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Audit - 2007 Horizons Program I I I I I I I I I I I I I I I I I I I SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina, Kansas AUDITED FINANCIAL STATEMENTS December 31, 2007 WOODS & DURHAM, CHARTERED Certified Public Accountants Salina,Kansas 1 1 :-'.' ::,' ,I: 'I,,' ,\' .1 1 ;1, . \. .! 1 1 1 '. 1 'I' ',' 'I' " I, p' 1 ,"'r, '." , I l I ", ' ,.', " ,. .\ t,,' ',,;' , ,', . , ' , ~. \ \,-' '" 'c.:." , certified public C H.A RTf R E'D accountants, v ',' "' ,',,' ~ : "INDEPENDENT AUDITOR'S REPORT "\ . . , , ': ",' ;"- ., '. ..' . , Salimi 'Arts and Humanities CommissiorL ' ,Horizons Progra~' ' , ',Salina, Kansas:, :,:'.' , ;,; ',' '\-, Tt.." ,.. .. .. ." \ " .... ... . - "..' .. '. "..:.... . , . , '.. .. - .~ . - , - ..' :' . -'. ..' . ; .. . ':We haveaudited the accompanyingstatemeritsof assets;:liabilities,'anil netassets -'cash basis,of' the Horizons Program of the $aiina Arts arid Humanities Commission (a nonprofit organization), as of 'Decemtier31; 2007:, and the relatedstatementofsupport; revenue, and expenses ~ cash basis. for ,- .. ,. >- ,. ',-.'" - ' "," -.. ,.-.. " the year the~ - ended, These financial statements are the: responsibility of the' Foundation's' management, Our responsibility IS to express'an opinion on these finanCial statements based on our audit " ' , ,'" ,. -...'. 'We conducted our audit 'in ac;:cordance with auditing s~andards 'generally ac.cepted in the 'United " Stales of America, Those'standards'require that we plan' andperformthe audit to ob~ainreasonable, assiJr1lnCe, about whether the fina'ncial statements are,freeof~aterialmisstatement An audit , .. '. ", ,_',. . , .. ',u '..' ..~".. .. .' '. .includes examining, on a test basis,eviaence supporting,the a'mounts and disclosures in'the financial, 'statements, Anaudil. also' inc:l~des assessing the accounting principles used and 'significant ,: ,estimates made' by ,management, aswE?lI,asevaluating the' overall financial ,statement presentation,: We believe that ouraudit provides a reasonable b<l~is for:our opinion:' ' , " , , , As described in Note 1, the~e financial stat~ments were 'prepared on th,e cash ,basis of acc~unting, , )Vhich isa corriprehensiv,ebasis?f acc:oUllting other tha~gene'raIlY accepted accounting p~inCiples:, . ... . f" .. .. . ~ ,In ouropiriion, the financial stat~mei1ts .referred toabo~e pre~e~t fairly; 'i~ ~Ii material respects; th~ "as~ets, Ii!,bilitie~, :and net a~s~ts of, the' Horizons Program of the ,Salina' Arts and ,Humanities CommissiSln as ofpecember31, 2007, and its support,revenue"and,exRense;s for the, year ,then , ended;on the basis,,of acc,otintirig'described in' NO,te1 ;,,' , ' .'- .^ .:: ,< " '; U'oo/s ct <DufGam,Cntf ' , WOODS & DURHAM" CHTD, ' , Certified Public Accountants " , ... , ' , , feb;uarY19,2008J .,.. ..\ ,. , ~ -'.' , -,', >,' C .( "',," ""A " ".'." .... I" , > ."'" J:'<. .,.,;. :\" ,"'r. . , ~, 1 -" " . ,~ ' ,- . .' . ..,' .', . 1619 E. Ir~n:Avenue .. ~p,o, Box 1516 .. Salii1a, Karis~s 67402"1516'.' Phone 785-825'5494 , ' , " Fax 785-825,4450 '. ww\v,woodsanddurlpm.com ' "', ' ,\" I I I I I I I I I I I I I I I I I I I SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina, Kansas STATEMENT OF ASSETS, LIABILITIES, AND NET ASSETS CASH BASIS December 31,2007 ASSETS Cu rrent Assets Unrestricted Cash Investments $ 2,192 159,742 Total Current Assets 161,934 Property and Equipment 3,975 TOTAL ASSETS $ 165,909 LIABILITIES AND NET ASSETS Net Assets Investment in equipment Unrestricted $ 3,975 161,934 TOTAL LIABILITIES AND NET ASSETS $ 165,909 The accompanying notes are an integral part of these financial statements. I I I I I I I I I I I I I I I I I I I SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina, Kansas STATEMENT OF SUPPORT, REVENUE, AND EXPENSES CASH BASIS Year Ended December 31,2007 PUBLIC SUPPORT AND REVENUE Public Support Private Charitable Contributions $ 36,869 Revenue Investment Return (Note 3) 8,025 TOTAL PUBLIC SUPPORT AND REVENUE 44,894 EXPENSES Program Services Evaluator 6,246 Horizons Grants - 2005 300 Horizons Grants - 2006 15,075 Horizons Grants - 2007 50,399 Sudden Opportunity GrantslTraining and Development 450 Total Prog ram Services 72,470 Supporting Services General administration 7,219 Fund raising 3,292 Total Supporting Services 10,511 TOTAL EXPENSES 82,981 DEFICtENCY OF REVENUE OVER EXPENSES (38,087) Transfers Transfer from Salina Arts and Humanities Commission City of Salina support 40,000 Change in Net Assets (1,913) NET ASSETS - January 1, 2007 163,996 NET ASSETS - December 31,2007 $ 165,909 The accompanying notes are an integral part 01 these linancial statements. I I I I I I I I I I I I I I I I I I I SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31, 2007 The Horizons Program was created by the Salina Arts and Humanities Commission in 1986 as a continuing grant program to provide support to the cultural life of the