(A NONPROFIT ORGANIZATION) MURFREESBORO, TENNESSEE REVIEWED FINANCIAL STATEMENTS DECEMBER 31, 2009 1
C O N T E N T S Accountants Review Report... Page 3 Statement of Financial Position... 4 Statement of Activities... 5 Statement of Functional Expenses... 6 Statement of Cash Flows... 7 Notes to Financial Statements... 8 10 2
Statement of Financial Position See Accountants' Review Report December 31, 2009 ASSETS Current Assets - Cash and cash equivalents $ 224,591 Inventory 7,659 Prepaid expenses 1,257 TOTAL CURRENT ASSETS $ 233,507 Fixed Assets - Equipment $ 48,474 Software 3,014 Building 496,603 $ 548,091 Less accumulated depreciation (91,357) $ 456,734 Land 175,082 $ 631,816 Other Assets - Investments $ 71,062 Certificates of deposit - long term 151,567 $ 222,629 TOTAL ASSETS $ 1,087,952 LIABILITIES AND NET ASSETS Current Liabilities - Accounts payable $ 6,786 Payroll tax liabilities 1,269 Sales tax payable 483 Deferred clinic income 2,297 TOTAL CURRENT LIABILITIES $ 10,835 Net Assets - Unrestricted - Unrestricted net assets $ 844,831 Board designated investments 222,629 $ 1,067,460 Temporarily restricted 9,657 TOTAL NET ASSETS $ 1,077,117 TOTAL LIABILITIES AND NET ASSETS $ 1,087,952 See notes to financial statements. -4-
Statement of Activities See Accountants' Review Report For the Year Ended December 31,2009 Temporarily Unrestricted Restricted Total Support and Revenue - Public Support - Contributions $ 27,043 $ 9,657 $ 36,700 Net assets released from restrictions 5,659 (5,659) TOTAL PUBLIC SUPPORT $ 32,702 $ 3,998 $ 36,700 Revenue - Clinic sales and service fees $ 332,953 $ 332,953 Realized gain on investments 313 313 Unrealized gain on investments 6,698 6,698 Interest income 3,090 3,090 Dividend income 3,726 3,726 TOTAL REVENUE $ 346,780 $ 346,780 TOTAL PUBLIC SUPPORT AND REVENUE $ 379,482 $ 3,998 $ 383,480 Expenses - Program services $ 324,858 $ 324,858 Fundraising 3,946 3,946 Management and general 29,361 29,361 TOTAL EXPENSES $ 358,165 $ 358,165 CHANGE IN NET ASSETS $ 21,317 $ 3,998 $ 25,315 Net Assets, January 1, 2009 $ 1,046,143 $ 5,659 $ 1,051,802 NET ASSETS, DECEMBER 31, 2009 $ 1,067,460 $ 9,657 $ 1,077,117 See notes to financial statements. -5-
Statement of Functional Expenses See Accountants' Review Report For the Year Ended December 31, 2009 Program Other Functional Expenses Clinic and Fund Management Education Raising and General Total Operating Expenses - Cost of sales $ 111,887 $ 3,946 $ 115,833 Deposit corrections $ 62 62 Wages 143,787 14,161 157,948 Contract labor 340 340 Payroll service fees 1,275 1,275 Payroll expenses 11,867 1,270 13,137 Repairs expense 2,871 2,871 Insurance expense 7,328 3,433 10,761 Supplies expense 410 410 Bank service fees 204 204 Advertising expense 200 539 739 Taxes and licenses 1,300 375 1,675 Dues and subscriptions 1,881 1,881 Vehicle reimbursements 1,045 573 1,618 Security expense 703 703 Utilities 7,368 7,368 Communications expense 7,469 2,300 9,769 Office expense 3,268 1,748 5,016 Gifts 1,594 1,594 Networking expense 128 128 Education expense 35 75 110 Postage and delivery 17 696 713 Professional expenses 5,350 698 6,048 Newsletter expense 636 636 Depreciation expense 16,540 16,540 Investment expenses 786 786 TOTAL EXPENSES $ 324,858 $ 3,946 $ 29,361 $ 358,165 See notes to financial statements. -6-
Statement of Cash Flows See Accountants' Review Report For the Year Ended December 31, 2009 Cash Flows from Operating Activities - Increase in net assets $ 25,315 To reconcile increase in net assets to net cash provided by operating activities - Add: Depreciation 16,540 Decrease in prepaid expenses 2,503 Increase in accounts payable 1,440 Increase in sales tax payable 381 Increase in deferred revenue 60 Deduct: Net realized/unrealized income from investments (9,951) Increase in inventory (2,514) Decrease in payroll liabilities (320) NET CASH PROVIDED BY OPERATING ACTIVITIES $ 33,454 NET INCREASE IN CASH AND CASH EQUIVALENTS $ 33,454 Cash and cash equivalents January 1, 2009 191,137 CASH AND CASH EQUIVALENTS DECEMBER 31, 2009 $ 224,591 Non-cash Transactions Purchase of certificates of deposit-long term $ 150,000 Withdrawal from investment account-long term (150,000) $ -0- See notes to financial statements. -7-
