Independent Accountant s Report and Financial Statements for the Year Ended September 30, 2015 dwg, inc 1912 N. Drexel Blvd. Phone: 405.949.0189 Oklahoma City, OK 73107 Fax: 405.949.1189
TABLE OF CONTENTS Independent Auditor s Report 1 Statement of Financial Position 3 Statement of Activities and Changes in Net Assets 4 Statement of Functional Expenses 5 Statement of Cash Flows 6 Notes to Financial Statements 7
1912 N Drexel Blvd. Oklahoma City, OK 73107 Telephone (405) 949-0189 Facsimile (405) 949-1189 Email. dwg, inc. Certified Public Accountant and Consultant bigdwg@dwgca.com www.dwgcpa.com INDEPENDENT AUDITOR'S REPORT The Board of Directors, Oklahoma Shakespeare in the Park, Inc. Report on the Financial Statements We have audited the accompanying financial statements of Oklahoma Shakespeare in the Park, Inc. (a nonprofit organization), which comprise the statement of financial position as of September 30, 2015 and the related statements of activities and changes in net assets, functional expenses, and cash flows for the year 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 audit. We conducted our audit 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 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 Member of the American Institute of Certified Public Accountants 1
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 Oklahoma Shakespeare in the Park, Inc. as of September 30, 2015, and the changes in its net assets, functional expenses and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. dwg, inc. David W. Gandall, CFE, CPA August 29, 2016 Member of the American Institute of Certified Public Accountants 2
Statement of Financial Position As of September 30, 2015 ASSETS Cash on hand and demand deposits $ 12,729 Grants receivable 4,334 Other current assets 9,519 Furniture, fixtures & equipment 5,464 Accumulated depreciation (5,464) Beneficial interest in assets held by others 11,085 Unrealized gain (loss) on beneficial interest in assets held by others 1,509 TOTAL ASSETS 39,176 LIABILITIES AND NET ASSETS LIABILITIES Notes payable 10,038 Accounts payable 4,822 Sales taxes payable 880 Payroll liabilities 2,643 TOTAL LIABILITIES 18,383 NET ASSETS Unrestricted (16,918) Temporarily restricted 25,117 Permanently restricted 12,594 TOTAL NET ASSETS 20,793 TOTAL LIABILITIES AND NET ASSETS $ 39,176 The accompanying notes are an integral part of these financial statements 3
Statement of Activities and Changes of Net Assets For the Year Ended September 30, 2015 Temporarily Restricted Permanently Restricted Unrestricted Total REVENUES, GAINS AND OTHER SUPPORT Program income $ 11,266 $ - $ - $ 11,266 Theatre income - ticket sales 44,985 - - 44,985 Grant income 39,334 25,117-64,451 Corporate foundation donors 1,493 - - 1,493 Personal donors 11,948 - - 11,948 Rent income 13,203 - - 13,203 Fundraiser income 1,749 - - 1,749 Bar sales income 687 - - 687 Other income 2,993 - - 2,993 Assets released from restrictions 69,175 (69,175) - - Total Revenues, Gains and Other Support 196,833 (44,058) 152,775 EXPENSES Program Services 141,726 - - 141,726 Management and general 91,841 - - 91,841 Fundraising 3,480 - - 3,480 Total Expenses 237,048 - - 237,048 CHANGE IN NET ASSETS (40,215) (44,058) - (84,273) BEGINNING NET ASSETS 23,297-13,342 36,639 Prior period adjustment - 69,175-69,175 Change in Unrealized gain (loss) on investment - - (748) (748) ENDING NET ASSETS $ (16,918) $ 25,117 $ 12,594 $ 20,793 The accompanying notes are an integral part of these financial statements 4
Schedule of Functional Expenses For the Year Ended September 30, 2015 Management Program & General Fundraising Total Expenses Expenses Expenses Expenses Salaries $ 30,646 $ 28,017 $ - $ 58,663 Payroll taxes 2,327 2,155-4,482 Advertising 150 - - 150 Bank and credit card fees - 1,297-1,297 Board meetings expenses - 12-12 Conferences - 995-995 Contract labor 68,758 - - 68,758 Contributions - - - - Costumes 7,531 - - 7,531 Dues and subscriptions 765 - - 765 Entertainment and meals - 238-238 First Friday expense 529 - - 529 Fundraiser - - 3,480 3,480 Insurance 3,098 12,988-16,086 Interest expense - 1,481-1,481 Leased equipment - 1,632-1,632 Licenses and permits - 185-185 Marketing - - - - Office expense - 4,406-4,406 Office Rent - 17,340-17,340 Postage - 167-167 Printing and reproduction 2,210 - - 2,210 Production expense 15,994 - - 15,994 Professional fees - accounting - 16,975-16,975 Repairs and maintenance 197 85-282 Sales taxes 3,891 - - 3,891 Show location fees 5,000 - - 5,000 Staff expense 400 - - 400 Storage for theatre inventory 150 - - 150 Transportation fees 80 - - 80 Utilities - 3,869-3,869 Total Expenses $ 141,726 $ 91,841 $ 3,480 $ 237,048 The accompanying notes are an integral part of these financial statements 5
