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Audit - 2008 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 31,2008 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 INDEPENDENT AUDITOR'S REPORT Salina Arts and Humanities Commission Horizons Program Salina, Kansas We have audited the accompanying statements of assets, liabilities, and net assets - mOdified cash basis, of the Horizons Prograrn of the Salina Arts and Humanities Commission (a nonprofit organization), as of December 31, 2008, and the related statement of. support, revenue, and expenses - modified cash basis, for the year then 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 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disClosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, these financial statements. were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets,. liabilities, and net assets of the Horizons Program of the Salina Arts and Humanities Commission as of December 31, 2008, and its support, revenue, and expenses for the year then ended, on the basis of accounting described in Note 1. WoodS eft CDurliam, Clitt! 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 SALINA ARTS AND HUMANITIES COMMISSION HORIZONS PROGRAM Salina, Kansas STATEMENT OF ASSETS, LIABILITIES, AND NET ASSETS MODIFIED CASH BASIS December 31, 2008 ASSETS Current Assets Unrestricted Cash Investments Total Current Assets $ 23,410 120,192 143,602 3,975 $ 147,577 Property and Equipment TOTAL ASSETS LIABILITIES AND NET ASSETS Net Assets Investment in equipment Unrestricted $ 3,975 143,602 TOTAL LIABILITIES AND NET ASSETS $ 147,577 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 MODIFIED CASH BASIS Year Ended December 31,2008 PUBLIC SUPPORT AND REVENUE Public Support Private Charitable Contributions $ 37,261 Revenue Miscellaneous Income 293 Investment Return (Note 3) (7,871 ) Total Revenue (7,578) TOTAL PUBLIC SUPPORT AND REVENUE 29,683 EXPENSES Program Services Evaluator 6,987 Horizons Grants - 2005 123 Horizons Grants - 2006 461 Horizons Grants - 2007 1 0,433 Horizons Grants - 2008 53,800 Sudden Opportunity GrantslTraining and Development 1,900 Total Program Services 73,704 Supporting Services General administration 4,431 Fund raising 3,380 Total Supporting Services 7,811 TOTAL EXPENSES 81,515 DEFICIENCY OF REVENUE OVER EXPENSES (51,832) Transfers Transfer to Salina Arts and Humanities Commission (1,500) Transfer from Smoky Hill River Festival 35,000 Change in Net Assets (18,332) NET ASSETS - January 1, 2008 165,909 NET ASSETS - December 31, 2008 $ 147,577 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 NOTES TO FINANCIAL STATEMENTS December 31, 2008 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations - 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. 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. A separate audit report has been issued for the Smoky Hill River Festival as of September 30, 2008, and for the Salina Arts and Humanities Commission as of December 31,2008. 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. Property and Equipment - The amount recorded as equipment represents equipment purchased at cost. Depreciation has not been provided on this equipment. 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, 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, 2008, there were no donor-imposed restrictions on contributions received. 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, 2008 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) 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. 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 $5,914. 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, 2008, the cash balance of the Commission was adequately secured by FDIC Insurance. A portion of 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 funds 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. Investments are stated at fair value and consist of: Unrealized Cost Market Gain (Loss) Money Market Funds $ 1,335 $ 1,335 $ Certificates of Deposit 78,017 78,017 Mutual Fund 54,386 40,840 (13,546) Total $ 133,738 $ 120,192 $ (13,546) Investment return (loss) is summarized as follows: Interest and Dividend Income $ 5,556 Net Unrealized (Loss) on Investment (13,427) Total Investment Return $ (7,871 ) 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, 2008 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. Through December 31, 2007, the various programs under the Foundation have paid this expense. Effective January 1, 2008, the City of Salina paid all of the copier lease payments. NOTE 6 - 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 fundraising expense.