CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. REPORTS IN COMPLIANCE WITH OMB CIRCULAR A-133 JUNE 30, 2012 and 2011 (with supplementary schedules)
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Contents Page Financial Statements and Compliance Reports Independent auditors' unqualified opinion on financial statements and supplementary schedules 1 Statements of financial position as of June 30, 2012 and 2011 2 Statements of activities for the years ended June 30, 2012 and 2011 3 Statement of functional expenses for the year ended June 30, 2012 (with summarized financial information for 2011) 4 Statement of functional expenses for the year ended June 30, 2011 5 Statements of cash flows for the years ended June 30, 2012 and 2011 6 Notes to financial statements 7 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 17 Independent auditors' report on compliance with requirements that could have a direct and material effect on its major program and on internal control over compliance in accordance with OMB Circular A-133 19 Schedule of findings and questioned costs for the year ended June 30, 2012 21 Supplementary Schedules Schedule of expenditures of federal awards for the year ended June 30, 2012 22 Note to schedule of expenditures of federal awards for the year ended June 30, 2012 23 Schedules for Children's Growing Place Day Care Program: Schedule of revenues and expenditures - budget and actual - Schedule A 24 Schedule of expenditures - budget and actual CASVR - Schedule B 26 Schedule of adjustments to CASVR - Schedule C 27 Schedule of accounts receivable and accounts payable - Schedule D 28 Schedule of centrally paid costs - Schedule E 29 Schedule of detailed explanation of questioned costs - Schedule F 30 Schedule of consultants - Schedule G 31 Schedule of fixed assets inventory - Schedule H 32 Schedule of quantitative program results - Schedule I 36
INDEPENDENT AUDITORS' UNQUALIFIED OPINION ON FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES Board of Directors Center for the Elimination of Violence in the Family, Inc. Brooklyn, New York We have audited the accompanying statements of financial position of the Center for the Elimination of Violence in the Family, Inc. (the "Center") as of June 30, 2012 and 2011, and the related statements of activities, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of the Center's management. 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 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Center for the Elimination of Violence in the Family, Inc. as of June 30, 2012 and 2011, and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 22, 2012, on our consideration of the Center's internal control over financial reporting and 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary schedules on pages 22-36 are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards on page 22 is required by U.S. Office of Management and Budget Circular A-133, "Audits of States, Local Governments, and Non- Profit Organizations." Schedules A through I on pages 24 through 36 are required by the New York City Agency for Child Development. 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 other 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, such information is fairly stated in all material respects in relation to the financial statements as a whole. New York, New York October 22, 2012
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Statements of Financial Position June 30, 2012 2011 ASSETS Cash and cash equivalents $ 921,606 $ 446,083 Cash and cash equivalents - restricted 407,566 408,243 Investments 1,078,739 988,292 Grants receivable 1,645,309 1,633,129 Prepaid expenses and other assets 52,486 44,655 Deferred bond issuance costs 175,971 185,900 Property and equipment, net 4,811,937 4,969,930 $ 9,093,614 $ 8,676,232 LIABILITIES Accounts payable and accrued expenses $ 940,303 $ 447,115 Bond interest payable 49,549 50,226 Bonds payable 4,230,000 4,295,000 Commitments and contingencies (see Note K) 5,219,852 4,792,341 NET ASSETS Unrestricted 3,747,377 3,757,656 Temporarily restricted 1,385 1,235 Permanently restricted 125,000 125,000 3,873,762 3,883,891 $ 9,093,614 $ 8,676,232 See notes to financial statements 2
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Statements of Activities Year Ended June 30, 2012 2011 Temporarily Permanently Temporarily Permanently Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total Public support and revenue: Government grants $ 8,139,954 $ 8,139,954 $ 7,597,870 $ 7,597,870 Other grants 13,202 13,202 48,087 48,087 Contributions (including donated services of $46,401 in both 2012 and 2011) 120,485 120,485 144,671 144,671 Special events (net of direct benefit to donors of $32,462 in 2012 and $38,986 in 2011) 78,015 78,015 112,636 112,636 Net investment income 3,168 $ 150 3,318 108,614 $ 1,786 110,400 Total public support and revenue before net assets released from restrictions 8,354,824 150 8,354,974 8,011,878 1,786 8,013,664 Net assets released from restrictions: Time and program restrictions 3,000 (3,000) 0 Total public support and revenue 8,354,824 150 8,354,974 8,014,878 (1,214) 8,013,664 Expenses: Program services 6,937,214 6,937,214 6,772,260 6,772,260 Supporting services: Management and general 1,272,083 1,272,083 1,178,183 1,178,183 Fund-raising 155,806 155,806 145,169 145,169 Total supporting services 1,427,889 1,427,889 1,323,352 1,323,352 Total expenses 8,365,103 8,365,103 8,095,612 8,095,612 Change in net assets (10,279) 150 (10,129) (80,734) (1,214) (81,948) Net assets - beginning of year 3,757,656 1,235 $ 125,000 3,883,891 3,838,390 2,449 $ 125,000 3,965,839 Net assets - end of year $ 3,747,377 $ 1,385 $ 125,000 $ 3,873,762 $ 3,757,656 $ 1,235 $ 125,000 $ 3,883,891 See notes to financial statements 3
