Canadian Parents for French. Financial Statements

Transcription

1 Financial Statements For the year ended March 31, 2016

2 Financial Statements For the year ended March 31, 2016 Contents Independent Auditor's Report 1 Financial Statements Statement of Financial Position 3 Statement of Changes in Net Assets 4 Statement of Operations 5 Statement of Cash Flows 6 Summary of Significant Accounting Policies 7 Notes to Financial Statements 10 Independent Auditor's Comments on Unaudited Supplementary Financial Information 14 Schedule of Expenses 15 Department of Canadian Heritage Program and Project Funding 16

3 Collins Barrow Ottawa LLP Chartered Professional Accountants 301 Moodie Drive, Suite 400 Ottawa, Ontario K2H 9C4 Canada T: F: Independent Auditor's Report To the Members of Canadian Parents for French We have audited the accompanying financial statements of Canadian Parents for French, which comprise the statement of financial position as at March 31, 2016 and the statements of changes in net assets, operations 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 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 audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our qualified audit opinion. Basis for Qualified Opinion In common with many not-for-profit organizations, the association derives revenue from donations, the completeness of which is not susceptible of satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the association and we were not able to determine whether any adjustments might be necessary to donation revenue, excess (deficiency) of revenue over expenses assets and net assets. This office is independently owned and operated by Collins Barrow Ottawa LLP. The Collins Barrow trademarks are owned by Collins Barrow National Cooperative Incorporated and are used under license.

4 Collins Barrow Ottawa LLP Chartered Professional Accountants 301 Moodie Drive, Suite 400 Ottawa, Ontario K2H 9C4 Canada T: F: Independent Auditor's Report (continued) Qualified Opinion In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion Paragraph, the financial statements present fairly, in all material respects, the financial position of Canadian Parents for French as at March 31, 2016 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 Professional Accountants, Licensed Public Accountants August 5, 2016 Ottawa, Ontario This office is independently owned and operated by Collins Barrow Ottawa LLP. The Collins Barrow trademarks are owned by Collins Barrow National Cooperative Incorporated and are used under license.

5 Statement of Financial Position March Assets Current Cash (Note 1) $ 177,134 $ 122,369 Short-term investments (Note 2) 100, ,000 Short-term investments - Mary Joyce Booth (Note 2) 98,777 - Accounts receivable 29,713 53,802 Government remittances receivable 19,295 35,754 Prepaid expenses 18,266 11, , ,993 Tangible capital assets (Note 3) 17,072 13,600 $ 460,257 $ 411,593 Liabilities and Net Assets Current Accounts payable and accrued liabilities $ 117,198 $ 82,466 Deferred revenue (Note 5) 8, ,766 82,466 Net assets Mary Joyce Booth endowment reserve (Note 4) 98, ,993 Unrestricted net assets 235, , , ,127 On behalf of the Board: $ 460,257 $ 411,593 Director Director The accompanying summary of significant accounting policies and notes are an integral part of these financial statements. 3

6 Statement of Changes in Net Assets For the year ended March Mary Joyce Booth Endowment Net Net Reserve Unrestricted Assets Assets Balance, beginning of year $ 106,993 $ 222,134 $ 329,127 $ 330,592 Excess (deficiency) of revenue over expenses for the year 776 4,588 5,364 (1,465) Mary Joyce Booth grants awarded (10,000) 10, Mary Joyce Booth grants refunded 1,000 (1,000) - - Balance, end of year $ 98,769 $ 235,722 $ 334,491 $ 329,127 The accompanying summary of significant accounting policies and notes are an integral part of these financial statements. 4

7 Statement of Operations For the year ended March Revenue Department of Canadian Heritage $ 917,800 $ 937,803 Provincial Government - Parents Reaching Out grant (Note 5) 12,666 - CPF Contribution Advertising 19,383 24,512 Conference Registration (Note 9) - 84,625 Donations 6,630 6,346 Interest 1,694 1,985 Membership fees 19,316 14,104 Other income 24,617 36,204 1,002,106 1,105,579 Expenses Amortization of capital assets 6,130 5,098 Programs, projects and national office 977,946 1,101,946 Parents Reaching Out 12, ,742 1,107,044 Excess (deficiency) of revenue over expenses for the year $ 5,364 $ (1,465) The accompanying summary of significant accounting policies and notes are an integral part of these financial statements. 5

