FINANCIAL STATEMENTS. For the Years Ended March 31, 2014 and 2013 with Independent Auditors Report

Transcription

1 FINANCIAL STATEMENTS For the Years Ended with Independent Auditors Report

2 FINANCIAL STATEMENTS CONTENTS Page Independent Auditors Report Financial Statements: Statements of Financial Position...3 Statements of Activities...4 Statements of Functional Expenses Statements of Cash Flows...7 Notes to Financial Statements

3 INDEPENDENT AUDITORS REPORT To the Board of Directors Youth Volunteer Corps We have audited the accompanying financial statements of Youth Volunteer Corps (a nonprofit organization), which comprise the statements of financial position as of March 31, 2014 and 2013, and the related statements of activities, functional expenses, and cash flows for the years 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. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 auditors 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.

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Youth Volunteer Corps as of, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Overland Park, Kansas August 12,

5 STATEMENTS OF FINANCIAL POSITION As of ASSETS Current Assets: Cash and cash equivalents $ 94,456 $ 250,202 Certificates of deposit, at cost 472, ,036 Receivables: Federal grants, no allowance for doubtful accounts 24,626 7,461 Pledges, net of allowance for uncollectible pledges of $-0- and $9,000, respectively 7,681 47,743 Affiliate sites, net allowance for doubtful accounts of $-0- and $129, respectively - 1,371 Interest Prepaid expenses - 2,231 Total Current Assets 599, ,214 Property and Equipment, net 37,977 41,253 Other Assets 9,417 8,291 Total Assets $ 647,043 $ 829,758 LIABILITIES AND NET ASSETS Current Liabilities: Accounts payable $ 20,204 $ 8,251 Accrued expenses 6,295 12,708 Total Current Liabilities 26,499 20,959 Net Assets: Unrestricted: Undesignated 591, ,549 Board-designated 2,375 - Total Unrestricted 593, ,549 Temporarily restricted 27,004 46,250 Total Net Assets 620, ,799 Total Liabilities and Net Assets $ 647,042 $ 829,758 See accompanying notes -3-

6 STATEMENTS OF ACTIVITIES Years Ended Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total Support and Revenue: Contributions: Individuals $ 42,795 $ 2,125 $ 44,920 $ 70,669 $ 2,500 $ 73,169 Corporations 49,945 25,000 74, ,559 25, ,559 Foundations 71,000 12,500 83,500 12,720 85,000 97,720 Other ,511 10,500 14,011 Total Contributions 163,740 39, , , , ,459 Federal grants - 78,808 78,808 50,208-50,208 Affiliate sites 12,835 80,700 93,535 26,266-26,266 Other revenue 4,038-4,038 2,546-2,546 Net assets released from restriction 214,379 (214,379) - 262,754 (262,754) - Total Support and Revenue 394,992 (15,246) 379, ,233 (139,754) 399,479 Expenses: Program services 407, , , ,986 General and administrative 71,286-71, , ,040 Fundraising 85,353-85,353 69,449-69,449 Total Expenses 564, , , ,475 Loss on Pledges Receivable - 4,000 4,000-9,000 9,000 Total Expenses and Losses 564,002 4, , ,475 9, ,475 Change in Net Assets (169,010) (19,246) (188,256) (102,242) (148,754) (250,996) Net Assets at Beginning of Year 762,549 46, , , ,004 1,059,795 Net Assets at End of Year $ 593,539 $ 27,004 $ 620,543 $ 762,549 $ 46,250 $ 808,799 See accompanying notes -4-

7 STATEMENT OF FUNCTIONAL EXPENSES Year Ended March 31, 2014 Program Services Support Activities YVCHQ - Affiliate General and Development Administrative Fundraising Total Salaries and benefits $ 268,563 $ 33,330 $ 35,432 $ 337,325 Rent 57,827 9,015 9,584 76,426 Professional and consulting - 18,583 36,322 54,905 Affiliate support and programming 33, ,881 Travel 19, ,482 Depreciation 7,616 1,188 1,262 10,066 Insurance 4, ,388 Information technology 2,041 3,846-5,887 Telephone and communication 4, ,638 Training and staff development 2, ,676 Office supplies - 3,302-3,302 Printing and production 2, ,498 Program supplies 1, ,838 Vehicle ,150 Membership and dues ,069 Bad debts Total Expenses $ 407,363 $ 71,286 $ 85,353 $ 564,002 See accompanying notes -5-

