MEDICINE HAT WOMEN'S SHELTER SOCIETY FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH

Transcription

1 FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH

2 FINANCIAL INFORMATION FOR THE YEAR ENDED MARCH 31, 2013 Page INDEPENDENT AUDITOR'S REPORT FINANCIAL STATEMENTS Statement of Financial Position 1 Statement of Operations 2 Statement of Changes in Net Assets 3 Schedule of Phoenix Safe House Statement Of Operations 4 Schedule of Musasa House Statement of Operations 5 Schedule of Housing First Statement Of Operations 6 Statement of Cash Flows 7 Notes to Financial Statements 8

3 f:>urns VALKCnf:>URG & 1I~~Qe/ate-~ ttl' Charte-re-d A«ountants PARTNERS ASSOCIATES 'Todd K. Valkenburg, B.Mgmt., C.A. 'June E. Burns, B.Comm., C.A. 'Brenda A. Kobley, B.Comm., C.A. Lauren A. Bueckert, B.Mgmt., c.a. 'Janet H. Adams, B.Comm., C.A. Perry D. Nurse, B.Comm., C.A. Al D. Kiesman, B.Comm., C.A., C.EP. Brandon J. Kobley, B.B.A., C.A. 'Melanie R. Harty, B.Admin., C.A. Rob 1. Schottner, B.Mgmt., C.A. 'Michael G. Baker, B.Comm., C.A. 'Randi R. Perry, B.Mgmt., C.A. Denotes CA who practices as a Professional Corporation INDEPENDENT AUDITOR'S REPORT To the Board of Directors of MEDICINE HAT WOMEN'S SHELTER SOCIETY We have audited the accompanying financial statements of MEDICINE HAT WOMEN'S SHELTER SOCIETY, which comprise the Statement of Financial Position as at MARCH 31, 2013, and the Statements of Operations, Changes in Net Assets and Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statel'dents 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 Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and 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 organization'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 organization's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 101, Avenue S.E., Medicine Hat, Alberta T1A 8G6 (403) [Branch Offices: Bow Island (403) Brooks: (403) Oyen & Maple Creek: (403) ] Fax: (403)

4 INDEPENDENT AUDITOR'S REPORT (continued). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualified Opinion Medicine Hat Women's Shelter Society derives a material amount of revenue from contributors' donations. We were not able to obtain sufficient appropriate audit evidence about the completeness of the reported amounts for donation revenue, revenue in excess of expenditure and changes to net assets because there is no direct relationship between assets or services given up in exchange for amounts received or receivable. Consequently, we were unable to determine whether any adjustments to these amounts were necessary. Qualified Opinion In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, these financial statements present fairly, in all material respects, the financial position of the organization as at March 31, 2013 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. Chartered Accountants Medicine Hat, Alberta July 9,2013

5 STATEMENT OF FINANCIAL POSITION MARCH ASSETS CURRENT ASSETS Cash and cash equivalents (Note 3) $ 823,645 $ 500,631 Accounts receivable 7, ,322 Prepaid expenses 11,253 10,983 GST receivable 8,482 7, , ,073 INVESTMENTS (Note 4) 327, ,539 CAPITAL ASSETS (Note 5) TOTAL $ 3,209,231 $ 2,930,802 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable (Note 6) $ 223,186 $ 103,216 Deferred contributions 174, Payable to Government of Alberta (Note 7) 70, , ,601 UNEARNED REVENUE (Note 8) 26,568 25,064 DEFERRED,CONTRIBUTIONS RELATED TO CAPITAL ASSETS (Note 9) , a142,653, NET ASSETS Invested in capital assets 590, ,204 Internally Restricted Net Assets (Note 11) 235, ,395 Unrestricted Net Assets 448, ,110 1,188,149 TOTAL $ $ ~~-r---~"\-i-~--- Board of ~\~n\\acr>--' jc-,,'cita;c~;...;;. -= Board of D~~ 1 of 14

6 STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, REVENUES Phoenix Safe House Statement of Operations (Schedule 1) Musasa House Statement of Operations (Schedule 2) Housing First Statement of Operations (Schedule 3) $ 1,163,652 $ 529, ,721 2,044,292 1,099, , ,172 1,830,545 EXPENDITURES Phoenix Safe House Statement of Operations (Schedule 1) Musasa House Statement of Operations (Schedule 2) Housing First Statement of Operations (Schedule 3) EXCESS OF REVENUES OVER EXPENDITURES FROM OPERATIONS OTHER Prior years' surpluses approved (repayable) Gain on sale of investments Investment income Loss on sale of capital assets 1,148, , ,039 2,014,997 29,295 31,769 14,760 10,137 56,666 1,080, , ,256 1,792,727 37,818 (16,297) 12,491 6,495 (1,254) 1,435 EXCESS OF REVENUES OVER EXPENDITURES $ 85 z 961 $ 39,253 2 of 14

