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Home My WebLink About12/31/2003 NORTH FORK ANIMAL WELFARE LEAGUE. INC. FINANCIAL STATEMENTS DECEMBER 31. 2003 I-q ..s -Ii-tJlf NORTH FORK ANIMAL WELFARE LEAGUE. INe. TABLE OF CONTENTS December 31, 2003 Pa~e INDEPENDENT AUDITORS' REPORT............................................................. 1 FINANCIAL STATEMENTS Statement of Financial Position................................................ ............... 2 Statement of Activities...................... ....................................................... 3 Statement of Cash Flows.......................................................................... 4 Statement of Functional Expenses....... ............ ............ ........................... 5 Notes to Financial Statements................................................................. 6,7 ~ JOSEPH W. IRWIN, CPA 6 Sterlington Commons Greenport, NY 11944 (631) 477-3011 (631) 477-9533 (fax) INDEPENDENT AUDITORS' REPORT Board of Directors North Fork Animal Welfare League, Inc. P.O. Box 297 Southold, NY 11971 Dear Members of the Board: We have audited the accompanying statement offmancial position of North Fork Animal Welfare League, Inc. as of December 31, 2003, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the organization's management. OUf responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 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 31,2003, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Joseph W. Irwin, CPA Certified Public Accountant May 11, 2004 Greenport, NY ASSETS CURRENT ASSETS Cash - Demand deposits Cash - Time deposits Investments Security deposits Prepaid insurance NORTH FORK ANIMAL WELFARE LEAGUE. INe. STATEMENT OF FINANCIAL POSITION December 31, 2003 TOTAL CURRENT ASSETS CURRENT LIABILITIES LIABILITIES AND NET ASSETS TOTAL ASSETS Accounts payable Taxes payable NET ASSETS Unrestricted - undesignated Restricted TOTAL CURRENT LIABILITIES TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS 2 See accompanying notes to financial statements $ 28813. 5454. 439941. 600. 1693. 476501. 476501. 7808. ~ 8509. 467992. o. 467992. $ 476501. NORTII FORK ANIMAL WELFARE LEAGUE, INe. STATEMENT OF ACTIVITIES For the Year Ended December 31, 2003 SUPPORT AND REVENUE Membership dues Donationslbequests Town contract income Interest income Dividend income Net capital gains Fund raising events Sundry Fees TOTAL OTHER INCOME Unrestricted Restricted $12510. 128153. 150000. 11419. 8109. (437.) 43793. 6531. 360078. TOTAL SUPPORT & REVENUE 360078. EXPENDITURES Program services Management & General (Note B) TOTAL EXPENDITURES INCREASE (DECREASE) IN NET ASSETS NET ASSETS - BEGINNING OF YEAR 234035. 97556. 331591. 28487. 439505. NET ASSETS - END OF YEAR $467992. 3 See accompanying notes to financial statements Total $12510. 128153. 150000. 11419. 8109. (437.) 43793. 6531. 360078. 360078. 234035. 97556. 331591. 28487. 439505. $467992. NORTH FORK ANIMAL WELFARE LEAGUE. INC. STATEMENTS OF CASH FLOWS December 31, 2003 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustment to reconcile net income to net cash provided by operating activities: Increase in prepaid expenses Increase in accounts payable Decrease in Accrued Expenses Increase taxes payable NET ASSETS PROVIDED BY OPERATING ACTIVITIES EXTRAORDINARY ITEM (NOTE B) CASH FLOWS FROM FINANCING ACTIVITIES NET CASH FLOWS FROM FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Subtraction from investment principle NET CASH FLOWS FROM INVESTMENT ACTIVITIES NET INCREASE IN CASH CASH BALANCE - BEGINNING CASH BALANCE - ENDING 4 See accompanying notes to financial statements $ 28487. <1693.> 2889. <32997.> 654. <2660.> o. 15563. 15563. 12903. 15910. $28813. NORTH FORK ANIMAL WELFARE LEAGUE. INC. STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended December 31,2003 Program Management % Services & General Total Admin. EXPENDITURES Personnel 105049. 26263. 131312. 20% Employee benefits 7538. 1885. 9423. 20% Payroll taxes 10320. 2580. 12900. 20% Accounting fees 6400. 1600. 8000. 20% Supplies 15605. 15605. Telephone 3441. 861. 4302. 20% Postage & Shipping 1875. 469. 2344. 20% Equipment rental & repairs 2279. 2279. Conferences/Travel 469. 469. Veterinarian fees 30570. 30570. Truck expense 2244. 2244. Utilities 5571. 