Holy Apostles Catholic Church Colorado Springs, Colorado. FINANCIAL STATEMENTS June 30, 2012

Transcription

1 Holy Apostles Catholic Church Colorado Springs, Colorado FINANCIAL STATEMENTS June 30, 2012

2 TABLE OF CONTENTS Page No. Independent Accountants Report 1 FINANCIAL STATEMENTS Statements of Financial Position 2 Statement of Activities 3 Statement of Cash Flows 4 Notes to Financial Statements 5 through 12

3 INDEPENDENT ACCOUNTANTS REVIEW REPORT To the Pastor, Parish Finance Council and the Diocese of Colorado Springs Holy Apostles Catholic Church Colorado Springs, Colorado We have reviewed the accompanying Statements of Financial Position of Holy Apostles Catholic Church (a nonprofit organization) as of June 30, 2012 and 2011, and the related Statements of Activities and Cash Flows for the year ended June 30, A review includes primarily applying analytical procedures to management s financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. December 13, 2012

4 STATEMENTS OF FINANCIAL POSITION AND 2011 ASSETS JUNE 30, 2011 CURRENT ASSETS Cash $ 42,474 $ 1,094 Cash - held for others 15,867 11,710 Total cash 58,341 12,804 Prepaid expenses - Outreach 19, Accounts receivable 1,717 1,230 Accounts receivable - Diocese 1,850 3,625 OTHER ASSETS Restricted interest in the net asset of the Catholic Foundation of the Diocese of Colorado Springs, Inc. 141, ,776 STABILIZED PATRIMONY Land, building and equipment, net of accumulated depr. of $ 3,868,286 (2012) and $ 3,653,275 (2011) 2,219,603 2,385,589 TOTAL ASSETS $ 2,442,963 $ 2,529,024 LIABILITIES AND NET ASSETS LIABILITIES CURRENT LIABILITIES Accounts payable and accrued expenses $ 62,779 $ 52,486 Deferred revenue 16,235 16,550 Funds held for others 15,867 11,710 Current portion of long-term debt 186, ,814 LONG-TERM LIABILITIES Long-term debt 308, ,906 TOTAL LIABILITIES 590, ,466 NET ASSETS Operating unrestricted 1,612,828 1,595,782 Temporarily restricted 97,925 64,775 Permanently restricted 142, ,001 TOTAL NET ASSETS 1,852,829 1,785,558 TOTAL LIABILITIES AND NET ASSETS $ 2,442,963 $ 2,529,024 SEE ACCOMPANYING NOTES AND ACCOUNTANTS' REVIEW REPORT Page 2

5 STATEMENT OF ACTIVITIES YEAR ENDED TEMPORARILY PERMANENTLY UNRESTRICTED RESTRICTED RESTRICTED TOTAL REVENUES, GAINS AND OTHER SUPPORT Offertory $ 1,432,500 $ $ $ 1,432,500 Gifts 2, , ,676 Tuition and student fees 193, ,765 Rent income 3,245 3,245 Program fees 8,073 8,073 Investment income 30 17,075 17,105 Other income 4,605 4,605 Change in interest in net assets of the Catholic Foundation of the Diocese of Colorado Springs, Inc ,644, ,312 17,075 2,028,331 NET ASSETS RELEASED FROM RESTRICTIONS Satisfaction of program restrictions 333,162 (333,162) TOTAL RELEASED FROM RESTRICTIONS 333,162 (333,162) TOTAL REVENUES, GAINS AND OTHER SUPPORT 1,978,106 33,150 17,075 2,028,331 EXPENSES PROGRAM SERVICES Worship 184, ,282 Faith formation 340, ,890 Preschool / daycare 269, ,239 Charity / social concerns 200, ,714 TOTAL PROGRAM SERVICES 995, ,125 SUPPORTING SERVICES General administration 419, ,693 Facilities 495, ,305 Fundraising expense 30,408 30,408 Interest expense 20,529 20,529 TOTAL SUPPORTING SERVICES 965, ,935 TOTAL EXPENSES 1,961, ,961,060 CHANGE IN NET ASSETS 17,046 33,150 17,075 67,271 NET ASSETS, JUNE 30, ,595,782 64, ,001 1,785,558 NET ASSETS, $ 1,612,828 $ 97,925 $ 142,076 $ 1,852,829 SEE ACCOMPANYING NOTES AND ACCOUNTANTS' REVIEW REPORT Page 3

