Financial Statements of FRIENDS OF HOSPICE OTTAWA
Table of Contents Page Independent Auditors' Report Statements of Financial Position 1 Statements of Operations 2 Statements of Changes in Net Assets 3 Statements of Cash Flows 4 Notes to Financial Statements 5-9
KPMG LLP Telephone (613) 591-7605 Chartered Accountants Fax (613) 591-7607 750 Palladium Drive, Suite 101 Internet www.kpmg.ca Kanata Ontario K2V 1C7 Canada INDEPENDENT AUDITORS' REPORT To the Board of Directors of Friends of Hospice Ottawa We have audited the accompanying financial statements of Friends of Hospice Ottawa, which comprise the statements of financial position as at December 31, 2012, December 31, 2011 and January 1, 2011, the statements of operations, changes in net assets and cash flows for the years ended December 31, 2012 and December 31, 2011, and notes, comprising a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation 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 Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our 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, we consider 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 in our audits is sufficient and appropriate to provide a basis for our audit opinion. KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. KPMG Canada provides services to KPMG LLP.
Page 2 Basis for Qualified Opinion In common with many charitable organizations, the organization derives revenues from fundraising and donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the accounts of the organization and we were not able to determine whether any adjustments might be necessary to these revenues, net revenue, assets, liabilities and net assets. Qualified Opinion In our opinion, except for the effect of the matters described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, at all material respects, the financial position of Friends of Hospice Ottawa as at December 31, 2012, December 31, 2011 and January 1, 2011, and its results of operations, changes in net assets and its cash flows for the years ended December 31, 2012 and December 31, 2011, in accordance with Canadian accounting standards for not-for-profit organizations. Chartered Accountants, Licensed Public Accountants May 12, 2013 Kanata, Canada
Statements of Financial Position December 31, 2012, December 31, 2011 and January 1, 2011 Assets December 31, December 31, January 1, 2012 2011 2011 Current assets: Cash and term deposits (note 4) $ 350,327 $ 328,998 $ 210,783 Contributions receivable - 3,000 - GST recoverable 19,455 5,622 4,830 Inventory 2,873 1,610 1,638 Prepaid expenses 4,632 6,412 4,678 Hospice home deposit - - 25,000 377,287 345,642 246,929 Capital assets (note 2) 8,477 11,220 14,916 Liabilities and Net Assets $ 385,764 $ 356,862 $ 261,845 Current liabilities: Accounts payable and accrued liabilities $ 73,628 $ 28,639 $ 15,022 Deferred contributions (note 3) 17,125 20,745 30,979 90,753 49,384 46,001 Deferred residential contributions (note 4) 282,220 216,294 124,207 372,973 265,678 170,208 Net assets: Invested in capital assets 8,477 11,220 14,916 Unrestricted 4,314 79,964 76,721 12,791 91,184 91,637 Contingent liabilities (note 5) $ 385,764 $ 356,862 $ 261,845 See accompanying notes to financial statements. Approved on behalf of the Board Director Director 1
Statements of Operations 2012 2011 Revenues: Grants: Champlain Local Health Integrated Network: Core Funding $ 80,465 $ 78,892 Special one time funding 50,000 2,670 United Way 31,942 36,016 GEM/ADP 34,935 34,935 City of Ottawa 10,000 5,539 Green Shield Benefit organization 5,000 7,500 Community Foundation 10,000 - Ontario Trillium Foundation 31,600 47,575 Bruyere one time funding 12,344 - Fundraising projects 247,343 236,914 Donations 48,294 29,683 Donations recognized for the capital campaign 417 3,403 Volunteer travel donations 47,134 37,531 Interest income 1,497 273 610,971 520,931 Expenditures: Advertising 6,484 3,938 Amortization 2,743 3,696 Association and membership fees 1,552 1,340 Bank charges 3,895 3,949 Capital campaign 417 3,403 Caregiver and bereavement 7,208 4,248 Communications 9,438 6,892 Day hospice supplies 8,087 8,063 Fundraising coordinator 62,425 44,891 Fundraising projects 93,875 86,872 Health benefits 18,077 1,248 Hospice coordinators 355,567 249,702 Insurance 2,642 2,568 Moving - 3,700 Office supplies 13,532 16,509 Professional fees 8,312 8,104 Program and service support 12,979 5,251 Rent 21,646 17,949 Repairs and maintenance - 217 Staff and volunteer professional development 2,394 2,673 Travel - patient 47,134 37,531 Travel - staff 10,957 8,640 689,364 521,384 Excess of expenditures over revenues $ (78,393) $ (453) See accompanying notes to financial statements. 2
