Management Overall Facility Facility Facility Facility Total and General Fundraising Total Total Salaries $ 351,220 $ 215,564 $ 233,992 $ 164,785 $ 965,561 $ 126,369 $ 64,648 $ 191,017 $ 1,156,578 Payroll taxes, employee health and retirement benefits 78,140 39,146 42,576 33,332 193,194 18,347 8,730 27,077 220,271 Total salaries and related expenses 429,360 254,710 276,568 198,117 1,158,755 144,716 73,378 218,094 1,376,849 Professional fees and contracted services 18,410 13,806 15,040 10,896 58,152 - - - 58,152 Supplies-office 1,273 302 208 471 2,254 5,409-5,409 7,663 Postage 1,421 730 869 646 3,666-433 433 4,099 Sponsor funded programs 39,137 14,305 21,056 11,869 86,367 - - - 86,367 Occupancy and utilities 46,519 30,304 46,418 12,231 135,472 36,270-36,270 171,742 Telephone 2,148 1,243 2,439 4,271 10,101 8,257-8,257 18,358 Local transportation 580 219 352 1,991 3,142-454 454 3,596 Vehicle expense 9,857 15,803 13,996 3,242 42,898 - - - 42,898 Child care food and beverage 18,503 1,070 722 837 21,132 - - - 21,132 Printing, publication and advertising 7,221 3,062 3,411 2,595 16,289 459 1,453 1,912 18,201 Conference, training and awards 6,542 5,835 7,993 2,918 23,288 - - - 23,288 Insurance 19,702 7,682 11,790 3,176 42,350 4,047-4,047 46,397 National dues 2,581 1,390 1,654 993 6,618 1,654-1,654 8,272 Direct fundraising - - - - - - 57,132 57,132 57,132 Bad debt 4,107 - - - 4,107 - - - 4,107 Equipment/rental/storage 9,857 9,532 11,535 4,536 35,460 7,282-7,282 42,742 Janitorial 25,178 14,347 20,857 504 60,886 1,300-1,300 62,186 Other 23,515 2,662 3,275 2,703 32,155 9,555 8,254 17,809 49,964 Depreciation expense 71,153 33,761 55,931 9,994 170,839 3,770-3,770 174,609 Interest expense - - 6,173 1,119 7,292 461-461 7,753 Total expenses $ 737,064 $ 410,763 $ 500,287 $ 273,109 $ 1,921,223 $ 223,180 $ 141,104 $ 364,284 $ 2,285,507 See accompanying notes to financial statements. 4
Statement of Functional Expenses For the Year Ended December 31, 2013 Program Services Supporting Services Sugarhouse Capitol West South Salt Lied Tooele Management Overall Facility Facility Lake Facility Facility Facility Total and General Fundraising Total Total Salaries $ 321,687 $ 200,288 $ - $ 214,228 $ 165,020 $ 901,223 $ 122,988 $ 78,951 $ 201,939 $ 1,103,162 Payroll taxes, employee health and retirement benefits 81,161 34,804-37,917 35,358 189,240 30,153 16,921 47,074 236,314 Total salaries and related expenses 402,848 235,092-252,145 200,378 1,090,463 153,141 95,872 249,013 1,339,476 Professional fees and contracted services 18,015 14,449-17,895 11,684 62,043 1,150 735 1,885 63,928 Supplies-office 935 172-302 562 1,971 3,985-3,985 5,956 Postage 1,379 754-897 734 3,764-222 222 3,986 Sponsor funded programs 29,376 18,072-14,234 11,989 73,671 - - - 73,671 Occupancy and utilities 40,752 22,781-44,177 12,116 119,826 34,670 300 34,970 154,796 Telephone 2,865 1,765-4,198 4,825 13,653 5,913-5,913 19,566 Local transportation 712 108-457 987 2,264-256 256 2,520 Vehicle expense 9,321 11,027-16,914 3,399 40,661 - - - 40,661 Child care food and beverage 16,160 - - - 1,445 17,605 - - - 17,605 Printing, publication and advertising 4,577 1,379-1,627 1,218 8,801 260 480 740 9,541 Conference, training and awards 5,060 3,038-3,563 2,032 13,693 - - - 13,693 Insurance 20,949 8,778 2,809 12,187 3,361 48,084 4,336-4,336 52,420 National dues 2,497 1,380-1,643 1,051 6,571 1,643-1,643 8,214 Direct fundraising - - - - - - - 49,511 49,511 49,511 Bad debt 2,234 - - - - 2,234 - - - 2,234 Equipment/rental/storage 4,109 3,341-3,666 2,580 13,696 7,835 1,046 8,881 22,577 Janitorial 24,312 13,360-19,485 423 57,580 1,300-1,300 58,880 Other 19,227 3,115 750 3,714 3,852 30,658 6,767 3,034 9,803 40,461 Depreciation expense 69,587 33,895 12,182 52,943 9,240 177,847 1,437-1,435 179,282 Interest expense - - - 7,062 1,031 8,093 603-603 8,696 Total expenses $ 674,915 $ 372,506 $ 15,741 $ 457,109 $ 272,907 $ 1,793,178 $ 223,040 $ 151,456 $ 374,496 $ 2,167,674 See accompanying notes to financial statements. 5
Statements of Cash Flows For the Years Ended December 31, 2014 2013 Cash flows from operating activities: Decrease in net assets $ (6,883) $ (239,282) Adjustments to reconcile decrease in net assets to net cash provided by operating activities: Depreciation 174,609 179,282 Loss on sale of assets - 187,010 Gain on investments (26,049) (48,782) (Increase) decrease in: Grants and other receivables (105,498) 5,741 Prepaid and other assets (23,664) 25,386 Increase (decrease) in: Accounts payable 35,183 (22,247) Accrued liabilities 122 (2,867) Deferred revenue 738 (3,628) Net cash provided by operating activities 48,558 80,613 Cash flows from investing activities: Purchase of buildings and equipment (61,642) (89,318) Proceeds from sale of land, buildings and equipment - 43,375 Purchase of investments 6,843 (48,589) Proceeds from sale of investments - 12,500 Net cash used in investing activities (54,799) (82,032) Cash flows from financing activities: Payment of notes payable (45,256) (32,939) Proceeds from line of credit 10,218 - Net cash used in financing activities (35,038) (32,939) Net change in cash and cash equivalents (41,279) (34,358) Cash and cash equivalents, beginning of the year 334,462 368,820 Cash and cash equivalents, end of the year $ 293,183 $ 334,462 Supplemental disclosures of cash flow information: Cash paid during the year for interest $ 7,753 $ 8,696 Cash paid during the year for income taxes - - See accompanying notes to financial statements. 6