8 Statement of Cash Flows For the year ended March Cash flows from operating activities Excess (deficiency) of revenue over expenses for the year $ 5,364 $ (1,465) Adjustment for Amortization of capital assets 6,130 5,098 11,494 3,633 Changes in non-cash working capital items Accounts receivable 24,089 77,938 Government remittances receivable 16,459 (1,677) Prepaid expenses (7,198) 6,107 Accounts payable and accrued liabilities 34,733 (85,760) Deferred revenue 8,568 (7,814) 88,145 (7,573) Cash flows from investing activities Disposal of tangible capital assets - 6,969 Purchase of tangible capital assets (9,602) (1,515) Purchase of short-term investments (523,778) (675,000) Redemption of short-term investments 500, ,000 (33,380) 80,454 Increase in cash during the year 54,765 72,881 Cash, beginning of year 122,369 49,488 Cash, end of year $ 177,134 $ 122,369 The accompanying summary of significant accounting policies and notes are an integral part of these financial statements. 6

9 Summary of Significant Accounting Policies March 31, 2016 Nature of Organization The association is incorporated under Part II of the Canada Corporations Act and was continued under the Canada Not-for-profit Corporations Act on June 5, The primary focus of the association is to create and promote opportunities for young Canadians to learn and use French as a second language. Currently a substantial amount of its funding is provided by the Department of Canadian Heritage. The association is a registered charity under the Income Tax Act and is therefore exempt from income taxes and may issue official donation receipts to donors. The accompanying financial statements reflect the assets, liabilities and operating results of the Canadian Parents for French national association. Although the organization is made up of Branches and Chapters across Canada, each Branch is separately incorporated and these financial statements do not reflect their assets, liabilities nor operating results. Basis of Presentation Use of Estimates These financial statements have been prepared in accordance with Canadian Accounting Standards for Not-for-Profit Organizations which are part of Canadian generally accepted accounting principles and include the following significant accounting policies. The preparation of financial statements in accordance with Canadian Accounting Standards for Not-for-Profit Organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management's best estimates and assumptions as additional information becomes available in the future. These estimates and assumptions are reviewed periodically and, as adjustments become necessary, they are reported in the periods in which they become known. Significant estimates include assumptions used in estimating the fair value of financial instruments, estimating the collectibility of accounts receivable and the related amount of the allowance for doubtful accounts, estimating the net realizable value of the inventory, in establishing the useful lives and related amortization of tangible capital assets, and in estimating provisions for accrued liabilities. Financial Instruments Financial instruments are financial assets or liabilities of the association where, in general, the association has the right to receive cash or another financial asset from another party or the association has the obligation to pay another party cash or other financial assets. Measurement of financial instruments The association initially measures its financial assets and liabilities at fair value, except for certain non-arm s length transactions. 7

10 Summary of Significant Accounting Policies March 31, 2016 Financial Instruments (continued) Measurement of financial instruments (continued) The association subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity and other instruments that are quoted in an active market, which are measured at fair value. Changes in fair value are recognized in operations. Financial assets measured at amortized cost include cash and accounts receivable. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities. Financial assets measured at fair value include short-term investments. Impairment Financial assets measured at amortized cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in operations. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in operations. Transaction costs The association recognizes its transaction costs in operations in the period incurred. However, the financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. Tangible Capital Assets Capital assets, both tangible and intangible consisting of computer software, are recorded at cost and are amortized based on the estimated useful lives and are provided on a straight-line basis as follows: Computers Furniture and equipment Computer software three years five years ten years Revenue Recognition The association 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. Investment income is unrestricted and is recognized as revenue when earned. 8

11 Summary of Significant Accounting Policies March 31, 2016 Mary Joyce Booth Endowment Reserve Contributed Services Allocation of Expenses The Mary Joyce Booth Endowment Reserve was created by the association's Board of Directors for the purpose of funding the promotion and enhancement of French-language learning opportunities. The value of service contributed to the association is not reflected in these financial statements because of the difficulty of determining their fair value. The association undertakes several projects as a part of their initiative to create and promote opportunities for young Canadians to learn and use French as a second language. The costs of each project include amounts directly related to providing the program and the association also incurs general support expenses that are common to the administration of the association and each of its projects. General support expenses, including amortization, rent, professional fees, and other administrative expenses, as well as honoraria, are allocated to projects proportionally as a percentage of total budgeted direct expenditures. Salaries and wages are allocated to projects based on the percentage of employee time spent against each activity. 9