Statements of Changes in Net Assets Invested in capital assets Unrestricted Total 2012 Total 2011 Balance, beginning of years $ 11,220 $ 79,964 $ 91,184 $ 91,637 Excess of expenditures over revenues (2,743) (75,650) (78,393) (453) Balance, end of years $ 8,477 $ 4,314 $ 12,791 $ 91,184 See accompanying notes to financial statements. 3
Statements of Cash Flows 2012 2011 Cash flows from operating activities: Excess of expenditures over revenues $ (78,393) $ (453) Item not involving cash: Amortization 2,743 3,696 Changes in non-cash operating working capital: Contributions receivable 3,000 (3,000) GST recoverable (13,833) (792) Inventory (1,263) 28 Prepaid expenses 1,780 (1,734) Accounts payable and accrued liabilities 44,989 13,617 Deferred contributions (3,620) (10,234) (44,597) 1,128 Financing: Deferred residential contributions received 66,343 95,490 Government funding for the purchase of capital assets - 13,388 66,343 108,878 Investing: Purchase of capital assets - (13,388) Deferred residential contributions spent (417) (3,403) Refund of Hospice home deposit - 25,000 (417) 8,209 Increase in cash and term deposits 21,329 118,215 Cash and term deposits, beginning of years 328,998 210,783 Cash and term deposits, end of years $ 350,327 $ 328,998 Cash and term deposits consists of: Cash $ 124,048 $ 303,615 Term deposits 226,279 25,383 $ 350,327 $ 328,998 See accompanying notes to financial statements. 4
Notes to Financial Statements Purpose: Friends of Hospice Ottawa (the "Organization) is a charitable organization providing, in collaboration with community hospitals, government agencies and other health care professionals, programs that deliver compassionate, quality end-of-life care for palliative patients, as well as support for the patients' families and loved ones. The program includes day hospice, in-home volunteer support, education, bereavement support and a caregiver support program. Operations: Friends of Hospice Ottawa was registered as a charitable organization under the Income Tax Act (Canada) effective January 1, 2004 and commenced active operations on that date. The Organization became incorporated under the Corporations Act - Ontario as a charity - PGT on October 8, 2004. On January 1, 2012, the Organization adopted Canadian accounting standards for not-for-profit organizations. These are the first financial statements prepared in accordance with Canadian accounting standards for not-for-profit organizations. In accordance with the transitional provisions, the Organization has adopted the changes retrospectively, subject to certain exemptions allowed under these standards. The transition date is January 1, 2011 and all comparative information provided has been presented by applying Canadian accounting standards for not-for-profit organizations. There were no adjustments to net assets as at January 1, 2011 or the statement of operations for the year ended December 31, 2011 as a result of the transition to Canadian accounting standards for not-for-profit organizations. 1. Significant accounting policies: These financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations. (a) Basis of accounting: The Organization follows the deferral method of accounting. (b) Cash and term deposits: Cash and term deposits are comprised of cash and investments that are highly liquid in nature and are cashable in three months or less. 5
Notes to Financial Statements (continued) 1. Significant accounting policies (continued): (c) Inventory: Inventory is valued at the lower of cost and net realizable value. Cost is determined on a first in first out basis. (d) Capital assets: Capital assets are stated at cost, less accumulated amortization. Amortization is provided using the straight-line method and following annual rates: Asset Rate Office furniture and fixtures 20% Computers 30% In the year of acquisition, amortization is provided at one half the annual rate. (e) Revenue recognition: Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Contributions are recognized in the period in which the related expenditures are incurred. Contributions received in years prior to the related expenditures being incurred are recorded as deferred contributions. (f) Volunteer travel donations: The Organization receives contributed services, the cost of which cannot always be reasonably estimated. Therefore, only those contributed services whose fair value can be reasonably estimated and are used in the normal course of the Organization's operations and would otherwise have been purchased are recorded in the accounts of the Organization. Volunteer drivers are reimbursed at $0.50 per kilometre, received as an in kind donation. (g) Management estimates: The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that 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 amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. 6
