2009 FRC Financial Statements

8/9/2019 2009 FRC Financial Statements

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FRANCISCAN ENEWALGENTER.NC.FINANCIAL TATEMENTS

AUGUST 1, 2009and 2008


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FRANCISCANENEWAL ENTER,NC.FINANCIALTATEMENTSAUGUST 1,2009 nd2008TABLEOF CONTENTS

PageBoard of Directors and Management Cert i f icat ion . . . . .1Statementsof Financial Posit ion . . . . .2Statementsof Act iv i t ies ...3StatementsofCashFlows .. . . .4Notes to Financial Statements . 5 - 12


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BOARDOF DIRECTORS ND MANAGEMENT ERTIFICATION

The FranciscanRenewalCenter, nc. is not under any regulatory equirementsoprepareaudited inancial tatements; owever, he Boardof Directors nd membersofthe managementeam desire o present etailed inancialnformationor informationalpurposes.The accompanyingtatements f f inancial osit ion f the Franciscan enewalCenter,Inc.as of August31, 2009 and 2008,and the related tatements f activit ies nd cashflows or the years hen ended, have been prepared n accordancewith Statements nStandards or Accountingand Review Services ssued by the American InstituteofCert if ied ublicAccountants.All informationcontained n this report is the representation f management. TheFinance Committee of the Board of Directorshas reviewed he accompanyingstatementso ensure heyare reeof material rrorsand omissions.We hereby certify his i nformation s accurategiven our fiduciary esponsibilityo theFranciscan riarsof California, t . BarbaraProvince,he Franciscan enewalCenter,Inc.and he community t large.

Respectfully ubmittedhe 22ndday of September 009.,( ,*iJ "W,r''q4r;4.*G. TomSimmonsBoardChair KevinGralenTreasurern i '' l ll i.)t \ tv t ' t_wn(>1"^*?h1-A/'16.\-J , lFr.JUseph chwab,O.F.M.Executive irector

, . / ' / ' . / /I i vl'Lbd 1'

-'/LPtrYJCharles rownGeneral anager


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FRANCISCAN ENEWALCENTER,NC.STATEMENTS F FINANCIAL OSITION

August 1, 009 nd 0082008ASSETSCurrent AssetsCashShort-term ertif icatesf DepositInterestReceivable Endowment istributionAccounts eceivable. etInventoriesPrepaid xpenses

TOTAL CURRENTASSETSLong-term AssetsEndowmentnvestments

Investments eld or he ProvinceProperty nd equipment, etTOTAL LONG.TERMASSEIS

TOTAL ASSEISLIABILITIESAND 'VETASSEISCurrent LiabilitiesAccountspayableAccrued iabil it iesDeferredncomeOther iabil it ies

TOTAL CURRENTU ABILITI SLong-Term LiabilitiesCommitmento Provincial rust

TOTAL LIABILITIESNet assetsUnrestrictedGeneralBoarddesignatedProperty

TOTAL UNRESTRICTEDTemporarily restrictedPerm anently restri ctedDonor estricted

439,619250,00088,39442,2336,57144.748

324,035250,00092,76496,9083,95040.201871,565

4,237,O90400,0001 865,181

6,502,271$ 7,373,836

34,31243,870135,44710,089

807,858

4,768,492400,0001,815,327

6,983,819$ 7,791,677

46,14330,338115,24010,877223,718400,000

202,598400,000

623.718 602,598

321,448710,584455,473672,6441 865,181 1.815.3272,993,298

192,3742,847,359

283,812

3.564.446TOTAL'VETASSETSTOTALLIABILITIES'VDA'ETASSEIS

6,750,1 87,373,836

The accompanyingotesare an integral artof these inancial tatements.2

4,057,9087,189,0797.791,677


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FRANCISCAN ENEWALCENTER. NC.STATEMENTS F CASHFLOWS

For he FiscalYearsEndedAugust 31,2009and 2008

(438,961)

514,596(144,361)147,0724,37054,675(2,621)(4,547)

(11,831)IJ ,CJZ20,207(788)

2009 2008cAsH FLOWS FROM(USED tN) OqERATINGACTTVIT|ESChanges n net assetsAdjustmentso reconcile etassetsto netcashprovided y operating ctivities:Realizedosses gains) n sales n secur it iesUnreal izedgains)osses osses n secur it iesDepreciationxpense(lncrease) ecrease n current ssets.Interest eceivableAccounts eceivableInventoriesPrepaid xpensesIncreasedecrease)n iabi l i t ies:Accounts ayableAccruediabi l i t iesDeferredncomeOther iabilit iesPledge o Provincial rustNET CASH PROVIDEDBYOPERATINGACTIVITIES

cAsH FLOWS (USED tN) FROM TA/yESr/NGACTtVtTtESCapital xpendituresCommitmentor ProvinceInvestment ctivity, et

