FLORENCE CRITTENTON SERVTCES,INC. Financial $tatements June 30,2013
With Independent Auditor's Report
FLORENCE CRITTENTON SERVICES, INC. Table of Contents
June 30,2013
INDEPENDENT AUDITOR'S
FINANCIAL STATEMENTS:
REPORT...............
.,,,,....,.......1
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IrllGHRIl B. HA]lllfl0lls, GPA
Address:
307 Sabot Lane Matthews, N.C. 28105 Mailins Address: P. O.Box2726 Matthews. N.C. 23106
Office
Phone (704)846-5721
Fax
(704)
846-4857
E-mail: MBHcpa@carolina.rr,com
INDEPENDENT AUDITOR'S REPORT To the Board of Directors
of
Florence Crittenton Services, lnc, Charlotte, North Carolina
I have audited the accompanying furancial statements of Florence Crlttenton Services, Inc, (a nonprofit organization), which comprise the statement of financial position as of June 30,2013, and the related stetements 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 siatements that are free from material misstatement, whether due to fraud or error,
Auditor's Responsibility
My responsibility is to express an opinion on these financial statements based on my audit, I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materiat
misstatement.
Al
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 enor. In making those risk assessments, the auditor considers intemal control relevant to the entity's preparation and fair presentation of the financial statements in order to dgfign audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity's internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonabieness of significant accounting estimates made by managemento as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is suffrcient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the furancial statements referred to above present fairly, in all material respects, the financial position of Florence Ctittenton Services, Inc, u of June 30,2Q73, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally acoepted in the United States of America.
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Report on Summarized Comparative Information
I have previously audited
the Florence Crittenton Semtcesr
lnc
financial statements, and my report dated January l
2013, expressed an unmodified opinion on those audited financial statements. comparative information presented herein as of and for the year ended June 30, respects, with the audited financial statements from which it has been derived.
A, An I
November 21,2013
[l/.,-U L'
t
In my opinion, the
l,
summarized
2AQ; is consistent, in all material
lfu*'
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FLORENCE CRITTENTON SERVICES, INC. Statement of Financlal Position
June 30, 2013, with prior yev comparative totals
Unrestricted
June 30,2013 Permanently Restricted Resnided
$
$.
Iune 30,2012
Temporarily
Totals
Comparative TotaIs
Assets Operating assets: Cash and cash equivalents Investments Receivables -
167,720 52,409
$-
203,042
$ 68,953
s
167,720 324,403
194,384
293,702
Fees from govemmental agencies
49,449 3,648 2,986
Other Inventory
Property and Equipment (net) Prepaid Expenses
48,449
79,716
227,886
26',1,667
2,986
2,621
1,399,720
1,399,720
1,44'l,3gl
g,0lg
9,018
10,469
224,239
Investments Controlled by
_.-, ,.,.
Foundations
,,,6,?61
,.._l51,se? ,
_.
1fq,,p58,,
ls0,q03
Total
Liabilities and Net Assets Liabilities: Accrued payroll
s47,779$-$-
Accounts payable
$
23,591
47,779 23,591
$
Accrued compensated absences
Notes payable
Total liabilities
Total
52,t42 665,428
52"142
62,3'17
665,428
760,t28
788,940
798.940
883,186
894,009 433,54t
Net assets $
47,561 13,120
1,682,949 q,
433,541
The notes tofinancial statemarts firc an integral part of thts statement
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223,550
$
223,550
r,551,100 $2,340,040
r.562.666
52.445.8s2
rLoRaNcE CRITTENTON SERYICES, INC. Statement of Activities
fune 30, 2013, with prior year comparative totals
June 30.201i
Temporarily Petmanently Unrestricted
Restricted
Restricted
Totals
June 30,2012 Comparative Totals