Notes to Financial Statements (continued) 1. Significant accounting policies (continued): (h) Financial instruments: Financial instruments are recorded at fair value on initial recognition and are subsequently recorded at cost or amortized cost, unless management has elected to carry the instruments at fair value. The Organization has not elected to carry any such financial instruments at fair value. Transaction costs incurred on the acquisition of financial instruments measured subsequently at fair value are expensed as incurred. All other financial instruments are adjusted by transaction costs incurred on acquisition and financing costs. Financial assets are assessed for impairment on an annual basis at the end of the fiscal year if there are indicators of impairment. If there is an indicator of impairment, the Organization determines if there is a significant adverse change in the expected amount or timing of future cash flows from the financial asset. If there is a significant adverse change in the expected cash flows, the carrying value of the financial asset is reduced to the highest of the present value of the expected cash flows, the amount that could be realized from selling the financial asset or the amount the Organization expects to realize by exercising its right to any collateral. If events and circumstances reverse in a future year, an impairment loss will be reversed to the extent of the improvement, not exceeding the initial carrying value. 2. Capital assets: Cost Accumulated amortization December 31, December 31, January 1, 2012 2011 2011 Net book Net book Net book value value value Office furniture and fixtures $ 11,648 $ 6,664 $ 4,984 $ 6,230 $ 7,787 Computers 11,788 8,295 3,493 4,990 7,129 $ 23,436 $ 14,959 $ 8,477 $ 11,220 $ 14,916 7
Notes to Financial Statements (continued) 3. Deferred contributions: Deferred contributions represents unspent grants and revenue received for the hospice palliative care program as follows: December 31, December 31, January 1, 2012 2011 2011 Healing Cycle $ 10,000 $ - $ - Ontario Trillium Foundation 7,125 12,525 18,600 GEM/ADP (payment for January 2012 received in December 2011) - 8,220 6,840 City of Ottawa - - 5,539 $ 17,125 $ 20,745 $ 30,979 4. Deferred residential contributions: In 2007, the Organization began accepting money for a capital campaign of building a permanent hospice home. During the year, $66,343 (2011 - $95,490) was contributed to the campaign and $417 (2011 - $3,403) was spent on related expenses. As at December 31, 2012 the deferred residential contribution balance is $282,220 (December 31, 2011 - $216,294, January 1, 2011 - $124,207). These funds are externally restricted for the capital campaign and related current expenditures. The Organization is required to restrict all cash donated and at year end these amounts, which are included in cash and term deposits on the balance sheet, were restricted. 5. Contingencies: Under the terms of various grants and contributions, the Organization may be required to repay funds received should they not be able to fulfil their funding obligations. 8
Notes to Financial Statements (continued) 6. Financial risks and concentration of risk: In the normal course of business, the Organization uses various financial instruments which by their nature involve risk, including credit risk, liquidity risk and market risk. Market risk consists of currency risk and interest rate risk. These financial instruments are subject to normal credit conditions, financial controls, risk management as well as monitoring procedures. (a) Currency risk: Currency risk is the risk that the fair value of a financial instrument or the related future cash flows will fluctuate due to changes in foreign exchange rates. The Organization is not exposed to currency risk. (b) Liquidity risk: Liquidity risk is the risk that the Organization will encounter difficulty in meeting obligations associated with financial liabilities. The Organization is exposed to liquidity risk arising primarily from the accounts payable and accrued liabilities. The Organization's ability to meet obligations depends on the receipt of funds from its operating activities. 7. Subsequent event: Effective January 1, 2013, the Organization merged with the Hospice at May Court and commenced operations as Ottawa Hospice Services. 9