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HomeMy WebLinkAbout2016 Audited Financial Statements L RECEIVED Nov 2 1 2017 Southold Town Clerk NORTH FORK ANIMAL WELFARE LEAGUE, INC. AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2016 PRESTON&LAGOMARSINO,CPA,PC e NORTH FORK ANIMAL WELFARE LEAGUE,INC. DECEMBER 31,2016 TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS'REPORT 1 FINANCIAL STATEMENTS Statement of Financial Position 2 Statement of Activities and Changes in Net Assets 3 Statement of Functional Expenses 4 Statement of Cash Flows 5 Notes to Financial Statements 6-9 PRESTON&LAGOMARSINO,CPA,PC PRESTON & LAGOMARSINO, CPA, PC ACCOUNTING AUDIT TAX INDEPENDENT AUDITORS' REPORT To the Board of Directors of North Fork Animal Welfare League, Inc. We have audited the accompanying financial statements of North Fork Animal Welfare League, Inc. (a nonprofit organization),which comprise the Statement of Financial Position as of December 31, 2016, and the related Statements of Activities and Changes in Net Assets 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 controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. Auditors' Responsibility , Our responsibility is to express an opinion on these financial statements based on our audits. 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 auditors'judgement, 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of North Fork Animal Welfare League, Inc. as of December 31, 2016, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Preston &Lagomarsin , CPA, PC August 1,2017 P.O.Box 257,COMMACK,NY 11725 631-404-7382 d North Fork Animal Welfare League,Inc. Statement of Financial Position As of December 31,2016 ASSETS Current Assets Cash and Cash Equivalents $ 104,524 Restricted Cash 17,172 Support Receivable 19,428 Inventory 892 Prepaid Insurance 4,855 Total Current Assets 146,871 Fixed Assets Fixed Assets(net of Accumulated Depreciation) 879 Capitalized Costs-Riverhead Building 5,400 Total Fixed Assets 6,279 Long-Term Assets Restricted Investments 291,031 Unrestricted Investments 2,432,523 Security Deposits 15,000 Total Long-Term Assets 2,738,554 Total Assets $ 2,891,703 LIABILITIES AND NET ASSETS 6 Current Liabilities Accounts Payable $ 1,250 Accrued Expenses and Payroll Taxes Payable 11,464 Total Current Liabilities 12,714 Net Assets Tempoarily Restricted Net Assets 319,631 Unrestricted Net Assets 2,559,358 Total Net Assets 2,878,989 Total Liabilities and Net Assets $ 2,891,703 THE ACCOMPANYING AUDITOR'S REPORT AND NOTES TO FINANCIAL STATEMENTS ARE INTEGRAL PARTS OF THIS REPORT AND SHOULD BE READ IN CONJUNCTION HEREWITH 2 North Fork Animal Welfare League,Inc. Statement of Activities and Changes in Net Assets For the Year Ended December 31,2016 Temporarily Unrestricted Restricted Total Revenues and Gains Contributions $ 1,259,159 $ - $ 1,259,159 Fundraising 17,097 - 17,097 Grants 6,650 - 6,650 Program Services 464,947 - 464,947 Income on Long-Term Investments - (Net of Investment Fees) 16,523 3,577 20,100 Net Realized and Unrealized Gains - on Long-Term Investments 74,912 8,137 83,049 Total Unrestricted Revenues and Gains 1,839,289 11,714 1,851,002 Net Assets Released from Restrictions Satisfaction of Restrictions - - - Total Net Assets Released from Restrictions - - - Total Revenues,Gains and Other Support 1,839,289 11,714 1,851,002 Expenses and Losses Program Services 646,281 - 646,281 Management and General 140,976 - 140,976 Fundraising 16,202 - 16,202 Total Expenses and Losses 803,458 - 803,458 Increase(Decrease)in Net Assets 1,035,830 11,714 1,047,544 Net Assets at Beginning of the Year 1,523,528 307,917 1,831,445 Net Assets at End of Year $ 2,559,358 $ 319,631 $ 2,878,989 THE ACCOMPANYING AUDITOR'S REPORT AND NOTES TO FINANCIAL STATEMENTS ARE INTEGRAL PARTS OF THIS REPORT AND SHOULD BE READ IN CONJUNCTION HEREWITH 3 1 North Fork Animal Welfare League,Inc. Statement of Functional Expenses For the Year Ended December 31,2016 Program Management Expenses And General Fundraising Total Salaries and Wages $ 357,543 $ 84,796 $ - $ 442,339 Payroll Taxes and Fringe Benefits 29,603 6,944 - 36,547 Health insurance 38,594 9,053 - 47,646 Veterinarian Fees 57,988 - - 57,988 Kennel Supplies 35,435 - - 35,435 Cat Food and Supplies 25,136 - - 25,136 Professional Fees 31,775 19,250 - 51,025 Special Events - - 13,820 13,820 Insurance 22,863 5,716 - 28,579 Bank Charges and Credit Card Discounts - 758 - 758 Public Education(Feral Cat Program) 5,990 - - 5,990 Advertising 4,623 - 2,381 7,004 Office Expense 2,188 8,751 - 10,939 Postage and Delivery 3,718 - - 3,718 Automobile Expense 4,922 1,230 - 6,152 Telephone and Internet 4,547 1,137 - 5,684 Rubbish Removal 2,791 698 - 3,489 Licenses and Permits 1,297 - - 1,297 Repairs and