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--11--lllJIJlllJll & ASSOCIATES, PA
Certified Public Accountants
PASCO EDUCATION FOUNDATION, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2016 AND 2015
3339 W Bearss Ave.· Tampa, FL 33618 ·Phone (813) 908-5310 ·Fax (813) 908-5402 Member: American Institute of Certified Public Accountants. Florida Institute of Certified Public Accountants
www.reeder-cpa.com
PASCO EDUCATION FOUNDATION, INC.
FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
TABLE OF CONTENTS
PAGE
Report of Independent Certified Public Accountants 1
FINANCIAL STATEMENTS
Statements of Financial Position 3
Statements of Activities and Changes in Net Assets 4
Statements of Functional Expenses 5
Statements of Cash Flows 7
Notes to the Financial Statements 8
Report on Internal Control over Financial Reporting and on 17 Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
--11--lllJIJlllJll &ASSOCIATES, PA
Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors Pasco Education Foundation, Inc. Land O'Lakes, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of Pasco Education Foundation, Inc. (a nonprofit organization), which comprise the statements of financial position as of June 30, 2016 and 2015, and the related statements of activities and changes in net assets, 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 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 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 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 for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of June 30, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
3339 W Bearss Ave.· Tampa, FL 33618 ·Phone (813) 908-5310 ·Fax (813) 908-5402 Member: American Institute of Certified Public Accountants. Florida Institute of Certified Public Accountants
www.reeder-cpa.com
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated August 1, 2016 on our consideration of the Organization's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization's internal control over financial reporting and compliance.
~11-~~4PA Certified Public Accountants August 1, 2016
ASSETS
Current Assets Cash Certificate of deposit Investments
Total Current Assets
PASCO EDUCATION FOUNDATION, INC. STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2016 AND 2015
2016
$ 292,075 27,000
543,764
862,839
Computer software, net of accumulated amortization 41,812 Certificate of deposit 80,000 Prepaid scholarships 1,708,043 Endowment investments 1,524,544
Total Assets $ 4,217,238
LIABILITIES AND NET ASSETS
Current Liabilities Accounts payable $ Accrued expenses 322
Total Liabilities 322
Net Assets Unrestricted, undesignated 267,863 Temporarily restricted 1,946,977 Permanently restricted 2,002,076
Total Net Assets 4,216,916
Total Liabilities and Net Assets $ 4,217,238
$
$
$
$
Read Report of Independent Certified Public Accountants. The accompanying notes are an integral part
of these financial statements.
3
2015
308,538
499,552
808,090
1,728,983 1,699,663
4,236,736
4,874 699
5,573
377,607 1,886,480 1,967,076
4,231,163
4,236,736
PASCO EDUCATION FOUNDATION, INC. STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2016 AND 2015
CHANGES IN UNRESTRICTED NET ASSETS
Revenue and Support Special events Less: direct costs of special events
Total special events, net of direct costs
Contributions In-kind contributions Grant revenue Investment return
Net assets released from restrictions
Total Revenues and Support
Expenses Program Services
Support Services Fund raising Administrative
Total Support Services
Total Expenses
Change in Unrestricted Net Assets
CHANGES IN TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted contributions Net assets released from restrictions
Change in Temporarily Restricted Net Assets
CHANGES IN PERMANENTLY RESTRICTED NET ASSETS
Permanently restricted contributions
Increase (decrease) in net assets
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
$
2016
343,737 (94,963)
248,774
222,840 18,411
443,260 (152,793)
780,492
49,503
829,995
822,493
70, 175 47,071
117,246
939,739
{109,744}
110,000 {49,503)
60,497
35,000
(14,247)
4,231,163
$ 4,216,916
Read Report of Independent Certified Public Accountants. The accompanying notes are an integral part
of these financial statements.