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Statement of Functional Expenses Year Ended June 30, 2012 (with summarized financial information for 2011) Program Services Supporting Services Women's Women's Children's Other Total Management Total 2012 2011 Survival Women's Second Growing Program Program and Fund- Supporting Total Total Space Safe Start Start Place Services Services General Raising Services Expenses Expenses Salaries $ 667,749 $ 1,022,660 $ 951,758 $ 217,421 $ 888,894 $ 3,748,482 $ 715,369 $ 64,875 $ 780,244 $ 4,528,726 $ 4,561,452 Employee benefits and payroll taxes 199,070 429,441 407,700 29,420 306,418 1,372,049 240,913 23,145 264,058 1,636,107 1,614,697 Professional fees 27,467 45,872 39,072 690 10,428 123,529 17,410 37,603 55,013 178,542 135,476 Travel and training 21,291 29,497 23,743 1,228 75,759 26,137 1,115 27,252 103,011 99,131 Liability insurance 13,958 24,427 25,143 337 3,287 67,152 5,279 3,046 8,325 75,477 72,668 Classroom supplies/trips 7,058 13,100 11,373 9,550 41,081 1,908 1,908 42,989 44,512 Printing 39 39 1,731 1,731 1,770 14,150 Food expenses 25,226 22,883 26,049 1,283 16,079 91,520 5,116 1,003 6,119 97,639 107,857 Household/office supplies 51,351 68,167 66,276 270 186,064 34,486 67 34,553 220,617 248,571 Contractual services 18,248 13,053 19,875 51,176 10,718 10,718 61,894 53,866 Rent 6,744 6,744 126,562 2,400 128,962 135,706 135,706 Utilities 42,942 75,350 47,150 165,442 16,463 16,463 181,905 181,296 Building maintenance and repairs 101,607 91,633 176,379 369,619 2,835 2,835 372,454 93,621 Telephone 12,815 10,430 8,105 2,697 34,047 5,814 1,200 7,014 41,061 48,918 Equipment and equipment repair 16,325 45,228 13,345 3,671 78,569 17,175 1,000 18,175 96,744 119,779 Postage 289 753 448 1,353 2,843 1,684 177 1,861 4,704 4,875 Advertising 36 196 102 334 110 110 444 561 Subscriptions and fees 1,182 268 906 220 2,576 6,934 5,713 12,647 15,223 6,929 Depreciation and amortization 167,922 167,922 167,922 167,921 Interest expense 309,097 309,097 309,097 313,056 Miscellaneous 2,099 7,256 20,473 282 13,060 43,170 35,439 14,462 49,901 93,071 70,570 $ 1,208,713 $ 1,900,214 $ 2,314,916 $ 249,653 $ 1,263,718 $ 6,937,214 $ 1,272,083 $ 155,806 $ 1,427,889 $ 8,365,103 $ 8,095,612 See notes to financial statements 4
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Statement of Functional Expenses Year Ended June 30, 2011 Program Services Supporting Services Women's Women's Children's Other Management Survival Women's Second Growing Program and Fund- Total Space Safe Start Start Place Services Total General Raising Total Expenses Salaries $ 632,158 $ 1,085,364 $ 1,003,479 $ 211,432 $ 897,685 $ 3,830,118 $ 658,324 $ 73,010 $ 731,334 $ 4,561,452 Employee benefits and payroll taxes 191,436 468,442 396,531 34,508 263,835 1,354,752 239,479 20,466 259,945 1,614,697 Professional fees 17,565 28,264 25,724 405 21,806 93,764 11,654 30,058 41,712 135,476 Travel and training 24,022 19,786 30,578 9,315 83,701 14,317 1,113 15,430 99,131 Liability insurance 13,053 22,842 22,842 3,204 61,941 6,477 4,250 10,727 72,668 Classroom supplies/trips 7,340 14,975 10,011 2,147 7,390 41,863 2,649 2,649 44,512 Printing 3,406 3,406 3,438 425 10,675 3,475 3,475 14,150 Food expenses 28,694 30,586 33,393 10,280 102,953 4,534 370 4,904 107,857 Household/office 50,163 71,193 103,749 3,245 1,092 229,442 18,887 242 19,129 248,571 supplies Contractual services 15,377 16,235 19,594 51,206 2,660 2,660 53,866 Rent 7,500 7,500 126,406 1800 128,206 135,706 Utilities 52,589 70,861 41,422 164,872 15,474 950 16,424 181,296 Building maintenance and repairs 15,439 30,715 33,840 625 10,000 90,619 3,002 3,002 93,621 Telephone 9,317 14,020 12,735 2,366 38,438 8,980 1,500 10,480 48,918 Equipment and equipment repair 32,894 23,469 46,449 3,000 105,812 12,967 1,000 13,967 119,779 Postage 322 538 438 1,515 2,813 1,317 745 2,062 4,875 Advertising 38 385 113 536 25 25 561 Subscriptions and fees 850 428 400 330 75 2,083 3,059 1,787 4,846 6,929 Depreciation and amortization 167,921 167,921 167,921 Interest expense 313,056 313,056 313,056 Miscellaneous 5,094 2,705 5,037 292 5,067 18,195 44,497 7,878 52,375 70,570 $ 1,099,757 $ 1,904,214 $ 2,270,750 $ 252,984 $ 1,244,555 $ 6,772,260 $ 1,178,183 $ 145,169 $ 1,323,352 $ 8,095,612 See notes to financial statements 5