Statement of Cash Flows As of September 30, 2015 Cash flows from current activities: Cash received from programs $ 8,452 Cash received from ticket sales 41,669 Cash received from grants 115,485 Cash received from corporate donors 1,473 Cash received from individual donors 11,948 Cash received from miscellaneous sources 5,431 Cash received from rental income 13,003 Payments for goods and services (174,858) Payments to employees (63,104) Net cash provided (used) by current activities (40,501) Cash flows from financing activities: Cash received from notes payable - bridge loans 31,700 Cash payment to notes payable - bridge loans (22,000) Net cash provided (used) by financing activities 9,700 Beginning cash 43,530 Ending cash $ 12,729 Reconciliation of change in net assets to net cash used by operations: Change in net assets: $ (84,273) Adjustments to reconcile change in net assets to net cash used by operating activities: Change in assets and liabilities: (Increase) decrease in receivable - grants 51,034 (Increase) decrease in receivable (6,150) (Increase) decrease in prepaid expenses - payroll (1,038) Increase (decrease) in accounts payable (190) Increase (decrease) in payroll liabilities 41 Increase (decrease) in sales taxes payable 76 Increase (decrease) in temporarily restricted assets (69,176) Increase (decrease) in prior period adjustments 69,175 Net cash from current activities $ (40,501) The accompanying notes are an integral part of these financial statements 6
Notes to the Financial Statements As of and for the Year Ended September 30, 2015 Note 1 -- Summary of Significant Accounting Policies General This summary of significant accounting policies of Oklahoma Shakespeare in the Park, Inc. is presented to assist in understanding the organization s financial statements. The financial statements and notes are representations of management, who is responsible for their integrity and objectivity. History of the Organization Oklahoma Shakespeare in the Park, Inc. (the Organization) was incorporated on February 13, 1986, as a non-profit organization under the laws of the State of Oklahoma. It has been granted tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. The mission of the Organization is to encourage growth in the cultural climate of Oklahoma through the production of classic theatrical productions in unique venues at a reasonable admission. To accomplish this, the Organization has developed the following programs: Summer Classics Season, Stage Center Production, Artist in Residence Program and Touring Programs. Basis of Accounting The Organization s books are kept on a cash receipts and disbursements basis during the year. At year-end, the books are converted to the accrual basis of accounting whereby revenue is recognized when earned and expenditures are recognized when incurred. Financial Statement Presentation The financial statement presentation follows the recommendations of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 958-205. Under ASC 958-205, the Organization is required to report information regarding its financials position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. Unrestricted net assets Net assets that are not subject to donor-imposed stipulations. Temporarily restricted net assets Net assets subject to donor-imposed stipulations that will be met either by actions of the Organization and/or the passage of time. The organization did not have a temporarily restricted net asset balance at September 30, 2015. Permanently restricted net assets Net assets subject to donor-imposed 7
Notes to the Financial Statements As of and for the Year Ended September 30, 2015 Note 1 -- Summary of Significant Accounting Policies (continued) stipulations that they be maintained permanently by the Organization. The Organization has permanently restricted net assets as stated in Note 3. Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e., the donorstipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as net assets released from restrictions. Contributions, Grants and Promises to Receive Contributions and grants are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. Support that is restricted by the grantor or donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a 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. Donated property and equipment, when received, would be reflected as contributions in the financial statements at their estimated values on the date of receipt. No significant donated property was received in the year ending September 30, 2015. Cash and Cash Equivalents For purposes of preparing the statement of cash flows, cash includes demand deposits, money market accounts and certificates of deposit with an original maturity date of three months or less. Property and Equipment Property and equipment are reported at cost. Costs of maintenance and repairs are charged to expense while costs of significant renewals and betterments are capitalized. Donated property is recorded at its fair market value at the time of the donation. 8
