Audited Financial Statements Malvin, Riggins & Company, P.C. Certified Public Accountants 1050 Connecticut Avenue NW, 5 th Floor Washington, DC 20036 (202) 296-2700
Table of Contents Page Independent Auditor's Report 1 Financial Statements: Statements of Financial Position 2 Statements of Activities 3 Statements of Functional Expenses 4 Statements of Cash Flows 5 Notes to Financial Statements 6-9
1050 Connecticut Avenue NW 5 th Floor Washington, DC 20036 202.296.2700 (T) 202.296.2799 (F) Licensed Certified Public Accountants Virginia Washington DC Maryland North Carolina West Virginia Oklahoma Pennsylvania www.malvinriggins.com Members of American Institute of Certified Public Accountants Virginia Society of Certified Public Accountants Greater Washington Society of Certified Public Accountants Maryland Association of Certified Public Accountants North Carolina Association of Certified Public Accountants Professional Organizations Community Associations Institute Center for Nonprofit Advancement Association of Certified Fraud Examiners Chambers of Virginia Peninsula Chamber of DC Chamber of Loudoun County Chamber of Greater Raleigh Chamber of Chapel Hill Carrboro Chamber of Greater Durham Chamber of Greater Bethesda-Chevy Chase Chamber of Baltimore City Chamber of Outer Banks Chamber of To the Board of Trustees of The Campaign Finance Institute Washington, DC INDEPENDENT AUDITOR S REPORT We have audited the accompanying financial statements of The Campaign Finance Institute (the Institute) which comprise the statements of financial position as of, 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. Auditor s 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 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 auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Campaign Finance Institute as of as of, 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. Washington D.C. December 15, 2016
Statements of Financial Position ASSETS 2016 2015 Current Assets Cash and cash equivalents $ 914,231 $ 961,388 Accounts receivable 259 75 Grants receivable 600,000 200,000 Prepaid expenses 2,467 2,403 Total Current Assets 1,516,957 1,163,866 Property and Equipment Equipment 5,759 5,759 Less - accumulated depreciation (5,759) (5,759) Property and Equipment - Net - - Total Assets $ 1,516,957 $ 1,163,866 LIABILITIES AND NET ASSETS Current Liabilities Accounts payable $ 1,749 $ 4,028 Accrued liabilities 33,171 29,439 Total Current Liabilities 34,920 33,467 Net Assets Unrestricted 857,016 804,722 Temporarily restricted 625,021 325,677 Total Net Assets 1,482,037 1,130,399 Total Liabilities and Net Assets $ 1,516,957 $ 1,163,866 See the independent auditor's report and accompanying notes. 2
Statements of Activities Years Ended August 31, 2016 August 31, 2015 Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total Revenue and Support Foundation grants $ 351,100 $ 600,000 $ 951,100 $ 75,100 $ 50,000 $ 125,100 Contributions 40,100-40,100 500 500 Interest income 1,147-1,147 1,770-1,770 Other revenue - - - 2,535-2,535 Net assets released from restrictions 300,656 (300,656) - 185,520 (185,520) - Total Revenue and Support 693,003 299,344 992,347 265,425 (135,520) 129,905 Expenses Research and education 503,491-503,491 461,441-461,441 General and administrative 116,031-116,031 77,862-77,862 Fundraising 21,187-21,187 11,638-11,638 Total Expenses 640,709-640,709 550,941-550,941 Changes in Net Assets 52,294 299,344 351,638 (285,516) (135,520) (421,036) Net Assets, Beginning of Year 804,722 325,677 1,130,399 1,090,238 461,197 1,551,435 Net Assets, End of Year $ 857,016 $ 625,021 $ 1,482,037 $ 804,722 $ 325,677 $ 1,130,399 See the independent auditor's report and accompanying notes. 3
Statements of Functional Expenses Years Ended August 31, 2016 August 31, 2015 Research General Research General and and and and Education Administrative Fundraising Total Education Administrative Fundraising Total Expenses Salaries and benefits $ 381,657 $ 98,256 $ 13,779 $ 493,692 $ 369,368 $ 61,860 $ 9,566 $ 440,794 Consultants 12,000 - - 12,000 4,000 - - 4,000 Course buy out 36,900 7,020 1,080 45,000 18,450 3,510 540 22,500 Space rental 3,977 757 116 4,850 4,489 854 131 5,474 Equipment/furniture 3,124 204 32 3,360 4,884 857 132 5,873 Office supplies 576 110 17 703 272 52 8 332 Printing and reproduction 2,758 31 5 2,794 336 13 2 351 Postage and delivery 344 47 7 398 505 96 15 616 Telecommunications 2,546 484 75 3,105 2,840 540 83 3,463 Meetings and conferences 2,171 403 62 2,636 9,847 571 88 10,506 Subscriptions and dues 2,925 15 2 2,942 4,313 22 3 4,338 Data 6,868 - - 6,868 - - - - Travel and transportation 12,226 1,147 176 13,549 10,416 917 141 11,474 Insurance 7,852 1,494 230 9,576 8,120 1,545 238 9,903 Accounting 23,918 4,550 700 29,168 22,587 4,297 661 27,545 Legal expenses 1,890 1,231 4,771 7,892 - - - - Bank service charges 20 18 94 132 - - - - In-kind expenses - - - - - 2,535-2,535 Other 1,739 264 41 2,044 1,014 193 30 1,237 Total Expenses $ 503,491 $ 116,031 $ 21,187 $ 640,709 $ 461,441 $ 77,862 $ 11,638 $ 550,941 See the independent auditor's report and accompanying notes. 4
Statements of Cash Flows Years Ended 2016 2015 Cash Flows from Operating Activities: Change in net assets $ 351,638 $ (421,036) Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: (Increase) Decrease in operating assets: Accounts receivable (184) (75) Grants receivable (400,000) 395,000 Prepaid expenses (64) 5,550 Increase in operating liabilities: Accounts payable and accrued liabilities 1,453 2,797 Net Used in Operating Activities (47,157) (17,764) Cash - Beginning of Year 961,388 979,152 Cash - End of Year $ 914,231 $ 961,388 See the independent auditor's report and accompanying notes. 5