7 STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED MARCH 31, 2013 Invested in Total capital assets BALANCE - BEGINNING OF YEAR $ 1,188,149 $ 606,204 $ EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 85,961 (15,909) Transfer of funds BALANCE - END OF YEAR $ $ $ Invested in Total capital assets BALANCE - BEGINNING OF YEAR $ 1,148,896 $ 581,279 $ Excess of revenues over expenditures 39,253 (19,671) Transfer of funds Purchase of capital assets BALANCE - END OF YEAR $ 1, $ $ Internally Restricted Net Assets 230,395 $ 4, ,268 $ Internally Restricted Net Assets 224,253 $ 6, ,395 $ 2013 Unrestricted Net Assets 351, ,870 (4,873) 448, Unrestricted Net Assets 343,364 58,924 (6,142) {44,596) 351,550 3 of 14

8 Schedule 1 SCHEDULE OF PHOENIX SAFE HOUSE STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, REVENUE Government grants $ 1,013,096 $ Donations and fund raising 119, Amortization of deferred capital funds 16, Other grants and income 8, Interest 3, Rent revenue 2,400 1,163, EXPENDITURES Operating Costs Payroll 682, Administration wages 160, Benefits 68, Repair and maintenance 40, Office supplies 36, Amortization 27, Utilities 23, Telephone and communications 12, Training and recruitment 9, Administration benefits 8, Facility insurance 7, Professional fees 7, Facility supplies 6, Program expenses 6, Board development and liability insurance 5, Fundraising expenses 4, Vehicle expenses 3, Staff and board travel 2, ,113, Direct Client Costs Food 18, Client materials and supplies 10, Client travel and SUbsistence 4, Personal incidentals 1, , ,148, EXCESS OF REVENUES OVER EXPENDITURES $ 15 z 335 $ of 14

9 Schedule 2 SCHEDULE OF MUSASA HOUSE STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, REVENUE Grants and other income $ 299,197 $ 229,114 Donations and fundraising 114,647 93,000 Amortization of deferred capital funds 60,789 64,493 Rent revenue 52,935 62,552 Interest 2, , ,111 EXPENDITURES Operating Costs Payroll 303, ,016 Amortization 65,684 69,903 Benefits 30,463 22,427 Repairs and maintenance 29,970 22,956 Program expense 22,543 23,549 Utilities 18,903 19,724 Administration wages 14,961 12,000 Supplies 9,252 3,905 Facility insurance 7,918 7,803 Fundraising expense 5, Professional fees 4,013 4,305 Vehicle 3, Training and recruitment 3,528 2,037 Facility supplies 2,592 2,194 Interest and bank charges 1,865 2,043 Telephone and communications 1,268 1,399 Administration Board development and liability insurance , ,479 Direct Client Costs Personal incidentals Client travel , ,829 EXCESS OF REVENUES OVER EXPENDITURES $ 2 z 278 $ 23,282 5 of 14

10 Schedule 3 SCHEDULE OF HOUSING FIRST STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH REVENUE Grants $ 350,721 $ 281,172 EXPENDITURES Wages and benefits Start Up Costs Benefits Vehicle Telephone and communications Office Supplies Professional fees Rental Interest and bank charges Board development and liability expense Client materials and supplies Training and recruitment Program expenses 198, ,155 15,596 5,830 4,325 3,440 2,414 2, , ,590 9,146 5,624 3,621 4, , , ,256 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 11!682 $ {4,084) 6 of 14

11 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31! OPERATING ACTIVITIES Cash receipts $ Cash receipts from other revenue Cash paid to suppliers and employees 2,182,648 $ 1,687,504 10, (1,801,764) (1,654,033) 391,123 39,966 INVESTING ACTIVITIES Purchase of investments Proceeds on sale of investments Purchase of capital assets Proceeds from maturation of investments (153,437) (233,674) 85, ,369 (44,596) 65,000 (68,109) 16,099 INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR $ 323,014 56, , , ,645 $ 500,631 REPRESENTED BY: Cash $ Cashable GIC's $ 718,307 $ 374, , , $ 500,631 7 of 14