Notes to Financial Statements December 31, 2014 and 2013 1. Organization and Summary of Significant Accounting Policies Organization Boys & Girls Clubs of Greater Salt Lake (the Organization or Boys & Girls Clubs) is a Utah not-for-profit corporation organized to provide youth development, before and after school care, summer camp, and recreational sports leagues. Financial Statement 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. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Concentration of Credit Risk The Organization maintains its cash and cash equivalents in bank deposit accounts which, at times, exceed federally insured limits. As of December 31, 2014, the Organization had approximately $49,000 of cash and cash equivalents that exceeded federally insured limits. To date, the Organization has not experienced a loss or lack of access to its cash or cash equivalents; however, no assurance can be provided that access to the Organization s cash and cash equivalents will not be impacted by adverse conditions in the financial markets. Concentrations of Revenues and Support Government support consisted of significant funding from certain government agencies, and contributions included one significant contributor, for the years ended December 31: 2014 2013 Government Support Agency A 36.1% 14.3% Agency B 22.7% 23.1% Agency C 13.9% 14.7% Agency D 11.7% 13.6% Agency E * 12.2% Contributions Donor A 24.1% 28.6% * This agency did not represent more than 10% of support for the year noted. 7
Notes to Financial Statements 1. Organization and Summary of Significant Accounting Policies Concentrations of Accounts Receivable Concentrations of accounts receivable consisted of the following as of December 31: Accounts Receivable 2014 2013 Agency A 56.1% 47.1% Agency C 15.0% 18.5% Cash and Cash Equivalents The Organization considers all highly liquid investments with an initial maturity to the Organization of three months or less to be cash equivalents. Investments Investments in marketable debt and equity securities are reported at their fair values in the statements of financial position. Unrealized gains and losses are included in the change in net assets. Grants and Other Receivables The Organization has grants, contracts, and promises to give receivables from entities located within and outside of Utah. Receivables are evaluated by management for collectability on an ongoing basis, and allowances for uncollectible receivables are established as considered necessary. Grants and other receivables are carried at the original amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a periodic basis. Management determines the allowance for doubtful accounts receivable by identifying troubled accounts and by using historical experience applied to an aging of accounts. Provisions for losses on receivables are charged to operations to maintain the allowance at a level considered adequate to cover losses. Receivables are written off against the allowance when deemed uncollectable. Recoveries of receivables previously written off are recorded when received. Receivables are considered past due when any portion of the receivable balance is outstanding more than thirty days. No allowance for doubtful accounts receivable was considered necessary by management as of December 31, 2014 and 2013. 8
Notes to Financial Statements 1. Organization and Summary of Significant Accounting Policies Land, Buildings and Equipment Expenditures for land, buildings and equipment are capitalized at cost. The fair value of donated land, buildings, and equipment is similarly capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the change in net assets for the period. The cost of maintenance and repairs is charged to expense as incurred; significant renewals and betterments, which equal or exceed $1,000, are capitalized. The estimated useful lives of buildings and equipment are as follows: Buildings and improvements Furniture and equipment Vehicles 10-35 Years 3-5 Years 5 Years Revenue Recognition Service revenues are recognized in accordance with the terms of service contracts and as service are provided. Generally, revenue is recognized when services have been performed, and collection is reasonably assured. Amounts received in advance of providing the services are recorded as deferred revenue until earned. Revenue on cost-reimbursement contracts is recognized as allowable costs are incurred, when a valid contract exists, collection is reasonably assured, and no significant obligations remain. Rental revenue is recognized proportionately over the rental term when collection is reasonably assured. Rent collected in advance is recorded as deferred rental income until earned. Contributions Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donor-restricted support is 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 a purpose 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. 9