Support and Revenue Support
Confibutions
$
United Way Grants Revenue Program service fees: Governmental agencies
Other
86,715 33,355
$-
$
224,239
244,364
2g,gg2
$30,369 direct cost) Net assets reloased from restriction
t06,592 ,
fi
1,299,017
1,299,017 17,453
Investment income (loss) Special events (net of
86,715
257,593 244,364
|
1Aq
15,287
315?4q9 (308,379) (7,080)
125,t26 263,349 303,290
tt,453 45,glg
1,056,29A 1,097 6,993
t06,592
89,425
_
_
Total support and revenue
Ixpenses Program services Management and general
Fundraising
-
1,923,397
79,369 60463 ,,
Total expenses Change in Net Assets Net Assetso Beginning
5l
Net Assets, Ending
43 J
The notes toft,naneial statements ilru an integrul paft
of
this statemenl
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1,923,39'7
1,750,141
79,369
83,954
60,463
77
"517
FLORENCE CRITTENTON SERVTCES' INC. Statement of Functional Expenses
June 30, 2013, with prior year compariltive totals
Iune 30,2013 Prugram Services
Prior Year Comparattve Totals
Management and General
Personnel Salaries
Payroll taxes Employee benefits
$1,176,795
s
41,926
99,427
3,186
113
$
32,789 2,492
$ 1,251,510
95,105
t57
$ 1,150,676 82,'l5g 109.485
Total personnel
Other Expenses Food
91,343
Building repairs and maintenance
Utilities Supplies Professional fees Insurance
Technology Equipment lease Transportation Interest expense Training and education Client recreation and assistance
Telephone Subscriptions and publications
Other
70,347
2,245
4,916
67,649 14,239 26,309 40,463 25,436 21,342
1,927
3,655
l9l
3,614 494
9,207 5,31
56 1,108 362 300
1
554
l8l
15,101
:"
14,769 8,880
20,605
91,343
75,394
77,508 73,130
69,919 67,253
18,043
24,161 48,206 39,396
36,009 45,930 27,099
24,776
21,885
23,103
16,062 14,769
15,6,97
8,880
16,3;55
20,605
14,395 7,3'77
5,329 16.407
1,909,595
8,631 13,625
225
150
544
354
5,941
s,739
9,006 14,523 15.933
1,924,204
75,834
57,700
1,957,739
16,910
Total other expenses Total expenses before depreciation Depreciation Total expenses
The notes toftnancial stalements are an integralpaft
oL*i snt"
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ent
FLORENCE CRITTENTON SERVICES, INC. Statement of Cash Flows
For the Year Ended rane 30,2013, with prioryear compqrative totqls
2013
2012
Operating Activities:
$
Change in net assots
Adjustments to reconcile change in net assets to cash flows from operating activities: Depreciation expense
(11,566)
$
l02,ln7
105,490
Non-cash conhibution Realized and unrealized (gains) losses on investments Change in Receivables
(7,000) (40,656)
5,231
70,049 (365)
Inventory Prepaid expenses
(65,940)
(i87)
1,450
Accrued payroll Accounts payable Accrued compensated absences
:t36
2t8
8,:l12 Q,n64)
r0.471
(10,235) 1t7,845
Cash flows from operating activities
Investing Activities: Purchases of investrnents Proceeds from the sale of invesfinents
(7,033) (24.300)
-
Purchase offixed assets
(65,972)
(13,885) 66,711
(49.809)
Cash flows from investing activities
__'J49,809)
52,8i26
Financing Activities: Principal paid on notes payable
_
Cash flows from furancing activities
Net Change in Cash and Cash Equivalents
(94,700)
(92,771)
(94,700)
(92,11!
Q6,664)
(54,245)
194,394 $ t67,720
Cash and Cash Equivalentso Beginning Cash and Cash Equivalents, Ending Interest expense paid
The notes to financial statemants arc an integrul purt af this statimen;t
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259,629
$
194,384
s 14,768 $
16.697
FLORENCE CRITTENTON SERVICES, INC. Notes to Financial Statements
For the Year Ended June 30,2013
I.
NATURE OFOPERATIONS: Orsanipation Florence Crittenton Services, Inc., (FCS) is incorporated under the laws of the State of North Carolina as a nonprofit
organization. FCS was organized in 1903 and opened Boulevard, Charlotte, North Carolina.
its first home in 1905. FCS is located at 1300 BJffie
Vision FCS is a client-centered program with comprehensive innovative services to improve the well being
of
single
pregnant and non-pregnant adolescents, women and their children and families.