8 STATEMENT OF FUNCTIONAL EXPENSES Year Ended March 31, 2013 Program Services Support Activities YVCKC - YVCHQ - Youth Affiliate Volunteer Total Program General and Development Engagement Services Administrative Fundraising Total Salaries and benefits $ 184,108 $ 120,677 $ 304,785 $ 33,582 $ 40,650 $ 379,017 Affiliate support and programming 40,864 35,808 76,672 5, ,093 Rent 39,838 3,022 42,860 7,267 8,796 58,923 Professional and consulting ,384 15,825 37,209 Moving ,959-22,959 Travel 9,517 4,806 14, ,323 Telephone and communication 5,867 3,845 9,712 1,070 1,295 12,077 Insurance 4,668-4, ,031 6,551 Printing and production 5, , ,895 Depreciation 4,177-4, ,861 Training and staff development 1,324 2,816 4, ,420 Information technology ,276-4,061 Office supplies ,031-4,031 Bad debts ,100-1,100 Vehicle Membership and dues Total Expenses $ 297,058 $ 171,928 $ 468,986 $ 103,040 $ 69,449 $ 641,475 See accompanying notes -6-

9 STATEMENTS OF CASH FLOWS Years Ended Cash Flows from Operating Activities: Cash received from donors $ 243,427 $ 425,205 Cash received from others 158,908 92,831 Interest received 1,698 2,491 Cash paid to vendors and others (203,877) (261,595) Cash paid to employees (347,414) (373,595) Net Cash Used by Operating Activities (147,258) (114,663) Cash Flows from Investing Activities: Purchases of certificates of deposit (1,698) (2,491) Purchases of property and equipment (6,790) (43,710) Acquisition of trademarks - (6,208) Net Cash Used by Investing Activities (8,488) (52,409) Net Decrease in Cash and Cash Equivalents (155,746) (167,072) Cash and Cash Equivalents at Beginning of Year 250, ,274 Cash and Cash Equivalents at End of Year $ 94,456 $ 250,202 Reconciliation of Change in Net Assets to Cash Used by Operating Activities: Change in net assets $ (188,256) $ (250,996) Adjustments to reconcile change in net assets to net cash used by operating activities: Depreciation 10,066 5,861 (Increase) decrease in: Accounts receivable 24, ,048 Prepaid expenses 2,231 3,870 Other assets (1,126) 13 Increase (decrease) in: Accounts payable 11,953 (4,301) Accrued expenses (6,413) 9,842 Net Cash Used by Operating Activities $ (147,258) $ (114,663) See accompanying notes -7-

10 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Youth Volunteer Corps ( YVC ) was incorporated as a Missouri notfor-profit corporation in YVC was organized to create and increase volunteer opportunities to enrich America s youth, address community needs and develop a lifetime commitment to service. YVC is primarily funded by contributions from foundations, corporations and individuals, as well as by government grants. YVC is located in approximately 30 communities across the United States and Canada. YVC recruits teams of diverse youth between the ages of 11 and 18 to perform service learning projects in their communities. The projects address unmet needs of the community while promoting a lifetime ethic of service among young people. Prior to January 1, 2013, YVC consisted of two primary programs, YVC Headquarters ( YVCHQ ) and YVC of Greater Kansas City ( YVCKC ). YVCHQ s primary responsibility is to act as an international headquarters and support its affiliates, which are essentially YVC programs sponsored by community or government organizations such as a local YMCA or United Way. YVC does not own or control any of these community or government organizations, neither are any of them fiscally dependent upon YVC or vice versa. YVCKC was the program branch of YVC, sponsored by YVCHQ itself as opposed to a local Kansas City community or government organization. During the past couple of years, YVC s Board of Directors indicated a desire to find a sponsor/host organization for the YVCKC program. The YVCKC program was sponsored by YVCHQ for years, but the Board felt that each affiliate, including YVCKC, should have its own sponsor and that YVCHQ would be better served by operating independently of each affiliate. YMCA of Greater Kansas City leadership was invited to engage in discussion with the specially formed United Way/YVC committee. Out of those discussions, a partnership with the YMCA was formed. On January 1, 2013, the YMCA began hosting the YVCKC program and acting as its fiscal agent. As part of this partnership, YVCHQ guaranteed to cover a portion of the expenses not raised jointly by YVCHQ and the YMCA. Accounts receivable Accounts receivable primarily consist of amounts due from federal and state government agencies, and from affiliates for membership dues and other fees. Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off to the valuation allowance and a credit to accounts receivable. -8-

