Teddy Bear Cancer Foundation FINANCIAL STATEMENTS. December 31, 2012 And For The Year Then Ended

Teddy Bear Cancer Foundation FINANCIAL STATEMENTS December 31, 2012 And For The Year Then Ended Teddy Bear Cancer Foundation TABLE OF CONTENTS Decem...
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Teddy Bear Cancer Foundation FINANCIAL STATEMENTS December 31, 2012 And For The Year Then Ended

Teddy Bear Cancer Foundation TABLE OF CONTENTS December 31, 2012

Page INDEPENDENT AUDITORS’ REPORT

1-2

FINANCIAL STATEMENTS: Statement of Financial Position

3

Statement of Activities

4

Statement of Changes in Net Assets

5

Statement of Functional Expenses

6

Statement of Cash Flows

7

Notes to Financial Statements

8-11

INDEPENDENT AUDITORS’ REPORT To the Board of Directors of Teddy Bear Cancer Foundation:

We have audited the accompanying financial statements of Teddy Bear Cancer Foundation (a nonprofit organization), which comprise the statement of financial position as of December 31, 2012, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

P.O. Box 57, Los Olivos, CA 93441 • (805) 689-5880 • Fax (810) 882-5880 • [email protected]

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Teddy Bear Cancer Foundation as of December 31, 2012, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Los Olivos, California July 25, 2013

P.O. Box 57, Los Olivos, CA 93441 • (805) 689-5880 • Fax (810) 882-5880 • [email protected]

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Teddy Bear Cancer Foundation Statement of Financial Position December 31, 2012

ASSETS Current Assets Cash and cash equivalents Pledges receivable Prepaid expenses and other assets

$

Total Current Assets

508,399 6,175 4,525 519,099

Fixed Assets, net (note 3)

6,923

Total Assets

$

526,022

$

36,246 48,272

LIABILITIES AND NET ASSETS Current Liabilities Accounts payable Grants payable Total Current Liabilities

84,518

Net Assets Unrestricted: Undesignated Temporarily restricted (note 4)

435,329 6,175

Total Net Assets

441,504

Total Liabilities and Net Assets

$

The accompanying notes are an integral part of these financial statements. 3

526,022

Teddy Bear Cancer Foundation Statement of Activities For the Year Ended December 31, 2012 Temporarily Restricted

Unrestricted

Total

Revenues, Gains, and Other Support Contributions and grants In-kind Contributions Investment income

$

375,459 116,585 270

Fundraising events - gross revenue Direct costs Net revenues from fundraising events Total Revenues, Gains, and Other Support

Net assets released from restrictions

$

6,175 -

$

381,634 116,585 270

510,724 (138,817) 371,907

-

510,724 (138,817) 371,907

864,221

6,175

870,396

44,776

(44,776)

619,081 73,167 71,136

-

619,081 73,167 71,136

763,384

-

763,384

-

Expenses Program Expenses Management and general Fundraising Total Expenses Change in Net Assets

$

145,613

$

(38,601)

The accompanying notes are an integral part of these financial statements.

4

$

107,012

Teddy Bear Cancer Foundation Statement of Changes in Net Assets For the Year Ended December 31, 2012

Unrestricted Net Assets Net assets at December 31, 2011

$

289,716

Change in net assets Net assets at December 31, 2012

Temporarily Restricted Net Assets $

145,613 $

435,329

44,776

Totals $

(38,601) $

6,175

334,492 107,012

$

441,504

The accompanying notes are an integral part of these financial statements. 5

Teddy Bear Cancer Foundation Statement of Functional Expenses For the Year Ended December 31, 2012

Program Expense Salaries Employee benefits Payroll taxes Total Salaries & Related Expenses

$

Management & General

172,193 19,921 12,595 204,709

$

30,314 3,453 2,183 35,950

Total Expenses

Fundraising $

30,677 3,188 2,016 35,881

$

233,184 26,562 16,794 276,540

Direct financial assistance Family support events Total Program Costs

268,169 9,331 277,500

-

-

268,169 9,331 277,500

Advertising Auto and travel Bank charges Uncollectible pledges receivable Depreciation Insurance Meetings Occupancy Office supplies Outside services Postage and delivery Printing Telephone Total Operating Expenses

1,143 3,521 7,029 26,531 4,619 66,984 4,189 17,306 5,550 136,872

535 4,606 10,460 3,514 935 791 5,012 448 6,971 1,007 1,684 1,254 37,217

15,223 545 1,061 966 5,012 1,020 7,745 1,093 1,549 1,041 35,255

15,223 2,223 4,606 10,460 3,514 5,517 8,786 36,555 6,087 81,700 6,289 20,539 7,845 209,344

Total Expenses

$

619,081

$

81%

73,167 10%

$

71,136 9%

The accompanying notes are an integral part of these financial statements. 6

$

763,384 100%

Teddy Bear Cancer Foundation Statement of Cash Flows For the Year Ended December 31, 2012

Cash Flows Provided By Operating Activities: Change in net assets Adjustments to reconcile increase in net assets to cash provided by operating activities: Depreciation Changes in: Pledges receivable Prepaid and other assets Accounts payable and accrued expenses

$

107,012

3,514 38,601 (2,525) 81,149

Net cash provided by operating activities

227,751

Cash Flows Used In Investing Activities: Acquisition of property and equipment

(684)

Net cash used in investing activities

(684)

Net increase in cash and cash equivalents

227,067

Cash and cash equivalents at Beginning of Year

281,332

Cash and ash Equivalents at End of Year

$

508,399

$

116,585

Supplemental Cash Flow Information In-kind donation of goods for program services

The accompanying notes are an integral part of these financial statements.

