FINANCIAL STATEMENTS TOGETHER WITH THE INDEPENDENT AUDITORS REPORT YEAR ENDED DECEMBER 31, 2012 NTRC, PC CERTIFIED PUBLIC ACCOUNTANTS
TABLE OF CONTENTS DECEMBER 31, 2012 PAGE INDEPENDENT AUDITOR S REPORT 1 FINANCIAL STATEMENTS Statement of Financial Position 2 Statement of Activities 3 Statement of Functional Expenses 4 Statement of Cash Flows 5 Notes to the Financial Statements 6 AUDITOR CONTACT INFORMATION 10
STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2012 ASSETS Cash $ 37,000 Accounts receivable 45,305 Prepaid expenses 2,838 Other current assets 5,357 Fixed assets 2,778 Investments 4,306 TOTAL ASSETS $ 97,584 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable $ 2,989 TOTAL LIABILITIES 2,989 NET ASSETS Unrestricted net assets 36,888 Temporarily restricted net assets 57,707 TOTAL NET ASSETS 94,595 TOTAL LIABILITIES AND NET ASSETS $ 97,584 See auditor's report and accompanying notes to the financial statements 2
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2012 Temporarily Unrestricted Restricted Total PUBLIC SUPPORT AND REVENUE Contributions $ 126,329 29,583 $ 155,912 Grant Income 30,000 44,000 74,000 In-kind contributions 129,530-129,530 Other revenue (314) - (314) TOTAL PUBLIC SUPPORT AND REVENUE 285,545 73,583 359,128 Net assets released from restrictions 55,879 (55,879) - EXPENSES Program services 184,207-184,207 General and administrative 103,730-103,730 Fundraising 62,437-62,437 TOTAL EXPENSES 350,374-350,374 CHANGE IN NET ASSETS (8,950) 17,704 8,754 NET ASSETS, BEGINNING OF YEAR 45,838 40,003 85,841 NET ASSETS, END OF YEAR $ 36,888 $ 57,707 $ 94,595 See auditor's report and accompanying notes to the financial statements 3
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2012 Program General and Services Administrative Fundraising Total EXPENSES Salaries $ 70,269 $ 24,754 $ 14,852 $ 109,875 Payroll taxes 5,375 1,894 1,136 8,405 TOTAL COMPENSATION 75,644 26,648 15,988 118,280 Employee benefits 4,791 1,688 1,012 7,491 Bank charges 176 3,316-3,492 Taxes and licenses 225 793-1,018 Professional fees 44,070 20,520 161 64,751 Computer and website 70 2,302-2,372 Telephone 137 1,710-1,847 Travel 11,925 12,236 2,626 26,787 Events and promotions - - 42,261 42,261 Field supplies 9,600 - - 9,600 Insurance - 3,437-3,437 Depreciation - 242-242 Occupancy 6,940 7,080-14,020 Printing 417 7,996 167 8,580 Other operating expenses 30,212 15,762 222 46,196 TOTAL EXPENSES $ 184,207 $ 103,730 $ 62,437 $ 350,374 See auditor's report and accompanying notes to the financial statements 4
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2012 CASH FLOWS FROM OPERATING ACTIVITIES Increase/(Decrease) in net assets $ 8,754 Adjustments to reconcile to net cash provided by (used in) operating activities: Depreciation expense 242 Changes in assets and liabilities: (Increase) decrease in : Accounts receivable (32,925) Other current assets (5,357) Prepaid expenses (12) Increase (decrease) in: Accounts payable (1,374) Accrued expenses (534) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (31,206) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchases of fixed assets (3,020) Investments 392 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (2,628) NET CHANGE IN CASH (33,834) BEGINNING CASH 70,834 ENDING CASH $ 37,000 See auditor's report and accompanying notes to the financial statements 5
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 NOTE A - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Development in Gardening, Inc. (the Organization) is a nonprofit organization formed to improve the nutrition and health of HIV-affected and at-risk populations around the world through sustainable gardening. The Organization empowers communities to develop sustainable community gardens, improving the nutrition and quality of life for people living with HIV-AIDS, orphans, pregnant women and other vulnerable populations in developing nations. This is accomplished by teaching people in agriculture and nutrition and providing resources to create projects that enable communities to meet their own needs. Method of Reporting The accompanying financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. The Organization categorizes net assets as unrestricted, temporarily restricted or permanently restricted based on stipulations made by the donor. Accordingly, the Organization reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. All contributions and unconditional promises to give which do not have donor restrictions as to purpose or time are classified as unrestricted and is reported as an increase in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. Equipment It is the Organization s policy to capitalize property and equipment over $1,000. Lesser amounts are expensed. Furniture and equipment are recorded at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives are as follows: furniture, seven years; vehicles, five years; and computer equipment, five years. Income Tax Development in Gardening, Inc. qualifies as a tax-exempt organization under Section 501(c) (3) of the Internal Revenue Code and, therefore, requires no provision for income taxes. In addition, the Organization has been determined by the Internal Revenue Service not to be a private foundation within the meaning of Section 509(a) of the Internal Revenue Code. As defined by Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 740, Income Taxes, no provision or liability for materially uncertain tax positions was deemed necessary by management. Therefore, no provision or liability for uncertain tax positions has been included in these financial statements. 6