NET CASH USED N INV ESTING CTIVITIESNET INCREASE'A/CASH

CASHAT BEGINNING F YEARCASHAT ENDOF YEAR

(506,7e0)

(213,444)175,429154,45638,085(57,343)(200)1,36313,879(14,851)(18,636)(2,320)400,000

151 343

(1e6,e26)161,167(35,75e)115,584324,035

(30,372)

(141,238)(400,000)567.14525,907(4,465)

328,500439,619 324,035

Th e accompanying otesare an integral artof these inanci al tatements


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FRANCISCAN ENEWALCENTER,NC.NOTESTO FINANCIAL TATEMENTSAugust 31,2009and 2008 Gont inued)Short-term Certificatesof Deposit and lnvestments held for the ProvinceTheseshort-termnvestmentsncludeong-termmoneymarket ccumulationunds orthe distributionrom unds related o unrestricted r temporarily estrictedunds or whichthe currentmaturit ies regreaterhan hreemonths.These undsare u lly nsuredthrough he FDICwith he Certificate f DepositRegistry ccountService CDARS)programInterest ReceivableTheseaccumulatedunds eoresent istributionsrom he endowmentunds.Accounts ReceivableAll accounts eceivable re reportedbased on the amount of the bil ledcontractualinvoice. After 90 days, rade receivables re deemeduncollectible nd transferredo areserve ccount, educinghe underlyingevenue.Forother eceivables,hendeemeduncollectible,he amounts re mmediatelyhargedo the underlyingncome r expenseaccount, asedon the nit ial ntry or he receivableor appropriate atching.lnventoriesInventories, onsisting rimarily f giftsand booksused or programs r eventsand oodserved n the dining oom,are statedat the lowerof cost or market. Cost s determinedby the average ostmethod,whichapproximateshe first-in, irst-outmethod.lnvestmentsInvestmentsare reported at fair market value in accordancewith the provisionsofStatement f FinancialStandards SFAS)No. 124,"Accountingor Certain nvestmentsHeldby Not-for-Profit rganizations.Realizedgains and losses on sales of investments re determinedon a specificcostidentification ethod. Unrealized ains and lossesare determined ased on year-endmarket value fluctuations. The Center follows the practiceof widely diversifying tsinvestmentso mitigate oncentra tionsf credit isk.Deferred lncomeThe Centeraccepts eservations nd deposits or programshroughouthe year.Deferred ncome epresents mounts eceived nderagreement r program egistrationin advance f he period n which heseservices i l lbe provided.Nef AssetsThe Centerhas adopted he provisions f Statement f Financial ccounting tandards(SFAS)No.117, Financial tatementsor Not-for-Profitrganizations,"Under hese provisions, et assets and revenues, xpenses, ains,and lossesareclassif ied based on the existence or absence of donor-imposed estrict ions.Accordingly,et assetsof the Centerandchangesherein reclassif ied ndreported sfollows:

Unrestrictednet assefs - net assets that arc not subject to donor-imposedstipulations.


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FRANCISCAN ENEWALCENTER, NC.NOTESTO FINANCIAL TATEMENTSAugust 31, 2009and 2008 Gontinued)Temporarily estrictednef assefs - net assets subject to donor-imposed, oard-imposed r managementmposed tipulationshat may or wil l be met by actions fthe Center nd/or he passage f ime.Permanently estrictednef assefs net assetswhose principalmust remain ntact;however, he incomederived rom these net assets may be expendedaccording odonor-specif iederms.

Donated AssetsDonatedmarketableecurit ies nd othernoncash onations re recorded s contributionsttheir estimated air values at the date of donation. Such donationsare reportedasunrestricted upportunless he donorhas restrictedhe donatedasset o a specificpurpose.Donated ServicesA substantialumberof unpaid olunteers avemadesignif icantontributionsf servicesothe Center. Generally ccepted ccounting rinciplesequire ontributedkil led ervicesobe valuedand reflectedn he inancial tatements. he Center's ontributedkil led ervicesare notsignif icantn relat iono all contributedervices ndaccordinglyuchamounts renotrecorded nd recognizedn hese inancial tatements.Revenue RecoqnitionThe Centerhas adoptedStatement f Financial ccountingStandards SFAS)No. 116,"Accountingor Contributionseceived nd Contributions ade."The Centerreportsgifts of cash and other assetsas restricted upport f they are receivedwithdonorstipulationshat imit he use of the donatedassets. When he donor estrict ionexpires, emporarily estrictednet assets are reclassifiedo unrestricted et assets andreported n the statement f activities s net assets eleased rom restrictions.Contributionswhich are restricted s to use by the donor,and whichare received nd spentduring hesameyear,are reflected s unrestrictedevenue.Contributionsare recognrzedas revenue when they are received. Contractedor feerevenues re recognizedn he month he service s provided.The Centermaintains n operatingease or Booksand Blessings, n independentlywnedbusiness, o operatea gift shop on the Center'sproperty or the benefit of the Center'svisitors.Thisentityprovides eligious ooksand products nd he underlyingental ncomeis recorded uring achmonthof operationor hatspecif ic nderlying onth.lnvestment lncomeBeginning eptember ,2004, nvestmentncome ncludes fourpercent 4%)distributionfthe average he prior three-year nding balancesof the endowment nvestments. Allmanagementees are charged o the endowmentund. Before hat ime, nvestmentncomeincludes nterest ncome,net of managementees. Gross realized ains and lossesarerecognized sing he specific dentification ethodas described n NoteG.