12 Notes to Financial Statements March 31, Cash The association's bank account is held at a chartered bank and earns nominal interest. The association also has a credit facility agreement with a chartered bank for a $75,000 line of credit, with the ability to request an additional $25,000 ( $25,000) which carries an interest rate of prime plus 5% ( prime + 5%). At year end $75,000 ( $75,000) is available for use. 2. Short-Term Investments Short-term investments as at March 31, 2016 includes a guaranteed investment certificate in the amount of $100,000 which was purchased March 2, 2016 and earns interest at a rate of 0.50% and a guaranteed investment certificate in the amount of $98,777 which was purchased on March 14, 2016 and earns interest at a rate of 0.50%. Short-term investments as at March 31, 2015 include a guaranteed investment certificate in the amount of $50,000 which was purchased October 1, 2014 and earns interest at a rate of 0.80% and a guaranteed investment certificate in the amount of $125,000 which was purchased on January 26, 2015 and earns interest at a rate of 0.80%. 3. Tangible Capital Assets Accumulated Net Book Accumulated Net Book Cost Amortization Value Cost Amortization Value Computers $ 30,614 $ 28,766 $ 1,848 $ 28,584 $ 27,562 $ 1,022 Furniture and equipment 56,693 43,106 13,587 50,939 38,361 12,578 Computer software 54,115 52,478 1,637 52,296 52,296 - $ 141,422 $ 124,350 $ 17,072 $ 131,819 $ 118,219 $ 13,600 During the year, the association acquired tangible capital assets totaling $9,602 ( $1,515). 4. Mary Joyce Booth Endowment Reserve In 2011, the Board of Directors internally restricted resources amounting to $129,984, relating to a bequest received from a donor in prior years. The amount is to be used for the purpose of promoting and enhancing French-language learning opportunities. This internally restricted amount is not available for other purposes without the approval of the Board of Directors. As of March 31, 2016, the balance of this fund is $98,769 ( $106,993). 10

13 Notes to Financial Statements March 31, Deferred Revenue Deferred revenue represents unspent funds received in the current year that are earmarked for activities to take place in the subsequent year. The revenue recognized match the expenses incurred in the current year, added together with the balance end of year equal the total of the contribution received in the current year. Balance Expenses Balance Beginning Incurred and End of Year Revenue of Year April 1, 2015 Contributions Recognized March 31, 2016 Parents Reaching Out grant $ - $ 13,500 $ 12,666 $ 834 Individual advertisers - 27,117 19,383 7,734 $ - $ 40,617 $ 32,049 $ 8, Commitments The association entered into a six-year premises lease on July 1, 2013, expiring on June 30, 2019 and signed a further three-year extension in The association entered into equipment leases beginning December 1, 2010 and expiring on May 30, 2016 as well as beginning November 1, 2015 and ending October 31, Minimum lease payments over the next five years and thereafter under the leases described above are as follows: 2017 $ 47, , , , and thereafter to ,126 $ 294, Government Grants Grants received from Government departments may be subject to audit under the terms and conditions of the contribution agreements. Should an audit reveal that any of the expenses on a project are not in accordance with funding guidelines, the funder may require the association to reimburse a portion of the funds advanced. No claim for reimbursement has been made to date and management is of the opinion that the amount of any possible claim cannot be anticipated at this time. No provision for reimbursement of funds has been made in the financial statements. In the event any sum has to be reimbursed, it will be treated as an expense in the year of reimbursement. 11

14 Notes to Financial Statements March 31, Allocation of General Overhead and Salary and Benefits Expenses to Projects General Overhead Salaries A - Youth $ 17,157 $ 17,877 $ 63,095 $ 19,213 B - Parents, Members and Volunteers 40,612 89, , ,262 C - Decisions-Makers 7,242 26,478 84, ,405 D - Organization 47,612 26, , ,293 E - Québec Programming 5,492 7,513 55,000 66,507 $ 118,115 $ 168,037 $ 487,627 $ 467, Conference Registration The association hosts a bi-annual conference for which it incurs revenue and expenses. No conference was held in Expenses for the conference are included with projects, program and national office expenses in the year in which they relate. 10. Financial Instruments Risks and Concentrations The association is exposed to various risks through its financial instruments. The following analysis provides a measure of the association s risk exposure and concentrations as at March 31, Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities and commitments. The association is exposed to this risk mainly in respect of its accounts payable and accrued liabilities and to meet its potential financial commitments set out in note 5 to these financial statements. Management closely monitors cash flow requirements to ensure that it has sufficient cash on demand to meet operational and financial obligations. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The association s main credit risks relate to its accounts receivable. The association routinely assesses the financial strength of its contributors and establishes an allowance for doubtful accounts based on credit risk applicable to particular contributors, historical and other information. 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. The association is mainly exposed to interest rate risk. 12