Notes to Financial Statements NOTE 1 Organization and Nature of Activities Description of organization The Campaign Finance Institute (the Institute) was incorporated on December 17, 1999. The mission of the Institute is to recommend reforms to campaign finance policies and laws by reaching across the normal lines of debate, through non-partisan research, deliberation, and public education, and to identify policies that can achieve meaningful and sustainable results over time. The Institute achieves its mission through programming, which includes: public forums, special studies and reports, the creation of non-partisan task forces and roundtable discussions, and information disseminated through its website. NOTE 2 Summary of Significant Accounting Policies Basis of presentation The accompanying financial statements are presented on the accrual basis of accounting, and in accordance with FASB ASC 958, Not-for-Profit Entities. Cash and cash equivalents The Institute considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents. The carrying amount reported on the statements of financial position for the cash and cash equivalents is fair value. Bank deposit accounts are insured by the Federal Deposit Insurance Corporation ( FDIC ) up to a limit of $250,000. At times during the year the Institute maintains cash balances in excess of the FDIC insurance limits. Amounts in excess of the FDIC limit as of were $178,161 and $211,388, respectively. The Institute has not experienced any losses in such accounts. Fixed assets Fixed assets in excess of $1,500 are capitalized and stated at cost. Fixed assets are depreciated on a straight-line basis over the estimated useful lives of the related assets, generally three to seven years. The cost of maintenance and repairs is recorded as expenses are incurred. Uncertain tax positions For the years ended, the Institute has documented its consideration of FASB ASC 740-10, Income Taxes, that provides guidance for reporting uncertainty in income taxes and has determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. The Federal Form 990, Return of Organization Exempt from Income Tax, is subject to examination by the Internal Revenue Service, generally for three years after it is filed. See the independent auditor s report. 6
Notes to Financial Statements NOTE 2 Summary of Significant Accounting Policies (continued) Income taxes The Institute is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been made in the accompanying financial statements. The Institute is not a private foundation. Net asset classification The net assets are reported in three self-balancing groups as follows: Unrestricted net assets include unrestricted revenue and contributions received without donor-imposed restrictions. These net assets are available for the operation of the Institute and include both internally designated and undesignated resources. Temporarily restricted net assets include grants subject to donor-imposed stipulations that will be met by the actions of the Institute and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statements of Activities and Changes in Net Assets as net assets released from restrictions. Permanently restricted net assets represent funds restricted by the donor to be maintained inperpetuity by the Institute. As of, there were no permanently restricted net assets. Contributions and grants Contributions and grants are recorded as revenue in the year notification is received from the donor. Temporarily restricted contributions and grants are recognized as unrestricted support only to the extent of actual expenses incurred in compliance with the donor-imposed restrictions and satisfaction of time restrictions. Such contributions and grants received in excess of expenses incurred are shown as temporarily restricted net assets in the accompanying financial statements. In-kind contributions In-kind contributions consist of donated services. In-kind contributions are recorded at their fair market value as of the date of the gift. Fair value measurement The Organization s financial instruments consist primarily of cash and accounts payable, which carrying amount approximate their fair value due to the short-term nature of such instruments. Use of 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 the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates. See the independent auditor s report. 7
Notes to Financial Statements NOTE 2 Summary of Significant Accounting Policies (continued) Functional allocation of expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the Statements of Activities and Changes in Net Assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. NOTE 3 Grants and Accounts Receivable Grants and accounts receivable approximate fair value. Management considers all amounts to be fully collectible. Accordingly, an allowance for doubtful accounts has not been established. NOTE 4 Temporarily Restricted Net Assets Temporarily restricted net assets consisted of the following at : 2016 2015 Research and Education/Operations $ 625,021 $ 325,677 NOTE 5 Net Assets Released from Restriction The following temporarily restricted net assets were released from donor restrictions due to passage of time and by incurring expenses, which satisfied the restricted purposes specified by the donors: 2016 2015 Research and Education/Operations $ 300,656 $ 185,520 For the years ending, total releases included $137,218 and $86,965, respectively, of indirect expenses, which are included in General and Administrative and Fundraising in the accompanying Statements of Functional Expenses. NOTE 6 Pension Plan The Institute sponsors a defined contribution Section 403(b) plan for its eligible employees who have completed 90 days of service. The Institute contributes 6% of salary and matches 100% of up to 6% contributed by employees. Pension expense for the years ending August 31, 2016 and 2015 was $36,152 and $30,334, respectively. See the independent auditor s report. 8
Notes to Financial Statements NOTE 7 Concentration of Revenue and Receivables The Institute receives funding from a limited pool of public charities and private foundations. For the year ending August 31, 2016, five organizations provided 100% of the Institute's foundation grants, 63% of which were outstanding grants receivable. As of August 31, 2015, three organizations provided 100% of the Institute's foundation grants. NOTE 8 Subsequent Events In preparing these financial statements, the Institute has evaluated events and transactions for potential recognition or disclosure through December 15, 2016, the date the financial statements were available to be issued. See the independent auditor s report. 9