GREAT LAKES ADAPTIVE SPORTS ASSOCIATION Lake Forest, Illinois FINANCIAL STATEMENTS (See independent auditors' report)
GREAT LAKES ADAPTIVE SPORTS ASSOCIATION Lake Forest, Illinois FINANCIAL STATEMENTS April 30, 2015 and 2014 CONTENTS INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities 4 Statements of Functional Expenses - 2015 5 Statements of Functional Expenses - 2014 6 Statements of Cash Flows 7 NOTES TO FINANCIAL STATEMENTS 8
Mowery & Schoenfeld LLC 475 Half Day Road Suite 250 Lincolnshire, Illinois 60069 P 847 247-8959 F 847 883-8704 CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS INDEPENDENT AUDITORS' REPORT The Board of Directors Great Lakes Adaptive Sports Association Lake Forest, Illinois We have audited the accompanying financial statements of Great Lakes Adaptive Sports Association (a nonprofit organization), which comprise the statements of financial position as of April 30, 2015 and 2014, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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. - 1 -
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Great Lakes Adaptive Sports Association as of April 30, 2015 and 2014, 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. Mowery & Schoenfeld, LLC Lincolnshire, Illinois October 27, 2015-2 -
STATEMENTS OF FINANCIAL POSITION ASSETS 2015 2014 CURRENT ASSETS Cash and cash equivalents $ 154,411 $ 240,620 Accounts receivable 44,889 7,124 Promises to give 7,084 1,019 Grants receivable (Note 3) 64,085 10,492 Prepaid expenses and other 7,352 8,428 Total current assets 277,821 267,683 PROPERTY AND EQUIPMENT, at cost Program equipment 308,125 267,704 Office equipment 35,406 35,406 343,531 303,110 Less accumulated depreciation 250,864 207,786 92,667 95,324 $ 370,488 $ 363,007 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 30,284 $ 33,743 Accrued wages and related expenses 15,863 14,380 Notes payable 5,000 5,000 Total current liabilities 51,147 53,123 NET ASSETS Unrestricted 261,493 167,091 Temporarily restricted (Note 8) 57,848 142,793 Total net assets 319,341 309,884 $ 370,488 $ 363,007 See accompanying notes to financial statements. - 3 -
STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED 2015 2014 CHANGE IN UNRESTRICTED NET ASSETS Unrestricted revenue and support In-kind contributions of goods and services (Note 7) $ 287,014 $ 267,724 Program fees 150,132 102,259 Special events 152,616 222,997 Foundation and corporate grants 253,663 156,281 Individual contributions 28,856 16,997 Interest income 507 14 Loss on sale of assets - (1,950) Other income 1,433 - Net assets released from restrictions 171,645 137,516 Total revenues and support 1,045,866 901,838 Expenses Program services 872,341 786,637 Management and general 60,487 41,561 Fundraising 18,636 18,051 Total expenses 951,464 846,249 Change in unrestricted net assets 94,402 55,589 TEMPORARILY RESTRICTED NET ASSETS Grants and contributions 86,700 154,450 Net assets released from restrictions (171,645) (137,516) Change in temporarily restricted net assets (84,945) 16,934 Change in net assets 9,457 72,523 NET ASSETS, BEGINNING OF YEAR 309,884 237,361 NET ASSETS, END OF YEAR $ 319,341 $ 309,884 See accompanying notes to financial statements. - 4 -
STATEMENTS OF FUNCTIONAL EXPENSES - 2015 FOR THE YEAR ENDED APRIL 30, 2015 With Summarized Financial Information for the Year Ended April 30, 2014 Support Services Total Total Total Program General and Support 2015 2014 Services Administrative Fundraising Services Expenses Expenses Salaries and wages $ 315,645 $ 35,262 $ 12,839 $ 48,101 $ 363,746 $ 335,083 Payroll taxes 23,635 2,658 968 3,626 27,261 24,472 Coaching 204,010 - - - 204,010 152,115 Facilities rent 78,199 - - - 78,199 75,573 Uniforms 21,851 - - - 21,851 22,854 Tournament expenses 22,488 - - - 22,488 20,173 Program expenses 66,819 - - - 66,819 64,964 Insurance 9,201 3,100-3,100 12,301 8,251 Postage and delivery 1,595 - - - 1,595 2,957 Printing and reproduction 2,876 - - - 2,876 6,263 Professional fees - 7,000-7,000 7,000 6,750 Rent 24,960 3,120 3,120 6,240 31,200 30,853 Repairs and maintenance 2,216 7,473-7,473 9,689 9,172 Bank service charges 3,074 - - - 3,074 4,304 Telephone 5,906 270 270 540 6,446 6,159 Travel 17,006 - - - 17,006 16,873 Supplies 25,801 - - - 25,801 8,532 Depreciation 42,913 165-165 43,078 41,269 Bad debt 2,706 - - - 2,706 1,720 Miscellaneous 1,440 1,439 1,439 2,878 4,318 7,912 Total expenses $ 872,341 $ 60,487 $ 18,636 $ 79,123 $ 951,464 $ 846,249 See accompanying notes to financial statements. - 5 -
STATEMENTS OF FUNCTIONAL EXPENSES - 2014 FOR THE YEAR ENDED APRIL 30, 2014 With Summarized Financial Information for the Year Ended April 30, 2013 Support Services Total Total Total Program General and Support 2014 2013 Services Administrative Fundraising Services Expenses Expenses Salaries and wages $ 302,371 $ 20,921 $ 11,791 $ 32,712 $ 335,083 $ 309,218 Payroll taxes 22,004 1,579 889 2,468 24,472 26,799 Coaching 152,115 - - - 152,115 190,340 Facilities rent 75,573 - - - 75,573 49,489 Uniforms 22,854 - - - 22,854 11,016 Tournament expenses 20,173 - - - 20,173 13,962 Program expenses 64,964 - - - 64,964 62,249 Insurance 6,479 1,772-1,772 8,251 8,686 Postage and delivery 2,957 - - - 2,957 1,513 Printing and reproduction 6,263 - - - 6,263 3,446 Professional fees - 6,750-6,750 6,750 6,500 Rent 24,683 3,085 3,085 6,170 30,853 29,954 Repairs and maintenance 4,383 4,789-4,789 9,172 6,068 Bank service charges 4,304 - - - 4,304 3,414 Telephone 5,711 224 224 448 6,159 6,941 Travel 16,873 - - - 16,873 11,881 Supplies 8,532 - - - 8,532 6,987 Depreciation 40,890 379-379 41,269 38,050 Bad debt 1,720 - - - 1,720 1,263 Miscellaneous 3,788 2,062 2,062 4,124 7,912 3,962 Total expenses $ 786,637 $ 41,561 $ 18,051 $ 59,612 $ 846,249 $ 791,738 See accompanying notes to financial statements. - 6 -
