FINANCIAL STATEMENTS With Independent Auditors' Report. December 31, 2014 and 2013

Transcription

1 FINANCIAL STATEMENTS With Independent Auditors' Report December 31, 2014 and 2013

2 Table of Contents Independent Auditors' Report 1 Financial Statements Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Notes to Financial Statements 6 Page

3 $ INDEPENDENT AUDITORS' REPORT Board of Directors Rocky Mountain MicroFinance Institute Denver, Colorado We have audited the accompanying financial statements of Rocky Mountain MicroFinance Institute, which comprise the statements of financial position as of December 31, 2014 and 2013, and the related statements of activities 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. Auditors' 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 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 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. #$#

4 Board of Directors Rocky Mountain MicroFinance Institute Denver, Colorado Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rocky Mountain MicroFinance Institute as of December 31, 2014 and 2013, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Centennial, Colorado July 17, 2015 #$#

5 Statements of Financial Position December 31, ASSETS: Cash and cash equivalents $ 363,123 $ 394,027 Accounts receivable and other assets 7,282 12,915 EbTaf exvx\itu_xnaxg 56,518 37,118 Contributions receivable 17,077 22,500 Total Assets $ 444,000 $ 466,560 LIABILITIES AND NET ASSETS: Liabilities: Accounts payable $ 5,916 $ 4,714 Accrued expenses 13,971 16,587 Notes payable 52,500 65,000 72,387 86,301 Net assets: Unrestricted: Operating 275, ,862 Board designated 65,312 52, , ,630 Temporarily restricted 31,078 93, , ,259 Total Liabilities and Net Assets $ 444,000 $ 466,560 See notes to financial statements -3-

6 Statements of Activities Year Ended December 31, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total SUPPORT AND REVENUE: Contributions and grants $ 488,949 $ 5,500 $ 494,449 $ 367,616 $ 44,331 $ 411,947 Program revenue 6,281-6,281 6,146-6,146 Loan collection income 3,983-3,983 2,298-2,298 Total Support and Revenue 499,213 5, , ,060 44, ,391 NET ASSETS RELEASED: Purpose and time restrictions 68,051 (68,051) - 66,827 (66,827) - EXPENSES: Program services 342, , , ,942 Supporting activities: Management and general 90,019-90,019 67,150-67,150 Fund-raising 80,853-80,853 73,489-73, , , , ,639 Total Expenses 513, , , ,581 Change in Net Assets 53,905 (62,551) (8,646) 34,306 (22,496) 11,810 Net Assets, Beginning of Year 286,630 93, , , , ,449 Net Assets, End of Year $ 340,535 $ 31,078 $ 371,613 $ 286,630 $ 93,629 $ 380,259 See notes to financial statements -4-

7 Statements of Cash Flows Year Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ (8,646) $ 11,810 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Net change in operating assets and liabilities: Accounts receivable and other assets 5,633 35,063 Contributions receivable 5, Accounts payable 1,202 4,469 Accrued expenses (2,616) 4,760 Net Cash Provided by Operating Activities ,322 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in loans receivable (19,400) (3,510) Net Cash Used by Investing Activities (19,400) (3,510) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on notes payable (12,500) - Net Cash Used by Financing Activities (12,500) - Net Change in Cash and Cash Equivalents (30,904) 52,812 Cash and Cash Equivalents, Beginning of Year 394, ,215 Cash and Cash Equivalents, End of Year $ 363,123 $ 394,027 See notes to financial statements -5-

8 Notes to Financial Statements December 31, 2014 and NATURE OF ORGANIZATION: The Rocky Mountain MicroFinance Institute (RMMFI) is in Denver, Colorado. RMMFI operates as a nonprofit organization exempt from federal income taxes under Section 501(c) of the Internal Revenue Code (the Code) and is not a private foundation under Section 509(a) of the Code. The primary source of support and revenue for RMMFI is contributions and grants. RMMFI was founded in August of 2008 as a non-profit organization to provide learning, lending, and coaching to grow community entrepreneurs who build businesses to advance along the pathway to self-sufficiency and self-worth. KFF@Cof brand of microfinance combines affordable and approachable business support services and flexible microloans to help individuals turn a good idea into an income-generating business. 2. SIGNIFICANT ACCOUNTING POLICIES: RMMFI uses estimates and assumptions in preparing financial statements on the accrual basis in accordance with accounting principles generally accepted in the United States of America. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of any contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of checking and savings accounts. These accounts, from time to time, may exceed federally insured limits. RMMFI has not experienced any losses on these accounts and does not believe it is subject to any credit risk on cash and cash equivalents. LOANS RECEIVABLE Loans receivable are the affordable and accessible business development loan balances that RMMFI has loaned to low-income individuals to help foster entrepreneurial growth in Colorado communities. Management has determined that an allowance for doubtful accounts recorded in the financial statements for $2,278 as of December 31, 2014 and RMMFI records loans receivable based on the actual amount borrowed. Payments are applied to principal and interest portions according to amortization schedules based on specific terms of the agreement. The agreement also determines past due and delinquency status. Interest is recognized and accrued based on the original agreement and when earned, regardless of when paid. Based on performance of loans, charge-off history, and individual evaluations for impairment, RMMFI has written off loan amounts of $2,123 and $2,269 during the years ended December 31, 2014 and 2013, respectively. -6-

