P.L.U.S. Group Homes, Inc.

Transcription

1 Financial Statements Year Ended December 31, 2015 The report accompanying these financial statements was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

2 Financial Statements Year Ended December 31, 2015

3 Contents Independent Auditor s Report 3-4 Financial Statements: Statement of Financial Position as of December 31, Statement of Activities for the Year Ended December 31, Statement of Functional Expenses for the Year Ended December 31, Statement of Cash Flows for the Year Ended December 31,

4 Tel: Fax: Park Avenue New York, NY Independent Auditor s Report Board of Directors P.L.U.S. Group Homes, Inc. Wantagh, New York We have audited the accompanying financial statements of P.L.U.S. Group Homes, Inc. ( P.L.U.S. ) which comprise the statement of financial position as of December 31, 2015, and the related statements of activities, 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 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. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 3

5 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of P.L.U.S. Group Homes, Inc. as of December 31, 2015, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited P.L.U.S. Group Homes, Inc. s 2014 financial statements, and we expressed an unmodified opinion on those audited financial statements in our report, dated May 27, In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2014, is consistent, in all material respects, with the audited financial statements from which it has been derived. June 1,

6 Statement of Financial Position (with comparative totals for 2014) December 31, Assets Cash and cash equivalents (Note 2) $1,582,280 $1,318,966 Investments, at fair value (Notes 2 and 3) 16,647 16,646 Accounts receivable (Note 2) 1,480,350 2,019,882 Prepaid expenses and other assets 129, ,136 Assets limited as to use (Notes 2 and 4) 320, ,754 Investments designated for deferred compensation (Notes 2, 3 and 11) 282, ,855 Fixed assets, net (Notes 2 and 5) 3,707,148 3,952,957 Liabilities and Net Assets $7,518,788 $8,026,196 Liabilities: Accounts payable and accrued expenses $ 246,720 $ 384,586 Accrued payroll and related liabilities 529, ,809 Swap liability (Notes 3, 8 and 12) 546 3,753 Due to governmental agencies (Note 6) 1,526,353 1,494,065 Deferred compensation (Notes 3 and 11) 282, ,855 Loans payable (Note 7) 104,353 49,473 Mortgages payable (Note 8) 30,487 83,178 Bond payable (Note 9) 2,323,334 2,537,500 Total Liabilities 5,043,845 5,312,219 Commitments and Contingencies (Notes 4, 6, 7, 8, 9, 11, 13 and 14) Net Assets - Unrestricted 2,474,943 2,713,977 $7,518,788 $8,026,196 See accompanying notes to financial statements. 5

7 Statement of Activities (Unrestricted) (with comparative totals for 2014) Year ended December 31, Program Revenues: Fee for service $8,501,940 $9,530,045 Prior period (loss) income (177,992) 32,788 Total Program Revenues 8,323,948 9,562,833 Program Expenses: Program services: Intermediate Care Facilities 4,343,466 5,398,582 Individualized Residential Alternative 3,267,168 3,319,238 Day Habilitation Services 22,206 - Medicaid Service Coordination 12,008 11,985 Total Program Services 7,644,848 8,729,805 Supporting services: Management and general 939, ,095 Total Expenses 8,584,026 9,588,900 Change in Net Assets Before Support and Nonoperating Revenues (260,078) (26,067) Support and Nonoperating Revenues: Contributions 10,940 15,340 Interest income (loss) Other income 6,857 6,230 Total Support and Nonoperating Revenues 17,837 21,615 Change in Net Assets Before Gain on Swap Agreement (242,241) (4,452) Gain on Swap Agreement (Note 12) 3,207 7,288 Change in Net Assets (239,034) 2,836 Net Assets, Beginning of Year 2,713,977 2,711,141 Net Assets, End of Year $2,474,943 $2,713,977 See accompanying notes to financial statements. 6