4
$
2015
223,356 (83,567)
139,789
215,665 25,186
450,856 88,762
920,258
42,611
962,869
748,718
62,756 41,830
104,586
853,304
109,565
158,985 {42,611)
116,374
225,939
4,005,224
$ 4,231, 163
Salaries and wages Benefits and payroll taxes
Total salaries and related expenses
Grants Student scholarships Awards Science fair Professional fees Printing costs Occupancy costs Food and beverage costs Supplies IT costs Dues and subscriptions Bank and merchant fees Travel and meetings Insurance Other
Total expenses before amortization
Amortization
Total expenses
PASCO EDUCATION FOUNDATION, INC. STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED JUNE 30, 2016
SUPPORT SERVICES
PROGRAM SERVICES FUNDRAISING ADMINISTRATIVE
$ 222,114 $ 44,423 $ 29,615 25,699 5, 140 3,427
247,813 49,563 33,042
222,706 249,020
11,655 2,332 1,555 9,500
12,413 2,483 1,655 2,227 446 297 8,250 1,650 1, 100 8,772 1,755 1, 170
24,123 4,824 3,216 7,325 1,465 977 6,236 1,247 831
2,357 8,861 1,772 1, 181
1,860 1,404 281 187
820,305 70, 175 47,071
2,188
$ 822,493 $ 70,175 $ 47,071
Read Report of Independent Certified Public Accountants. The accompanying notes are an integral part
of these financial statements.
5
TOTAL PROGRAM
TOTAL AND SUPPORT SUPPORT SERVICES SERVICES
$ 74,038 $ 296,152 8,567 34,266
82,605 330,418
222,706 249,020
3,887 15,542 9,500
4,138 16,551 743 2,970
2,750 11,000 2,925 11,697 8,040 32, 163 2,442 9,767 2,078 8,314 2,357 2,357 2,953 11,814 1,860 1,860
468 1,872
117,246 937,551
2,188
$ 117,246 $ 939,739
Salaries and wages Benefits and payroll taxes
Total salaries and related expenses
Grants Student scholarships Awards Science fair Marketing and promotions Professional fees Printing costs Occupancy costs Food and beverage costs Supplies IT costs Dues Bank and merchant fees Travel and meetings Insurance Other
Total expenses
PASCO EDUCATION FOUNDATION, INC. STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED JUNE 30, 2015
SUPPORT SERVICES
PROGRAM SERVICES FUNDRAISING ADMINISTRATIVE
$ 185,186 $ 37,037 $ 24,692 18,823 3,765 2,510
204,009 40,802 27,202
196,929 245,521
10,588 2, 118 1,412 8,000
1,637 27,330 5,466 3,644
6,158 1,076 717 11,006 2,201 1,468 9,398 3,783 1, 189 9,093 1,818 1,212 9,060 1,812 1,208 2,508 502 334
425 7,236 1, 116 965
2,236 1,882 243
$ 748,718 $ 62,756 $ 41,830
Read Report of Independent Certified Public Accountants. The accompanying notes are an integral part
of these financial statements.
6
TOTAL PROGRAM
TOTAL AND SUPPORT SUPPORT SERVICES SERVICES
$ 61,729 $ 246,915 6,275 25,098
68,004 272,013
196,929 245,521
3,530 14,118 8,000
1,637 1,637 9, 110 36,440 1,793 7,951 3,669 14,675 4,972 14,370 3,030 12, 123 3,020 12,080
836 3,344 425 425
2,081 9,317 2,236 2,236
243 2,125
$ 104,586 $ 853,304
PASCO EDUCATION FOUNDATION, INC.
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015
2016 CASH FLOWS FROM OPERA TING ACTIVITIES Change in net assets $ {14,247}
Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Amortization expense 2,188 Net unrealized (gain) loss in investments 176,269 (Increase) decrease in prepaid scholarships 20,940 Increase (decrease) in accounts payable and accrued expenses {5,251)
Total Adjustments 194,146
Net Cash Provided (Used) by Operating Activities 179,899
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of computer software (44,000) Purchase of certificates of deposit (107,000) Purchase of investments {45,362)
Net Cash Provided (Used In) Investing Activities {196,362)
Net Increase (Decrease) in Cash (16,463)
Cash and cash equivalents, beginning of year 308,538
Cash and cash equivalents, end of year $ 292,075
Read Report of Independent Certified Public Accountants. The accompanying notes are an integral part
of these financial statements.
7
2015
$ 225,939
(72, 141) (21,759)
{3,586)
{97,486)
128,453
(8,038)
{8,038)
120,415
188, 123
$ 308,538
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTE A- DESCRIPTION OF ORGANIZATION
The Pasco Education Foundation, Inc. ("the Organization") is an independent nonprofit organization established in 1991 in the state of Florida. The Foundation is the avenue for the individuals and the private sector to develop positive and supportive relationships with the Pasco County School district and to make philanthropic contributions to help accomplish the goals of Pasco County's public schools.