11 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Basis of accounting - YVC prepares its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Basis of presentation - Financial statement presentation follows the recommendations of the Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) , which requires YVC to report information regarding its financial position and activities according to three classes of net assets: Unrestricted net assets - include unrestricted resources which represent the portion of funds that are available for the operating objectives of YVC. Board-designated net assets represent amounts YVC has set aside for a specific purpose. Temporarily restricted net assets - consist of donor-restricted contributions. Amounts restricted by donors for a specific purpose are deemed to be earned and reported as temporarily restricted revenue, when received, and such unexpended amounts are reported as temporarily restricted net assets at year-end. When the donor restriction expires, that is, when a stipulated time 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. Permanently restricted net assets consist of donor-restricted contributions, which are required to be held in perpetuity. Income from the assets held is available for either general operations or specific purposes, in accordance with donor stipulations. There were no permanently restricted net assets as of March 31, 2014 or Cash and cash equivalents For the purposes of the statements of cash flows, YVC considers those highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Certificates of deposit Certificates of deposit of $472,734 were held by YVC at March 31, 2014 and are carried at cost. Their maturity dates range from six to twelve months, with interest rates ranging between 0.15% and 0.45%. Concentrations of credit risk - YVC maintains its cash in bank accounts in amounts that may exceed federally insured limits at times. YVC has not experienced any losses in these accounts in the past, and management believes YVC is not exposed to significant credit risks as they periodically evaluate the strength of the financial institutions in which it deposits funds. -9-

12 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Functional expense allocation Expenses are charged to each program based on direct expenditures incurred. Expenses which cannot readily be related to a specific program are charged to the various programs based upon hours worked, number of program staff, square footage, or other reasonable methods. General and administrative expenses include those expenses that are not directly identifiable with any other specific function but provide for the overall support and direction of YVC. In-kind donations Donated stock, federal grant assistance, office space rent and pro bono professional services for trademark registration are reflected as contributions and federal grant revenue at their estimated values at date of receipt, summarized below for the years ended, respectively Contributions Rent $ 48,745 $ 35,066 Stock 10,997 - Legal services - 5,883 Federal grants AmeriCorps VISTA 4,230 - Total In-Kind Donations $ 63,972 $ 40,949 A number of volunteers donated service to YVC for the years ended March 31, 2014 and These services do not meet the criteria for recognition as contributions and are not reflected in the accompanying financial statements. Income taxes YVC is a non-profit organization exempt from Federal income taxes, except on unrelated income, under Section 501(c)(3) of the Internal Revenue Code ( the Code ). Contributions to YVC are deductible within the limitations of the Code. The Organization has been classified as a publicly-supported entity which is not a private foundation under Section 509(a) of the Code. -10-

13 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income taxes (continued) YVC s policy with regard to FASB ASC is to record a liability for any tax position that is beneficial to YVC, including any related interest and penalties, when it is more likely than not the position taken by management with respect to the transaction or class of transactions will be overturned by a taxing authority upon examination. Management believes there are no such positions as of March 31, 2014 and 2013, and accordingly, no liability has been accrued. However, YVC s returns are subject to examination by the Internal Revenue Service generally for three years after they were filed. Pledges receivable Pledges are recognized as support in the period the promises to give are received. Conditional promises to give, which depend upon specified future and certain events are recognized as support when the conditions upon which they depend are substantially met. Pledges receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for estimated uncollectible amounts through a charge to the statement of activities and a credit to a valuation allowance based on its assessment of the current status of individual accounts. As of March 31, 2014 and 2013, the allowance for uncollectible pledges was $-0- and $9,000, respectively. Property and equipment Property and equipment are stated at cost. Expenditures for major renewals and betterments exceeding $1,000 and that extend the useful life of assets are capitalized. Depreciation and amortization are charged to operations using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Estimated Useful Life Furniture, fixtures and equipment Software and website 3-7 years 3 years Depreciation amounted to $10,066 and 5,861 for the years ended March 31, 2014 and 2013, respectively. Revenue recognition Federal grant revenue related to cost reimbursement contracts is recognized when the underlying, allowable grant expenditures are incurred. Affiliate site dues are generally due at the beginning of each membership period and recognized on a pro-rated basis over the related membership period. Unearned dues received in advance are recorded as deferred revenue on the statements of financial position. Other amounts charged to affiliate sites are recorded when billed. -11-

