Vincent M. Marotta & Associates, Ltd Lathrop Avenue River Forest, IL

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1 Vincent M. Marotta & Associates, Ltd Lathrop Avenue River Forest, IL This PDF contains the documents listed below. Click a link to jump to the corresponding document. Documents for: Pro-Life Action League, Inc. Accounting Documents Pro Life Audit Cover Revised (05/31/14) Pro Life Audit Table (05/31/14) Pro Indep Audit Letter (05/31/14) PRO Bal Sheet Cash Audit 3 (05/31/14) PRO Inc St - Cash Audit 3 (05/31/14) Pro Life Notes Audit (05/31/14)

2 Financial Statements And Independent Auditor's Report - Cash Basis For the Period Ended May 31, 2014 Prepared By Vincent M. Marotta & Associates, Ltd. Certified Public Accountants 1538 Lathrop Avenue River Forest, Illinois Ph: (708) Fx: (708)

3 Financial Statements And Independent Auditor's Report - Cash Basis For the Period Ended May 31, 2014 Table of Contents Independent Auditor's Report... 1 Financial Statements Statement of Financial Position - Cash Basis for the Year Ended May 31, Statements of Activities - Cash Basis for the Year Ended May 31, Notes to the Financial Statements for the Year Ended May 31,

4 Vincent M. Marotta & Associates, Ltd. Certified Public Accountants 1538 Lathrop Avenue River Forest, Illinois TELEPHONE (708) FACSIMLE (708) vmmaltd@aol.com Website: marottacpa.com INDEPENDENT AUDITOR'S REPORT To the Board of Trustees of Pro-Life Action League, Inc. d/b/a Pro Life Action League Chicago, Illinois We have audited the accompanying statement of financial position-cash basis of Pro-Life Action League, Inc. (a nonprofit organization) as of May 31, 2014, and the related statement of activities-cash basis for the year then ended. These financial statements are the responsibility of the Organization's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, these financial statements were prepared on the cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position- cash basis and net assets of Pro-Life Action League, Inc. as of May 31, 2014, and its statement of activities-cash basis for the year then ended on the basis of accounting described in Note 1. This report is intended solely for the information and use of the board of trustees and management of Pro-Life Action League, Inc. and the Office of the Illinois Attorney General, Lisa Madigan, and is not intended to be and should not be used by anyone other than these specified parties. Vincent M. Marotta, CPA Vincent M. Marotta & Associates, Ltd. January 6,

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6 Statement of Financial Position - Cash Basis As of May 31, 2014 ASSETS Current Assets: Cash in bank - Associated $ 4,285 Cash in bank - Small Business NP 129,461 Petty cash 340 Total Current Assets 134,086 Property and Equipment: Computer software 36,939 Computer equipment 41,388 Office furniture & equipment 35,200 Less: Accumulated Depreciation (103,896) Net Property and Equipment 9,631 Other Assets: Rent deposit 7,245 Investment - Variable Annuity 120,130 Total Other Assets 127,375 Total Assets $ 271,092 See Independent Auditor's Report 2

7 Statement of Financial Position - Cash Basis As of May 31, 2014 LIABILITIES AND NET ASSETS Current Liabilities: Employee 401k payable $ 1,210 Total Current Liabilities 1,210 Long-Term Liabilities: Total Liabilities 1,210 Net Assets: Unrestricted Beginning Net Assets 320,514 Change in Unrestricted Net Assets (50,632) Total Net Assets 269,882 Total Liabilities and Net Assets $ 271,092 See Independent Auditor's Report 3

8 Statement of Activities - Cash Basis AMOUNT % Support & Revenues: General donations $ 572, % Payroll deduction % LifeLine long distance % Thank you letters 108, % Memorial donation 2, % Grant 75, % Matching grant donation % Bequest 126, % PLAL newspaper 9, % Interest & dividends 9, % Reimbursement 18, % Postal reimbursement % Travel reimbursement % Literature & taps 15, % Total Support & Revenues 938, Cost of Goods Sold: Literature/tapes/photos 1, Total Cost of Goods Sold 1, Total Revenues 937, See Independent Auditor's Report 4

9 Statement of Activities - Cash Basis AMOUNT % Program Services: Salaries 298, Salaries - officers 94, Stipend for speaking 1, Credit card processing fee 3, Insurance - health 51, Rent 42, CD's Production Telephone 15, Yellow pages advertising Memorial mass or donation Depreciation and amortization 6, Printing & stationery 27, Generations printing 1, Printing PLAL newspaper 5, Brochures etc. 18, Postcards & invitations 1, Office supplies 6, Display supplies 1, Postage 17, Media support 53, Travel & staff expenses 8, Auto expenses 2, Advertising & promotion 3, Computer support 8, Miscellaneous 1, Brunch 4, Gift Payroll taxes 32, Special events 23, Total Program Services 733, See Independent Auditor's Report 5

10 Statement of Activities - Cash Basis AMOUNT % Management & General: Salaries 52, Salaries - officers 6, Bank charges 4, Insurance - health 7, Insurance - workers compensation 9, Insurance - office equipment 1, Rent 34, Telephone Maintenance & repairs Printing & stationery 13, Postage & Shipping 4, Postal meter fees 4, Copier rental Newspapers & magazines Accounting fees 10, Delivery service fees 3, Computer supplies Payroll taxes 4, Illinois annual report fee Annual fee Interest & finance charges Utilities - Electric Total Management & General 159, See Independent Auditor's Report 6