15 Notes to Financial Statements March 31, Financial Instruments Risks and Concentrations (continued) Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The association s revenue and expenses as well as its financial instruments are in Canadian currency. Consequently, the association is not exposed to foreign exchange fluctuations. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The association is exposed to interest rate risk on its fixed interest rate financial instruments. Given the current composition of the association's investments is substantially all fixed-rate instruments, as set out in note 2 to these financial statements, the association is subject to a fair value risk. The line of credit set out in note 1 to these financial statements bears interest at floating rate based on the bank prime rate, and as such, is subject to interest rate cash flow risk resulting from market fluctuations in interest rates. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The association is not exposed to other price risk since its financial instruments are not traded in the market. Changes in risk There have been no significant changes in the association's risk exposures from the 2015 fiscal year. 13

16 Collins Barrow Ottawa LLP Chartered Professional Accountants 301 Moodie Drive, Suite 400 Ottawa, Ontario K2H 9C4 Canada T: F: Independent Auditor's Comments on Unaudited Supplementary Financial Information To the Members of Canadian Parents for French The audited financial statements of Canadian Parents for French for the year ended March 31, 2016 and our report thereon dated August 5, 2016 are included in the preceding section of this financial report. The financial information that follows, consisting of the Schedule of Programs, Projects and National Office Expenses and Department of Canadian Heritage Program and Project Funding, was derived from the accounting records of Canadian Parents for French and forms part of the financial statements for the year then ended on which we reported on August 5, Our opinion on financial statements is a qualified opinion as set out in our Independent Auditor's Report in the preceding section of this financial report. Our audit of Canadian Parents for French financial statements for the year ended March 31, 2016 was not directed to the determination of the detailed information set out in the accompanying Schedule of Programs, Projects and National Office Expenses and Department of Canadian Heritage Program and Project Funding. We have not performed an audit of, and, accordingly, do not express an opinion on, the Schedule of Programs, Projects and National Office Expenses and Canadian Heritage Program and Project Funding. In addition, 2015 amounts presented for comparative purposes are unaudited. Chartered Professional Accountants, Licensed Public Accountants August 5, 2016 Ottawa, Ontario This office is independently owned and operated by Collins Barrow Ottawa LLP. The Collins Barrow trademarks are owned by Collins Barrow National Cooperative Incorporated and are used under license.

17 Schedule of Programs, Projects and National Office Expenses (Unaudited) For the year ended March A - Youth Youth Activity Development $ 95,225 $ 73,565 Mary Joyce Booth Endowment 17,805 20,393 Youth Advisory Committee 14, ,830 93,958 B - Parents, Members and Volunteers Conference 15, ,718 Communications & Publications 72, ,134 National Support for Branches 131,587 14,687 Membership Supports & Services 145,626 87, , ,424 C - Decisions-Makers Advocacy Development 27,740 52,581 Advocacy Activities & Production 17,739 30,150 Research & Dissemination 56,805 57, , ,996 D - Organization Governance 86, ,460 AGM 125,421 32,527 Leadership Network 30,213 10,278 Fundraising & Development 52,768 91, , ,765 E - Québec Programming QC Youth Activities 27,891 16,200 QC Virtual Choir 31,348 - QC Outreach & Engagement 28,561 91,603 87, ,803 $ 977,946 $ 1,101,946 15

18 Department of Canadian Heritage Program and Project Funding (Unaudited) For the year ended March 31, 2016 Parents Core Quebec Reaching Funding Outreach Out Total Total Revenue Department of Canadian Heritage $ 830,000 $ 87,800 $ - $ 917,800 $ 937,803 CPF contribution 71, , ,776 Parents Reaching Out grant ,666 12, ,640 87,800 12,666 1,002,106 1,105,579 Expenses Honoraria 66,071 6,000-72, ,132 Operational costs 162,782 9,800 12, , ,790 Other (staff training) 7, ,568 4,231 Outreach and Participant Training Publicity 67,225 7,000-74,225 72,724 Salaries 432,627 55, , ,681 Travel 160,003 10, , , ,276 87,800 12, ,742 1,107,044 Excess (deficiency) of revenue over expenses for the year $ 5,364 $ - $ - $ 5,364 $ (1,465) The purpose of this schedule is to reconcile funding received from Canadian Heritage. 16