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FRANCISCAN ENEWALCENTER,NC.NOTESTO FINANCIAL TATEMENTSAugust 31, 2009and 2008 Continued)receivedordinarysupport rom hostedevents of other non-profitgroups with missions nalignmentwith the Center'svision,educationprograms, nvestment ncome,donationsandother gifts. The Center s dependentupon directcontributions nd bequests rom thegeneralpublicor support owards he individual rogramsofferedat the Center o meet heoperational nd programexpenses. Consequently,he Center s affectedby the numbersand composit ion f the localFranciscan nd community opulations s well as affected ygeneral conomicluctuations.NOTEE _ CASHAND CASH EQUIVALENTSCashandCashEquivalentsonsist f he ollowing t August31,2009TemporarilyRestrictedUnrestricted

TotalCashand CashEquivalentsNOTEF _ ACCOUNTSRECEIVABLE

$ 439,6192008$ 41,412282,623

$___439*619 $__324p35

AccountsReceivable re shownnetof an allowanceor uncollectiblerade eceivables f$5,126 nd$11 392at August31 2009and2008, espectively.NOTEG - LONG-TERMNVESTMENTS ND PERMANENTLY ESTRICTED UNDSIn 1993, he long{erm nvestments ere put under he management f two investmentmanagerswho are responsibleo the Boardof Directors. In 2006, all temporarily estrictedassetswere iquida ted nd reclassifiedo cash or a Certificate f Deposit.At thissame ime,the endowment unds were transferred o one investment irm, with $200,000of the fundsremaining n cash accounts. Of this amount$100,000 esided n a Certificate f Depositandwas permanently ndowed or the Franciscan ormation roup. In 2008, his $100,000amount was transferred o the Provinceof St. Barbara FraternalCare Trust to use forFormation.The addit ional 100,000 as providedo the CatholicCommunity oundationn2006and s includedn Endowmentnvestments.The temporarily estricted nvestments re either donor-restrictedor a specificshort-termpurposeor are availableor use at the discretion f the ExecutiveDirector f the Center.To sustain he futureoperations f the Center, he Endowment nvestments re restricted yeither the donors or the Board of Directors. The principal s held in perpetuityand willf luctuate ith he unrealized nd realized ainsor losses n these nvestments. he Centerused a four percent (4o/o) istribution rom the three-year olling average balance of thepermanently estricted nvestmentso support currentoperations. The Board designatedportionof the endowment unds are reflectedas Unrestricted et assets while the donorrestrictedundsare presented s Permanentlyestricted et assets.During 008, he Boardof Directors ommitted 400,000rom he endowmentunds, elatedto formationactivities, o the Provinceof St . BarbaraFraternalCare Trust. These fundsremain n an insuredCertificate f Depositand have been classified s investments eld orthe Province nd ncludedn longtermassets. Thisamounthas been eclassif iedrom hepermanentlyestrictednvestment et assetsat the end of the fiscalyear o Investments eldfor the Provincewith an offsettingongterm iability.These undswill be sent o the Provinceof St. Barbara uring iscal2011. Unti l hen, hese unds emain artof the nvestmentseldby the Center. Uponmaturity,he underlyingnterestwill remainwith he Center.9


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FRANCISCAN ENEWALCENTER, NC.NOTESTO FINANCIAL TATEMENTSAugust 3f , 2009and 2008 Continued)The Endowmentnvestments re recorded t the marketvalueprovided y the investmentmanagers nd as of August31 are as fol lows:EndowmentnvestmentsCash/MoneyarketundsEquity ecurit iesDebt ecuritiesGovernmentecurit ies

TOTALENDOWMEIVT/VYESTMENTS

lnvestment istributionncomeRealizedlosses) ainsUnrealizedains losses)