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Statements of Cash Flows Year Ended June 30, 2012 2011 Cash flows from operating activities: Change in net assets $ (10,129) $ (81,948) Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Depreciation 157,993 157,992 Amortization of deferred loan origination costs 9,929 9,929 Net unrealized losses (gains) on investments 18,987 (100,488) Changes in: Grants receivable (12,180) (128,140) Prepaid expenses and other assets (7,831) (8,847) Accounts payable and accrued expenses 493,188 (590,109) Bond interest payable (677) (625) Net cash provided by (used in) operating activities 649,280 (742,236) Cash flows from investing activities: Purchases of investments (321,003) (9,249) Proceeds from sales and maturity of investments 211,569 602,860 Net cash (used in) provided by investing activities (109,434) 593,611 Cash flows from financing activities: Repayment of bonds payable (65,000) (60,000) Changes in restricted cash and cash equivalents held for debt services 677 (2,751) Net cash used in financing activities (64,323) (62,751) Net change in cash and cash equivalents 475,523 (211,376) Cash and cash equivalents, beginning of year 446,083 657,459 Cash and cash equivalents, end of year $ 921,606 $ 446,083 Supplemental disclosure of cash flow information: Interest paid $ 309,774 $ 313,681 See notes to financial statements 6
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [1] Organization: The Center for the Elimination of Violence in the Family, Inc. (the "Center"), which operates as the Center Against Domestic Violence, was formed in 1976 in New York to provide shelter, education, and a network of supporting services to victims of domestic violence. The Center is exempt from federal income taxes under Section 501(c)(3) of the U.S. Internal Revenue Code and from state and local taxes under comparable laws. [2] Basis of accounting: The accompanying financial statements of the Center have been prepared using the accrual basis of accounting and conform to accounting principles generally accepted in the United States of America as applicable to not-for-profit organizations. [3] Functional allocation of expenses: The cost of providing the various programs and supporting services has been summarized on a functional basis in the accompanying statements of activities. Accordingly, expenses have been allocated among the programs and supporting services using appropriate measurement methodologies developed by management. [4] Use of 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, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. Actual results could differ from those estimates. [5] Net assets: The net assets of the Center and changes therein are classified and reported as follows: (a) Unrestricted: Unrestricted net assets represent those resources that have no donor restrictions as to their use. (b) Temporarily restricted: Temporarily restricted net assets represent those resources that are subject to the requirements of the New York Prudent Management of Institutional Funds Act ("NYPMIFA") and the use of which has been restricted by donors to specific purposes and/or the passage of time. When a donor restriction expires, that is, when a stipulated time restriction ends or a purpose restriction is accomplished, or funds are appropriated through an action of the Board of Directors, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the accompanying statements of activities as net assets released from restriction. (c) Permanently restricted: Permanently restricted net assets represent those resources that have been designated by the donors to be held and invested in perpetuity. The donors of these assets direct the Center to use all or part of the income earned on related investments to support scholarships and other programs. Under the terms of NYPMIFA, those earnings will be classified as temporarily restricted in the accompanying statements of activities, pending appropriation by the Board of Directors. 7
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) [6] Endowment: NYPMIFA principally addresses (i) the management and investment of all of a not-for-profit entity's "institutional funds" (which are mainly the financial assets of the entity and which exclude programmatic assets such as buildings or operating facilities), and (ii) the appropriation by the governing board of earnings derived from donor restricted endowment funds. In essence, NYPMIFA requires all of the financial resources of the entity to be used in a "prudent" fashion, with the excess requiring approval and action of the governing board. The Center adheres to the provisions of NYPMIFA, as well as to those of the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic ASC 958, which provides guidance on the net asset classification of board-designated and donor-restricted endowment funds for a not-for-profit organization (see Note G). [7] Cash equivalents: For financial-reporting purposes, the Center considers all highly liquid securities purchased with a maturity of three months or less to be cash equivalents, with the exception of cash and short-term investments that are managed as part of the Center's long-term investment strategy. [8] Investments in securities: Investments in equity securities with readily determinable fair values and all investments in debt securities are reported at their fair values, with realized and unrealized gains and losses included in the accompanying statements of activities. Mutual