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Teddy Bear Cancer Foundation Notes to Financial Statements December 31, 2012

(1)

NATURE OF ACTIVITIES Teddy Bear Cancer Foundation (the Foundation) is a nonprofit organization located in Santa Barbara, California established to ensure that children with cancer receive the undivided comfort of their parents during the treatment and recovery process. The Foundation provides middle to low-income families with financial aid for rent, mortgage, utilities, and car payments, as well as other supportive services, thereby allowing families to focus on what is truly important – their children.

(2)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The Foundation uses the accrual basis of accounting, recognizing revenues when earned and expenses when incurred. Financial Statement Presentation The Foundation is required by generally accepted accounting principles 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 Foundation is required to present a statement of cash flows. The accounting and reporting method used by the Foundation classifies resources by their nature and purpose, based on the presence or absence of donor-imposed restrictions, into three classes of net assets: Unrestricted net assets - Unrestricted net assets are not subject to donorimposed stipulations. All expenses, revenues, gains, and losses that are not temporarily or permanently restricted by donors are included in this classification. Unrestricted net assets may include designations by the Board of Directors. Temporarily restricted net assets – Temporarily net assets include gifts subject to donor-imposed stipulations that may or will be met either by actions of the Foundation and/or by the passage of time. Permanently restricted net assets – Permanently restricted net assets are subject to donor-imposed stipulations that they be maintained in perpetuity by the Foundation. Generally, the donors of these assets permit the Foundation to use all or part of the income earned on related investments for general or specific purposes. The Foundation did not classify any assets as permanently restricted as of December 31, 2012.

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Teddy Bear Cancer Foundation Notes to Financial Statements December 31, 2012

Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments purchased with an original maturity of three months or less. Property and Equipment Property and equipment which is purchased or constructed is stated at cost; assets acquired by gift or bequest are stated at fair value at the date of acquisition. The Foundation uses the straight-line method for the computation of depreciation of longlived assets over the assets estimated useful life which ranges from 3 to 5 years. The Foundation capitalizes all long lived assets with a value of $500 or more. Normal repair and maintenance expenses and equipment replacement costs are expensed as incurred. Contributions Receivable (Pledges) Unconditional promises to give (pledges) are recorded as contribution income and as receivables. Long-term pledges are discounted to present value using a discount rate commensurate with the risk involved. An allowance for uncollectible pledges is estimated by management based on such factors as prior collection history, type of contribution and the nature of the fund-raising activity. Management believes all receivables are collectible and thus no reserve has been reported at December 31, 2012. Conditional pledges are recognized when the conditions on which they depend are substantially met. No conditional pledges receivable existed at December 31, 2012. Contributions The Foundation reports grants and gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or a purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements as a release from restrictions. Donor restricted contributions whose restrictions are met within the same year as received are reported as unrestricted contributions in the accompanying financial statements. The Foundation reports gifts of property and equipment (or other long lived assets) as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Income Taxes The Foundation is exempt from federal and California income taxes under Section 501(c)(3) of the Internal Revenue Code and Section 27301d of the California 9

Teddy Bear Cancer Foundation Notes to Financial Statements December 31, 2012

Revenue and Taxation Code. foundation.

The Foundation is not considered a private

In June 2006, the Financial Accounting Standards Board issued ASC 740-10 (formerly known as FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes), which prescribed a comprehensive model for how an organization should measure, recognize, present, and disclose in its financial statements uncertain tax positions that an organization has taken or expects to take on a tax return. The Foundation has adopted ASC 740-10. There was no impact to the Foundation's financial statements as a result of the implementation of ASC 740-10. The Foundation evaluates uncertain tax positions, whereby the effect of the uncertainty would be recorded if the outcome was considered probable and reasonably estimable. As of December 31, 2012, the Foundation had no uncertain tax positions requiring accrual. The Foundation files tax returns in California and U.S. federal jurisdictions. Functional Allocation of Expenses The costs of providing the various programs and supporting services have been summarized by function in the Statement of Functional Expenses. Direct costs are charged directly to the appropriate program. Joint costs such as insurance, rent and facility maintenance are allocated by using the direct costs of each program and supporting services. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimated used in preparing these financial statements include:   

Allocation of certain expenses by function Depreciable lives and estimated residual value of property and equipment Allowance for uncollectible accounts, grants, contracts and pledges receivable

It is at least reasonably possible that the significant estimates will change within the next year. Donated Goods and Services Donated goods and services received by the Foundation are recorded at fair market value at the time of the donation. During 2012, numerous volunteers gave their time and expertise to the Foundation in a wide variety of areas including grants and scholarship committees; administrative activities, technical and financial advice; and 10

Teddy Bear Cancer Foundation Notes to Financial Statements December 31, 2012

office and public relations activities. These contributions, despite their considerable value to the mission of the Foundation, are not reflected in the financial statements. (2)

CONTINGENT LIABILITY As of December 31, 2012, the Foundation had a conditional liability for support pledged to families of children with cancer. Families may request direct financial assistance for up to three years from the time the child has been diagnosed and the family has been approved by the board

(3)

FIXED ASSETS Fixed assets at December 31, 2012 were as follows:

Equipment Other Total Property and Equipment Accumulated Depreciation

(4)

$

10,797 8,795 19,592 (12,669)

$

6,923

TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets as of December 31, 2012 were available for the following purposes: Restricted for time

(5)

$ 6,175

CONCENTRATIONS

Individual donors are primarily from Santa Barbara and Ventura County, as are the clients of the Foundation.

(6)

SUBSEQUENT EVENTS

The Foundation has evaluated subsequent events through July 25, 2013, the date which the financial statements were available to be issued. Management has determined that no subsequent event requiring disclosure or significantly impacting disclosure has occurred.

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