Audit - 2007/2008
BENSON ACCOUNTING, CPA, PA
JOEL BENSON, CPA MARY BENSON, CPA
1929 S. OHIO ST.
SALINA, KS 67401
PH: 785-827-3157 FAX: 785-827-3159
To the Board of Directors and Executive Director of
SALINA DOWNTOWN, INC.
In accordance with professional standards we are required to communicate to
management any suggestions we may have pertaining to the maintenance of the books
and records of an organization upon completion of our review.
During the review, the following items were noted as areas for potential improvement,
which if implemented will improve the internal controls related to the accuracy and
completeness of the books and records of the Organization:
1) It appears that the Organization is pursuing more grants in an effort to generate
additional revenue sources. Although this is a great source for funding, some
grants require specific utilization of those funds. The funding is being properly
used, but the implementation of a tracking mechanism would be extremely
beneficial in the various stages of following through the grant obligations. We
recommend that such a mechanism be developed and that communications
relating to the satisfaction of the grants be communicated to the accountants as
soon as possible on an ongoing basis.
We are confident that with the implementation of these suggestions, the internal
controls and efficiency of the accounting function will be improved.
Very truly yours,
(M~P'/}
Benson Accounting, CPA, PA
May 6, 2009
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SALINA DOWNTOWN, INC.
Financial Statements
And
Accountants' Review Report
December 31, 2008 & 2007
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Accountants' Review Report
Statements of Financial Position
Statements of Activities
Statements of Cash Flows
Notes to the Financial Statements
Table of Contents
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BENSON ACCOUNTING, CPA, PA
JOEL BENSON, CPA - MARY BENSON, CPA
1929 S. Ohio St.
SALINA, KS 67401
PH: 785-827-3157 FAX: 785-827-3159
Accountants' Review Report
To the Board of Directors of
SALINA DOWNTOWN, INC.
We have reviewed the accompanying statements of financial position of Salina
Downtown, Inc. (a nonprofit organization) as of December 31, 2008 & 2007, and the
related statements of activities and cash flows for the years then ended in accordance
with Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information inclluded in these
financial statements is the representation of the management of Salina Downtown, Inc.
A review consists principally of inquiries of Organization personnel and analytical
procedures applied to financial data. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made
to the accompanying financial statements in order for them to be in conformity with
generally accepted accounting principles.
BENSON ACCOUNTING, CPA, PA
By: ~~CIIJ
Joel Benson, CPA
May 6, 2009
Salina, KS
I SALINA DOWNTOWN, INC.
I STATEMENTS OF FINANCIAL POSITION
For the Years Ended December 31,2008 & 2007
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I ASSETS
2008 2007
Current Assets
I Cash on hand $ 60 $ 55
Cash in banks 140,572 104,931
Accounts receivable 2,394 1 ,767
I Prepaid expenses 570 837
$ 143,596 $ 107,590
I Notes Receivable $ 10,236 $ 0
Property and equipment, net $ 1.362 $ 2.489
I Total Assets $ 155.194 $ 110,079
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I LIABILITIES & NET ASSETS
I Current Liabilities
Accounts payable $ 4,411 $ 2,290
Fayade grant payable 30,236 17,456
I Payroll taxes payable 1.609 1.554
$ 36,256 $ 21,300
I Notes Payable $ 10.350 $ 0
Total Liabilities $ 46,606 $ 21 ,300
I Net Assets
Unrestricted $ 108,588 $ 88,779
I Permanently restricted $ 0 $ 0
$ 108.588 $ 88.779
I Total Liabilities and Net Assets $ 155.194 $ 110.079
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I See accountants' review report and accompanying notes.
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I SALINA DOWNTOWN, INC.
I STATEMENTS OF ACTIVITIES
For the Years Ended December 31,2008 & 2007
I UNRESTRICTED NET ASSETS 2008 2007
Revenues
I Service fees $ 92,734 $ 87,353
Organization contribution 55,000 40,000
Destination marketing 3,600 6,326
I Partnership income 3,525 3,850
Interest 2,379 4,982
C & A Annual Meeting 1,202 1,089
I Business Support & Recruitment-Other 527 4,845
Business Support & Recruitment-Grants 500 14,180
Miscellaneous 4 178
I Total Revenue $ 159.471 $ 162.803
I Program Expenses
Organizational Expenses
Salaries & Wages $ 48,417 $ 58,491
Outside professional services 11,632 584
I Office rent 6,840 6,814
Accounting & legal 5,281 5,010
'I Payroll taxes 4,581 4,584
Postage & printing 2,148 6,887
Office supplies 2,039 2,472
I Telephone 1,768 1,122
Equipment & building maintenance 1,704 3,276
Dues & subscriptions 1,696 1,237
I Insurance 1,627 1,418
Utilities 1,376 1,858
Depreciation 1,127 1,696
I Travel 1,103 576
Other organization expenses 286 328
Small equipment purchases 219 474
I Professional Development 170 2,226
Conferences 88 211
Taxes 20 40
I Advertising 0 94
Total Organizational Expenses $ 92,122 $ 99,398
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I See accountants' review report and accompanying notes.