funds, consisting primarily of bond and equity funds, are reported at their fair values, as determined by the related investment manager or advisor. Net investment income is recorded as unrestricted or permanently restricted in accordance with donor intent. Contributions of marketable securities are recorded at their fair values at the dates of donation. [9] Fair-value measurement: The Center reports a fair-value measurement of all applicable financial assets and liabilities, including investments, pledges receivable and short-term payables. [10] Deferred bond issuance costs: The costs associated with the issuance of New York City Development Agency bonds have been capitalized and are amortized over the life of the bonds using the straight-line method. [11] Revenue recognition: All unconditional contributions to the Center are recorded as revenue when received as either (i) cash or other assets or (ii) pledges. Conditional contributions are recognized as revenue when the conditions on which they depend have been substantially met. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. The Center records contributions as temporarily restricted if they are received with donor stipulations that limit their use through either purpose or time restrictions. Revenue from government contracts and grants is recognized when costs are incurred or other services are performed. Contracts and grants received in advance are deferred until the related expenses are incurred. 8
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) [12] Property and equipment: Property and equipment are stated at their original costs or at their fair values on the dates of donation. Depreciation is provided when assets are placed in service using the straight-line method, applied over the estimated useful lives of the assets, which range from five to 30 years. [13] Donated goods and services: Those donated goods and services that meet the requirements for recognition under generally accepted accounting principles are recorded as both revenue and expense in the accompanying statements of activities, at amounts determined by management to be reasonable for acquiring such goods and services. [14] Income tax uncertainties: The Center is subject to the provisions of ASC 740-10-05, relating to accounting and reporting for uncertainty in income taxes. Because of the Center's general tax-exempt status, ASC 740-10-05 has not had, and is not expected to have, a material impact on the Center's financial statements. [15] Subsequent events: The Center considers the accounting treatments, and the related disclosures in the current fiscal-year's financial statements, that may be required as the result of all events or transactions that occur after the fiscal year-end through the date of the independent auditors' report. NOTE B - INVESTMENTS At each fiscal year-end, investments consisted of the following: June 30, 2012 2011 Fair Fair Value Cost Value Cost Money-market funds $ 244,013 $ 244,013 $ 245,462 $ 245,617 Certificates of deposit 300,376 300,000 206,858 205,569 Government obligations 163,519 151,683 164,274 151,683 Equities 12,582 27,517 13,879 27,517 Mutual funds 358,249 275,158 357,819 258,551 $ 1,078,739 $ 998,371 $ 988,292 $ 888,937 9
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE B - INVESTMENTS (CONTINUED) During each fiscal year, net investment income consisted of the following: Year Ended June 30, 2012 2011 Interest and dividends $ 22,305 $ 9,912 Net unrealized (losses) gains (18,987) 100,488 $ 3,318 $ 110,400 ASC 820-10-05 establishes a three-level valuation hierarchy of fair-value measurements. These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. These two types of inputs create the following fair-value hierarchy: Level 1: Valuations are based on observable inputs that reflect quoted market prices in active markets for identical assets and liabilities at the reporting date. Level 2: Valuations are based on (i) quoted prices for similar assets or liabilities in active markets, or (ii) quoted priced for identical or similar assets or liabilities in markets that are not active or (iii) pricing inputs other than quoted prices that are directly or indirectly observable at the reporting date. Level 2 assets include those securities that are redeemable at or near the balance sheet date and for which a model was derived for valuation. Level 3: Fair value is determined based on pricing inputs that are unobservable and includes situations where (i) there is little, if any, market activity for the asset or liability, or (ii) the underlying investments of which cannot be independently valued, or (iii) they cannot be immediately redeemed at or near the fiscal year-end. The following tables summarize the fair value of the Center's assets and liabilities at each fiscal year-end, in accordance with the ASC 820-10-05 valuation levels: June 30, 2012 Level 1 Level 2 Total Money-market funds $ 244,013 $ 244,013 Certificates of deposit 300,376 300,376 Government obligations $ 163,519 163,519 Equities 12,582 12,582 Mutual funds 358,249 358,249 Total $ 915,220 $ 163,519 $ 1,078,739 10