Maintenance 6,517 1,629 - 8,146 Continuing Education 2,160 - - 2,160 Utilities 2,272 568 - 2,840 Miscellaneous 1,517 379 - 1,896 Travel 4,551 - - 4,551 Payroll Processing - 68 - 68 Depreciation Expense 252 - - 252 TOTALS $ 646,281 $ 140,976 $ 16,202 $ 803,458 THE ACCOMPANYING AUDITOR'S REPORT AND NOTES TO FINANCIAL STATEMENTS ARE INTEGRAL PARTS OF THIS REPORT AND SHOULD BE READ IN CONJUNCTION HEREWITH 4 Y North Fork Animal Welfare League, Inc. Statement of Cash Flows As of December 31,2016 Cash Flow from Operating Activities Increase in Net Assets $ 1,047,544 Adjustments to Receoncile net increase to net cash provided by Operating Activities Depreciation 252 (Increase)Decrease in Support Receivable (19,428) (Increase)Decrease in Inventory (892) (Increase)Decrease in Prepaid Insurance 793 Increase(Decrease) in Accounts Payable (14,641) Increase(Decrease) in Accrued Expenses 6,630 Total Operating Activity Adjustments (27,286) Net Cash Provided (used) by operating Activities 1,020,258 Cash Flow from Investing Activities Equipment Purchase - Capitalized Building Expenditures-Riverhead - (Gain)Loss on Investments (115,011) Proceeds from Sale of Investments 1,664,968 Purchase of Investments (2,638,598) Net Cash Provided (used) by Investing Activities (1,088,641) Cash Flow from Financing Activities Net Cash Provided (used) by Financing Activities - Net Increase (Decrease)in Cash and Cash Equivalents $ (68,383) Beginning Balance-Cash and Cash Equivalents 190,079 Ending Balance- Cash and Cash Equivalents $ 121,696 THE ACCOMPANYING AUDITOR'S REPORT AND NOTES TO FINANCIAL STATEMENTS ARE INTEGRAL PARTS OF THIS REPORT AND SHOULD BE READ IN CONJUNCTION HEREWITH 5 1 North Fork Animal Welfare League, Inc. Notes to Financial Statements December 31, 2016 NOTE A—NATURE OF THE ORGANIZATION Nature of Activities North Fork Animal Welfare League, Inc. ("NFAWL") was incorporated on July 19, 1963, in the state of New York. NFAWL was established to care for animals by locating owners of lost animals, by finding homes for homeless animals,and by providing home, food, grooming, exercise, and medical treatment. In 1980 the Certificate of Incorporation of NFAWL was amended to enable NFAWL to contract with the Southold Town to manage and operate Southold Animal Shelter. NFAWL now operates two Animal Shelters: Southold and Riverhead, and covers the area from Orient to Riverhead,NY. NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accrual Basis Financial Statements The financial statements of NFAWL have been prepared on the accrual basis and conform to generally accepted accounting principles as applicable to not-for-profit organizations. Under the accrual basis of accounting,revenue is recognized when earned and expenses are recognized when incurred. Fund Accounting and Net Asset Classifications In accordance with Statement of Financial Accountings (SFAS) No. 117, "Financial Statements of Not- For-Profit Organization", NFAWL is required to report information regarding its financial position and activities according to three classes of net assets: permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets. • Permanently restricted net assets contain donor-imposed restrictions that stipulate the resources be maintained permanently, but permit NFAWL to use, or expend part or all of the income derived from the donated assets for either a specified or unspecified purposes. As of December 31, 2016, NFAWL had no permanently restricted net assets. • Temporarily restricted net assets contain donor-imposed restrictions that permit NFAWL to use or expend the assets as specified. The restrictions are satisfied either by the passage of time or by actions of NFAWL. Temporarily restricted net assets as of December 31, 2016 total $ 319,631, which are specifically from the"Troxel Estate"and are to be used exclusively towards constructing an animal shelter building in Riverhead,NY • Unrestricted net assets are not restricted by donors,or the donor-imposed restrictions have expired. 6 North Fork Animal Welfare League, Inc. Notes to Financial Statements December 31,2016 Support Recognition In accordance with Statement of Financial Accounting Standards(SFAS)No. 116, "Contributions Received by a Not-for-Profit Organization", NFAWL records contributions as permanently restricted, temporarily restricted,or unrestricted support depending on the existence and/or nature of any donor restrictions. Contributed Services A substantial number of unpaid volunteers have been made significant contributions of their time to NFAWL's various programs. These contributed services did not meet the criteria for recognition required by generally accepted accounting principles and are not reflected in the accompanying financial statements. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and amount of support and expense during the reporting period. Actual results could differ from those estimates. Income Taxes The Company is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code of 1986. Therefore,no accompanying provisions for income taxes have been recorded. Further,the Internal Revenue Service has classified NFAWL as an organization other than a private foundation. Cash and Cash Equivalents For the purposes of the statement of cash flows, NFAWL considers all highly liquid investments with a maturity of three months or less to be cash equivalents. The fair value of cash and cash equivalents approximates carrying value. NFAWL maintains separate cash and investment accounts for monies restricted by donors. Property, Plant and Equipment Property,plant,and equipment are recorded at cost. Addition,renewals,and betterments of property, plant and equipment are capitalized. Expenditures for repairs and maintenance are charged to support. Depreciation is provided for by using straight-line methods over the useful lives of the assets. 7 1 North Fork Animal Welfare League, Inc. Notes to Financial Statements December 31, 2016 Investment Valuation NFAWL's investments are stated at fair value. Fair value is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date in an active market. See Note C for the discussion of fair value measurements. Investment Returns Unrestricted: For the year ended December 31, 2016,NFAWL has received a total of$6,844 in interest income,$29,814 in dividend income,$106,454 in unrealized gains on investments at fair value,and$31,542 in realized losses on investments. Advisory fees and brokerage costs totaled$20,157. Temporarily Restricted: For the year ended December 31,2016,NFAWL has received a total of$2,009 in interest income, $5,397 in dividend income, $8,556 in unrealized gains on investments at fair value, and $419 in realized losses on investments. Advisory fees and brokerage costs totaled$3,829. Functional Expenses Functional expenses for shares costs have been allocated between program services, support services (general and administrative expenses) and fundraising based on an analysis of personnel time, space utilized, and other equitable bases for the related activities (50% of management's payroll, payroll taxes, and health insurance; 20% of insurance, auto expense, office, telephone and internet, rubbish removal, repairs and maintenance, miscellaneous, and utilities). Compensated Absences Compensated absences have not been accrued as of December 31, 2016 because they are not reasonably estimable. Risks and Uncertainties NFAWL owns investment accounts that hold various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect these investment account balances and the amounts reported in the statement of financial position. 8 Y North Fork Animal Welfare League, Inc. Notes to Financial Statements December 31,2016 Custodial Credit Risk NFAWL maintains deposit accounts at two commercial banks and at one brokerage firm in two separate accounts. The deposit accounts at the commercial bank are insured through FDIC up to $250,000. The cash accounts at the brokerage firm are guaranteed by the Securities Investor Protection Corporation up to a maximum of$500,000. NFAWL had$0 in uninsured deposits at the brokers as of December 31, 2016. NOTE C—INVESTMENTS Fair Value Measurements NFAWL follows ASC 820, which defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, NFAWL considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such 'as inherent risk, transfer restrictions, and risk of nonperformance. ASC 820 also establishes a fair value hierarchy that requires NFAWL to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The categorization of each investment type within the fair value hierarchy is based upon the lowest of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value: • Level 1: quoted price in active markets for identical assets or liabilities at the measurement date; • Level 2: inputs other than level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities 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 assets or liabilities; • Level 3: unobservable inputs that are supported by little or no market activity and that reflect the Organization's own assumptions about market participants and investment prices. All of NFAWL's investments measured at fair value consist of Level I assets as of December 31,2016. The described methods may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future value. Furthermore, although NFAWL believes its valuation methods are appropriate and consistent with other market participants,the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date. 9