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SALINA DOWNTOWN, INC.
STATEMENTS OF ACTIVITIES (CONTINUED)
For the Years Ended December 31,2008 & 2007
Program Expenses (Continued) 2008 2007
Committee Expenses
Business Support Expenses
Environment $ 5,874 $ 908
Seminars 1,303 4,999
Miscellaneous 479 1,785
Development Study 0 11 ,000
Parking Study 0 5.000
Total Business Support Expenses $ 7,656 $ 23,692
Destination Marketing Expenses
Special Events $ 16,006 $ 4,431
Marketing 14,251 15,827
Miscellaneous 5,590 524
Bravo Salina 425 5,075
Total Destn. Marketing Expenses $ 36,272 $ 25,857
Communications & Advocacy Expenses
Communications $ 1,880 $ 7,480
Meetings 1,553 2,871
Other 179 463
Total Comm. & Advocacy Exp. $ 3,612 $ 10.814
Total Committee Expenses $ 47.540 $ 60.363
Total Program Expenses $ 139.662 $ 159.761
Change in Unrestricted Net Assets $ 19,809 $ 3,042
Unrestricted Net Assets - Beginning of Year $ 88.779 $ 85.737
Unrestricted Net Assets - End of Year $ 108,588 $ 88,779
See accountants' review report and accompanying notes.
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SALINA DOWNTOWN, INC.
STATEMENTS OF ACTIVITIES (CONTINUED)
For the Years Ended December 31, 2008 & 2007
PERMANENTLY RESTRICED NET ASSETS 2008 2007
Fagade Grant Revenues $ 50,000 $ 15,000
Fagade Grant Expenses $ (50,000) $ (15,031)
Change in Permanently Restricted Net Assets $ (0) $ (31)
Permanently Rest. Net Assets - Beginning of Year $ 0 $ 31
Permanently Rest. Net Assets - End of Year $ 0 $ 0
See accountants' review report and accompanying notes.
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SALINA DOWNTOWN, INC.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended December 31,2008 & 2007
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies of Salina Downtown, Inc. is as follows:
Business Activitv - The function of Salina Downtown, Inc. is to improve the image of
downtown Salina, Kansas through cooperation, promotion, business retention,
recruitment and enhancement of physical appearance. The Organization receives funds
in the form of assessments to businesses located in the Business Improvement District.
These assessments are invoiced and collected by the City of Salina and paid to the
Organization.
Taxes - Salina Downtown, Inc. is exempt from federal and state income taxes under
Internal Revenue Code Section 501 (c)(6) and similar state provisions. The Organization
prepares its financial statements on the accrual method of accounting.
Method of Accountinq - The Organization prepares its financial statements according to
Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statements for
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. In addition, the Organization is required to present a statement of
cash flows.
The Organization also follows SFAS No. 116, "Accounting for Contributions Received and
Contributions Made", whereby contributions received are recorded as unrestricted,
temporarily restricted, or permanently restricted support depending on the existence
and/or nature of any donor restrictions. Restricted net assets are reclassified to
unrestricted net assets upon satisfaction of the time or purpose restrictions.
Accounts Receivable - Salina Downtown, Inc. considers accounts receivable to be fully
collectible; accordingly, no allowance for doubtful accounts is required. If amounts
become uncollectible, they will be charged to operations when that determination is
made. Through City of Salina ordinance, all accounts are to be billed and collected by
the City of Salina for distribution to Salina Downtown, Inc. Therefore, all accounts
uncollected by the City will remain on the receivables list of the City, and not the books of
Salina Downtown, Inc. Accounts receivable included on the books of Salina Downtown,
Inc. include only those payments actually received from Business Improvement District
patrons through the end of the year which have not been paid to Salina Downtown, Inc.
Depreciation - Capital assets are recorded at cost. Depreciation is determined using
both straight-line and accelerated methods over the estimated useful life of each asset.
Reclassification - Certain amounts in the 2007 financial statements have been
reclassified to conform to the 2008 presentation.
See accountants' review report.
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SALINA DOWNTOWN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,2008 & 2007
Use of estimates - The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect certain reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and certain reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE B - CONCENTRATIONS OF CREDIT RISK
The Organization maintains cash balances in banks. The money market fund account
held at UMB Bank is not insured by the Federal Deposit Insurance Corporation.