6 CASH FLOWS FROM OPERATING ACTIVITIES HOLY APOSTLES CATHOLIC CHURCH STATEMENT OF CASH FLOWS YEAR ENDED Change in net assets $ 67,271 ADJUSTMENTS TO RECONCILE CHANGE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation 215,011 Unrealized investment income (17,075) Net change in the net asset of the Catholic Foundation of the Diocese of Colorado Springs, Inc. (362) (INCREASE) DECREASE IN Prepaid expenses - Outreach (19,563) Accounts receivable (487) Accounts receivable - Diocese 1,775 INCREASE (DECREASE) IN Accounts payable and accrued expenses 10,293 Deferred revenue (315) Funds held in trust 4,157 NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 260,705 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale of investments 1,324 Purchase of stabilized patrimony - land, building and equipment (49,025) NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (47,701) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long term debt (167,467) NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (167,467) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 45,537 CASH AND CASH EQUIVALENTS, JUNE 30, ,804 CASH AND CASH EQUIVALENTS, $ 58,341 ADDITIONAL CASH FLOW INFORMATION Interest paid $ 20,529 SEE ACCOMPANYING NOTES AND ACCOUNTANTS' REVIEW REPORT Page 4

7 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Canon Law establishes the public juridic person and defines the roles and responsibilities of the Bishop and of the Pastors of parishes within the territory of the Diocese of Colorado Springs ( the Diocese ). The Diocese of Colorado Springs is a separate and distinct public juridic person, and under Canon Law the Bishop serves several roles, including Administrator as to Diocesan property and Legislator as to the overall affairs within the territory of the Diocese of Colorado Springs. Each parish within the territory of the Diocese of Colorado Springs, one of which is Holy Apostles Catholic Church ( the Organization ), is also a separate and distinct public juridic person, and the parish Pastor is the Administrator of the parish, with powers inherent to his status as Pastor. The Diocese of Colorado Springs, a Colorado Corporation Sole, holds bare legal title, as Trustee, to real properties for the benefit and use of the parishes, for example, parish land and buildings. The Diocese of Colorado Springs, a Colorado Corporation Sole, also holds bare legal title, as Trustee, to real properties for the benefit of the Diocese, for example, development lands and other properties that are not parish properties or those of other juridic persons. The beneficial owner of real property is the parish. Each parish Pastor, by virtue of his authority as Pastor, is the Administrator of the parish and its property, and is responsible for the use, possession and management of such property. In his role as Administrator of parish property, the parish Pastor is not the representative or delegate of the Bishop. The power of the Pastor is proper, ordinary power attached by Canon Law to his office. The Bishop has an oversight or monitoring role in regards to the parishes within the Diocese to ascertain that they are operating in accordance with Canon Law. Subsequent Events Subsequent events have been evaluated through December 13, 2012, which is the date that the financial statements were available to be issued. Basis of Accounting and Use of Estimates The financial statements of the Organization have been prepared on the accrual basis of accounting. The preparation of financial statements in conformity with generally accepted accounting principles requires management 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, expenses, gains, losses and other changes in net assets during the reporting period. Actual results could differ from those estimates. Contributions Contributions received are recorded as unrestricted, temporarily restricted or permanently restricted support depending on the existence and/or nature of any donor restrictions or any restrictions applicable due to Canon Law. Gifts received with a donor stipulation that limits their use are reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. Non-cash Page 5

8 donations are recorded as contributions at their estimated fair values at the date of donation. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restriction. Gifts having donor stipulations which are satisfied in the period the gifts are received are reported as a temporary restriction and a simultaneous entry as released from restriction in the statement of activities. Investments Investments in equity securities having a readily determinable fair value and all debt securities are carried at fair value. Other investments are valued at the lower of cost (or fair value at time of donation, if acquired by contribution) or fair value. Investment return includes dividend, interest and other investment income: realized and unrealized gains and losses on investments carried at fair value and realized gains and losses on other investments. Investment return that is initially restricted by donor stipulation and for which the restriction will be satisfied in the same year is included in unrestricted net assets. Other investment return is reflected in the statement of activities as unrestricted, temporarily restricted or permanently restricted based upon the existence and nature of any donor or legally imposed restrictions. Stabilized Patrimony Land, Building and Equipment Stabilized patrimony land, building and equipment acquisitions are capitalized at cost when purchased or at fair value at the date of gift or transfer when donated. Land and buildings are, under Canon Law, generally stabilized patrimony and, therefore, subject to certain canonical restrictions regarding use and alienation. Fixed assets transferred to the Diocese of Colorado Springs on January 1, 1984 are stated at fair market value as of the date of transfer. Income Taxes The Organization is exempt from federal income taxes per Internal Revenue Code section 501(c)(3). Accordingly, there is no provision for income taxes in the accompanying financial statements. Allocations The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the various programs and supporting services benefited. Donated Services During the year ended June 30, 2012, the value of contributed services did not meet the requirements for recognition in the financial statements and has not been recorded. Many individuals volunteer their time and perform a variety of tasks that assist the Organization in its daily operation. The Catholic Foundation The Organization and the Catholic Foundation ( the Foundation ) of the Diocese of Colorado Springs, Inc. are financially interrelated organizations. The Foundation receives contributions on the Organization s behalf. Beginning July 1, 2000, the Organization began recognizing its interest in the net assets of the Page 6

