The Samaritan's Purse - Canada. Financial Statements December 31, 2010

Transcription

1 Financial Statements

2 April 19, 2011 PricewaterhouseCoopers LLP Chartered Accountants Avenue SW, Suite 3100 Calgary, Alberta Canada T2P 5L3 Telephone Facsimile Independent Auditor s Report To the Members of The Samaritan's Purse - Canada We have audited the accompanying financial statements of The Samaritan's Purse - Canada (the Organization ), which comprise the statement of financial position as at and the statements of operations and changes in fund balances and cash flows for the year then ended, and related notes including a summary of significant accounting policies. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation 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 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 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. 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. PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

3 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 In common with many charitable organizations, the Organization derives some of its revenue through donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the Organization, and we were not able to determine whether any adjustments might be necessary to contributions, excess (deficiency) of revenue over expenditures, current assets and fund balances. Opinion In our opinion, except for the possible effects of the matter discussed in the basis for qualified opinion paragraph, the financial statements present fairly, in all material respects, the financial position of The Samaritan's Purse - Canada as at and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants

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5 Statement of Operations and Changes in Fund Balances For the year ended General Fund Capital Fund Ministry Fund Total Total Revenue Contributions (note 8) 4,546,154-17,306,645 21,852,799 16,427,766 Gifts in kind - 10,000 26,973,999 26,983,999 27,528,438 Investment income (loss) Realized 453, , ,526 Unrealized (133,864) - - (133,864) 148,916 4,866,097 10,000 44,281,288 49,157,385 44,382,646 Expenditures Ministry expenses (schedule) ,692,329 36,692,329 36,071,672 Other missionary projects and supporting services 1,313, ,670 2,432,867 3,900,868 3,957,148 1,313, ,670 39,125,196 40,593,197 40,028,820 Donor education and fundraising 654, ,123 1,471,979 1,627,301 General and administrative support for ministries 936, ,670 1,799,167 2,889,921 2,797,589 2,904, ,340 41,741,486 44,955,097 44,453,710 Excess (deficiency) of revenue over expenditures 1,961,826 (299,340) 2,539,802 4,202,288 (71,064) Fund balance Beginning of year 3,727,366 5,770,461 8,635,590 18,133,417 18,204,481 Inter fund transfer to Ministry Fund (366,406) - 366, Inter fund transfer capital asset purchases (186,498) 225,454 (38,956) - - Fund balance End of year 5,136,288 5,696,575 11,502,842 22,335,705 18,133,417

6 Statement of Cash Flows For the year ended Cash provided by (used in) Operating activities Excess (deficiency) of revenue over expenditures 4,202,288 (71,064) Items not affecting cash Amortization 309, ,782 Gift in kind capital asset (10,000) (44,488) Unrealized investment income (loss) 133,864 (148,916) ,635,492 95,314 Changes in non-cash working capital Accounts receivable (180,251) 68,085 Prepaid expenses (4,286) 102,396 Accounts payable 336,620 (189,108) 152,083 (18,627) Investing activities Purchase of capital assets (225,454) (73,749) Purchase of investments (7,636,073) (6,639,963) Proceeds on sale of investments 3,075,480 7,394,132 (4,786,047) 680,420 Increase in cash 1, ,107 Cash Beginning of year 5,372,148 4,615,041 Cash End of year 5,373,676 5,372,148

7 Notes to Financial Statements 1 Nature of the organization The Samaritan's Purse - Canada ( the Organization ), incorporated under Part II of the Canada Corporations Act, is a not-for-profit Christian relief organization whose purpose is to aid in the spreading of the Gospel of Jesus Christ to the utmost parts of the world, to serve the church of Jesus Christ in its total ministry, and to exemplify Christianity by acts and deeds patterned after the Good Samaritan (Luke 10). The Organization does this by meeting the physical needs of victims of war, poverty, natural disasters, and disease. The Organization distributes gifts in kind such as medical supplies and equipment in countries where there is need. The Organization is a registered charity under the Income Tax Act and accordingly is exempt from income taxes. 2 Significant accounting policies Use of estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates and assumptions are the responsibility of management. These estimates and assumptions are subject to measurement uncertainty and actual results and financial position may differ from those reported in these financial statements. Significant estimates included in financial statements are useful life of capital assets, accruals and valuation of gifts in kind. Fund accounting The Organization follows the restricted fund method of accounting for contributions. The Organization maintains the following funds: The General Fund reports the assets, liabilities, revenue and expenditures related to the general operating activities of the Organization. The Capital Fund reports the assets, liabilities, revenue and expenditures related to the Organization s capital assets. The Ministry Fund reports the assets, liabilities, revenue and expenditures related to the Organization s programs or locations. Revenue recognition Unrestricted contributions are recognized as revenue in the General Fund in the year received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. (1)