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 9,457 $ 72,523 Adjustments to reconcile changes in net assets to net cash provided by (used in) operating activities: Depreciation 43,078 41,269 Donated property and equipment included in contributions (1,056) - Donated property and equipment included in expenses - 4,240 Loss on sale of assets - 1,950 Changes in operating assets and liabilities: Accounts receivable (37,765) (1,940) Promises to give (6,065) 13,594 Grants receivable (53,593) 2,162 Prepaid expenses and other 1,076 143 Accounts payable (3,459) 15,654 Accrued wages and related expenses 1,483 947 Net cash provided by (used in) operating activities (46,844) 150,542 CASH FLOWS FROM INVESTING ACTIVITIES Property and equipment acquisitions (39,365) (50,324) Net cash used in investing activities (39,365) (50,324) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable - 5,000 Net cash provided by financing activities - 5,000 CHANGE IN CASH AND CASH EQUIVALENTS (86,209) 105,218 Cash and cash equivalents, beginning of year 240,620 135,402 Cash and cash equivalents, end of year $ 154,411 $ 240,620 See accompanying notes to financial statements. - 7 -
NOTES TO FINANCIAL STATEMENTS NOTE 1 ORGANIZATION AND PURPOSE Great Lakes Adaptive Sports Association (the "Organization ) is an Illinois nonprofit corporation organized on February 16, 1999 under the laws of the State of Illinois to provide recreational and competitive sports opportunities to youths and adults with primary physical or visual impairments. Most of the individuals participating in the Organization s programs reside in northern Illinois and southern Wisconsin. Funding is derived primarily from program fees, donor contributions, grants and special events. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Contributions and Financial Statement Presentation All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Contributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Amounts received that are designated for future periods are reported as temporarily restricted support. When a temporary restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Contributions received with donor-imposed restrictions that are met in the same year in which the contributions are received are classified as unrestricted contributions. Great Lakes Adaptive Sports Association has recorded temporarily restricted net assets in the amounts of $57,848 and $142,793 as of April 30, 2015 and 2014, respectively, as a result of contributions received that are designated for future periods (Note 8). Donated Services, Goods and Facilities Donated services, goods and facilities are recorded as revenue and expense only if the donated services, goods and facilities create or enhance a non-financial asset, that would typically need to be purchased if not contributed or require specialized skills and are provided by individuals possessing those skills. Donated services, goods and facilities are measured at their fair value. See Note 7 for details of donated services, goods and facilities for the years ended April 30, 2015 and 2014. - 8 -
NOTES TO FINANCIAL STATEMENTS NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Organization presents its cash flows using the indirect method. The Organization considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Receivables and Credit Policies Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Unpaid accounts receivable with invoice dates over 30 days do not bear any interest. Accounts receivable are stated at the amount billed to the customer. Customer account balances with invoices dated over 90 days are considered delinquent. Payments of accounts receivable are allocated to the specific invoices identified on the customer s remittance advice or, if unspecified, are applied to the earliest unpaid invoices. The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management s best estimate of the amounts that may not be collected. Management individually reviews all accounts receivable balances that become past due and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that may not be collected. At April 30, 2015 and 2014, no allowance for doubtful accounts was deemed necessary by management. Property and Equipment Property and equipment are recorded at cost and contributed property and equipment are recorded at their estimated fair market value on the date of donation. Property and equipment are depreciated for financial reporting purposes using the straight-line method over estimated useful lives of three to five years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for normal maintenance and repairs are charged to expense as incurred. - 9 -