8 Statement of Functional Expenses (with comparative totals for 2014) Year ended December 31, Intermediate Care Facilities (ICF) Individualized Residential Alternative (IRA) Program Services Day Habilitation Services Medicaid Service Coordination (MSC) Total Program Services Supporting Services Totals Management and General Salaries and Related Expenses: Salaries $2,499,418 $1,907,259 $17,240 $ 9,242 $4,433,159 $516,223 $4,949,382 $4,881,583 Payroll taxes and employee benefits 724, ,471 4,886 2,723 1,279, ,717 1,447,177 1,397,153 Total Salaries and Related Expenses 3,223,798 2,454,730 22,126 11,965 5,712, ,940 6,396,559 6,278,736 Other Expenses: Professional fees ,428 69,428 59,322 Data processing 11,623 8, ,556 2,426 22,982 22,023 Utilities 51,374 38, ,376 12, , ,810 Facility tax assessment 249, , , ,693 Rent (Note 13) ,747 91,747 84,263 Repairs and maintenance 83,848 68, ,208 9, , ,450 Employee travel 9,672 11, ,645 2,959 24,604 17,126 Telephone 11,137 14, ,726 15,384 41,110 29,887 Postage ,028 2,028 2,644 Office expense 4,012 2, ,357 5,572 11,929 13,948 Dues and subscriptions 1, ,659 10,792 12,451 10,779 Interest expense 40,142 82, , , ,140 Personnel recruitment 1, ,175 4,900 7, Vehicle expense 23,025 33, ,064-56,064 79,874 Staff training ,187-1,187 1,940 Insurance expense 35,134 36, ,060 10,963 83,023 76,074 Medical and therapeutic supplies 7,141 2, ,021-10,021 22,208 Food 151, , , , ,349 Household and program supplies 83,839 72, , , ,996 Stationary and printing ,424 2,424 1,893 Contracted services 118,443 39, ,404 7, , ,816 Client activities 38,994 66, , , ,191 ICF Day Hab Expense ,078,749 Equipment and furniture 8,190 4, ,084 3,558 16,642 25,941 Computer expenses 4,001 4, ,895 1,275 10,170 7,568 Miscellaneous 1,200 2, ,119 1,231 5,350 6,297 Total Expenses Before Depreciation and Amortization 4,160,159 3,059,473 22,206 12,008 7,253, ,540 8,192,386 9,175,136 Depreciation and Amortization 183, , , , ,764 Total Expenses $4,343,466 $3,267,168 $22,206 $12,008 $7,644,848 $939,178 $8,584,026 $9,588,900 See accompanying notes to financial statements. 7

9 Statement of Cash Flows (with comparative totals for 2014) Year ended December 31, Cash Flows From Operating Activities: Change in net assets $ (239,034) $ 2,836 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 391, ,764 Gain on swap agreement (3,207) (7,288) (Increase) decrease in: Accounts receivable 539,532 (459,293) Prepaid expenses and other assets 11,411 (21,980) Change in investments designated for deferred compensation (24,242) (26,740) Increase (decrease) in: Accounts payable and accrued expenses (137,866) 56,180 Accrued payroll and related liabilities 28,146 (58,255) Due to governmental agencies 32, ,706 Deferred compensation 24,242 26,740 Net Cash Provided By Operating Activities 622, ,670 Cash Flows From Investing Activities: (Increase) decrease in assets limited as to use (1,787) 7,356 Change in short-term investments (1) (1) Purchases of fixed assets (145,831) (46,353) Net Cash Used In Investing Activities (147,619) (38,998) Cash Flows From Financing Activities: Proceeds from loans payable 78,539 36,807 Principal payments on loans payable (23,659) (19,670) Principal payments on mortgages payable (52,691) (89,241) Principal payments on bonds payable (214,166) (242,500) Net Cash Used In Financing Activities (211,977) (314,604) Net Increase in Cash and Cash Equivalents 263, ,068 Cash and Cash Equivalents, Beginning of Year 1,318,966 1,049,898 Cash and Cash Equivalents, End of Year $1,582,280 $1,318,966 Supplemental Disclosure of Cash Flow Information: Cash paid for interest $ 124,084 $ 162,071 See accompanying notes to financial statements. 8

10 1. Description of Organization P.L.U.S. Group Homes, Inc. ( P.L.U.S. ) provides services to individuals with developmental disabilities, which will maximize their well-being, independence and ability to exercise choice and to develop to their fullest potential. P.L.U.S. addresses the needs of these individuals by providing services including housing, medical care, psychiatric care, counseling, recreation, fitness programs, service coordination, social work, art and music therapy and nutritional guidance. 2. Summary of Significant Accounting Policies (a) Basis of Presentation The financial statements of P.L.U.S. have been prepared on the accrual basis. In the statement of financial position, assets and liabilities are presented in order of liquidity or conversion to cash and their maturity resulting in the use of cash, respectively. (b) Financial Statement Presentation The classification of a not-for-profit organization s net assets and its support, revenue and expenses is based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assets, permanently restricted, temporarily restricted, and unrestricted, be displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities. These classes are defined as follows: (i) Permanently Restricted Net assets resulting from contributions and other inflows of assets whose use by P.L.U.S. is limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of P.L.U.S. (ii) Temporarily Restricted Net assets resulting from contributions and other inflows of assets whose use by P.L.U.S. is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of P.L.U.S. pursuant to those stipulations. When such stipulations end or are fulfilled, such temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities. (iii) Unrestricted The part of net assets that is neither permanently nor temporarily restricted by donor-imposed stipulations. (c) Cash and Cash Equivalents Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of purchase. (d) Investments at Fair Value Investments primarily consist of certificates of deposit and mutual funds. All investments are carried at fair value based on quoted market prices. Investment income, including realized and unrealized gains and losses, is reflected in the statement of activities. 9

