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Audit - 2008 I I I I I I I I I I I I I I I I I I I ALL PROGRAMS OF TH SALINA ARTS AND HUMANITIES C MMISSION Salina,Kansas COMPILED FINANCIAL STATE ENTS December 31,2008 WOODS & DURHAM, CHARTERED Certified Public Accountants Salina, Kansas I I I I I I I I I I I I I I I I I I I certified public C H ART ERE D accountants To The Board of Directors Salina Arts and Humanities Commission Sa.lina, Kansas I I We have compiled the accompanying statement of assets, liabilities and net assets - modified cash basis, of All Programs of the Salina Arts and HumanitiesCOmmi$sion (a nonprofit organization) as of December 31, 2008, and the related statement of support, rev~nue and expenses - modified cash basis, for the year then ended, in accordance with Statements on Standards for Accounting and I Review Services issued by the American . Institute of Certified public Accountants. Tlhese financial statements were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principle$. A compilation is limited to presenting in the form of financial statements informaticm that is the representation of management. We have not audited or reYiewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. tWoodS ~ t])urlia~ Cfttl. February 11, 2009 WOODS & DURHAM, CHTD. Certified Public Accountants 1619 E. Iron Avenue - P.O. Box 1516- Salina, Kansas 67402-1516 - Phone 785-825-5494 Fax 785-825-4450 - www.woodsanddurham.com I I I I I I I I I I I I I I I I I I I ALL PROGRAMS OF THE SALINA ARTS AND HUMANITIES COMMISSION Salina, Kansas STATEMENT OF ASSETS, LIABILITIES, AND NET ASSETS MODIFIED - CASH BASIS December 31, 2008 ASSETS Current Assets Cash Investments Total Current Assets Other Asset Beneficial interest in Community Foundation (Note 2) Equipment TOTAL ASSETS LIABILITIES AND NET ASSETS Net Assets Investment in equipment Unrestricted TOTAL NET ASSETS The accompanying notes are an integral part of these financial statements. $ 39,040 276,786 315,826 9,827 16,749 $ 342,402 $ 16,749 325,653 $ 342,402 I I I I I I I I I I I I I I I I I I I ALL PROGRAMS OF THE SALINA ARTS AND HUMANITIES COMMISSION Salina, Kansas STATEMENT OF SUPPORT, REVENUE, AND EXPENSES MODIFIED - CASH BASIS Year Ended December 31,2008 PUBLIC SUPPORT AND REVENUE Public Support Government grants Contracted revenue Contributions Total Public Support Revenue Program revenue Investment Return (Note 3) Miscellaneous Total Revenue TOTAL PUBLIC SUPPORT AND REVENUE EXPENSES Program Services Arts programs Arts services Total Program Services $ 353,340 33,822 188,975 303,541 (17,259) 3,467 627,793 93,138 Supporting Services General administration Fund raising Total Supporting Services 125,420 34,654 TOTAL EXPENSES DEFICIENCY OF SUPPORT AND REVENUE OVER EXPENSES NET ASSETS - January 1, 2008 NET ASSETS - December 31, 2008 The accompanying notes are an integral part of these financial statements. $ 576,137 289,749 865,886 720,931 160,074 881,005 (15,119) 340,772 $ 325,653 I I I I I I I I I I I I I I I I I I I ALL PROGRAMS OF THE SALINA ARTS AND HUMANITIES COMMISSION Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31,2008 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations - This report combines all of the activities of the Salina Arts and Humanities Commission, which are a part of the Arts and Humanities Department of the City of Salina and financially housed in the Salina Arts and Humanities Foundation, as of and for the year ended December 31, 2008, including the work of the Salina Arts and Humanities Commission and its programs - Horizons Program, Smoky Hill River Festival, Community Cultural Development, and Community Art & Design. The combined financial entity, the Foundation, 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. Basis of Accounting - The organization prepares its financial statements on the modified 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. 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 determinabl'e 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. Property and Equipment - The amount recorded as property and equipment represents equipment purchased. Such assets are recorded at cost. Depreciation has not been provided on these assets. It is the Foundation's policy to capitalize equipment in excess of $500. 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, 2008, there were no donor-imposed restrictions on net assets. 