Notes to Financial Statements 1. Organization and Summary of Significant Accounting Policies Donated Property and Equipment Donations of property and equipment are recorded as support at their estimated fair value at the date of donation. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organization reclassifies temporarily restricted net assets to unrestricted net assets at that time. Donated Services No amounts have been reflected in the financial statements for donated services. The Organization pays for most services requiring specific expertise. However, many individuals volunteer their time and perform a variety of tasks that assist the Organization with specific programs and assignments. Income Taxes The Organization is a qualified charitable organization under Section 501(c)(3) of the Internal Revenue Code and under State of Utah regulations, and as such, is not subject to federal or state income taxes on income related to the Organizations' exempt purposes. The Organization is subject to taxation on unrelated business income. The Organization recognizes a liability for an uncertain tax position when it is more likely than not that the tax position will not be sustained on examination by the taxing authorities, based on the technical merits of the position. The Organization has no uncertain tax positions as of December 31, 2014 and 2013. The Organization is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Organization believes it is no longer subject to selection for examinations for years prior to 2011. Allocated Expenses The costs of providing program and other activities have been summarized on a functional basis in the statements of activities and in the statements of functional expenses. Accordingly, certain expenses have been allocated among the programs and supporting services benefited. 10
Notes to Financial Statements 1. Organization and Summary of Significant Accounting Policies Subsequent Events Management has evaluated subsequent events through the date of the independent auditors report, which is the date the financial statements were available to be issued. 2. Investments Investments are stated at fair value, based on the valuation methodologies described in Note 3, and consist primarily of mutual funds as of December 31, 2014 and 2013. Returns on investments and cash balances are summarized as follows for the years ended December 31: 2014 2013 Net realized and unrealized gains $ 26,049 $ 48,782 Interest income, net of fees 873 1,195 $ 26,922 $ 49,977 3. Fair Value Measurements The Organization utilizes various methods to measure the fair value of its investments on a recurring basis. Accounting principles generally accepted in the United States of America establish a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. Level 2: Unobservable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Inputs are unobservable, are supported by little or no market activity, and are significant to the fair value of the underlying asset. 11
Notes to Financial Statements 3. Fair Value Measurements The following tables summarize the inputs used to value the Organization s assets measured at fair value on a recurring basis as of December 31: 2014 Description Level 1 Level 2 Level 3 Total Equities: $ 1,509 $ - $ - $ 1,509 Mutual funds: Fixed income 129,360 - - 129,360 International stock 33,077 - - 33,077 Small cap 49,945 - - 49,945 Mid cap 48,270 - - 48,270 Large cap 56,759 - - 56,759 Total mutual funds 317,411 - - 317,411 Cash 52,734 - - 52,734 Total $ 371,654 $ - $ - $ 371,654 2013 Description Level 1 Level 2 Level 3 Total Equities: $ 1,655 $ - $ - $ 1,655 Mutual funds: Fixed income 120,643 - - 120,643 Small cap 63,813 - - 63,813 Large cap 57,309 - - 57,309 Mid cap 55,882 - - 55,882 International stock 44,122 - - 44,122 Total mutual funds 341,769 - - 341,769 Total $ 343,424 $ - $ - $ 343,424 12
Notes to Financial Statements 4. Land, Buildings And Equipment Land, buildings and equipment consist of the following as of December 31: 2014 2013 Buildings and improvements $ 3,822,872 $ 3,785,435 Furniture and equipment 723,114 700,987 Land 235,928 235,928 Vehicles 176,619 174,541 4,958,533 4,896,891 Less accumulated depreciation (2,802,530) (2,627,921) $ 2,156,003 $ 2,268,970 Depreciation expense for the years ended December 31, 2014 and 2013 totalled $174,609 and $179,282, respectively. 5. Accrued Liabilities Accrued liabilities consist of the following as of December 31: 2014 2013 Accrued wages and payroll taxes $ 51,265 $ 52,530 Accrued vacation 38,109 36,072 Other 1,266 1,916 $ 90,640 $ 90,518 6. Notes Payable The Organization has a mortgage note payable to a bank, due in monthly installments of $2,724, including interest at the one-year treasury note rate plus 3% (3.10% at December 31, 2014), secured by real property, maturing in May 2022, with an outstanding balance of $184,364 and $210,882 as of December 31, 2014 and 2013, respectively. The Organization had a note payable to a financial institution, due in monthly installments of $695, including interest at 6.49%, secured by a vehicle. The note was paid in full in 2014. The note had an outstanding balance of $18,738 as of December 31, 2013. 13