11 (e) Fair Value Measurements and Disclosures Accounting Standards Codification ( ASC ) 820, Fair Value Measurement, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that inputs that are most observable be used when available. Observable inputs are inputs that market participants operating within the same marketplace as P.L.U.S. would use in pricing P.L.U.S. s asset or liability based on independently derived and objectively determined market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of P.L.U.S. are traded. P.L.U.S. estimates the price of any assets for which there are only unobservable inputs by using assumptions that market participants that have investments in the same or similar assets would use as determined by the money managers administering each investment based on the best information available in the circumstances. The input hierarchy is broken down into three levels based on the degree to which the exit price is independently observable or determinable as follows: Level 1 - Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted market prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples include mutual funds and cash and cash equivalents. Level 2 - Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly. Examples include most debt securities and annuity funds. Level 3 - Valuation based on inputs that are unobservable and reflect management s best estimate of what market participants would use as fair value. Examples include limited partnerships and private equity investments. (f) Provision for Doubtful Accounts P.L.U.S. does not provide an allowance for doubtful accounts. Doubtful accounts are written off as they are deemed by management to be uncollectible. All accounts receivable, as stated in the financial statements, are deemed by P.L.U.S. s management to be fully collectible. (g) Assets Limited as to Use Assets limited as to use include assets held by the trustees under bond agreements. (h) Fixed Assets Fixed assets are stated at cost or estimated fair market value if donated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets. Land improvements Buildings and improvements Furniture and equipment Leasehold improvements 5-25 years 5-25 years 3-20 years Lease term or 12 years 10

12 P.L.U.S. follows the policy of capitalizing all fixed asset acquisitions in excess of $5,000. Maintenance and repairs are charged to operations when incurred. When property and equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved and any gain or loss is included in operations. P.L.U.S. reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. As of December 31, 2015, there have been no such losses. (i) Contributions and Grants Contributions and grants, including unconditional promises to give that are expected to be collected within one year, are recognized as revenues in the period earned and are either classified as temporarily restricted or unrestricted. Conditional contributions, including conditional promises to give, are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributed property is recognized at fair value. (j) Income Taxes P.L.U.S. was incorporated in the State of New York and is exempt from Federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code (the Code ) and, therefore, has made no provision for income taxes in the accompanying financial statements. P.L.U.S. has been determined by the Internal Revenue Service not to be a private foundation within the meaning of Section 509(a) of the Code. There was no unrelated business income for the year ended December 31, Under ASC 740, Income Taxes, an organization must recognize the financial statement effects of a tax position taken for tax return purposes when it is more likely than not that the position will not be sustained upon examination. The implementation of ASC 740 had no impact on P.L.U.S financial statements. P.L.U.S. does not believe it has taken any material uncertain tax positions and, accordingly, it has not recorded any liability for unrecognized tax benefits. P.L.U.S has filed for and received income tax exemptions in the jurisdictions where it is required to do so. Additionally, P.L.U.S. has filed Internal Revenue Service Form 990 information returns, as required, and all other applicable returns in jurisdictions where so required. For the year ended December 31, 2015, there were no interest or penalties recorded or included in the statement of activities. P.L.U.S. is subject to routine audits by a taxing authority. As of December 31, 2015, P.L.U.S. was not subject to any examination by a taxing authority. Management believes it is no longer subject to income tax examination for the years prior to (k) Third-Party Reimbursements and Revenue Recognition P.L.U.S. receives substantially all of their revenue from third-party reimbursement agencies; primarily the New York State Office for People with Developmental Disabilities ( OPWDD ). These revenues are for services provided to approved consumers and are based on rates issued by funding agencies. Revenues are recognized as earned and are subject to audit and retroactive adjustment by the respective third-party fiscal intermediaries. 11