8 Notes to Financial Statements Restricted contributions related to a specific program or location are recognized as revenue of the Ministry Fund in the year received. Unrestricted investment income is recognized as revenue of the General Fund. Contributed goods and services Donations of goods and services are recorded when the fair market value is reasonably determinable. A portion of the Organization s work is dependant on voluntary services from many members and supporters. Because of difficulty in determining their value, these contributed services are not recognized in the financial statements. Investments Investments are carried at fair market value determined by reference to published price quotations in an active market. The change in fair market value is recorded directly in the Statement of Operations in the General Fund. Transaction costs are expensed as incurred. Investments with maturities within one year have been classified as short-term investments. Foreign currency translation Current assets and liabilities denominated in foreign currencies are translated at exchange rates in effect at the end of the year. Transactions during the year are translated at exchange rates in effect at the date of the transaction. Exchange gains and losses occurring from the date of the transaction to the date of payment are reflected in the Statement of Operations. Capital assets Capital assets are recorded at cost. Donated assets are recorded at fair value at the date of contribution. Amortization is recorded using the straight line method over the following estimated useful lives: Building Computer equipment and software Office furniture and equipment Automobiles Project equipment 40 years 3 to 5 years 3 to 5 years 5 years 3 to 5 years (2)

9 Notes to Financial Statements Financial instruments The Organization has chosen to follow the disclosure requirements of CICA Handbook Section 3861, instead of new expanded rules set out in Sections 3862 and 3863, in keeping with the options provided by Handbook Sections (c) and (c). The Organization s financial instruments recognized in the balance sheet consist of cash, short term investments, accounts receivable, long term investments, accounts payable and accrued liabilities and long-term liability. The Organization has classified each financial instrument into the following categories: Category Held for trading Loans or receivables Financial liabilities Financial Instrument Cash and short term and long term investments Accounts receivable Accounts payable and accrued liabilities, and long-term liability All financial instruments must initially be recognized at fair value on the balance sheet. Subsequent measurement of the financial instruments is based on their classification. Held for trading financial assets are measured at fair value with unrealized gains or losses recognized in the Statement of Operations in the General Fund. Financial loans or receivables and other financial liabilities are measured at cost or amortized cost. a) Fair values The fair value of these financial instruments, excluding long term liability, approximate their carrying amount due to their short term nature. The fair value of long-term liability is not materially different from its carrying amount. b) Credit risk The Organization does not have a concentration of credit exposure with any one customer or sponsor. The Organization does not consider that it is exposed to undue credit risk. c) Interest rate risk The Organization is not exposed to interest rate risk. Comparative figures Certain of the prior year s figures have been reclassified to conform with the current year s presentation. (3)

10 Notes to Financial Statements 3 Investments Cost Fair Market Value Cost Fair Market Value Government and corporate bonds 11,645,721 11,619,111 7,157,924 7,265,178 Canadian equities ,046 11,046 Cash 84,634 84, ,730,355 11,703,745 7,169,762 7,277,016 Government and Corporate Bonds have effective interest rates ranging from 2.0% to 5.514% and mature between 2011 and The amount maturing in the next fiscal year is 2,918,091 ( ,796). 4 Related party transactions a) Common control The Organization and Billy Graham Evangelistic Association of Canada ( BGEA Canada ) are considered related parties as each of these organizations share common directors and a close working relationship. Included in accounts receivable, as at, are amounts receivable from BGEA Canada of 21,497 ( ,556). This operating amount is subject to normal trade terms and is included in the accounts receivable balance. During the year, the Organization and BGEA Canada paid reimbursable expenses on behalf of each other. b) Affiliated The Organization and Samaritan s Purse Inc. are considered to be affiliated as each of these have one common director, common joint project activities and a close working relationship. Included in accounts receivable, as at are amounts receivable from Samaritan s Purse Inc. of 218,744 (2009 3,018). Included in accounts payable, as at, is an amount payable to Samaritan s Purse Inc. of 120,674 ( ,598). These operating amounts are subject to normal trade terms and are included in the respective accounts receivable and accounts payable balances. During the year, the Organization and Samaritan s Purse Inc. paid reimbursable expenses on behalf of each other. These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. (4)