14 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Subsequent events Management has evaluated events and transactions that have occurred since March 31, 2014 and reflected their effects, if any, in these financial statements through August 12, 2014, the date the financial statements were available to be issued. 2. PLEDGES RECEIVABLE Pledges receivable consisted of the following at : Due in less than one year $ 5,681 $ 56,743 Due in one to five years 2,000 - Less allowance for uncollectible pledges - (9,000) Total Pledges Receivable $ 7,681 $ 47, PROPERTY AND EQUIPMENT Property and equipment consists of the following at : Furniture, fixtures and equipment $ 41,579 $ 34,789 Software and website 13,250 13,250 Less accumulated depreciation (16,852) (6,786) Net Property and Equipment $ 37,977 $ 41, OTHER ASSETS Other assets consist of the following at : Trademarks: Word mark $ 4,163 $ 4,163 Design mark 2,045 2,045 Office rent deposit 2,083 2,083 Other 1,126 - Total Other Assets $ 9,417 $ 8,

15 NOTES TO FINANCIAL STATEMENTS 4. OTHER ASSETS (continued) The trademarks are comprised of the associated legal and filing costs as part of the trademark registration process and are considered to have an indefinite life; therefore, no amortization has been recorded as of March 31, 2014 or Additionally, no impairment has been recorded as of March 31, 2014 or TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of the following at : Time Restricted Pledges receivable $ 2,000 $ 43,750 Purpose Restricted Don and Jean Sloan Scholarship Fund 2,125 2,500 Adele Hall Joy of Serving Fund 12,500 - AmeriCorps Site Match 10,379 - Total Temporarily Restricted Net Assets $ 27,004 $ 46,250 Net assets were released from time and donor-imposed restrictions as follows: Pledges receivable $ 39,750 $ 129,739 COO Executive Search & Salary - 42,515 Relocation Expenses - 30,000 Student Leader 25,000 25,000 YVC Summit Conference - 25,000 YVCKC Affiliate Support - 10,500 Don and Jean Sloan Scholarship Fund AmeriCorps CNCS Grant 74,579 - AmeriCorps Site Match 70,320 - AmeriCorps VISTA Grant 4,230 - Net Assets Released from Restriction $ 214,379 $ 262,

16 NOTES TO FINANCIAL STATEMENTS 6. FEDERAL GRANTS On July 25, 2013, YVC was awarded $263,840 in federal grant funds by the Corporation for National and Community Service ( CNCS ) for the grant year beginning September 1, Such funds are available to be drawn down at any time. On September 30, 2013, YVC was awarded another $263,840 for use starting the grant year September 1, Of these awards, $74,579 has been recognized as federal grant revenue on the 2014 statement of activities, of which $24,626 has been included in federal grants receivable on the 2014 statement of financial position. 7. LEASE COMMITMENT YVC entered into an operating lease for office space on August 1, 2012, expiring September 30, Rental payments associated with this operating lease are charged to expense as incurred. Minimum future lease payments under the non-cancelable operating lease are as follows: Fiscal Year Ending March 31: 2015 $ 28, , ,500 Total $ 70,208 Rent expense for the year ended was $76,426 and $58,923, respectively, of which $48,745 and $35,066, respectively, was considered to be an inkind contribution from the landlord. 8. OTHER COMMITMENT As mentioned in Note 1, YVC assigned its YVCKC program to the YMCA of Greater Kansas City as of January 1, As part of this agreement, YVC committed to pay the YMCA of Greater Kansas City up to a certain amount of funds to help ensure the ongoing success of YVCKC as follows: Calendar Year Ending December 31: 2014 $ 71, ,058 Total $ 109,

17 NOTES TO FINANCIAL STATEMENTS 9. RELATED PARTY TRANSACTIONS For the year ended March 31, 2014, approximately $41,000 or 20% of total contributions revenue and $7,681 or 100% of pledges receivable originated from board members or from their related organizations. For the year ended March 31, 2013, approximately $55,000 or 17% of total contributions revenue and $11,743 or 25% of pledges receivable originated from board members or from their related organizations. 10. CONCENTRATIONS For the year ended March 31, 2014, three donors contributed approximately $149,000 or 73% of total contributions revenue and 39% of total support and revenue. For the year ended March 31, 2013, four donors contributed approximately $205,000 or 64% of total contributions revenue and 51% of total support and revenue. Of these donors, one comprises $30,000 or 63% of pledges receivable on the statement of financial position. Additionally, one of the four donors is a YVC board member and was also included as part of Note 9, comprising $40,000 or 12% of total contributions revenue. 11. SUBSEQUENT EVENTS On June 11, 2014, the YVC received an unrestricted, unconditional promise to give of $75,000 from a related party donor. The pledge is to be paid at a rate of $25,000 per year for three years. Additionally, the donor has made a conditional promise to give of $10,000 per new affiliate that YVC adds to its membership over the next three years, up to a maximum of three affiliates per year. -15-