13 (l) Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates (m) Allocation Methodology The cost of providing the various programs and other activities has been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated to the programs and supporting services benefited. (n) Comparative Financial Information The financial statements include certain prior year summarized comparative information. With respect to the statement of functional expenses, the prior year expenses by the expense classification are presented in total rather than functional category. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the prior year financial statements from which the summarized information was derived. (o) New Accounting Pronouncement In February 2016, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) No , Accounting for Leases, which applies a right-of-use ( ROU ) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. At inception, lessees must classify all leases as either finance or operating based on five criteria. Balance sheet recognition of finance and operating leases is similar, but the pattern of expense recognition in the income statement, as well as the effect on the statement of cash flows, differs depending on the lease classification. In addition, lessees and lessors are required to provide certain qualitative and quantitative disclosures to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The amendments are effective for fiscal years beginning after December 15, Management is currently evaluating the impact of the pending adoption of ASU

14 3. Financial Instruments and Fair Value Below sets forth a table of assets and liabilities measured at fair value at December 31, 2015: Assets Fair Value Measurement at Reporting Date Using Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2015 Mutual funds $16,647 $ - $ - $ 16,647 Flexible premium annuity - 282, ,097 Liabilities Total assets at fair value $16,647 $282,097 $ - $298,744 Swap liability $ - $ 546 $ - $ 546 Deferred compensation - 282, ,097 Total liabilities at fair value $ - $282,643 $ - $282,643 During the year ended December 31, 2015, there were no significant transfers in or out of Level 1 or Level 2 investments. 4. Assets Limited as to Use Under the terms of the Facilities Development Corporation ( FDC ) (Note 8) and Industrial Development Agency of New York ( IDA ) Dormitory Authority of the State of New York ( DASNY ) bonds (Note 9), P.L.U.S. was required to deposit with the bond trustee amounts to be held in reserve, which will be withdrawn to satisfy the last remaining installments on the loans. Also, under the terms of the FDC loans, P.L.U.S. was required to deposit with the Medical Care Facilities Finance Agency ( MCFFA ) bond trustee amounts to be held in reserve, which will be withdrawn to satisfy the last remaining installments on the FDC loans. Interest earned on the reserve funds will be used to reduce P.L.U.S. s payment obligations under the loans. The balance of these reserve funds as of December 31, 2015 was $320,541. Assets limited as to use consist of cash and cash equivalents and U.S. Government securities that are carried at their aggregate market value and are determined by quoted market prices. The valuation of the above is based on Level 1 inputs within the hierarchy used in measuring fair value. 13

15 5. Fixed Assets, Net Fixed assets, net consist of the following at December 31, 2015: Land $ 990,000 Buildings and improvements 6,790,641 Furniture and equipment 1,051,115 Leasehold improvements 15,300 8,847,056 Less: Accumulated depreciation and amortization (5,139,908) Fixed assets, net $ 3,707,148 Depreciation expense for the year ended December 31, 2015 was $391, Due to Governmental Agencies Due to governmental agencies consists of the following at December 31, 2015: Advances by funding sources to be recouped. The balance as of December 31, 2015 is payable through year $1,526, Loans Payable Loans payable consist of the following: December 31, 2015 Loan payable to a bank, due April 2016, payable in current monthly installments of $1,031, including interest at 5.44%; secured by equipment owned. $ 3,363 Loan payable to a bank, due June 2019, payable in current monthly installments of $712, including interest at 5.99%; secured by equipment owned. 26,896 Loan payable to a bank, due September 2021, payable in current monthly installments of $545, including interest at 0%; secured by equipment owned. 37,047 Loan payable to a bank, due September 2021, payable in current monthly installments of $545, including interest at 0%; secured by equipment owned. 37,047 $104,353 14

16 Future minimum payments on loans payable are as follows: Year ending December 31, 2016 $ 23, , , , ,090 Thereafter 8,647 Total $104, Mortgages Payable Mortgages payable consist of the following: December 31, 2015 Mortgage payable to a bank, due July 2016, payable in current monthly installments of $3,356, including interest at the one-month London Interbank Offered Rate ( LIBOR ) (.358% at December 31, 2015) plus 200 basis points; secured by real estate located in Seaford, New York. The loan is subject to a swap agreement with a bank which expires at maturity (Note 12). $30,487 Future minimum payments on mortgages payable are as follows: Year ending December 31, 2016 $30, Bonds Payable In 2007, P.L.U.S. began a capital improvement project on its Uniondale residence and purchased another residence in Massapequa that was renovated during In order to finance the projects, on December 19, 2007, P.L.U.S. secured financing of $2,085,000 from the Nassau County IDA bonds. As part of the agreement with IDA, P.L.U.S. transferred title to the existing land and buildings to IDA. IDA has leased the land and building back to P.L.U.S. for a term concurrent with the bond repayment schedule. During the term of the lease, P.L.U.S. is responsible for maintaining the property. The bonds are issued by IDA as a conduit issuer. P.L.U.S. has the obligation under the lease agreement to make the payments to the Bond Trustee, U.S. Bank, equal to the amounts payable as principal and interest on the outstanding bonds. Interest on the bonds is fixed at 6.15% on $2,015,000 and 7.08% on $70,000. Principal and interest are due semiannually on May 1 and November 1. The final payment is due November 1, The payment of the bonds is secured by a mortgage and a security agreement. P.L.U.S. has unconditionally guaranteed payment of the bonds. In conjunction with this financing, P.L.U.S. is required to maintain and have available for 15