12 NOTES TO FINANCIAL STATEMENTS MARCH 31, ) NATURE OF OPERATIONS The primary purpose of the Medicine Hat Women's Shelter Society is to support women and children who are experiencing family violence by providing them with safe shelter, education and access to community resources. The Society is incorporated under the Societies Act of the Province of Alberta and is a registered charity under the Canadian Income Tax Act. 2) SIGNIFICANT ACCOUNTING POLICIES The society applies the Canadian accounting standards for not-for-profit enterprises. (a) Cash equivalents Cash equivalents consist of cashable GICs classified as short term investments. (b) Short term investments Short term investments are valued at the fair market value. (c) Investments The society records investments at fair market value. Donated investments are recorded at fair market value at the date of donation. (d) Capital assets Capital assets are recorded at cost. Contributed capital assets are recorded at fair market value at the date of contribution. Amortization is provided on the diminishing balance basis at rates designed to amortize the cost of the capital assets over their estimated useful lives. Rates are disclosed in Note 5. (e) (f) Impairment of long-lived assets The society tests for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability is assessed by comparing the carrying amount to the projected undiscounted future net cash flows the longlived assets are expected to generate through their direct use and eventual disposition. When a test for impairment indicates that the carrying amount of an asset is not recoverable, an impairment loss is recognized to the extent carrying value exceeds its fair value. Revenue recognition The society follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Endowment contributions are recognized as direct increases in net assets. Restricted investment income is recognized as revenue in the year in which the related expenses are incurred. Unrestricted investment income is recognized as revenue when earned. Fundraising and donation income is recorded when received and rent is recorded at the beginning of each month. 8 of 14

13 NOTES TO FINANCIAL STATEMENTS MARCH 31! ) SIGNIFICANT ACCOUNTING POLICIES (continued) (g) Deferred capital contributions Deferred capital contributions related to capital assets represent restricted contributions for the purchase of capital assets. Deferred contributions related to capital assets are amortized to revenue on the same basis as the amortization expense of the corresponding capital assets. (h)' Donated goods and services The work of the Society is dependent on the voluntary service of many members and the contribution of materials by the public. Some of these services and materials are not normally purchased by the Society and it would be difficult to determine their fair value. It is for these reasons that such donated services and materials are not recognized in these financial statements. (i) (j) Use of estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires Members of the Board to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Financial instruments (i) Measurement of financial instruments The society initially measures its financial assets and financial liabilities at fair value adjusted by, in the case of a financial instrument that will not be measured subsequently at fair value, the amount of transaction costs directly attributable to the instrument. Amounts due to and from related parties are measured at the exchange amount, being the amount agreed upon by the related parties. The society subsequently measures its financial assets and financial liabilities at amortized cost. Changes in fair value are recognized in net income. Financial assets measured at amortized cost include cash and cash equivalents, accounts receivable, and investments. Financial liabilities measured at amortized cost include accounts payable and unearned revenue. 9 of 14

14 NOTES TO FINANCIAL STATEMENTS MARCH 31, ) SIGNIFICANT ACCOUNTING POLICIES (continued) (j) Financial instruments (continued) (ii) Impairment Financial assets measured at amortized cost are tested for impairment when there are indicators of possible impairment. When a significant adverse change has occurred during the period in the expected timing or amount of future cash flows from the financial asset or group of assets, a write-down is recognized in net income. The write down reflects the difference between the carrying amount and the higher of: the present value of the cash flows expected to be generated by the asset or group of assets; the amount that could be realized by selling the assets or group of assets; the net realizable value of any collateral held to secure repayment of the assets or group of assets. When the events occurring after the impairment confirm that a reversal is necessary, the reversal is recognized in net income up to the amount of the previously recognized impairment. 10 of 14

15 NOTES TO FINANCIAL STATEMENTS MARCH 31! ) CASH AND CASH EqUIVALENTS Included in cash and cash equivalents are funds, the use of which, is restricted by the Alberta Gaming and Liquor Board, the Ministry of Human Services and the Kind Community Alliance. The Casino account with a balance of $1,992 ( $205) can be used in the next fiscal period. The Surplus Retention Reserve Funds balance of $70,112 ( $96,180) is restricted by Ministry of Human Services and can be used by the society only at the discretion of Ministry of Human Services. Included in the General chequing account is $124,543 in funds which are restricted by the Kind Community Alliance. Cash and cash equivalents includes the following: Bank of Nova Scotia Cashable GIC 1.18% Maturing August 30, 2013 $ 54,518 $ Bank of Nova Scotia Cashable GIC 0.90% Maturing January 11, ,594 Montreal Trust Company of Canada Cashable GIC 0.90% Maturing January 2, ,226 Bank of Nova Scotia Cashable GIC 0.89% Maturing August 18, ,723 Bank of Nova Scotia Cashable GIC 0.89% Maturing December 22, ,456 Bank of Nova Scotia Cashable GIC 0.92% Maturing March 1, ,507 $ 105,338 $ 125,686 4) INVESTMENTS Scotiabank (NBV $278,872, NBV $207,723) $ 301,210 $ 218,475 Investor's Group (FMV $28,712, FMV $28,449) 26,568 25,064 $ 327,778 $ 243,539 The Investor's Group investment is the Charitable Remainder Trust. details. See Note 8 for further 11 of 14