The Organization's mission is to advance student achievement and invest community resources to enrich educational opportunities for students and educators.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows:
Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations, including restricted contributions whose restrictions are met in the same reporting period.
Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may or will be met, either by actions of the Organizations and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.
Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. Generally the donors of these assets permit the Organization to use all or part of the Income earned on any related investment for general or specific purposes.
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 may differ from those estimates.
Cash and Cash Equivalents Cash includes amounts on deposit in bank accounts and currency on hand.
Investments Investments are reported at fair value based on quoted market value with unrealized gains and losses included in changes in net assets.
Read Report of Independent Certified Public Accountants.
8
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Prepaid Scholarships Prepaid scholarships consist of prepaid college tuition fees purchased through the Florida Prepaid College Foundation, Inc. The Organization raises money through contributions which are matched dollarfor-dollar by the State of Florida passed through the Consortium of Florida Education Foundations. The scholarships are recorded at the lower of contract cost or current tuition value and are amortized based on actual credit hours used by students.
Computer Software Acquisitions of computer software are capitalized, recorded at historical cost, and amortized using the straight-line method over the estimated useful lives ranging from 3 to 5 years. Acquisitions of computer software with a cost in excess of $1,000 are capitalized. Amortization expense for the years ended June 30, 2016 and 2015 was $2,188 and $0, respectively.
Donated Facilities, Materials and Services Donated facilities are reflected in the accompanying financial statements as revenue and expense based on the fair rental value of comparable facilities. At June 30, 2016 and 2015, the amount of donated facilities recorded in expense is $11,000 each year. Donated materials and services, when received are reflected as contributions in the financial statements at their estimated fair market values at the date of receipt. For the year ended June 30, 2016, the Organization received donated professional services valued at $7,411 ($14, 186 at June 30, 2015). Volunteer services not requiring specialized skills are not reflected in the financial statements since no objective basis exists for recording and assigning values to many of these services.
Functional Allocation of Expenses The costs of providing the various programs have been summarized on a functional basis in the statement of functional expenses. Expenses that are associated with a specific program are charged directly to that program. Expenses that benefit more than one program are allocated to the various programs based on the relative benefit provided. Administrative expenses are allocated to the various programs and supporting services based on each program's total labor cost.
Income Tax Status Income taxes are not provided for in the financial statements since the Organization is exempt from federal and state income taxes under section 501 (c)(3) of the Internal Revenue Code and similar state provisions. The Organization is treated as a public supported organization, and not as a private foundation. Management is not aware of any activities that would jeopardize the Organization's taxexempt status.
The Organization accounts for uncertain tax positions, if any, in accordance with ASC Section 740. In accordance with these professional standards, the Organization recognizes tax positions only to the extent that Management believes it is "more likely than not" that its tax positions will be sustained upon IRS examination. Management believes that it has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements for the year ended June 30, 2016 and 2015.
Read Report of Independent Certified Public Accountants.
9
PASCO EDUCATION FOUNDATION, INC.NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Tax Status (continued)The Organization believes that its income tax filing positions will be sustained upon examination anddoes not anticipate any adjustments that would result in a material adverse affect on the Organization’sfinancial condition, results of operations or cash flows. Accordingly, the Organization has not recordedany reserves, or related accruals for interest and penalties for uncertain income tax positions at June 30,2016 and 2015.
The Organization is subject to routine audits by taxing jurisdictions; however, there are currently no auditsfor any tax periods in progress. The Organization believes it is no longer subject to income taxexaminations for fiscal years ending prior to June 30, 2013.
The Organization’s policy is to classify income tax related interest and penalties in interest expense andother expenses, respectively.
Fair Value of Financial InstrumentsProfessional standards require disclosure of an estimate of fair value of certain financial instruments.The Organization’s significant financial instruments are cash, money market funds, prepaid scholarshipsand other short-term assets and liabilities. For these financial instruments, carrying values approximatefair value.
Concentration of Credit RiskFinancial instruments which potentially subject the Organization to concentrations of credit risk consistprincipally of cash, money market funds, and certificates of deposit. The Organization places itsdeposits with creditworthy, high quality financial institutions. The Organization’s cash held withfinancial institutions exceeded the FDIC $250,000 insured limit at June 30, 2016 by $71,843. TheOrganization’s deposits held with financial institutions exceeded federally insured limits at June 30,2015 by $144,108.