17 use a project fund, which includes a lease payments fund and an earnings fund, as well as a debt reserve fund. The trustee has a lien on and security interest in the facility, property, equipment and furnishings. Future minimum debt service payments and the present value of net minimum debt service payments are as follows: Year ending December 31, 2016 $ 209, , , , ,826 Thereafter 415,134 Total minimum lease payments 1,456,744 Less: Interest (286,744) Total minimum lease payments $1,170,000 In 2012, P.L.U.S. purchased a residence at Universal Drive and began renovations to prepare the property for new consumers. In order to finance the projects, on March 13, 2013, P.L.U.S. secured financing of $1,355,000 from the DASNY bonds. The bonds are issued by IDA as a conduit issuer. P.L.U.S. has the obligation under the lease agreement to make the payments to the Bond Trustee, Bank of New York, equal to the amounts payable as principal and interest on the outstanding bonds. Interest on the bonds is fixed at 2.79% on $1,295,000 and 1.23% on $60,000. Principal and interest are due annually on July 1. The final payment is due July 1, The payment of the bonds is secured by a mortgage and a security agreement. P.L.U.S. has unconditionally guaranteed payment of the bonds. In conjunction with this financing, P.L.U.S. is required to maintain and have available for use a debt reserve fund with a minimum balance of $60,098. The trustee has a security interest in the fixtures, furnishings and equipment. Future minimum debt service payments and the present value of net minimum debt service payments are as follows: Year ending December 31, 2016 $ 113, , , , ,400 Thereafter 828,409 Total minimum payments 1,389,309 Less: Interest (235,975) Total minimum lease payments $1,153,334 16

18 10. Pension P.L.U.S. s employees are covered under a noncontributory defined contribution pension plan. Contributions to the plan are based on 3% of each covered employee's salary up to $30,000 and 6% thereafter on earned salaries up to $260,000. Pension expense for the year ended December 31, 2015 was $159, Deferred Compensation The Board of Directors has approved a nonqualified deferred compensation plan for executive management in the form of annuity funds (see Note 3). The plan provides for benefits to be paid at specific future dates upon retirement, subject to specific arrangements. The plan includes employer and employee contributions. The balance at December 31, 2015 was $282, Derivative Financial Instruments P.L.U.S. has entered into interest rate swap agreements to limit the effects of increases in interest rates on variable rate mortgages. The differential is accrued as interest rates change and is recorded as gain on swap agreement. The terms of the P.L.U.S. swap agreements are summarized below: December 31, 2015 Notional Amount Fair Value Interest rate swap agreement with a bank. P.L.U.S. pays a fixed rate of interest at 8.45%. The bank pays a variable rate of interest at LIBOR. The agreement provides for monthly settlement and matures in July $26,665 $(546) 13. Lease Commitments P.L.U.S. leases its administrative office under an operating lease expiring in March Rent expense amounted $91,747 in The following is a schedule of future minimum lease payments: Year ending December 31, 2016 $100, , , , ,179 Thereafter 19,123 Total minimum lease payments $557,132 17

19 14. Commitments and Contingencies Concentration of Credit Risk Financial instruments which potentially subject P.L.U.S. to concentration of credit risk consist primarily of cash and cash equivalents. At various times, P.L.U.S. maintained cash deposits at financial institutions, which exceed the Federal Depository Insurance Corporation insurance limits. As of December 31, 2015, P.L.U.S. received approximately 99% of its revenues from the Office for People With Developmental Disabilities ( OPWDD ) and the Department of Health ( DOH ). 15. Subsequent Events P.L.U.S. s management has performed subsequent event procedures through June 1, 2016, which is the date the financial statements were available to be issued, and there were no subsequent events requiring adjustment to the financial statements or disclosures as stated herein. 18