9 Notes to Financial Statements December 31, 2014 and SIGNIFICANT ACCOUNTING POLICIES, continued: LOANS RECEIVABLE, continued As of December 31, 2014 and 2013, there is only one class of receivables, which is evaluated based on the following indicators: loan-to-value, collection experience, and other internal metrics. RMMFI writes-off uncollectible loans once all collection efforts have been exhausted and, at that point in time, RMMFI stops accruing interest on the loan. If a payment is collected after the loan balance was written-off, RMMFI would first allocate the payment to accrued interest and fees and the remainder would be applied to the principal of the loan. RMMFI would resume accruing interest on a previously written-off loan if and when a payment is made. As of December 31, 2014, there were no loans on nonaccrual status, however there were six loans past due over 90 days. Beginning in 2012, all new loans were submitted to Colorado Housing and Finance Authority (CHFA) for loan loss insurance. Each new loan enrolled in the program is insured up to the amount of the outstanding principal owed on the loan and within the balance available in the program. CONTRIBUTIONS RECEIVABLE Contributions receivable are the receivables from foundations that RMMFI has a receivable balance outstanding as of December 31, 2014 and Management believes all amounts to be fully collectible, thus an allowance for doubtful accounts has not been recorded. FURNITURE AND EQUIPMENT RMMFI capitalizes furniture and equipment purchases exceeding $1,000 and expenses lesser amounts in the year purchased. Furniture and equipment are recorded at cost. Donated items are recorded at their fair market value on the date of the gift. Depreciation is computed on the straight-line method over the estimated useful lives, which is three years. CLASSES OF NET ASSETS The financial statements report amounts separately by class of net assets. Unrestricted net assets are resources currently available for use at the discretion of the board of directors. Temporarily restricted net assets are resources that include funds restricted by donors of RMMFI for loan operations, leadership development, and other purpose and time restrictions. -7-

10 Notes to Financial Statements December 31, 2014 and SIGNIFICANT ACCOUNTING POLICIES, continued: SUPPORT, REVENUE, AND EXPENSES Contributions and grants are recorded as support when cash is received or unconditional promises to give are made. All contributions are considered available for unrestricted use unless specifically restricted by the donor. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is satisfied, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. All contributions are considered available for unrestricted use unless specifically restricted by the donor. Donated assets are recorded as contributions at their estimated fair value on the date of donation. Program revenue consists of income from classes and other programs. Program revenue and loan collection income are recorded when earned. Expenses are recorded when incurred in accordance with the accrual basis of accounting. The costs of providing program services and supporting activities have been summarized on a functional basis. Accordingly, certain costs, such as depreciation and salaries, have been allocated among the program services and supporting activities. UNCERTAIN TAX POSITIONS The financial statement effects of a tax position taken or expected to be taken are recognized in the financial statements when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Interest and penalties, if any, are included in expenses in the statements of activities. As of December 31, 2014, RMMFI had no uncertain tax positions that qualify for recognition or disclosure in the financial statements. RMMFI is generally no longer subject to U.S. federal and state income tax examinations by tax authorities for years before NOTES PAYABLE: A note payable of $50,000 was obtained from a foundation for the lending program during the year ended December 31, % of the outstanding balance was due on September 15, 2014 and the remaining balance is due on March 14, There is no interest on the loan and imputed interest on the balance was not included in these financial statements due to immateriality. The outstanding balance on this note as of December 31, 2014 and 2013, was $37,500 and $50,000, respectively. -8-

11 Notes to Financial Statements December 31, 2014 and NOTES PAYABLE, continued: A note payable of $15,000 was obtained from a foundation for the lending program during the year ended December 31, Interest on the note payable accrues at the rate of 1% over the life of the loan. 25% of the outstanding balance is due on March 1, 2015 and the remaining balance is due on October 1, The outstanding balance as of December 31, 2014 and 2013, was $15,000. RMMFI is in compliance with all loan covenants as of December 31, 2014 and BOARD DESIGNATED NET ASSETS: Board designated net assets consist of: December 31, Board designated for reserves $ 42,349 $ 32,305 Internally designated for lending 22,963 20, TEMPORARILY RESTRICTED NET ASSETS: Temporarily restricted net assets consist of: $ 65,312 $ 52,768 December 31, Loan restrictions $ 17,473 $ 81,266 Leadership development 8,105 12,363 Internship program 5,500 - $ 31,078 $ 93, RELATED PARTY TRANSACTIONS: A board member of RMMFI is the executive director of his family foundation that granted RMMFI $6,100 and $5,000 during the years ended December 31, 2014 and 2013, respectively. 7. SUBSEQUENT EVENTS: Subsequent events have been evaluated through the report date, which represents the date the financial statements were available to be issued. Subsequent events after that date have not been evaluated. -9-