Audit - 2006 Horizons Program
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SALINA ARTS AND HUMANITIES COMMISSION
HORIZONS PROGRAM
Salina, Kansas
AUDITED FINANCIAL STATEMENTS
Decernber31,2006
WOODS & DURHAM, CHARTERED
Certified Public Accountants
Salina,Kansas
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certified
public
C H ART ERE 0 accountants
INDEPENDENT AUDITOR'S REPORT
Salina Arts and Humanities Commission
Horizons Program
Salina, Kansas
We have audited the accompanying statement of assets, liabilities, and net assets _ cash
basis, of the Horizons Program of the Salina Arts and Humanities Commission (a nonprofit
organization), as of December 31, 2006, and the related statement of support, revenue, and
expenses - 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 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, 2006, and its support, revenue, and expenses for
the year then ended, on the basis of accounting described in Note 1.
'WoodS e't tDurfuzm, Cliti.
January 17, 2007
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
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SALINA ARTS AND HUMANITIES COMMISSION
HORIZONS PROGRAM
Salina,Kansas
STATEMENT OF ASSETS, LIABILITIES, AND NET ASSETS
CASH BASIS
December 31, 2006
ASSETS
Current Assets
Unrestricted
Cash $
Investments
Total Current Assets
Property and Equipment
TOTAL ASSETS $
LIABILITIES AND NET ASSETS
Net Assets
Investment in equipment $
Restricted
Unrestricted
TOTAL LIABILITIES AND NET ASSETS $
The accompanying notes are an integral part
of these financial statements.
-
7,861
152,160
160,021
3,975
163,996
3,975
16,998
143,023
163,996
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SALINA ARTS AND HUMANITIES COMMISSION
HORIZONS PROGRAM
Salina,Kansas
STATEMENT OF SUPPORT, REVENUE, AND EXPENSES
CASH BASIS
Year Ended December 31, 2006
PUBLIC SUPPORT AND REVENUE
Public Support
Private Charitable Contributions $ 22,610
Revenue
Investment Return (Note 3) 9,739
TOTAL PUBLIC SUPPORT AND REVENUE 32,349
EXPENSES
Program Services
Evaluator 6,471
Horizons Grants - 2004 1,613
Horizons Grants - 2005 2,683
Horizons Grants - 2006 43,596
Sudden Opportunity Grants/Training and Development 2,500
Total Program Services 56,863
Supporting Services
General administration 5,422
Fundraising 928
Total Supporting Services 6,350
TOTAL EXPENSES 63,213
DEFICIENCY OF REVENUE OVER EXPENSES (30,864)
Transfers
Transfer from Salina Arts and Humanities Commission
City of Salina support 40,000
NET ASSETS - January 1, 2006 154,860
NET ASSETS - December 31, 2006 $ 163,996
The accompanying notes are an integral part
of these financial statements.
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SALINA ARTS AND HUMANITIES COMMISSION
HORIZONS PROGRAM
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31,2006
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
tax under Section 501 of the Internal Revenue Code, and is not considered a private foundation.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Presentation
The accompanying financial statements are presented on the cash basis; consequently, revenue is
recorded as received and expenditures are recorded as disbursed.
B. The Horizons Program is a project of the Salina Arts and Humanities Commission. Separate
accounting records are maintained, and separate audit reports have been issued for both entities.
C. The Horizons Program considers all highly liquid investments available for current use with an initial
maturity of three months or less to be cash equivalents. Fair market value equals carrying value.
D. 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.
E. Financial statement 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.
F. 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.
G. No amounts have been reported in the financial statements for donated services because no
objective basis is available to measure the value of such services.
H. The amount recorded as property and equipment represents equipment purchased with
undesignated funds held in the Horizons accounts. Such assets are recorded at cost. Depreciation
has not been provided on these assets.
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SALINA ARTS AND HUMANITIES COMMISSION
HORIZONS PROGRAM
Salina,Kansas
NOTES TO FINANCIAL STATEMENTS
December 31,2006
NOTE 1 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
I. Management uses estimates and assumptions in preparing financial statements. Those
estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities, and the reported revenue and expenses. Actual results
could differ from those estimates.
NOTE 2 . RESTRICTED NET ASSETS
The restricted net assets of the Horizons Program consist of unpaid balances of Horizons grants.
NOTE 3 . INVESTMENTS
Investments are stated at fair value and consist of:
Money Market Funds
Certificates of Deposit
Mutual Fund
.cost
$ 908
100,474
47,823
Market
$ 908
100,474
50,778
Total
$ 149,205
$ 152,160
Investment return is summarized as follows:
Interest and Dividend Income
Long-Term Capital Gains
Net Unrealized Gain on Investment
$ 5,714
1,596
2,429
Total Investment Return
$ 9,739
NOTE 4 . CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Foundation to concentrations of credit risk include
cash deposits with commercial banks and a brokerage firm. There were no deposits at risk as of
December 31, 2006. The Foundation's investments at the brokerage firm 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.
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SALINA ARTS AND HUMANITIES COMMISSION
HORIZONS PROGRAM
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31,2006
NOTE 5 - OPERATING LEASE
The Foundation entered into a three-year operating lease for office equipment in December 2003,
requiring monthly payments of $391 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
Program Payments Payment Amount
Salina Arts & Humanities Foundation 2 $404 $ 808
Horizons 2 $404 808
Smoky Hill River Festival 2 $404 808
$ 2,424
Under this agreement, rent expense for 2006 was $808 for the Horizons Program. The City of
Salina reimbursed the above Programs for six of the scheduled payments. A new contract was
negotiated on November 27, 2006, for a term of three years, requiring monthly payments of $390
plus expenses. Future payments will be made as follows for all Programs, including
reimbursements from the City:
Total
Year Amount
2007 $4,848
2008 $4,848
2009 $4,848