Notes to the Financial Statements As of and for the Year Ended September 30, 2015 Note 1 -- Summary of Significant Accounting Policies (continued) Assets are depreciated by the straight-line method over various estimated useful lives of five to fifteen years. Income Taxes The Organization is a not-for-profit organization as described in Section 501 ( c ) ( 3 ) of the Internal Revenue Code and is exempt from federal and state income taxes. Accordingly, no provision for income taxes has been included in the accompanying financial statements. The Organization is required to file annual informational returns with the Internal Revenue Service and the Oklahoma Tax Commission. Tax returns for the years ended September 30, 2015, 2014 and 2013 are subject to review by the taxing authorities. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accordingly, actual results could vary from those estimates. Note 2 Grants Receivable Grants receivable consist of grants awarded to the Organization prior to September 30, 2015 for use during the 2015 or 2016 season. 2016 grants are recorded as temporarily restricted revenue. All grants are considered fully collectible. Note 3 Beneficial Interest in Assets Held by Others Oklahoma Shakespeare in the Park, Inc. is the beneficiary of an endowment with the Oklahoma City Community Foundation (the Foundation), and records this interest in accordance with FASB Accounting Standards No. 958-320, Investments Debt and Equity Securities. The endowment was transferred from the Organization to the Foundation with variance power granted to the Foundation in the following three circumstances: a) The Organization ceases to exist; b) the Organization ceases to qualify under its current exempt status with the IRS; and c) the Organization s mission becomes impractical to fulfill. The current distribution policy of the Foundation is 5% of the market value of the fund at June 30 of each year, averaged over 8 quarters, distributed each October. The cumulative gifts from the Organization have totaled $18,140. The total Oklahoma City Community Foundation General Market Pool market value as of September 30, 2015 is $395,826,315. The Oklahoma Shakespeare in the Park, Inc. s percentage of that investment of $395,826,315 is.019%, or approximate current market value of $75,207. The 9
Notes to the Financial Statements As of and for the Year Ended September 30, 2015 percentage that is considered The Oklahoma Shakespeare in the Park, Inc. s beneficial interest in these assets is 16.745%, or current market value of $12,594. Note 4 Debt The organization obtained three interest bearing notes payable bridge loans for 2015 operations from Citizens Bank of Edmond. The first note payable bridge loan was $15,000 dated February 11, 2015 due on June 11, 2015 with interest expense of $499. This loan was paid in full. The second note payable bridge loan was $7,000 dated June 23, 2015 due on August 15, 2015 with interest expense of $644. This loan was paid in full. The third note payable bridge loan was $9,700 dated July 9, 2015, due October, 2015 with interest expense payable of $338. This loan was subsequently paid in full October 13, 2015. Interest is 4% of balance due on outstanding balance as of September 30, 2015. The following is a summary of the note payable bridge loans as of September 30, 2015: 09/30/2014 9/30/2015 Balance Additions Retirements Balance Note payable - Citizens Bank of Edmond #1-15,000 (15,000) - Note payable - Citizens Bank of Edmond #2-7,000 (7,000) - Note payable - Citizens Bank of Edmond #3-10,038-10,038-32,038 (22,000) 10,038 Note 5 Functional Expenses Program services and membership include both direct and indirect costs attributed to the various programs of the Organization. Note 6- Prior Period Adjustment The financial presentation of grant funds received but not for use in the current year was incorrect in the previous year s financial statements. This adjustment does not change the results of the previous year s operations or the current year s results of operations. Note 7 Subsequent Events Management has evaluated subsequent event through the audit report date and has concluded that there are no significant subsequent events requiring disclosure through that date. 10