Burnose The mission of FCS is to promote health and hope for tomonow's children by providing comprehensive health, educational, pregnancy prevention and social services for single pregnant and non-pregnant adolescents, young womeq and their families. The major programs of FCS are as follows:
Residentiql,Materniq)- The primary operation of FCS is a 32 bed,24-hour residential maternity program for single pregnant women age l0 and older. Through the provision of prenatal and medical carq educalion, vocational, individual and group counseling, parenting education and adoption support, life skills, and substimce abuse intervention, prevention and treatment, FCS provides an opportunity for vulnerable young mothers to lave healthy pregnancies and healthy babies as well as gain new skills and tools to become successful in the filure. During the year, FCS provided 5,018 days of care to 65 maternity clients.
*
Sarah's. House. Mother'Child Program The purpose of this program is to assure a safe, supportive environment in which teen mothers in foster care can acquire the knowledge and skills to become effective parents and learn life skills that promote self-sufficiency. Sarah's House provides six mothers and their chillren in a 24-hour residential program for adolescent mothers and their children who need placement together. During the year, FCS provided 2,572 days ofcare to l6 clients. Prenatal/Parcntiry{ Education Program (PPEP.I This non-residential home visitation program offers after,;are services for former clients living in Mecklenburg, Gaston, and surrounding counties. Serviies are provided for up to three years or longer ifneeded. During the year, 16 mothers and children were served.
Legaq) Hall: Prepqration
for Adult Livinp Services (PAL9 This independent living program focuses on prevention and is designed to aid non-pregnant at-risk females, ages 16-21, nbreaking the cyile of adolesr;enr pregnancy, child abuse, substance abuse and neglect that is a barrier to healthy adult living. The program serves in a residential setting, females who are aging out of foster care system. A primary goai of the prigram is to educate high risk yo"ng females and help them develop vocational, life and social slills that will facilitate a positive life outcome for the future. During the year, PALS provided 1,707 days of service for l0 clients.
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Funding,Sources
Activities of the Organization arc financed by governmental agencies, the United Way, and public and private contributions.
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2,
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation
The accompany financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence ofdonor-imposed resfrictions. Revenue, urr r.poi.d u, inffeases in unresficted net assets unless use of the related assets is limiied by donor-imposed restrictions. Gains and losses on investments and other assets or liabilities are reported as increases or decreaies in unrestricted net essets unless their use is restricted by explicit donor stipulations or law. Expenses are recorded as decreases in unrest'icted net assets' Accordingly, net assets and changes therein are classified and reported as follows: U*nleftricted Net As;ets - Unrestricted net assets are those currently available for use in the day-to-day operation of the FCS and those resources invested in property and equipment. Tgryporari-h) Restric,ted Net Assets Net assets subject to donor-imposed stipulations that may or will be met, either by actions of FCS and/or the passage of time. When a restriclion expiies, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reilassified to unrestricted net assets and reported in the statement of activitiei as net assets released fiom restrictions.
Permanently Restficted Net Assets permanently by the FCS.
-
Net assets subject to donor-imposed stipulations that they be maintained
Foundation.for the Carolinas Funds
The Organization has established the Florence Crittenton Services Endowment Fund of the Foundation (FCS Endowment Fund) and the Kimberly Ann Sipes Memorial Endowment Fund of the Foundation (KAS Memorial Endowment Fund). The Organization may request distributions of investment income from both the FCS Endowment Fund and the KAS Memorial Endowment Fund. The Board of Directors of the Foundation fbr the Carolinas has discretion as to the timing and amounts of dishibutions from these funds; however, all funds are ultimately repayable to the Organization and the Foundation has no variance power to distribute any portion of these lhnds to another notfor-profit entity. Culrently, the Foundation for the Carolinas spending poiicy is that the amount available for distribution on an annual basis is 4.5Yo of the average ending balance of the fund for the last 3 years, as long asi the individual fund balance is greater than66vo of historical dollir value. Donated, Seqvices and Goods
Donated services are reported as contributions when the services (a) create or enhance nonfinancial assets or (b) would be purchased if they had not been provided by contribution, require specialized skills, and p.ouiO".t individuals possessing those skills. Donated equipment or materials, ii signihcant, are included in support
*r
iy
at fair
value.