9 Foundation and the changes therein in a manner similar to the equity method of accounting. The Organization s interest in the Foundation s net assets is recognized at fair value and is reported in the Statement of Financial Position as Interest in the Catholic Foundation of the Diocese of Colorado Springs, Inc. Changes in the Organization s interest in the Foundation s net assets arising from contributions received, changes in fair value, investment return and other matters are included in the change in net assets. Transfers of assets from the Foundation to the Organization are recognized as an increase in such assets and a decrease in the Interest in the Catholic Foundation of the Diocese of Colorado Springs, Inc. and have no impact on the change in net assets. NOTE 2 STABILIZED PATRIMONY LAND, BUILDING AND EQUIPMENT Fixed assets are being depreciated on the straight-line method over various useful lives. Buildings are being depreciated over 40 years, furnishings and fixtures are being depreciated over 7 years, computer and office equipment over 5 years. Land is not depreciated. In addition, depreciation expense has been allocated to the various ministries as follows: 6/30/12 6/30/11 LAND $ 582,081 $ 582,081 BUILDINGS & IMPROVEMENTS 4,623,227 4,623,227 FURNISHINGS, FIXTURES & EQUIPMENT 873, ,956 VEHICLES 8,600 8, TOTAL 6,087,889 6,038,864 LESS: ACCUMULATED DEPRECIATION (3,868,286) (3,653,275) NET FIXED ASSETS $ 2,219,603 $ 2,385,589 ======== ======== ALLOCATION OF DEPRECIATION EXPENSE FACILITIES $ 193,510 PRESCHOOL 21, TOTAL DEPRECIATION EXPENSE $ 215,011 ======== Page 7

10 NOTE 3 FAIR VALUE MEASUREMENTS Accounting principles generally accepted in the United States of America establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows: Level 1: Level 2: Level 3: Quoted prices in active markets that the Organization has the ability to access at the measurement date for assets or liabilities. Observable prices that are based on inputs not quoted in active markets, but corroborated by market data; or Unobservable inputs in which there is little or no market data and that require the Organization to develop its own assumptions about fair value. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measure. These classifications (Levels 1, 2, and 3) are intended to reflect the quality and character of the inputs used in valuation and are not necessarily an indication of risk or liquidity. The following presents assets that are measured at fair value as of June 30, 2012: Level 1 Level 2 Level 3 Interest in the Catholic Foundation Permanently Restricted $ $ $ 116,366 Restricted interest in the Catholic Foundation Endowment Fund 25, $ $ $ 141,889 ======= ======= ======= The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the fiscal year ended June 30, 2012: Beginning balance $ 125,776 Net realized and unrealized gains included in earnings 17,437 Purchases / (Liquidations) (1,324) $ 141,889 ======= Page 8

