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PREGNANCY ASSISTANCE CENTER NORTH, INC.
FINANCIAL STATEMENTS
WITH INDEPENDENT AUDITOR’S REPORT
December 31, 2019 and 2018
Contents
Page
Independent Auditor’s Report 2
Statements of Financial Position 4
Statements of Activities 5
Statement of Functional Expenses 6
Statements of Cash Flows 8
Notes to Financial Statements 9
2
Independent Auditor’s Report Board of Directors Pregnancy Assistance Center North, Inc. The Woodlands, Texas Report on the Financial Statements
We have audited the accompanying financial statements of Pregnancy Assistance Center North, which comprise the statements of financial position as of December 31, 2019 and 2018, and the statements of activities, statements of functional expenses and statements of cash flows for the years 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 the 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.
10515 Saddlehorn Trail, Houston, Texas 77064 Phone 281-890-3042
3
Independent Auditor’s Report (continued) 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 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 the significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 Pregnancy Assistance Center North as of December 31, 2019 and 2018, and the changes in net assets, and the functional expenses, and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
May 30, 2020 Houston Texas
4
PREGNANCY ASSISTANCE CENTER NORTH, INC.
STATEMENTS OF FINANCIAL POSITION
December 31, 2019 and 2018
2019 2018
ASSETS
CURRENT ASSETS
Cash 335,595$ 281,785$
Prepaid Expenses 1,994 2,022
TOTAL CURRENT ASSETS 337,589.00 283,807
FIXED ASSETS
Property, Plant, and Equipment - Net 620,081 655,527
OTHER ASSETS
Rental Lease and Utility Deposit 4,464 4,464
TOTAL ASSETS 962,134$ 943,798$
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 6,712$ 6,330$
TOTAL CURRENT LIABILITIES 6,712 6,330
NET ASSETS
With Donor Restrictions 50,143 85,536
Without Donor Restrictions 905,279 851,932
TOTAL NET ASSETS 955,422 937,468
TOTAL LIABILITIES AND NETASSETS 962,134$ 943,798$
See independent auditor's report and notes to financial statements
5
PREGNANCY ASSISTANCE CENTER NORTH, INC.
STATEMENTS OF ACTIVITIES
For the years ended December 31, 2019 and 2018
2019 2018
CHANGE IN NET ASSETS WITHOUT DONOR RESTRICTIONS
REVENUES AND GAINS:
Contributions/Fundraising 1,027,270$ 934,838$
Thrift Store 156,835 144,793
Grants 41,250 79,324
Other Income 5,200 3,746
TOTAL REVENUE AND GAINS WITHOUT DONOR RESTRICTIONS 1,230,555 1,162,701
NET ASSETS RELEASED FROM RESTRICTIONS
Satisfaction of program restrictions 71,748 96,889
TOTAL REVENUES, GAINS, AND OTHER SUPPORT
WITHOUT DONOR RESTRICTIONS 1,302,303 1,259,590
EXPENSES AND LOSSES:
Program Expenses 914,430 906,684
General & Administrative 118,475 111,840
Thrift Store 110,897 131,589
Fundraising Expense - Note 3 105,154 115,955
Total Expenses 1,248,956 1,266,068
TOTAL EXPENSES AND LOSSES 1,248,956 1,266,068
INCREASE (DECREASE) IN NET ASSETS WITHOUT DONOR RESTRICTIONS 53,347 (6,478)
Changes in Net Assets with Donor Restrictions
Contributions 36,355 97,960
Net assets released from restrictions 71,748 96,889
Increase (Decrease) in Net Assets With Donor Restrictions (35,393) 1,071
Decrease in Total Net Assets 17,954 (5,407)
Net Assets, Beginning of Year 937,468 942,875
Net Assets, End of Year 955,422$ 937,468$
See independent auditor's report and notes to financial statements
6
PREGNANCY ASSISTANCE CENTER NORTH, INC.