11 Notes to Financial Statements 5 Capital assets Cost Accumulated amortization Net book value Net book value Land 1,491,237-1,491,237 1,491,237 Building 4,693, ,867 3,935,449 3,979,973 Computer equipment and software 923, , ,267 84,244 Office furniture and equipment 879, ,495 88, ,277 Automobiles 93,746 75,816 17,930 22,733 Project equipment 247, ,399 37,147 41,997 8,328,643 2,632,068 5,696,575 5,770,461 During the year, amortization in the amount of 309,340 ( ,782) was recorded in the Capital Fund. 6 Long-term liability A promissory note payable to an unrelated party is unsecured, non-interest bearing and is due at maturity on March 1, (5)

12 Notes to Financial Statements 7 Externally restricted The externally restricted fund balance consists of the following contributions restricted by donors for the programs or locations that were not spent at December 31: Programs Operation Christmas Child 5,572,019 5,441,355 Water projects 1,279, ,658 Women s projects 407, ,904 Other 344, ,756 Children s care and education 321, ,669 Agriculture and livelihood 139, ,411 World Medical Mission 129,011 88,701 Medical needs 91, ,237 Evangelism 66,964 63,673 SP Canada building fund 33,924 33,624 Locations Haiti 1,986,923 - Central and South America 319, ,681 Sudan 210, ,596 Nepal 148, ,589 Pakistan 126,863 - Nicaragua 92, ,282 Africa 64,855 39,979 Mexico 56,932 86,133 Asia 40, ,784 Cambodia 33,012 99,029 Europe 14,763 8,681 Ethiopia 12,968 12,580 Middle East 10,761 27,410 Indonesia - 48,859 8 Government contributions 11,502,842 8,635,591 Contributions include federal government contributions totalling 752,879 ( ,724) from the Canadian International Development Agency. (6)

13 Notes to Financial Statements 9 Statutory disclosures a) Fundraising As required by Section 7(2) of the Charitable Fundraising Regulation of Alberta, the Organization discloses that it paid 161,225 in 2010 to employees whose principle duties involved fundraising. b) Declarations to the Canadian International Development Agency ( CIDA ) The Organization received 2,724,067 of donations in support of Haiti Earthquake Relief and 288,865 for Pakistan Flood Relief that were declared to CIDA as eligible under the Government of Canada s matching Haiti Earthquake Relief Fund and Pakistan Flood Relief Fund respectively. 10 Capital disclosures The Organization defines its capital as the amounts included in its Fund Balances. The Organization s objectives in managing its capital are preservation of capital and sufficient liquidity to meet project and operating payments. A portion of the Organization s capital is restricted in that the Organization is required to meet certain requirements in order to utilize its externally restricted funds as described in note 7. The Organization has internal control processes to ensure that the restrictions are met prior to the utilization of these resources and has been in compliance with these restrictions throughout the year. The Organization manages components of its capital in accordance with an investment policy approved by the Board of Directors. The policy is reviewed annually to assess risk and performance, and to make adjustments as required in light of changes in economic conditions, organizational environment, and legal considerations. (7)

14 Schedule of Ministry Expenses For the year ended (Unaudited) Emergency response 2,535, ,278 Water and sanitation 1,570,507 1,518,046 Mission teams 704,153 1,047,039 Medical training and infrastructure 647, ,489 Assistance for women 554, ,082 Evangelism and discipleship 419, ,357 Children care and support 371, ,324 Education and literacy 187, ,925 Livelihood training and support 186, ,052 Family health and nutrition 180, ,929 Church and community mobilization 174, ,526 Development and training 82,605 38,809 HIV/AIDS and other disease projects 66, ,952 Other projects 5,271 13,401 7,685,761 6,326,209 World Medical Mission 120,172 93,534 Operation Christmas Child 28,886,396 29,651,929 36,692,329 36,071,672

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