1393. 6964. 20% Office expense 2137. 2136. 4273. 50% Insurance 6517. 6517. Advertising 6135. 682. 6817. 10% Bank charges 10. 10. Garbage 2404. 2404. Fund raising 23609. 23 609. Legal rees (Note B) 59221. 59221. Miscellaneous expenses 1862. 466. 2328. 20% TOTAL EXPENDITURES $234035. 97556. 331591. 5 See accompanying notes to financial statements NORTII FORK ANIMAL WELFARE LEAGUE, INe. NOTES TO FINANCIAL STATEMENT December 31, 2003 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: North Fork Animal Welfare League, Inc., a non-profit organization, was incorporated July 19, 1963 and is exempt from federal income tax under the provisions of Section 501(c) (3) of the Intemal Revenue Code, and has been designated as an organization which is not a private foundation. The mission of the League is to promote animal welfare by means of neutering, human care and protection of stray and abandoned animals. The organization uses the accrual method of accounting. Contractual Agreement with Southold Town: On December 31, 2002, the previous 3 year contractual agreement with the Town of Southold expired and the League entered into a I year contract for the year ended December 31, 2003. On May 11,2004 the League entered into a 4 year contractual agreement which will expire on December 31, 2007. The agreement calls for a 4% annual increase over the term of the contract. The League is to perform the duties and responsibilities of dog control officer in the enforcement of the provisions of Article 7 of the Agricultural and Markets Law and the Town of Southold rules and regulations. The sum of money paid by the Town was in the amount of$12,500.00/month ($150,000 for the year) for the calendar year 2003. In addition, the League is to operate and maintain at its own expense the Town Animal Shelter in Peconic, NY; properly shelter, feed and water and otherwise care for all dogs in the shelter and comply with all of the duties outlined in the contract. Any humanitarian needs pertaining to the welfare of cats are to be an expense of the League. Use of Estimates in the Preparation of Financial Statements: Management of the League uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affected the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that management uses. Cash and Cash Eauivalents: The League considers all higWy liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents for purposes of the statement of cash flows exclude permanently restricted cash and cash equivalents. 6 Note B. Extraordinarv item - Legal fees: The League iucurred $59,221.00 oflegal fees during the fiscal year 2003. Of that amount approximately 40% was for general counsel of a recurring and ordinary nature (i.e. By-Law review and changes; Town contractual negotiations and annual meeting protocol). The remaining fees can be attributed to (2) extraordinary items. (I.) In 2002, the NF A WL was a defendant in a civil suit brought by potential candidates for the Board of Directors whose candidate filings were deemed invalid by the present board. On December 2, 2002, the Court issued a stipulation and order of settlement, covering what the League would produce to the petitioners and stipulations on their use. Additional legal fees were incurred in 2003 to meet the requirements of the settlement and also respond to numerous correspondences by the petitioners. (2.) The league was named as residuary beneficiary of the Estate of Patricia Toner Troxel. Commencing in the summer of2003, general counsel was in discussion and negotiation with the Trustee of the Estate about this bequest. The Trustee assesses the value of the residuary estate at approximately $300,000. In December 2003, the Trustee commenced a proceeding in Suffolk County Surrogates Court asserting that the League cannot comply with the terms of the gift and suggesting that the residuary should be given to another animal welfare organization. As of the report date, litigation to have this bequest released to the NF A WL is in process. The Attorney General of New York State has filed papers supporting the Leagues position that it should be giveu an opportunity to comply with the terms of the gift. The NFA WL has a strong legal position, however, it is not possible to predict what the outcome of this litigation will be. 7