Notes to Financial Statements 6. Notes Payable Future maturities of notes payable are as follows: Years Ending December 31: 2015 $ 26,626 2016 27,581 2017 28,568 2018 29,590 2019 30,648 Thereafter 41,351 $ 184,364 7. Line of Credit The Organization has a bank line of credit which allows the Organization to borrow up to $200,000. Outstanding balances bear interest at the greater of i) the prime rate plus 1.5% (4.75% at December 31, 2014) or ii) 5.0%, and are secured by a building. The line of credit had an outstanding balance of $10,218 and $0 as of December 31, 2014 and 2013, respectively. The line of credit matures in January 2016. 8. Restrictions on Net Assets Temporarily restricted net assets totaled $30,105 and $57,842 as of December 31, 2014 and 2013, respectively, and are restricted for use in enhancement and outreach programs at several of the Organization s facilities, as well as capital improvements. Permanently restricted net assets consist of contributions toward an endowment fund totaling $5,000 as of December 31, 2014 and 2013, required to be held in perpetuity. Income from the endowment fund may be used in support of operating the Organization s clubs. This endowment is held in a separate fund, and has been classified as restricted cash and cash equivalents on the statements of financial position. 9. Retirement Plan The Organization sponsors and maintains a 401(k) profit sharing plan (the Plan). The Plan covers qualifying employees age 21 or older who work 1,000 hours or more per year and complete one year of employment. The Organization s contributions to the Plan totaled approximately $32,000 and $34,000 for each of the years ended December 31, 2014 and 2013, respectively. 14
Notes to Financial Statements 10. Related Party Transactions The Organization pays yearly dues to Boys and Girls Clubs of America. Payments were approximately $8,000 for 2014 and 2013. Donations received from members of the Board of Directors were approximately $69,000 during each of the years ended December 31, 2014 and 2013. 11. Commitments and Contingencies Legal Proceedings Management is not currently aware of claims or threatened claims that reasonably would be expected to exceed insurance limits, or otherwise have a material adverse effect upon the Organization s financial position or activities. Operating Leases The Organization is obligated under certain operating leases for vehicles, equipment and office space. Total lease expense for these operating leases for the years ended December 31, 2014 and 2013 was approximately $56,000 and $53,000, respectively. Future minimum lease payments under non-cancellable operating leases, with initial terms of one year or more, are as follows as of December 31, 2014: Years Ending December 31: 2015 $ 43,303 2016 39,527 2017 2,475 Total $ 85,305 12. Subsequent Event On March 4, 2015, the Board of Directors voted to merge the Organization with another nonprofit entity with a mission consistent with that of the Organization. The two entities assets, liabilities, and operations will be combined in the merger, and the other entity will continue as the surviving legal entity for the combined future operations; however, the combined entity will change its name to that of the Organization. The effective date of the merger will be July 1, 2015. 15
Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2014 Federal Grantor/ Pass Through Grantor/ Program Title Federal CFDA Number Pass- Through Grantors Numbers Federal Expenditures U.S. Department of Health and Human Services: Tooele County-SSBG 93.667 120291 $ 17,000 Salt Lake County-SSBG Tobacco Prevention 93.667 BJ13122 8,627 Salt Lake County-SSBG Tobacco Prevention 93.667 BJ14104 4,881 Total 93.667 30,508 Child Care and Development Block passed through State of Utah, Department of Workforce Services 93.575 150391 204,250 Child Care and Development Block passed through State of Utah, Department of Workforce Services 93.575 140292 15,715 Child Care and Development Block passed through State of Utah, Department of Workforce Services 93.575 140233 15,110 Child Care and Development Block passed through State of Utah, Department of Workforce Services 93.575 140232 14,962 Total 93.575* $ 250,037 * Denotes a major program 16