ReclassificationCertain 2015 amounts have been reclassified to conform to the 2016 presentation.
NOTE C – PREPAID SCHOLARSHIPS
During the years ended June 30, 2016 and 2015, the Organization paid $69,454 and $88,134,respectively, to the Florida Prepaid College Foundation, Inc. for the purpose of purchasing prepaidscholarships to be awarded in the future to qualified, economically disadvantaged students in Florida.The State of Florida matching contributions for the year ended June 30, 2016 and 2015 totaled $69,454and $88,134, respectively, and are recorded as temporarily restricted contributions until the scholarshipsare utilized.
Read Report of Independent Certified Public Accountants.
10
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTED - FAIR VALUE MEASUREMENTS
Professional standards, establishes a framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:
Level1 • Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities
in active markets that the Organization has the ability to access.
Level2 • Inputs to the valuation methodology include:
o Quoted prices for similar assets or liabilities in active markets; o Quoted prices for identical or similar assets or liabilities in inactive markets; o Inputs other than quoted prices that are observable for the asset or liability; o Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.
Level3 • Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable input and minimize the use of unobservable input and minimize the use of unobservable inputs.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Read Report of Independent Certified Public Accountants.
11
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTED- FAIR VALUE MEASUREMENTS, (continued)
The following table sets forth by level, within the fair value hierarchy, the Organization's assets at fair value at June 30, 2016:
Short term investments $ Corporate bonds Municipal bonds Equities Exchange traded funds
Total $
Fair Value Measurements at Reporting Date Using Fair Value (Level 1) (Level 2) (Level 3)
64,480 $ 197,998 77, 185
422,039 1,306,606
2,068,308 $
64,480
422,039 1,306,606
2,068,308
$
$
197,998 77, 185
$
$
The following table sets forth by level, within the fair value hierarchy, the Organization's assets at fair value at June 30, 2015:
Fair Value Measurements at Reporting Date Using Fair Value (Level 1) (Level 2) (Level 3)
Short term investments $ 143, 156 $ 143, 156 $ $ Corporate bonds 51,965 51,965 Municipal bonds 72,720 72,720 Equities 621,503 621,503 Exchange traded funds 1,309,871 1,309,871
Total $ 2, 199,215 $ 2, 199,215 $ $
Investment return consists of the following at June 30,: 2016 2015
Interest and dividends $ 38,654 $ 28,358 Realized and unrealized gains (losses) (176.269) 72 141
(137,615) 100,499 Less: investment expenses (15.178) (11 ,737)
$ (152,793) $ 8f3i762
Read Report of Independent Certified Public Accountants.
12
NOTE E - ENDOWMENT
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
At June 30, 2016 and 2015, the Organization was the beneficiary of various endowment funds that totaled $2,002,076 and $1,967,076, respectively. The donors require that the monies received be held as permanent endowment funds, the income is to provide scholarships for students.
Endowment Net Asset Composition by Type of Fund as of June 30, 2016:
Organization Endowment
Unrestricted
$
Temporarily Restricted
$
Permanently Restricted
$ 2,002,076
Endowment Net Asset Composition by Type of Fund as of June 30, 2015:
Organization Endowment
Unrestricted
$
Temporarily Restricted
$
Permanently Restricted
$ 1,967,076
Changes in Endowment Net Assets for the Fiscal Year Ended June 30, 2016:
Temporarily Permanently Unrestricted Restricted Restricted
Endowment net assets, beginning of year $ $ $ 1,967,076
Contributions 35,000
Investment income, net 12, 134
Net appreciation (realized and unrealized) (12,134) Endowment net assets, end of year $ $ $ 2,002,076
Read Report of Independent Certified Public Accountants.