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE B - INVESTMENTS (CONTINUED) June 30, 2011 Level 1 Level 2 Total Money-market funds $ 245,462 $ 245,462 Certificates of deposit 206,858 206,858 Government obligations $ 164,274 164,274 Equities 13,879 13,879 Mutual funds 357,819 357,819 Total $ 824,018 $ 164,274 $ 988,292 NOTE C - GRANTS RECEIVABLE Grants receivable are amounts reimbursable to the Center for client-service expenditures, under the terms of agreements signed with various governmental agencies. At June 30, 2012 and 2011, grants receivable consisted of the following: June 30, 2012 2011 City of New York Human Resources Administration - Domestic Violence Unit $ 1,465,300 $ 1,540,300 New York City Agency for Child Development 180,009 92,829 $ 1,645,309 $ 1,633,129 At both June 30, 2012 and 2011, the Center estimates that, based on past history and subsequent collections, grants receivable will be substantially collected in full. Accordingly, no allowance for uncollectible amounts has been provided. NOTE D - PROPERTY AND EQUIPMENT At each fiscal year-end, property and equipment consisted of the following: June 30, 2012 2011 Land $ 1,046,450 $ 1,046,450 Building and improvements 4,933,032 4,933,032 Furniture and equipment 235,692 235,692 6,215,174 6,215,174 Less: accumulated depreciation and amortization (1,403,237) (1,245,244) $ 4,811,937 $ 4,969,930 11
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE E - NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY BONDS In fiscal-year 2006, in order to finance the purchase of property (see Note D), the Center borrowed $6,510,000 through the issuance of New York City Industrial Development Agency (the "Agency") Civic Facility Revenue Bonds, Series 2006 A-1, 2006 A-2, 2006 B-1, and 2006 B-2 (the "bonds"). The bonds are fixed-rate and mature in 2016 and 2036. In connection with the issuance of the bonds, the Center leased certain properties to the Agency for the duration of the debt, for a nominal rental, and concurrently leased the properties back from the Agency for the same period. The Center will make payments under the lease sufficient to provide for timely payment of the principal, sinking-fund installments, redemption price, and interest on the bonds, together with certain other fees and expenses. Further, the Center has entered into a guaranty agreement whereby the Center guarantees the payment of debt service on the bonds, and the payment and performance obligations under the lease. The net proceeds of the bonds are held in trust accounts and were used to finance the purchase of property, the funding of a debt-service reserve fund, and the financing of certain costs relating to the issuance of the bonds. At each fiscal year-end, approximately $400,000 of cash and cash equivalents is held in trust accounts and is restricted for debt service. In July 2006, the Center entered into a $2,000,000 funding agreement with the New York City Economic Development Corporation ("EDC") to provide funding to reimburse the Center, in part, for the purchase of the property located in New York City. Simultaneously with the execution of the funding agreement, the Center entered into a restricted covenant agreement with the EDC which requires the Center to use the property as a social service facility for the benefit of the people of New York City for a term of 30 years. On October 2, 2006, the Center used the proceeds from the funding agreement to pay in full the Series B-1 and Series B-2 bonds. At June 30, 2011 and 2010, the bonds payable consisted of the following: June 30, 2012 2011 Series A-1 bonds, due from November 1, 2007 through November 1, 2016, 6.25% $ 375,000 $ 440,000 Series A-2 bonds, due November 1, 2017 through November 1, 2036, 7.375% 3,855,000 3,855,000 $ 4,230,000 $ 4,295,000 12
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE E - NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY BONDS (CONTINUED) Annual bond principal payments are required on every November 1 beginning November 1, 2007, until November 1, 2036. The required principal payments on the above obligations in each of the five fiscal years subsequent to June 30, 2012 are as follows: Year Ending June 30, Amount 2013 $ 65,000 2014 70,000 2015 75,000 2016 80,000 2017 85,000 Interest expense incurred during 2012 and 2011 from the bonds amounted to $309,097 and $313,056, respectively. NOTE F - TEMPORARILY RESTRICTED NET ASSETS At June 30, 2012 and 2011, temporarily restricted net assets of $1,385 and $1,235, respectively, were restricted for scholarships. For fiscal year 2011, net assets released from temporarily restrictions of $3,000, were for scholarships. NOTE G - ENDOWMENT [1] The endowment: The Center's endowment at both June 30, 2012 and 2011 consists solely of a donor-restricted fund of $125,000 for the purpose of supporting scholarships and other programs. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existing or absence of donor-imposed restrictions. In July 2012, the donor modified the restriction and reduced the donor-restricted fund to $100,000. [2] Interpretation of relevant law: The New York Prudent Management of Institutional Funds Act ("NYPMIFA") became law in September 2010. The Board of Directors will continue to adhere to NYPMIFA's requirements relating to the Center's permanent restricted endowment funds. 13