The Organization derives the vast majority of its revenues from the City of Salina, Kansas
either through special budgeted funds or through sales tax revenues allotted to Salina
Downtown, Inc. The Organization conducts all of its business and derives all of its
funding as it relates to the geographical downtown district of Salina, Kansas.
NOTE C - ORGANIZATION CONTRIBUTION
The Organization has entered into an agreement with the City of Salina to merge private
efforts with city government efforts toward the development of plans and programs to
assure the vitality and prosperity of Salina's Central Business District. The agreement
provides the City and Salina Downtown, Inc. will jointly fund these programs.
Contributions from the City of Salina for 2008 & 2007 were $40,000 each. In addition,
Salina Regional Health Center participates in a similar program and contributed $15,000
during the year ended December 31,2008. No amount was contributed by the hospital in
2007.
NOTE D - LEASES
The Organization had entered into a 1-year lease with the current landlord spanning the
period February 1, 2008 through January 31, 2009 payable on a monthly basis at $570
per month. Lease expense for the year ended December 31, 2008 & 2007 was $6,840
and $7,270, respectively. There are no future minimum lease payments at December 31,
2008 or 2007 as January's lease payments was paid by December 31, 2007 and 2008.
Subsequent to year end, the Company has entered into a lease at the same location for
the amount of $570 per month for a duration of 6 months.
NOTE E - FUNCTIONAL CLASSIFICATION OF EXPENSES
Salina Downtown Inc.'s expenses are primarily program related with an insignificant
amount of expenses related to administration and fund raising. Thus, thli3 statement of
functional expenses is not presented.
See accountants' review report.
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SALINA DOWNTOWN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,2008 & 2007
NOTE F - CASH ON HAND AND IN BANKS
Cash on the Statement of Cash Flows includes the following:
2008
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86,970
50,000
3.602
$ 140,632
Cash on hand
Cash in bank - Money Market Fund
Cash in bank - Certificate of Deposit
Cash in Bank - Operating
$
2007
$ 55
96,591
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8,340
$ 104.986
For purposes of the Statement of Cash Flows, the Organization considers all highly liquid
investments with a maturity of three months or less to be cash equivalents.
NOTE G - PROPERTY AND EQUIPMENT
A detail of property and equipment, recorded at cost, is as follows:
2008 2007
Furniture and Fixtures $ 9,221 $ 9,221
Less Accumulated Depreciation (7.859) (6.732)
Net Property and Equipment $ 1 ,362 $ 2.489
It is the policy of the Organization to capitalize assets with useful lives beyond 1 year and
a cost in excess of $500.
NOTE H - NOTEPAYABLE/NOTE RECEIVABLE
During the year ended December 31, 2008, the Organization entered into an agreement
with the Kansas Center for Entrepreneurship, Inc. (KCEI) whereby the Organization has
applied for and was granted a loan to award to a member organization (Salina Tacos)
carrying an interest rate of 0% for a term of 6 years. For purposes of this loan, the
Organization oversees the administration of the loan and related payments. The original
loan amount was $10,350 and is payable in monthly installments of $143.75. However,
from this payment of $143.75, the Organization is allowed a monthly administrative
charge of $30. The amount due to KCEI monthly is $113.75. Should Salina Tacos
default on this loan, under the terms of the agreement, a workable plan will be
determined.
Loan maturity amounts due to KCEI are $1,365 annually for years ending December 31,
2009 through 2014.
Loan Receipts scheduled for the next six years is $1,725 annually for the years ending
December 31,2009 through 2013, and 1,581 for the year ending 2014.
See accountants' review report.
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SALINA DOWNTOWN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
For the Years Ended December 31,2008 & 2007
NOTE I - DEVELOPMENT INCENTIVE PROGRAM (FACADE GRANT)
The City of Salina has joined resources with Salina Downtown, Inc. in an effort to improve
the aesthetics of the Business Improvement District through the repair and maintenance
of exterior building fac;ades. Property owners and/or tenants who are in good standing
with the Business Improvement District (service fees are current) are eligible to apply.
During the years ended December 31, 2008 & 2007, City contributions to Salina
Downtown, Inc. amounted to $50,000 & $15,000, respectively. Payments committed to
Downtown Patrons from Salina Downtown, Inc. for 2008 & 2007 amounted to $50,000 &
$15,031, respectively. Amounts not expended to Downtown shop and property owners
are subject to return to the City of Salina upon request, but may be rolled into the
following year's grant allocation total. As of December 31, 2008 & 2007, all amounts
have been earmarked for distribution. The grant activity is listed in the accompanying
financial statements as Permanently Restricted activities due to the specificity of use of
these funds.
See accountants' review report.
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