STATEMENT OF FUNCTIONAL EXPENSES
For the year ended December 31, 2019
Program Mangt & Thrift
Services General Fundraising Store Total
Advertising 3,141$ -$ -$ 2,654$ 5,795$
Affiliation Fees 2,334 2,334
Audit 6,956 6,956
Cleaning & Maintenance 10,902 1,920 5,607 18,429
Compensation 408,258 63,094 93,164 81,391 645,907
Conferences & Training 5,445 5,445
Cost of Direct Benefit to Donors 116,017 116,017
Credit Card Fees 6,163 2,515 8,678
Events 3,165 3,165
Educational & Counseling 27,632 27,632
Equipment Rental & Maintenance 17,923 8,132 106 26,161
Marketing and Mailings 6,073 6,073
Insurance 18,189 2,053 277 5,157 25,676
Office Supplies & Expense 5,008 6,181 11,189
Postage 1,899 1,899
Utilities 14,334 1,570 3,557 19,461
Rent 136,553 8,460 145,013
Repairs & Maintenance 17,228 17,228
Supplies 5,208 53 3,711 8,972
Sonogram & Testing Supplies 42,267 42,267
Well Women Expenses 24,367 24,367
Telephone 8,351 4,239 1,140 13,730
Depreciation 43,265 3,990 2,778 50,033
Other 8,008 3,765 2,475 2,281 16,529
914,430$ 118,475$ 105,154$ 110,897$ 1,248,956$
See independent auditor's report and notes to financial statements
7
PREGNANCY ASSISTANCE CENTER NORTH, INC.
STATEMENT OF FUNCTIONAL EXPENSES
For the year ended December 31, 2018
Program Mangt & Thrift
Services General Fundraising Store Total
Advertising 2,728$ -$ 5,283$ 3,072$ 11,083$
Affiliation Fees 2,222 - - - 2,222
Audit - 6,100 - - 6,100
Cleaning & Maintenance 13,569 1,436 - 3,411 18,416
Compensation 422,349 63,056 89,533 100,171 675,109
Conferences & Training 8,294 - - 2,988 11,282
Cost of Direct Benefit to Donors 127,121 - - - 127,121
Events - 240 9,645 - 9,885
Educational & Counseling 24,482 - - - 24,482
Equipment Rental & Maintenance 17,797 9,528 - - 27,325
Mailings - - 11,213 - 11,213
Insurance 17,860 2,118 281 4,950 25,209
Office Supplies & Expense 5,825 3,035 - - 8,860
Postage - 2,000 - 7 2,007
Utilities 13,061 1,055 - 2,927 17,043
Rent 136,637 8,011 - - 144,648
Repairs & Maintenance 2,398 540 - 2,713 5,651
Supplies 3,083 271 - 4,058 7,412
Sonogram & Testing Supplies 51,125 - - - 51,125
Well Women Expenses 17,666 - - - 17,666
Telephone 9,522 3,980 - 1,139 14,641
Depreciation 15,291 1,330 - 916 17,537
Other 15,654 9,140 - 5,237 30,031
906,684$ 111,840$ 115,955$ 131,589$ 1,266,068$
See independent auditor's report and notes to financial statements
8
PREGNANCY ASSISTANCE CENTER NORTH, INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2019 and 2018
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Change in net assets 17,954$ (5,407)$
Adjustments to Reconcile Change in Net Assets
to Net Cash used by Operating Activities
Depreciation 50,031 17,537
(Increase) Decrease in Prepaid Expenses 27 1,218
Increase (Decrease) in Accounts Payable 382 (3,429)
NET CASH FROM OPERATING ACTIVITIES 68,394 9,919
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Building Improvement and other assets (14,584) 13,318
NET CASH FROM INVESTING ACTIVITIES (14,584) (13,318)
NET INCREASE (DECREASE) IN CASH 53,810 (3,399)
Cash, Beginning of Year 281,785 285,184
Cash, End of Year 335,595$ 281,785$
See independent auditor's report and notes to financial statements
9
PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS
December 31, 2019 Note 1 – Organization
Pregnancy Assistance Center North, Inc. (The Center) was incorporated in 1987 under the Texas Non- Profit Corporation Act. The Center is a Christian, non-profit organization that provides practical assistance to women/men in unexpected pregnancy situations without charge or obligation. The Center provides pregnancy testing, STD testing, consultations, professional counseling, childbirth and relationship classes, an educational program (Vouch for Success – VFS), support groups, training in life skills and well-women exams. The Center also provides free food, clothing, diapers and formula to clients in need. Through the programs, which are responsibility based, clients may earn vouchers to exchange for layette items such as cribs, car seats and baby furniture. In April, 1996, the Center became a Care Net affiliate. Care Net is a national organization dedicated to equipping crisis pregnancy centers to offer high quality, biblically based client services. Note 2 – Summary of Significant Accounting Policies Basis of Statements The financial statements of the Center are prepared using the accrual basis of accounting. Contributions are recognized when a donor makes an unconditional promise to give and expenses are recognized when incurred. Cost Allocation The financial statements report certain categories of expenses that are attributable to more than one program or supporting function. Therefore, these expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include compensation and benefits, which are allocated on the basis of estimates of time and effort, as well as depreciation, occupancy and property insurance, which are allocated on a square footage basis.