13
Total
$ 2,002,076
Total
$ 1,967,076
Total
$ 1,967,076
35,000
12, 134
(12,134)
$ 2,002,076
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTE E - ENDOWMENT, (continued)
Changes in Endowment Net Assets forthe Fiscal Year Ended June 30, 2015:
Un restricted
Endowment net assets, beginning of year $
Contributions
Investment income, net
Net appreciation (realized and unrealized) Endowment net assets, end
16,621
(16,621)
of year $ ......, ____ _
Interpretation of Relevant Law
Temporarily Restricted
$
$
Permanently Restricted
$ 1,967,076
$ 1,967,076
Total
$ 1,967,076
16,621
(16,621)
$ 1,967,076
The Board of Directors has interpreted the law as requiring donor restricted net assets in an endowment fund to remain restricted until appropriated for expenditure by the Organization for the donor's intended purpose. In accordance with the Florida Uniform Prudent Management of Institutional Funds Act (FUPMIFA), the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:
1) The purposes of the Organization and the donor restricted endowment fund 2) General economic conditions 3) The possible effect of inflation and deflation 4) The expected total return on investment 5) Other resources of the Organization 6) The investment policies of the Organization 7) The duration and preservation of the endowment fund.
Return Objectives and Risk Parameters The Organization has adopted an Investment Guideline Policy for endowment assets that attempts to emphasize continued focus on planned giving. The objective is to enhance maximum total return from a combination of capital appreciation and income, without assuming unreasonable risk. Investments are divided between fixed income and equity securities with approximately 40% in fixed income and 60% in equity.
Spending Policy Each endowment fund has an endowment principal fund and an endowment spendable fund. Distributions are made on a quarterly basis in accordance with the endowment spending policy. The current annual spending rate is 4.0% of the endowment principal fund's quarterly adjusted endowment spending base, distributed at a rate of 1 % per calendar quarter.
Read Report of Independent Certified Public Accountants.
14
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTE E - ENDOWMENT, (continued)
Market Fluctuations From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level that current law requires the Organization to retain for a fund of perpetual duration. Deficiencies of this nature are reported in unrestricted net assets were approximately $477,532 at June 30, 2016 and $267,000 as of June 30, 2015. Such deficiencies resulted from unfavorable market fluctuations that occurred after the investment of permanently restricted contributions and continued appropriation for certain scholarships was deemed prudent by the Board of Directors. To remedy the situation, The Board of Directors adopted an endowment spending policy to preserve the purchasing power of endowments and to generate a current income stream to support donor objectives, while assuming a prudent level of investment risk.
NOTE F - TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets of the Organization are comprised of cash and prepaid expenses available for the following purposes:
Florida Prepaid College Fund scholarships Other scholarships
$1,708,043 238,934
$1.946.977
Net assets of $49,503 and $42,611 were released from donor restrictions in satisfaction of program restrictions during the years ended June 30, 2016 and 2015, respectively.
NOTE G - DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES
The Organization receives revenue from the sale of the Florida Education specialty license plate offered by the Florida Department of Highway Safety and Motor Vehicles (the Department). For the years ended June 30, 2016 and 2015, the Organization recognized $15,389 and $15,857, respectively in revenue from the Department. The Organization expended the monies on providing scholarships and grants in accordance with the mission of the Organization and in compliance with sections 320.08056 and 320.08058 of the Florida Statutes governing the use of the moneys received from the Department.
NOTE H- RELATED PARTY TRANSACTIONS
During the years ended June 30, 2016 and 2015 a member of the Board of Directors is an officer at a bank that is used by the Organization. This Board member does not receive any payment of commission for the banking services. The School District of Pasco County donates space and services to the Organization. A member of the Board of Directors is also a Pasco County School Board member. The superintendent of Pasco County schools is also a member of the Organization's Board of Directors. Neither of these Board members receives any compensation for the donation of space.
Read Report of Independent Certified Public Accountants.
15
PASCO EDUCATION FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016 AND 2015
NOTE I - SUBSEQUENT EVENTS
Management has evaluated subsequent events through August 1, 2016, the date the financial statements were available to be issued.
Read Report of Independent Certified Public Accountants.
16
--11--llBBlllJll &ASSOCIATES, PA
Certified Public Accountants
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON
AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors of Pasco Education Foundation, Inc.
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Pasco Education Foundation, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated August 1, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Organization's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Organization's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
3339 W Bearss Ave. • Tampa, FL 33618 ·Phone (813) 908-531 O ·Fax (813) 908-5402 Member: American Institute of Certified Public Accountants. Florida Institute of Certified Public Accountants
www.reeder-cpa.com
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Certified Public Accountants August 1, 2016
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