Schedule of Expenditures of Federal Awards Federal Grantor/ Pass Through Grantor/ Program Title Federal CFDA Number Pass- Through Grantors Numbers Federal Expenditures U.S. Department of Health and Human Services (): Temporary Assistance for Needy Families passed through State of Utah, Department of Workforce Services 93.558 140753 $ 43,798 Temporary Assistance for Needy Families passed through State of Utah, Department of Workforce Services 93.558 140752 40,856 Temporary Assistance for Needy Families passed through State of Utah, Department of Workforce Services 93.558 130053 38,807 Temporary Assistance for Needy Families passed through State of Utah, Department of Workforce Services 93.558 140293 34,075 Total 93.558* 157,536 Personal Responsibility Education Program passed through State of Utah, Division of Family Health and Preparedness 93.092 121191 96,063 Sexual Violence Prevention Education Program passed through State of Utah, Division of Family Health and Preparedness 93.166 150801 8,316 Total U.S. Department of Health and Human Services $ 542,460 * Denotes a major program 17
Schedule of Expenditures of Federal Awards Federal Grantor/ Pass Through Grantor/ Program Title Federal CFDA Number Pass- Through Grantors Numbers Federal Expenditures U.S. Department of Housing and Urban Development: Block Grant program for Entitlement Communities passed through Salt Lake City 14.218 71-5-13-6040 $ 29,293 U.S. Department of Justice Office: Juvenile Mentoring Program 16.726 OJP201332601 12,000 Juvenile Mentoring Program 16.726 OJP201332602 8,000 Juvenile Mentoring Program 16.726 OJP201332600 4,000 Total 16.726 24,000 Total federal expenditures $ 595,753 * Denotes a major program Note 1 Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Boys & Girls Clubs of Greater Salt Lake under programs of the federal government for the year ended December 31, 2014. The information in this Schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of Boys & Girls Clubs of Greater Salt Lake, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Boys & Girls Clubs of Greater Salt Lake. Note 2 Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. 18
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Boys & Girls Clubs of Greater Salt Lake We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Boys & Girls Clubs of Greater Salt Lake (the Organization) (a nonprofit organization), which comprise the statement of financial position as of December 31, 2014, the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated June 29, 2015. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Organization s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Boys & Girls Clubs of Greater Salt Lake s financial statements are free of material misstatement, we performed tests of its 19
compliance with certain provisions of laws, regulations, contracts, and grants, agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. June 29, 2015 20
INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Board of Directors Boys & Girls Clubs of Greater Salt Lake Report on Compliance for Each Major Federal Program We have audited Boys & Girls Clubs of Greater Salt Lake s (the Organization) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on the Organization s major federal programs for the year ended December 31, 2014. The Organization s major federal programs are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its major federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for the Organization s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Organization s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal programs. However, our audit does not provide a legal determination on the Organization s compliance. Opinion on the Major Federal Programs In our opinion, Boys & Girls Clubs of Greater Salt Lake complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended December 31, 2014. 21
Report on Internal Control Over Compliance Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Organization s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal programs to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for the major federal programs and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organization s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. June 29, 2015 22
Schedule of Findings and Questioned Costs For the Year Ended December 31, 2014 Section I - Summary of Auditors Results Financial Statements Type of auditors report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported Type of auditors report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? yes X no Identification of major programs: CFDA Number Name of Federal Program or Cluster 93.575 Child Care and Development Block Grant 93.558 Temporary Assistance for Needy Families Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? yes X no 23
Schedule of Findings and Questioned Costs Section II - Financial Statement Findings No findings were noted related to our audit of the financial statements. Section III - Federal Award Findings and Questioned Costs No findings or questioned costs were noted related to our audit of the major federal award programs. 24
Summary Schedule of Prior Audit Findings There were no findings or questioned costs reported as a result of the December 31, 2013 Audit. 25