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE G - ENDOWMENT (CONTINUED) [3] Changes in endowment net assets in fiscal-year 2012: Year Ended June 30, 2012 Temporarily Permanently Restricted Restricted Total Endowment net assets, beginning of year $ 1,235 $ 125,000 $ 126,235 Investment return: Investment income 203 203 Net depreciation (realized and unrealized) (53) (53) Total investment return 150 150 Endowment net assets, end of year $ 1,385 $ 125,000 $ 126,385 [4] Changes in endowment net assets in fiscal-year 2011: Year Ended June 30, 2011 Temporarily Permanently Restricted Restricted Total Endowment net assets, beginning of year $ 2,449 $ 125,000 $ 127,449 Investment return: Investment income 287 287 Net appreciation (realized and unrealized) 1,499 1,499 Total investment return 1,786 1,786 Appropriation of endowment assets for expenditure (3,000) (3,000) Endowment net assets, end of year $ 1,235 $ 125,000 $ 126,235 [5] Funds with deficiencies: Due to unfavorable market fluctuations, from time to time the fair value of assets associated with individual donor-restricted endowment funds may decline below the historic dollar value of the donor's original permanently restricted contribution. There were no such deficiencies in either 2012 or 2011. [6] Return objectives and risk parameters: The Center has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner that is intended to produce investment earnings for operating activities. 14
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE G - ENDOWMENT (CONTINUED) [7] Strategies employed for achieving objectives: To satisfy its total return objectives, the Center relies on a strategy focused on capital preservation. Accordingly, the Center targets an asset allocation comprised of low risk investments, such as certificates of deposit and money-market funds, that are provided by well-established financial institutions. [8] Spending policy and relationship to investment objectives: The Center, in accordance with the donor agreement, has adopted a policy of appropriating for distribution each year 75% of the current year's total realized investment income as a scholarship. Any remaining unspent investment income (less reasonable administrative or other costs) are added to the principal of said endowment. Accordingly, over the long term, the Center expects the current policy to allow its endowment to grow annually. This is consistent with the Center's objective to maintain the purchasing power of the endowment assets held in perpetuity or for a specified term, as well as to provide additional real growth through new gifts and investment return. NOTE H - EMPLOYEE-BENEFIT PLANS The Center maintains a defined-contribution, money-purchase benefit plan covering employees of the Center (exclusive of union employees) who have attained the age of 21, have completed one full year of employment, and have a minimum of 1,000 hours worked. Employees become vested after six years subject to a six-year graded vesting schedule at 20% per year commencing after the first year (or employees hired prior to July 1, 2007 are subject to a three-year cliff vesting schedule). Under the plan, the Center contributes an amount equal to 5% of the compensation of all eligible employees each year. Contributions to the plan for fiscal-years 2012 and 2011 were approximately $146,500 and $191,300, respectively. The Center also maintains a profit-sharing plan whereby the Center makes discretionary contributions on behalf of eligible employees. Eligibility and vesting requirements of the plan are the same as for the money-purchase plan. Contributions to the profit-sharing plan for fiscal-year 2012 were approximately $90,500. No contributions were made in 2011. The Center also maintains a tax-deferred annuity plan pursuant to Section 403(b) of the U.S. Internal Revenue Code that allows employees to defer a portion of their salaries for tax purposes, with contributions to the plan made from payroll deductions. The plan covers all employees of the Center who elect to participate. NOTE I - DONATED SERVICES In both fiscal-years 2012 and 2011, the Center received donated employee-benefit services through one of its grant agreements with the City of New York amounting to $46,401. 15
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Notes to Financial Statements June 30, 2012 and 2011 NOTE J - CONCENTRATIONS The Center received grants from the New York City Department of Human Resources Administration in the amount of $7,597,301 and $7,148,434 for the fiscal years ended June 30, 2012 and 2011, respectively. Such grants represent approximately 90% of total public support and revenue for both fiscal 2012 and 2011. The Center maintains its cash in bank deposit accounts in amounts which, at times, may exceed federally insured limits, and its investments are held at major financial institutions. Management believes that the Center is not exposed to any significant risk of loss on these accounts. NOTE K - COMMITMENTS AND CONTINGENCIES [1] Operating leases: The Center occupies space located in Brooklyn, New York under an operating lease that expires on