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 NOTE A - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Concentration of Credit Risk Cash and cash equivalents consist of demand deposits with a single financial institution. The balances in the Organization s bank accounts, as reflected in the bank s records, are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. None of the cash balances were uninsured as of December 31, 2012. Compensated Absences No accrual of compensated absences has been made in the financial statements because the amount cannot be reasonably estimated. Functional Allocation of Expenses The costs of providing the various programs and other activities are summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among the various programs and supporting services benefited. Estimates The preparation of financial statements in conformity with accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents The Organization considers all cash investments and highly liquid investments with maturities of three months or less to be cash equivalents. Investments The Organization s investments consist of marketable securities which are classified as available for sale. Securities classified as available for sale are carried in the financial statements at fair value. Realized gains and losses are included in earnings; unrealized holding gains and losses are included in other revenue. Unrealized holding losses for the year ended December 31, 2012 totaled $392. NOTE B - PROPERTY AND EQUIPMENT Components of property and equipment consist of the following at December 31, 2012: Equipment $ 3,020 Less accumulated depreciation (242) $ 2,778 Depreciation expense for the year ended December 31, 2012 was $242. 7
NOTE C - ECONOMIC DEPENDENCY DEVELOPMENT IN GARDENING, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 The Organization depends heavily on contributions for its revenue. Accordingly, the ability of certain contributors to continue giving amounts comparable with the current year may be dependent upon current and future overall economic conditions. While the Organization s Board of Directors believes that the Organization s resources are sufficient to continue its programs, its ability to do so and the extent to which it continues, may be dependent on the above factors. NOTE D DONATED FACILITIES AND SERVICES The Organization records the value of donated goods, facilities, and services when there is an objective basis available to measure their value. The Organization received the following during the year: Donated printing and reproduction $ 6,550 Donated event food and auction items 5,900 Donated housing, facilities and venues 38,480 Donated field materials 7,000 Donated services 71,600 Total $ 129,530 NOTE E - COMMITMENTS AND CONTINGENCIES Grants and contracts often require the fulfillment of certain conditions as set forth in the instrument or agreement. Failure to fulfill the conditions could result in the return of funds to grantors. Although return of funds is a possibility, management of the Organization deems the contingency unlikely. Grants and contracts are subject to audit by the grantor. The grantor has the authority to determine liabilities or limit or suspend participation in the various sponsored programs. NOTE F DEFINED CONTRIBUTION PLAN The Organization has a defined contribution plan (the Plan) covering all employees who are twenty-one years old or older and have at least one year of service. The Organization can make discretionary matching contributions as either a percentage of the employee s contribution or a flat dollar amount. No matching contributions were made for the year ended December 31, 2012. Pension expense totaled $710. NOTE G FAIR VALUE GAAP defines fair value and establishes a hierarchy for reporting the reliability of input measurements used to assess fair value. The hierarchy prioritizes fair value measurements based on the types of inputs used in the valuation technique. The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The Organization s investments are measured at fair value on a recurring basis using Level 1 inputs. The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable approximate fair value due to the short maturity of these instruments. 8
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2012 NOTE H TEMPORARY RESTRICTION ON NET ASSETS Temporary restrictions on net assets at the end of the year are related to funds raised through campaigns, grants, and contributions. Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes as follows: Projects in Kenya $ 35,153 Projects in Uganda 971 Donor Trips 17,342 Projects in Burkina Faso 2,413 Total $ 55,879 Temporarily restricted net assets are available for the following purposes: NOTE I SUBSEQUENT EVENTS Projects in Kenya $ 49,401 Projects in Uganda 29 Program Expenses 8,277 Total $ 57,707 Management has evaluated subsequent events through September 16, 2013, the date which the financial statements were available to be issued and determined that no additional adjustments and/or disclosures are required. 9
John Pitts, CPA NTRC, P.C. 3054 Panola Road, Suite H Lithonia, GA 30038 Telephone: 678.518.1554 Fax: 678.518.1812 Email: jpitts@ntrccpa.com AUDITOR CONTACT INFORMATION