community. Initial funding was provided by the Artist in Residence Program, which was terminated December 31, 1985. The Horizons Program, as a project of the Salina Arts and Humanities Commission, is exempt from federal income taxes under Section 501 (c)(3) of the Internal Revenue Code, and is not identified as a private foundation within the Code. NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The organization prepares its financial statements on the cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Under this basis, revenue is recognized when received and expenses are recorded as disbursed. Transactions considered as modifications could include the recording of non-cash expenses such as depreciation, and amounts reflecting certain timing issues related to payments made for periods after the period under audit. A separate audit report has been issued for the Smoky Hill River Festival as of September 30, 2007, and for the Salina Arts and Humanities Commission as of December 31,2007. Cash and Cash Equivalents - Cash and cash equivalents include all monies in banks and highly liquid investments with maturity dates of three months or less. Fair market value equals carrying amounts. Investments - The Organization has adopted SFAS No. 124, "Accounting for Certain Investments Held by Not-for-Profit Organizations." Investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the statement of assets, liabilities and net assets. Unrealized gains and losses are reported in the statement of revenue and expenses as increases or decreases in net assets. Basis of Presentation - Financial statements presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. As of December 31, 2007, there were no donor-imposed restrictions on net assets. Revenue Recognition - The Foundation has adopted SFAS No. 116, "Accounting for Contributions Received and Contributions Made." In accordance with SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. They are then reclassified to unrestricted net assets upon expiration of time restrictions or upon meeting program requirements. As of December 31, 2007, there were no donor-imposed restrictions on contributions received. Contributed Services - No amounts have been reported in the financial statements for donated services because no objective basis is available to measure the value of such service. Employee salaries and fringe benefits are paid by the City of Salina under a third party reimbursement program; therefore, they are covered by Kansas Public Employees Retirement System through the City. Accordingly, no disclosures pertaining to the City's retirement plan is included in these financial statements. I I I I I I I I I I I I I I I I I I I SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31,2007 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd,) Estimates - The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2 - BOARD DESIGNATED FUNDS The Commission, by Board action, has restricted net assets in the amount of $10,732. These restricted net assets of the Horizons Program consist of unpaid balances of Horizons grants, payable in future periods. These designated funds are shown on the Statement of Assets, Liabilities, and Net Assets - Cash Basis as a part of Unrestricted Net Assets. NOTE 3 - DEPOSITS AND INVESTMENTS As of December 31,2007, the cash balance of the Commission was adequately secured by FDIC Insurance. The Foundation's investments are held at a brokerage firm and are not collateralized by the Federal government. It is the opinion of management that the solvency of the referenced financial institution is not of concern at this time. These fund are insured with SIPC. Investments are stated at fair value and consist of: Unrealized Cost Market Gain (Loss) Money Market Funds $ 21,996 $ 21,996 $ Certificates of Deposit 84,726 84,726 Mutual Fund 53,139 53,020 (119) Total $ 159,861 $ 159,742 $ (119) Investment return is summarized as follows: Interest and Dividend Income $ 7,441 Long-Term Capital Gains 3,657 Net Unrealized (Loss) on Investment (3,073) Total Investment Return $ 8,025 I I I I I I I I I I I I I I I I I I I SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina,Kansas NOTES TO FINANCIAL STATEMENTS December 31, 2007 NOTE 5 - OPERATING LEASE The Foundation entered into a three-year operating lease for office equipment on November 27, 2006, requiring monthly payments of $390 plus expenses. This lease allows the Foundation to renew monthly after the three-year term is met. Payments will be made from the following programs: No. of Monthly Total ProQram Payments Pavment Amount Salina Arts & Humanities Foundation 2 $390 $ 780 Horizons 2 $390 780 Smoky Hill River Festival 2 $390 780 $ 2,340 Under this agreement, rent expense for 2007 was $780 for the Horizons Program. The City of Salina pays for six of the scheduled payments. Effective January 1, 2008, the City of Salina will pay all of the copier lease payments.