In addition, many individuals volunteer their time and perform a variety of tasks that assist the organization with
specific assistance programs and various assignments. Also, the Organization receives clothing and similar non<;ash contributions, which are either given to residents or are donated to ;ther nonprofit organizations for distribution. No amounts have been reflected in the financial statements for these contributions is the contributions are either insigrificant or do not meet the criteria for recosnition.
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Cash qnd Cash FqFivatents FCS considers all highly liquid investments with an initial maturity of three months or less to be cash equivallents. Cash and equivalents consist of cash on hand, cash in banks, and money market funds. ILvpst{nents FCS's invesfments are carried on the statement of financial position at fair value. Gains and losses on the change in the value of investments are recorded as increases or decreases in the applicable net asset category.
Functional Allocatign of E4penqes Expenses are allocated to progam services, management and general, and frrndraising based on management,s estimates of time spent and various allocation methods appropriate to the type of expense.
Federal Incomg Tax $tatqs The Organization is exempt from Federal income tax under Internal Revenue Code Section 501(c)(3). FCS is not a privatg foundation as defined by Section 509(a) of the Internal Revenue Code. Generally accepied accounting procedures require an organization to recognize ataxbenefit or expense from an uncerlain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on tne technical merits of the position. FCS had no uncertain tax positions as of June 30,2013.
The Organization's tax retunts (Form 990) for the years ended June 30, 2010 through 2012 are subject to
examination by the Internal Revenue Service. Use of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting princiiples requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could be different from those estimates.
Prior-Year Comnarative Totals The financial statements include cefiain prior-year summarized information, which is presented for comparative purposes only. Accordingly, such information should be read in conjunction with the FCS's 2012 fnwrcial statements, from which the summarized information was derived.
3.
INVENTORY: The $2'986 balance in inventory consists of food and kitchen supplies and is presented on a cost basis, utilizing a fi rst-in, first-out method.
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4.
INVESTMENTS: Investments consist of the following atJune 30,2013
Market Value
Investments controlled by FCS: First clearing, LLC (a wholly owned subsidiary of wells Fargo and company): Pimco Total Return Fund Harbor Fund Capital Appreciation Fund
$
54,441
36,976
Diamond Hill Large Cap Fund Europacific Growth Fund Pimco Investment Management Fund Allianz Small Cap Value Fund Vanguard Intermediate Term Invesfinent Fund
4',1,960
10,923
62,611 24,065 39,g3g
Fundamental Investors Fund
47,050
538
Other Investments conholled by Foundation for the Carolinas: Large cap equities Fixed income Small cap equities Intemational equities Real assets Hedge funds
$ 324,4A3
36,918 22,842 15,961
31,094 25,110
29,033
%
Total
160,858 $ 485,261
Investment Income The components of investment income during the year ended June 30, 2013, are as follows
Dividends and interest income, net of $5,062 of fees Net realized and unrealized sains
Total
$
11,355
34,5p9_
$
45,913
FAIR VALUE MEASUREMENTS: Generally accepted accounting principles require the fair value of furancial instruments to be determined basecl on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an order$ transaction between market participantsr. It establishes a three'level valuation hierarchy based upon observable and unobservable inputs, as followi
*
* Fair value is based on quoted prices in active markets for identical assets or liabilities. II - Fair value is based on observable inputs other than Level I prices, such as quoted prices for similar
Level I
Level assets
or liabilities, quoted prices
in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the ais"ts or liabilities. Level III - Fair value is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The vaiue of the FCS's funds at Foundation for the Carolinas is based on the value of the underlying investrnents, which are generally publicly traded.
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FCS has segregated its financial instrument$ into the most appropriate level within the fair value hierarchy at June 30,2013" as follows
-
Total
Level
I
Level
II
Level
III
Investments:
Wells Fargo and Company Foundation for the Cmolinas Total
fi 324,403
*:
$ 324,403
$
l60,g5g
160,858
$ 485,261
The following table sets forth a swnmary of changes in the fair value of the FCS's level 3 assets for the year ended
June 30, 2013
-
Balance, beginning of year Net increase in value
$ 150,903 15,297
Purchases, sales, issuances, and settlements (net)
(s,332\
Balance. end ofvear
.$_{g.g$_
PROPERTY AND NQUIPMENT: Propeily is recorded at cost ifpurchased or fair market value ifdonated, both subject to a $500 capitalization policy. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which vary Ilom five to forty years. The balance at June 30, 2013, consists of the followine
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Buildings and improvements Equipment Furniture and fixtures Transportation equipment
$ 3,432,974
93,759 213,212 51,q65
Total cost
3,791,609
Less - accumulated depreciation
2,392,999
Property and equipment - at net
7.