11 NOTE 4 - PENSION AND BENEFIT PLANS The Diocese has two defined benefit pension plans that cover substantially all priests and lay personnel. The Diocese makes annual contributions in order to maintain the plans on a sound basis and charges appropriate assessments to the parishes for the reimbursement of costs related to personnel at the parish. The liabilities and costs of the priests' retirement and lay personnel plans are determined under an aggregate funding method and projected unit credit method, respectively. These methods are among several projected benefit funding methods which may be used to provide for the systematic accumulation of assets to cover the benefits under the plans. The true costs of the plans will depend on the actual benefits and expenses paid and on the investment return of the plans' assets. The actuarial funding method, along with other actuarial assumptions, affects when and at what rate this true cost will be paid. The Organization s portion of both accumulated vested benefits and net assets available for benefits is insignificant and, therefore, no adjustment has been included in these financial statements for over- or under-funding. NOTE 5 RELATED PARTY TRANSACTIONS As an organization that operates under the auspices of the Diocese of Colorado Springs, Holy Apostles Catholic Church is charged monthly assessments to support the financial operation of the Diocese in general and to assist with Diocesan charities and programs. The Organization is also charged for their portion of priest and lay retirement, health insurance, property insurance, workers compensation, etc. Insurance payments are sent to the Diocese of Colorado Springs where they are held in trust until disbursed to the various insurance carriers. During the fiscal years ended June 30, 2012 and June 30, 2011, the Organization made the following cash payments to the Diocese of Colorado Springs. 6/30/12 6/30/11 Parish Support of Diocese $ 271,741 $ 276,960 Insurance 175, ,448 Charity 115, ,006 Debt Service 187, ,724 Retirement 23,162 40,009 Other 6,946 20, Total $ 780,644 $ 691,585 ======== ======== Page 9

12 NOTE 6 - LONG TERM DEBT In June 2007 Holy Apostles entered into a $300,000 short term line of credit agreement with Allied Irish Bank and the Diocese of Colorado Springs. During the fiscal year ending June 30, 2010, the Organization refinanced this loan agreement with the Diocese of Colorado Springs and Colorado State Bank and Trust. Under the loan, principal and interest payments of $1,757 are made monthly for 20 years beginning in October of During the fiscal year ended June 30, 2011, the Organization obtained a second line of credit to help finance the expansion project. That phase of the project was recently completed, and the line of credit has been converted to an amortized loan. As of August 15, 2011, the new loan bears an interest rate of 2.98% and is payable in monthly payments of $15,000 for 24 months. The final payment is due October 15, CURRENT LONG TERM PORTION PORTION TOTAL Diocese of Colorado Springs (2.98%) $ 175,314 $ 59,550 $ 234,864 Diocese of Colorado Springs 11, , , $ 186,531 $ 308,722 $ 495,253 ======== ======== ======== The following is a schedule of principal payments under the agreement: July 1, 2012 June 30, 2013 $ 186,531 July 1, 2013 June 30, ,370 July 1, 2014 June 30, ,449 July 1, 2015 June 30, ,102 July 1, 2016 June 30, ,783 July 1, 2017 and after 198, $ 495,253 ======== NOTE 7 - LEASE AGREEMENTS The Organization maintains leases for copiers, a security system and other office equipment that require monthly payments of $590. The leases are secured through Key Equipment Finance, Pitney Bowes, Birchams, and ACA. The following is a schedule of lease payments under the contracts. Page 10

13 The future rental commitments under the above operating lease agreements are as follows: July 1, June 30, 2013 $ 7,080 July 1, June 30, ,720 July 1, June 30, ,147 July 1, June 30, , $ 15,996 ======== NOTE 8 NET ASSETS Net assets consist of the following: Unrestricted 6/30/12 6/30/11 Unrestricted $ 1,612,828 $ 1,595, Total $ 1,612,828 $ 1,595,782 ======== ======== Temporarily restricted Ukraine Fund $ 1,594 $ 9,022 Golden Agers 2,214 2,473 Building Fund 83,344 45,844 Refugee Ministry 1,286 1,287 Environment 7, MOPS -- 1,471 Prayer Shawl Ministry 2,062 2,577 Angel Fund -- 1,326 Interest in the Catholic Foundation Total $ 97,925 $ 64,775 ======== ======== Permanently restricted Interest the Catholic Foundation $ 25,710 $ 25,710 Permanent Endowment 116,366 99, Total $ 142,076 $ 125,001 ======== ======== Page 11

14 NOTE 9 CAPITAL CAMPAIGN During 2010, the Organization began a facilities focused capital campaign to raise funds for various projects within the parish to improve or upgrade the existing facility. The Organization currently expects to raise over $ 1,200,000 for projects including a rectory, technology upgrades, building improvements, and debt repayment. NOTE 10 CHANGE IN ACCOUNTING POLICY During the past fiscal year, the Organization adopted a new accounting system and chart of accounts. Concurrent with this change, management has also revised its method for allocating expenses among its various cost centers and ministries. As a result, some of the cost centers when compared to prior years may show large variances and could reflect new titles. However, this new policy does not reflect a change to operations and is not expected to materially affect the presentation of the Organization s financial position. Page 12