16 NOTES TO FINANCIAL STATEMENTS MARCH 31, ) CAPITAL ASSETS Rate Accumulated Cost amortization Net Net Land Parking lot Buildings Playground Office equipment Furniture and fixtures Computer equipment Vehicles Computer software $ 370,711 $ 4% 62,945 22,280 5% 2,589, ,985 10% 20,962 13,599 20% 22,596 17, % 127, ,144 30% 5,126 4,658 30% 31,930 31, % 9,989 9,989 $ 370,711 $ 40,665 1,589,784 7,363 5,154 16, ,711 42,359 1,673,459 8,181 6,442 21, Total capital assets $ 3,241,341 $ 1,210,685 $ 2,030,656 $ 2,124,190 6) ACCOUNTS PAYABLE KCA grant payable - current year $ Vacation payable KCA grant payable- previous years Trade accounts payable Accrued liabilities Damage deposit payable Prepaid rent 90,000 $ 59,632 34,543 25,513 11,800 1,698 50,055 29,710 4,859 11,800 5,154 1,638 $ 223,186 $ 103,216 7) PAYABLE TO GOVERNMENT OF ALBERTA (NOTE 7) Deferred contributions represent funds received prior to year end that have not been used for their designated purposes during the year. 8) UNEARNED REVENUE Unearned revenue represents resources that the society does not have access to until the terms of the trust are met. The associated funds are reported as a long-term investment (Note 4) Charitable Remainder Trust $ 26 z 568 $ 25, of 14

17 NOTES TO FINANCIAL STATEMENTS MARCH 31! ) DEFERRED CAPITAL CONTRIBUTIONS The deferred contributions related to capital assets represents the unamortized portions of restricted contributions used to build facilities and purchase equipment and a van. Deferred contributions are amortized at the same rate as the assets to which they relate. The changes in the deferred contributions balance for the year are as follows: Balance - Beginning of the year Less: Amounts amortized to revenue $ 1,517,988 $ 1,600,284 (77,624) (:...:;;82=.J,;' 2=.::9~6) $ 1,440,364 $ 1,517,988 10) CONTINGENT LIABILITY The operations of the Phoenix Safe House program operated by the Medicine Hat Women's Shelter Society are majority funded by Ministry of Human Services. This department reviews budgeted to actual revenues and expenditures at the end of every year and reallocates surplus funds to various categories within the budget. Any funds that are not reallocated are transferred to a restricted fund subsequent to review of the audited financial statements for the year. The potential amount of funds to be transferred in relation to the current year is not known nor can it be reasonably estimated. 11 ) INTERNALLY RESTRICTED NET ASSETS The board of directors internally restricted $200,000 of investments to be used to replace the building in the future. Investment income on the $200,000 is unrestricted. In addition, the society is required by CMHC to keep a portion of rental income received to be used for repairs and maintenance at the Musasa House when necessary. The balance of this fund at March 31, 2013 is $35,329 (2012 $30,395). 12) ECONOMIC DEPENDENCE During the year ended March 31, 2013, the Medicine Hat Women's Shelter received $1,056,066 (2012 $1,018,791) from Ministry of Human Services, measured at the exchange amount, who is a major funder of the Medicine Hat Women's Shelter Society, providing approximately 51% ( %) of its revenue. 13 of 14

18 NOTES TO FINANCIAL STATEMENTS MARCH 31, ) FINANCIAL INSTRUMENTS Transactions in financial instruments may result in an entity assuming or transferring to another party one or more of the financial risks described below. The required disclosures provide information that assists users of financial statements in assessing the extent of risk related to financial instruments. (a) Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Of these risks, the Society is only exposed to interest rate risk. (i) Interest rate risk Interest rate risk relates to the risk that changes in interest rates will affect the fair value or future cash flows of financial instruments held by the Society. The Society manages its exposure through a combination of fixed and floating rate investments. The fixed rate investments are subject to interest rate price risk, as the value will fluctuate as a result of changes in market rates. The floating rate investments are subject to interest rate cash flow risk, as the received cash flows will fluctuate as a result of changes in market rates. 14 of 14