10
PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2019
Note 2 – Summary of Significant Accounting Policies - Continued Contributions Contributions received are recorded as net assets with donor restrictions or net assets without donor restrictions depending on the existence or nature of any donor restrictions. General Fixed Assets Property and equipment are recorded at cost. Depreciation is calculated using the straight- line method with assets depreciated over the following useful lives: Furniture and Fixtures 5 years Office Equipment 3-5 years Building 39 years Federal Income Taxes Pregnancy Assistance Center North, Inc. is a nonprofit corporation as defined by section 501(c)(3) of the Internal Revenue Code and, accordingly, is exempt from federal and state income taxes. Pregnancy Assistance Center North, Inc. is up to date with all of its tax filings. Tax years ended December 31, 2017, 2018, and 2019 are open to examination by the Internal Revenue Service. Donated Services Client services are provided primarily by trained volunteers. The value of time and effort contributed by such individuals is not reflected in these financial statements. Non-Cash Donations The Center receives various non-cash donations including formula, diapers, and clothes. The value of the non-cash donations is immaterial and are not reflected in the financial statements. Cash equivalents and Cash Cash equivalents are highly liquid investments with a maturity date no longer than 90 days.
11
PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2019 Note 2 – Summary of Significant Accounting Policies - Continued Credit Risk The Center maintains bank accounts at two banks. Accounts at an institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2019 and 2018 the Center had no uninsured bank balance. Note 3 – Fundraising Income & Expenses Fundraising income and expenses are derived from the development dinner held annually by the Center and various other fundraising events. Income includes amounts paid by participants of the events as well as amounts donated by sponsors to offset costs incurred by these events. Expenses reflect the total costs incurred for these events and are not reduced by the donations described above. Note 4 – Fixed Assets
Fixed assets as of December 31, 2019 and 2018 are as follows:
2019 2018
Building and Improvements 631,037$ 631,037$
Land 117,300 117,300
Furniture and Fixtures 135,712 136,276
Equipment 98,001 129,962
Box Truck 9,775 9,775
991,825 1,024,350
Less - Accumulated Depreciation 371,744 368,823
Total Fixed Assets 620,081$ 655,527$
12
PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS
December 31, 2019 Note 5 – Commitments
The Center leases office space, copiers and a postage machine under non-cancelable operating leases. The Center also has a maintenance agreement on its ultrasound machines which is non-cancelable. Expenses for the year ended December 31, 2019 amounted to $ 175,084 and the year ended December 31, 2018 amounted to $134,650. The leases and maintenance agreement expire February 14, 2023. The future minimum lease and maintenance agreement commitments are as follows: Year ended December 31, 2020 $ 179,127 Year ended December 31, 2021 171,051 Year ended December 31, 2022 147,794 Year ended December 31, 2023 23,808 Note 6 – Restrictions on Net Assets Net assets with donor restrictions as of December 31, 2019 and 2018 are available for the following purposes:
2019 2018
Subject of expenditure for specified purposes:
Care -$ 649$
Mobil Clinic 18,980 31,872
Joshua 1.9 - 3,975
Pro U - 5,899
Security 2,120 17,881
Ultrasound 29,043 20,260
Medical WW Designation - 5,000
Total Net Assets with Donor Restrictions 50,143$ 85,536$
13
PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS
December 31, 2019 Note 7 - Liquidity and availability of Financial Assets
The following reflects the Organization’s financial assets as of the statement of financial position date, reduced by amounts not available for general use because of donor-imposed restrictions within one year of the statement of financial position date.
2019 2018
Financial assets at year end 335,595$ 281,785$
Less financial assets unavailable for general
expenditures within one year due to:
Net assets with donor restrictions - See note 6 50,143 85,536
Financial assets available to meet cash needs
for general expenditures within one year 285,452$ 196,249$
Note 8 – Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Note 9 – Subsequent Events Subsequent events have been evaluated through May 30, 2020, which is the date the financial statements were issued. Note 10 – New Accounting Pronouncements
The effects of accounting pronouncements that have been issued but have not yet taken effect are not believed to be material to the financial statements.