Notes to Financial Statements December 31, 2009 Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities The Jesse C. Beesley Animal Humane Foundation (the Foundation) is a volunteer organization with the purpose of promoting the welfare of companion animals. The Foundation accomplishes this goal by operating a low-cost spay/neuter clinic that provides spay/neuter services for members of the general public and for people adopting from the local animal shelter upon request. Education programs are also provided for the Rutherford County, Tennessee schools and other organizations. The education programs cover kindness to animals, the importance of rabies vaccines, avoiding animal bites, and the importance of population control. The Foundation primarily serves the Rutherford County area. Basis of Accounting - The Foundation s financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles, and accordingly reflect all significant receivables, payables, and other liabilities. Basis of Presentation - Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Foundation is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, which represents the expendable resources that are available for operations at management s discretion; temporarily restricted net assets, which represents resources restricted by donors as to purpose or by the passage of time; and permanently restricted net assets, which represents resources whose use by the organization is limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of the organization. The Foundation has no permanently restricted net assets. Inventories - Inventories consist of clinic supplies and are stated at cost. Investments - Investments are recorded at fair market value in accordance with the Statement of Financial Accounting Standards (SFAS) No. 124, Accounting for Certain Investments Held by Not-for-Profit Organizations. Gains and losses on market value adjustments are recognized as the market fluctuates. Contributions - The Organization has adopted the Statement of Financial Accounting Standards (SFAS) No. 116, Accounting for Contributions Received and Contributions Made, whereby contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. Restricted net assets are reclassified to unrestricted net assets upon satisfaction of the time or purpose restrictions. However, if a restriction is fulfilled in the same time period in which the contribution is received, the Foundation reports the contribution as unrestricted. Income Tax Status - The Organization is a not-for-profit corporation exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code and has been classified by the Internal Revenue Service as an organization that is not a private foundation under Section 509(a)(2). Accordingly, federal income taxes are not provided in the accompanying financial statements. Donor-Imposed Restrictions - All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are restricted for future periods or donor-restricted for specific purposes are reported as temporarily restricted or permanently restricted support that increases those net asset classes. When a donor-stipulated time restriction ends or a purpose restriction is accomplished, then the restricted net assets are reclassified to unrestricted net assets. If a restriction is fulfilled in the same time period in which the contribution is received, the contribution is reported as unrestricted. Advertising - The Foundation expenses advertising costs as they are incurred. - 8 -
Notes to Financial Statements (continued) December 31, 2009 Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Functional Allocation of Expenses - The costs of providing the Foundation's various programs and supporting services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs may have been allocated among the programs and supporting services benefited. Cash and Cash Equivalents - The Foundation considers all liquid investments with maturity of three months or less and all certificate of deposits classified as current assets to be cash equivalents. Cash equivalents at December 31, 2009, consisted of checking accounts, savings accounts, petty cash, returned checks and certificates of deposit, totaling $224,591. Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Equipment and Furniture Fixed assets are recorded at cost as of the date of acquisition or fair value as of the date of receipt in the case of gifts. The Foundation does not have a written policy concerning the threshold determining when an asset should be capitalized; however, assets costing under $100 are expensed. Depreciation is computed using the straight-line method based on the estimated useful life of the asset. Expenditures for maintenance and repairs are charged to expense as incurred. Major improvements are capitalized. Depreciation expense for the year ended December 31, 2009 is $16,540. Donated Property and Equipment Donations of property and equipment are recorded as contributions at their estimated fair value at the date of donation. Such donations are reported as increases in unrestricted net assets unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the Foundation reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Foundation reclassifies temporarily restricted net assets to unrestricted net assets at that time. Subsequent Events Management has evaluated subsequent events through July 2, 2010, the date the financial statements were available to be issued. Compensated Absences The Foundation allows employees to receive compensation for vacation and sick leave. Compensated absences for vacation and sick pay have not been accrued since they cannot be reasonably estimated, but are expensed as incurred. Note B - INVESTMENT INCOME Investment income is comprised of interest earned on money held in money market accounts and certificates of deposits at financial institutions, and dividends earned on securities held in brokerage accounts. The income is reported as unrestricted revenue. Note C - IN-KIND DONATIONS The Foundation has many volunteers who contribute their time and provide other services and supplies to assist the Foundation during fund-raising and clinic services. The value of donated volunteer services is not reflected in the accompanying financial statements because of the difficulty in monitoring the time donated and of placing a monetary value on the donated services and supplies. - 9 -
Notes to Financial Statements (continued) December 31, 2009 Note D - FAIR VALUES OF FINANCIAL INSTRUMENTS The Foundation s financial instruments, none of which are held for trading purposes, include cash and cash equivalents and investments. The Foundation estimates that the fair value of all financial instruments at December 31, 2009 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying statement of financial position. The estimated fair value amounts have been determined using available market information and appropriate valuation methodologies. The carrying amounts of cash and cash equivalents reported in the statement of financial position approximate fair values because of the short maturities of those instruments. Note E - CONCENTRATIONS At December 31, 2009, the Foundation had on deposit with financial institutions operating cash and board designated certificates of deposit in the amounts of $234,447, and $151,567, respectively. Cash held in bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. These deposits were fully insured by the FDIC as of December 31, 2009. Approximately 87% of the Foundation s revenue for the year ended December 31, 2009 was from the clinic operations. Note F - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted contributions contain donor-imposed restrictions that direct the Foundation to use the donation as specified and is satisfied either by the passage of time (time restriction) or by fulfilling the donor-imposed purpose (purpose restriction). A time restriction stipulates the time period for which the contribution is to be used and is released from the restriction with the passage of time. A purpose restriction specifies the purpose or specific program that the contribution is to support. The release from a purpose restriction is by fulfillment of the purpose. Temporarily restricted net assets at December 31, 2009: Purpose restrictions: $ 9,657 Note G - NET ASSETS RELEASED FROM RESTRICTION Net assets are released from donor restrictions by incurring expenses satisfying the restricted purposes or by occurrence of other events specified by the donors. Net assets released from restriction during the year ended December 31, 2009: Purpose restrictions: $ 5,659 Note H - INVESTMENTS Investments are recorded at fair value using level 1 inputs. The value assigned to investments received by gift is the market value at the date of the donation. At December 31, 2009, investments consisted of mutual funds and cash with a cost of $66,421 and a fair value of $71,062 and certificates of deposit with a cost and fair value of $151,567. These funds have been designated by the Board of Directors as a resource for future expenses. Note I - REMAINDER BENEFICIARY The Foundation is a remainder beneficiary of a trust established in 2004. The Foundation will receive a 10% share of the trust when it is distributed upon the expiration of the life estate of the income beneficiary. The fair market value of this share is $198,460 as of December 31, 2009. - 10 -