NOTES TO FINANCIAL STATEMENTS NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Impairment of Long-Lived Assets The Organization reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of carrying amount or the fair value less costs to sell. Fair Value of Financial Instruments The Organization's financial instruments consist primarily of cash and cash equivalents, promises to give, grants receivable, and accounts payable. The carrying values of these financial instruments approximate their respective fair values as they are either short-term in nature or carry interest rates which approximate market rates. For the fiscal year ending April 30, 2015, there have been no changes in the application of valuation methods applied to similar assets and liabilities. Revenue Recognition The Organization recognizes program fees in the same period as when the services are provided. Event revenues received are recognized as income at the time the event is held. Joint Costs Allocated The costs of providing programs have been summarized on a functional basis in the statement of activities. Accordingly, salaries, benefits and payroll taxes of several employees were allocated based on estimated actual efforts between administrative and fundraising activities. Income Taxes The Organization received notification that it qualifies as a tax-exempt organization under section 501(c)(3) of the U.S. Internal Revenue Code and corresponding provisions of state law and, accordingly, is not subject to federal or state income tax. There was no unrelated business income for the years ended April 30, 2015 and 2014. Accordingly, no provision for income tax has been included in the accompanying financial statements. - 10 -
NOTES TO FINANCIAL STATEMENTS NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes (continued) The Organization files income tax returns in the U.S. federal jurisdiction, and one state jurisdiction. With few exceptions, the Organization is no longer subject to U.S. federal and state income tax examinations by tax authorities for fiscal years before April 30, 2012. Subsequent Events Events that occurred subsequent to April 30, 2015 have been evaluated by management through the time of issuing this report on October 27, 2015. NOTE 3 GRANTS RECEIVABLE Grants receivable were comprised of the following as of April 30: 2015 2014 United States Paralympics $ 2,000 $ 5,072 Disabled Sports USA 30,500 2,500 United Way of Lake County 1,585 1,912 Lake County 25,000 - Town of Vernon 5,000 - National Alliance for Accessible Golf - 1,008 NOTE 4 LINE OF CREDIT $ 64,085 $ 10,492 The Organization has a $50,000 line of credit facility with Lake Forest Bank and Trust Company, which matures March 7, 2016. The line of credit bears interest at the prime rate (3.25% at April 30, 2015) with a floor of 5.00%. There were no outstanding borrowings on the line of credit facility at April 30, 2015 or 2014. The line is secured by substantially all assets of the Organization. - 11 -
NOTES TO FINANCIAL STATEMENTS NOTE 5 LEASES The Organization leases its office facilities under an operating lease agreement that expires December 31, 2015 and provides for monthly rentals of approximately $1,200. Rent expense was approximately $31,200 and $30,900 for the years ended April 30, 2015 and 2014, respectively. The difference between the fair market rental value and the amount paid has been recorded as an in-kind contribution (Note 7). NOTE 6 MAJOR CONTRIBUTORS AND CONCENTRATIONS Contributors are considered major when contributions exceed 10% of total net support for the year. For the years ended April 30, 2015 and 2014, the Organization received no grants exceeding 10% of total net support for the year. The Organization relies heavily on the support from the community and there are no guarantees that any contributor will continue supporting the Organization in the future. NOTE 7 CONTRIBUTED GOODS, SERVICES AND FACILITIES Donated services, equipment and facilities recognized in the financial statements are as follows: 2015 2014 Contributed services $ 223,720 $ 189,358 Contributed equipment and supplies 5,593 17,070 Contributed facilities 57,701 61,296 $ 287,014 $ 267,724 All contributed services, equipment and facilities were of a professional nature and related to program services. These amounts detailed above are reflected in the accompanying financial statements as in-kind contributions and are offset by like amounts included in expenses or additions to property and equipment. - 12 -
NOTES TO FINANCIAL STATEMENTS NOTE 8 TEMPORARILY RESTRICTED NET ASSETS The Organization has recorded temporarily restricted net assets in the amounts of $57,848 and $142,793 as of April 30, 2015 and 2014, respectively, which are available for the following purposes: 2015 2014 Abbvie, Inc. Adaptive Summer Programs $ - $ 3,000 Aetna Foundation Adaptive Sports - 25,000 Bank of America Foundation for Health Adaptive Sports 10,000 - Claddagh Foundation, Inc. Adaptive Sports 3,333 - Disabled Sports USA Adaptive Sports 19,015 - Ski Tour and Great Lakes Regional Games 8,000 4,000 Disabled American Veterans Disabled Military Participants - 5,243 Finish Line Foundation Adaptive Sports 5,000 - HP Healthcare Foundation Adaptive Sports - 48,000 Lake County Bar Foundation Adaptive Sports 5,000 5,000 Northfield Township Adaptive Sports 1,500 - United States Paralympics Disabled veterans 2,000 47,394 Other temporarily restricted assets 4,000 5,156 $ 57,848 $ 142,793-13 -