+ $ 1.398.720
RECEIVABLES: Vnited lV,ay Receivable This receivable represents the commitment from United Way of Central Carolinas which is to be received in monthly installments commencing July, 20 I 3.
Operatins Operattng receivables consist primarily of sales tax and fees due for services rendered. Amounts deemed to be uncollectible are immediately written offand management believes that no allowance for uncollectible amounts was needed as ofyear-end.
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8.
LEASES PAYABLE:
Buildins FCS leases the land for its main location from the Charlotte-Mecklenburg Hospital Authority (the Hospital
Authority) under a lease agreement whiph expires in 20g7. Rental payments under the terrns of the lease-are $100 per year, with payments beginning n 2017. The lease allows that, under specified circurnstances, FCS *uy *itl., purchase the land from the Hospital Authority at fair market value or require the Hospital Authority to purchase the brilding and improvements from FCS at fair market value. The lease also contains a provision which would give the Hospital Authority an option to purchase the building and improvements from FCS if it ceases to operate a charitable service in the facilities.
Eouinme{r( FCS leases vehicles and office equipment under various operating lease agreements. Lease payments made during the year ended June 30,2013, totaled $21,885. Fufure minimum puy*ent, due under these leasis do not represent significant commitment by FCS,
i
9.
RESTRICTND NET ASSETS: Balance of Temnoralily Restricted Net A,ssets Temporarily restricted net assets as of June 30,20l3,were restricted for the following pulposes
-
Campaign for Tomorrow's Children
$ 182,325
Kimberly Ann Sipes Memorial Endowment Fund Florence Crittenton Services Auxilarv
6,261 20,717 224^238
United Way pledge
Total
$ 433,541
Permanently restricted net assets consists of the followine
*
Florence Crittenton Services Endowment Fund Campaign for Tomorrow's Children
Kimberly Ann Sipes Memorial Endowment Fund Total
$ 118,066 68,953 ,
,, 36,531
$ 223,5s0
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10. RETIREMENT PLAN: Defined Contribution PIan FCS has established a 401(k) Profit Sharing Plan which covers all full-time and certain part-time employees who have attained the age of 21 and have one year of service. FCS matches 50% of each employee,s defenafupto 5% of the employee's annual salary. For the year ended June 30,2013,FCS made matching .ont ibution, of $l0Jl0 to the Plan.
IT. NOTE PAYABLE: Buildins The $665,428 note payable as of June 30,2013, is due to Charlotte-Mecklenburg Hospital Authority and is payable in monthly installments of 59,122 applied first to interest at 63.5 percent of ihe cunent prime iate anAinen to principal. This note is secured by a building with a book value of $1,386,585. This rrote matures as fbllows current interest rates
based on
-
s
2014
201s
96,669
2017 2018
98,679 100,730 102,561 104,795
Thereafter
162,004
2016
Total
s 665,429
12. CONCENTRATIONS OF' RISK: Credit FCS regularly maintains cash balances in excess of insured limits, currently $250,000, at various local financial institutions. However, management believes that the risk of loss on these accounts is minimal. Investments held in financial institutions are insured up to $500,000 by the securities Investor protection corporation (SIPC); however, this insurance does not covei the loss of value of the underlying assets. As disclosed in Note 4 above, FCS maintains a variety of investments which are subject to fluctuations in market values and expose FCS to a certain degree of investment risk. Revenue FCS received approximately 63 percent of its funding during the year ended June 30,2013, from confracts with government ageneies. This amount represents a substantial conientration of risk.
Geoeranhic Area FCS operates in a limited geographic area and is sensitive to changes in the local economy.
13. SUBSEQUENTEVENTS: The organization has evaluated subsequent events from the date of the statement of frnancial position through the date of the audit report which is the date the financials were available to be issued. During this period, no material recognizable subsequent events were identified.
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