TOTAL NVESTMENT ETURN

2009$ 594,3382,502,225888,15252.342$rt23z*090

2008$ 626,3082,307,9511,039,599794,644$_4J58fr2

The investmenteturns nd classif icationsn the Statement f Activit iesor the yearsendedAugust31 are as follows: 2009 2008$ 208,992 $ 203,640(514,596) 213,444144,361 (175.429\

$_Jr6r243) L_241-055Managementees for the years ended August 31,2009 and 2008 were $39,506and$50,485, espectively.Each of these items have been allocatedbetweenDonor restrictedand Boarddesignatedunds or presentation n the Statements fActivities.NOTEH - PROPERTY ND EQUIPMENTProperty nd equrpments of August31 s as ollows: 2009 2008Landand and mprovements $ 743,717 $ 741,292Building nd structuralmprovements 4,483,825 4,354,971Equipment nd urnishings 833.780 768.1336,061,322 5,864,396LessAccumulatedepreciationndamortization (4,196,141\ (4,049,069TOTAL PROPERTY ANDEQUTPMENT $_l_805_181 $_l_815322lmprovements reater han $1,000 hat extendasset ivesare capitalized; ther repairsandmaintenance hargesare generally xpensed s incurred. The cost applicableo assetssold or retired s removed rom he accounts nd the gainor losson dispositions recognrzedas a component of ordinary income. Depreciationand amortizationof property andequipment re computed n a straight-l ineasisoverestimated seful ivesof 3 to 40 yearsand totaled$147,072and $154,456 or the years ended August 31, 200 9 and 2008,respectively.NOTE - LONGTERMLIABILITIESAs noted n NoteG, during iscal2009, he Boardof Directorsommitted 400,000o theProvince f St. Barbara raternal areTrust. Theagreement rovidesor hisamount o beprovidedo the Province n fiscal2011. Therefore, s of August31, 2008, he committedamounthas been eclassif iedrom he permanentlyestrictedunds,where he amountresided tAugust31,2007, o the ong-termiabil i ty, ommitmento Provincial rust.

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FRANCISCAN ENEWALCENTER, NC.NOTESTO FINANCIAL TATEMENTSAugust 31, 2009and 2008 Cont inued)NOTEK - RETIREMENT AVINGSPLANThe Centerprovides retirement avingsplan or the benefitof el igible mployees.Theplanallowseligible mployeeso defera port ion f theirannualcompensation,ursuantoSection403(b)of the InternalRevenueCode. The Center'smatching nd profit-sharingcontributions re discretionary s determinedby the Center's Board of Directors. TheCenter'smatching nd profit-sharingontributionsest o employees s follows:

0-1Year2 Years3 Years4 Years5 Years

0o/o25o/o50%75%100o/oThe Center unded$32,410 nd$30,227 uring he yearsendedAugust31, 2009and 2008,respectively.NOTEL_RELATEDPARTIESThe Centerhas an agreementwith the Franciscan riars,Province f St. Barbara o provideassessment ayments qual o 4o/o f the Center'sadjusted iscalyear gross evenues.TheCenterpaidassessments f $87,566 nd $75,474or the yearsendedAugust31, 2009and2008, espectively.Per NotesG and l, the Center'sBoard of Directorsentered nto an agreement o provide$500,000of the Center'sendowment und to the Province f St. BarbaraFraternalCareTrust o use or Formation.Until he decisionof the Board o commit hese unds, hey weredesignated y the donor or use n formation ctivit ies nd were ncludedn the permanentlyrestricted etassetsof the Center.The Centerprovidesoom,boardand miscellaneousdministrat ivend retirementxpensesfor the local Francrscan riarswho work directlywith the Center. The Centerpaid he localFranciscan riars ivingexpensesand benefitsof $147,831and $139,913 or the yearsended August 31, 2009 and 2008, respectively.The Centerpaid the Franciscan riars,Province f St. Barbara ocialsecurity nd retirement enefits f $15,465 nd $14,987 orthe yearsendedAugust31,2009and2008, espectively.The Board of Directors onsistsof 12 voting directorsof which three membersare friars.One of these riars epresentshe Boardof Trusteesof the Franciscan riars,Province f St.Barbara. One of the other riarsservesas the ExecutiveDirectorof the Center. One of thelay boardmembers s the GeneralManagerof the Center.NOTEM _ INCOMETAX STATUSThe Center s exempt rom ederal ncome ax underSection501(cX3) f the lnternalRevenueCode,except or axeson unrelated usinessncome.During heyearsendedAugust31, 2009and 2008, he Centerhad no unrelated usinessncome.A'OTE N - SUBSEQUEA/TEYENTSThe Centerwas namedas beneficiaryn a Trust. On October20,2009, he Center eceivedthe inalnetproceeds f $175,000rom he estate.

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2009 FRC Financial Statements