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. Salaries have been allocated to the Arts Programs and Arts Services based upon an estimate by management of the time spent by the employees of the particular activities. I I I I I I I I I I I I I I I I I I I ALL PROGRAMS OF THE SALINA ARTS AND HUMANITIES COMMISSION Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31 , 2008 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) Contributed Services (cont'd.) - The City of Salina provides all occupancy related facilities and services to the Commission at no cost to the Commission. No amounts for such have been reported in these financial statements. Routine office and administrative expenses are paid for by the City of Salina and have been recorded under revenue as Government Grants. The related expenses have been charged to Supporting Services in these financial statements. 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, 2008, there were no donor-imposed restrictions on contributions received. 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 - ASSETS TRANSFERRED TO A RECIPIENT ORGANIZATION The Organization permanently transferred $10,000 to the Greater Salina Community Foundation for its benefit. The Foundation has variance power and legal ownership over all property in the fund and the income derived from it. The Foundation may make annual distributions to Salina Arts and Humanities Commission of an amount up to but not to exceed five percent of the fund's net fair market value. Thla Organization has recognized the fair market value of the fund at December 31, 2008, of $9,827, as an other asset in the accompanying Statement of Assets, Liabilities, and Net Assets. NOTE 3 - BOARD DESIGNATED FUNDS The Commission, by Board action, has approved carryover of unrestricted funds as designated funds for certain programs within the Organization. The Horizons Program has board designated funds in the amount of $5,914, and the Salina Arts & Humanities Commission has $17,704 of board designated funds for a total of $23,618. These designated funds are shown on the Statement of Assets, Liabilities, and Net Assets - Modified Cash Basis as part of Unrestricted Net Assets. NOTE 4 - DEPOSITS AND INVESTMENTS As of December 31, 2008, the cash balance of the Commission was adequately secured by FDIC Insurance. A portion of the Commission'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. These investments are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in values of investment securities will occur in the near term. I I I I I I I I I I I I I I I I I I I ALL PROGRAMS OF THE SALINA ARTS AND HUMANITIES COMMISSION Salina, Kansas NOTES TO FINANCIAL STATEMENTS December 31, 2008 NOTE 4 - DEPOSITS AND INVESTMENTS (Cont'd.) Investments are stated at fair value and consist of (not including Greater Salina Community Foundation, presented in Note 2): Fair Market Unrealized Cost Value Gain (Loss) Money Market Funds $ 63,674 $ 63,674 $ Certificates of Deposit 149,812 149,812 Mutual Funds 72,564 63,300 (9,264) Total $ 286,050 $ 276,786 $ (9,264) Investment return is summarized as follows (including Greater Salina Community Foundation): Interest and Dividend Income Realized (Loss) on Investments Net Unrealized (Loss) on Investment $ 12,322 (560) (29,021) $ (17,259) Total Investment Return NOTE 5 - OPERATING LEASE The Commission 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 Through December 31, 2007, the various programs under thIS Foundation have paid this expense. Effective January 1, 2008, the City of Salina paid all of the copier lease payments. NOTE 6 - ARTWORK COLLECTION Since 1977, the Smoky Hill River Festival, a program of the Salina Arts and Humanities Commission, has purchased selected artwork from each annual festival. These works have been inventoried, and are displayed around the community in public spaces. The total of these purchases to date is $43,638. The purchases are charged to expense as acquired. Accordingly, no "inventory" of artwork is recorded in these financial statements. NOTE 7 - FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing the various programs and activities have been summarized on a functional basis in the Statement of Support, Revenue, and Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited, including fund raising expenses.