June 30, 2016. Minimum future lease payments under the rental lease agreements in each of the fiscal years subsequent to June 30, 2012 are as follows: Year Ending June 30, Amount [2] Agreements: 2013 $ 140,688 2014 142,092 2015 144,936 2016 147,840 Total $ 575,556 During fiscal-year 2012, the Center entered into agreements to upgrade its fire alarm systems for two of its shelters, aggregating approximately $214,000, of which approximately $144,000 has been expended through June 30, 2012. [3] Line of Credit At June 30, 2012, the Center has a $500,000 line of credit with a bank, expiring in April 2013. [4] Government-funded activities: Government-funded activities are subject to audit by the applicable granting agencies. At June 30, 2012, there were no material obligations outstanding as a result of such audit, and management believes that unaudited projects would not result in any material obligations. 16
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 Board of Directors Center for the Elimination of Violence in the Family, Inc. Brooklyn, New York We have audited the financial statements of the Center for the Elimination of Violence in the Family, Inc. (the "Center") as of and for the year ended June 30, 2012, and have issued our report thereon dated October 22, 2012. We conducted our audit in accordance with 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. Internal Control Over Financial Reporting Management of the Center is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Center's internal control over financial reporting as a basis for designing our auditing procedures 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 Center's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Center's internal control over financial reporting. 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 misstatement on a timely basis. A material weakness is a deficiency, or 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. Our consideration of internal control over financial reporting 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 financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 17
Compliance and Other Matters As part of obtaining reasonable assurance about whether the Center's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant 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. This report is intended solely for the information and use of the Board of Directors and management of the Center and of the federal awarding agencies and pass-through entities and is not intended to be used, and should not be used, by anyone other than these specified parties. New York, New York October 22, 2012 18
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON ITS MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Board of Directors Center for the Elimination of Violence in the Family, Inc. Brooklyn, New York Compliance We have audited the Center for the Elimination of Violence in the Family, Inc.'s (the "Center") compliance with the types of compliance requirements described in the U.S. Office of Management and Budget ("OMB") Circular A-133 Compliance Supplement that could have a direct and material effect on its major federal program for the year ended June 30, 2012. The Center's major federal program is identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to its major federal program is the responsibility of the Center's management. Our responsibility is to express an opinion on the Center's compliance based on our audit. 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 Center'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. Our audit does not provide a legal determination of the Center's compliance with those requirements. In our opinion, the Center complied, in all material respects, with the requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2012. Internal Control Over Compliance The management of the Center is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the Center's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance 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 Center's internal control over compliance. 19
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. 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 deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the Board of Directors and management of the Center and of the federal awarding agencies and pass-through entities, and is not intended to be used, and should not be used, by anyone other than these specified parties. New York, New York October 22, 2012 20
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Schedule of Findings and Questioned Costs Year Ended June 30, 2012 Section I - Summary of Auditors' Results Financial Statements Type of auditors' report issued: Unqualified Internal control over financial reporting: Material weaknesses identified: No Significant deficiencies identified: None reported Noncompliance material to financial statements noted: No Federal Awards Internal control over major programs: Material weaknesses identified: No Significant deficiencies identified: None reported Type of auditors' report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section 510(a): No Identification of major programs: CFDA Number Name of Federal Program U.S. Department of Health and Human Services 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 Section II - Financial Statement Findings No matters reported for the year ended June 30, 2012. Section III - Federal Award Findings and Questioned Costs No matters reported for the year ended June 30, 2012. Section IV - Prior Period Findings No matters reported in the prior year. 21