11 Statement of Activities - Cash Basis AMOUNT % Fundraising: Salaries - officers 3, Salaries 30, Rent Fundraising printing 31, Fundraising postage 25, Fundraising mailing list 3, Total Fundraising 95, Total Expenses 988, Change in Unrestricted Net Assets $ (50,632) (5.39)% See Independent Auditor's Report 7

12 Notes to the Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NOTE A. REPORTING ENTITY Pro-Life Action League, Inc.(the Organization) was incorporated under the Illinois Not For Profit Corporation Act of The Organization is tax exempt under Section 501c (3) of the Internal Revenue Code. NOTE B. BASIS OF ACCOUNTING The Organization's policy is to maintain its books and prepare its financial statements on the cash receipts and disbursements basis of accounting, which is a comprehensive basis of accounting other than in accordance with generally accepted accounting principles. Under this basis, revenues and the related assets are recognized when received rather than when earned and expenses are recognized when paid rather than when the obligations are incurred. Consequently, the Organization had not recognized pledges receivable from donors, accounts payable to vendors, and their related effects on the change in net assets in the accompanying financial statements. NOTE C. ESTIMATES The preparation of financial statements requires management to make certain estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 8

13 Notes to the Financial Statements NOTE D. PROPERTY & EQUIPMENT Property and equipment are recorded at cost. Depreciation is computed using the Modified Accelerated Cost Recovery System (MACRS) and is used for financial accounting purposes and for federal income tax purposes. The use of MACRS depreciation is not in conformity with generally accepted accounting principles. The rates are based on the following estimated useful lives: Estimated Useful Life Computer Software 3 years Computer Equipment 5 years Office Furniture & Equipment 5-7 years Depreciation expense for the year ended May 31, 2014, under the accelerated method was $6,143. Expenses for maintenance and repairs are charged to expense as incurred, whereas major improvements are capitalized. NOTE E. CONTRIBUTIONS The Organization records contributions when they are received. Contributions received in form of cash, checks, money orders, credit card charges, wire transfers, and other transfers are deposited into one of the Organization's bank accounts. NOTE F. INCOME TAXES No provision has been made for income taxes in the financial statements. The Organization is exempt from Federal and State income taxes under Internal Revenue Service Code Section 501c (3.) This code section enables the Organization to accept donations which qualify as charitable contributions to the donor. 9

14 Notes to the Financial Statements NOTE 2 - COMMITMENTS AND CONTINGENCIES The Organization leases its office facility in Chicago for $5,222 per month under a 12- month renewable lease, expiring January Rent expense under this lease was $63,960 for the year ended May 31, The Organization leases a second office facility in Aurora for $1,500 per month under 12- month renewable lease, expiring May For the period June 2014 through November 2014, the rent will be at the rate of $1,675 per month. After November 2014, a 90-day written notice is required for renewal options. Rent expense under this lease was $14,100 for the year ended May 31, NOTE 3 - INVESTMENT - VARIABLE ANNUITY In July 2013 the Organization terminated its life insurance policies on two of its directors. Under the terms of the insurance, the Organization received the cash surrender value of the life insurance policies in two separate deposits totaling $120,888. In July 2013 the Organization purchased a variable annuity from Jackson National Life Insurance. The Organization is the owner of the contract. The annuitant is Ann Scheidler. The variable annuity is a financial contract in the form of an insurance product which makes a series of future payments to the Organization in exchange for the immediate payment of a lump sum single payment annuity. The Organization purchased the lump sum single payment annuity in the amount of $120,130 from Jackson National Life Insurance. The payment stream from variable annuity has an unknown duration based principally upon the date of death of the annuitant Ann Scheidler. At this point the contract will terminate, and the remainder of the funds accumulated is forfeited unless there are other annuitants in the contract. The value stated on the accompanying balance sheet as of May 31, 2014, is $120,130 which is the purchase price of the contract. 10

15 Notes to the Financial Statements NOTE 4 - SECURITIES The securities are recorded at fair market value on the balance sheet and recognized as revenue in the accounting period when they are received. These securities are held with the Organization's brokerage firm. All the securities are currently classified as available-for-sale and may be sold in response to changes in interest rates, liquidity needs, and for other purposes determined by the Organization. Unrealized gains and losses on investment securities available for sale are based on the difference between book value and fair value of each security. The Organization reports realized gains and losses as a credit or charge to net assets when the securities are sold. NOTE 5 - SUBSEQUENT EVENTS Scheidler v. Trombley During 2007 the Organization sued Planned Parenthood of Illinois, Inc. and codefendants for libel. Defendants moved to dismiss based on a new law, the Citizen Participation Act. The suit was initially dismissed, but amended counts were filed. Defendants claim that the Citizen Participation Act requires the Organization to pay their attorney fees of $495,000. On June 1, 2012, the judge in the Circuit Court of Kane County "vacated" and "reversed" the order directing the Organization to pay attorney fees. As of the date of this report, the lawsuit will proceed. Although the Citizen Participation Act is relatively new, the Organization's attorneys are encouraged by a recent ruling by the Illinois Supreme Court in Sandolm vs. Kuecker, a similar case, and expect to prevail as the case goes forward. The Organization is currently awaiting a ruling from the Court. National Organization for Women, Inc. v. Scheidler In April 2013 Judge Norgle awarded $63,391 to the Pro-Life Action League and ordered National Organization for Women, Inc. (NOW) to pay that amount. NOW appealed. On April 18, 2014, the Seventh Circuit Appellate Court affirmed Judge Norgle's ruling. NOW finally sent the check from their attorney, Fay Clayton, dated June 26, 2014, to the Organization. The check in the amount of $63,391 was received by the Organization on July 9, This case is officially closed. 11