SUPPLEMENTARY SCHEDULES
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Schedule of Expenditures of Federal Awards Year Ended June 30, 2012 Pass-Through Entity Federal Identifying Federal Agency CFDA # Number Expenditures Department of Health and Human Services: Pass-through New York City Department of Human Resources Administration: Temporary Assistance for Needy Families 93.558 M593220 $ 691,304 Temporary Assistance for Needy Families 93.558 M593221 1,233,859 Temporary Assistance for Needy Families 93.558 M593248 1,299,081 Social Services Block Grant 93.667 CT106820120000678 203,748 Pass-through New York State Office of Children and Family Services: Family Violence Prevention and Services Grant 93.671 CO23358 35,602 Total Department of Health and Human Services 3,463,594 Department of Justice: Crime Victims Board 16.575 79,461 Total Department of Justice 79,461 Department of Agriculture: Pass-through New York State Department of Health: Child and Adult Food Care Program 10.558 3227 10,851 Total Department of Agriculture 10,851 $ 3,553,906 See note to schedule of expenditures of federal awards 22
CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. Note to Schedule of Expenditures of Federal Awards Year Ended June 30, 2012 NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Center for the Elimination of Violence in the Family, Inc. and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with requirements of OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations." Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. 23
SCHEDULE A CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. CHILDREN'S GROWING PLACE DAY CARE PROGRAM BUDGET I.D. # 12-531 CONTRACT # 2012-00-678 Schedule of Revenues and Expenditures - Budget and Actual Year Ended June 30, 2012 Annual Favorable ACS Approved Actual (Unfavorable) Questioned Budget ACS CACFP Total ACS Costs Revenues: ACS $ 309,731 $ 318,356 $ 0 $ 318,356 U.S.D.A. 0 10,851 10,851 Disability deductions 0 190 0 190 Total revenues 309,731 318,546 10,851 329,397 Expenditures: Personnel costs: ACS regular salaries 217,039 208,704 0 208,704 $ 8,335 $ 0 Fringes 33,993 29,420 0 29,420 4,573 0 Unemployment insurance 0 0 0 Other personnel costs 0 0 0 Substitutes' salaries, FICA and unemployment insurance 12,438 9,566 0 9,566 2,872 0 263,470 247,690 0 247,690 15,780 0 Facilities costs: Rent 15,088 15,084 0 15,084 4 0 Maintenance and repairs 625 0 625 0 Other facilities costs 0 0 0 0 0 0 15,713 15,084 0 15,084 629 0 24
SCHEDULE A CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. CHILDREN'S GROWING PLACE DAY CARE PROGRAM BUDGET I.D. # 12-531 CONTRACT # 2012-00-678 Schedule of Revenues and Expenditures - Budget and Actual Year Ended June 30, 2012 (continued) Annual Favorable ACS Approved Actual Actual (Unfavorable) Questioned Budget ACS CACFP Total ACS Costs Expenditures: (continued) Category costs: Other non-itemized OTPS: Classroom supplies/equipment $ 1,575 1,283 $ 0 $ 1,283 $ 292 $ 0 Household supplies/office supplies 0 0 0 0 0 0 Services 28,973 25,529 0 25,529 3,444 0 Other 0 0 0 0 0 0 30,548 26,812 0 26,812 3,736 0 Other CACFP costs: Food 0 0 16,075 16,075 0 0 0 0 16,075 16,075 0 0 Total expenditures 309,731 289,586 16,075 305,661 $ 20,145 $ 0 Excess (deficit) of revenues over expenditures $ 0 $ 28,960 $ (5,224) $ 23,736 25
SCHEDULE B CENTER FOR THE ELIMINATION OF VIOLENCE IN THE FAMILY, INC. CHILDREN'S GROWING PLACE DAY CARE PROGRAM BUDGET I.D. # 12-531 CONTRACT # 2012-000-678 Schedule of Expenditures - Budget and Actual CASVR Year Ended June 30, 2012 Year-to-Date Report 11 CAPS Received Name of Program: Children's Growing Place #531 Budget Period: 07/11 to 06/12 Type of Program Budget ID: 12-531 Address: Box 200279, Bayridge, Brooklyn, NY 11220 Report Period: 07/11 to 06/12 A B C D E F G H Agency Accrued Total Approved Reported Auditors' Expenditures Expenses Expenses Questioned Amount Line Budget Categories Code Budget Expenses Adjustments Per Audit Per Audit Per Audit Costs Due HRA 1 Salaries 1120-7 $ 229,477 $ 218,270 $ 0 $ 218,270 $ 0 $ 218,270 $ 0 $ 0 2 Federal 1131-2 0 0 0 0 0 0 0 0 3 State 1132-0 0 0 0 0 0 0 0 0 4 City 1133-9 0 0 0 0 0 0 0 0 5 FICA 1134-7 0 0 0 0 0 0 0 0 6 Other deductions 1144-4 0 0 0 0 0 0 0 0 7 Employer's FICA 1210-6 17,555 16,698 0 16,698 0 16,698 0 0 8 Unemployment insurance 1220-3 5,249 5,249 0 5,249 0 5,249 0 0 9 Other personnel costs 1300-5 11,189 7,473 0 7,473 0 7,473 0 0 10 Physical facilities 2100-8 15,713 15,084 0 15,084 0 15,084 0 0 11 Consumables 2200-4 30,548 26,812 0 26,812 0 26,812 0 0 $ 309,731 $ 289,586 $ 0 $ 289,586 $ 0 $ 289,586 $ 0 $ 0 Columns A and B data were not available from New York City Human Resources Administration Agency for Child Development/Children's Growing Place. 26