Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEEN
FINANCIAL STATEMENTS
DECEMBER 31, 2016
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENFINANCIAL STATEMENTS
DECEMBER 31, 2016
CONTENTS
INDEPENDENT AUDITORS'REPORT 1
STATEMENT OF FINANCIAL POSITION 2
STATEMENT OF CHANGES IN FUND BALANCES 3
STATEMENT OF OPERATIONS 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6 -12
JJLW The Sum of Excellence www.hlw-cpa.com
HLWPh: 250 -492 -8821
Fax:250-492-8288CHARTERED PROFESSIONAL [email protected]
ACCOUNTANTS 502 Ellis StreetPenticton, BC
V2A4M3
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Community Foundation of the South Okanagan Similkameen
We have audited the accompanying financial statements of the Community Foundation of the South OkanaganSimilkameen which comprise the statement of financial position as at December 31, 2016 and statements ofchanges in fund balances, operations, and cash flows for the year then ended, and a summary of significantaccounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordancewith Canadian accounting standards for not-for-profit organizations, and for such internal control as managementdetermines is necessary to enable the preparation of financial statements that are free from materialmisstatement, 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 Canadian generally accepted auditing standards. Those standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors' judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby 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 auditopinion.
Opinion
In our opinion, these financial statements present fairly, in all material respects, the financial position of theFoundation as at December 31, 2016, and its results of operations and cash flows for the year then ended inaccordance with Canadian accounting standards for not-for-profit organizations.
Report on Other Legal and Regulatory Requirements
As required by the Society Act of British Columbia, we report that, in our opinion, these financial statements havebeen prepared on a basis consistent with the basis on which the financial statements of the preceding year wereprepared.
HL\M QSMU^uL \>/M>J(jW&04»*L f\0604A+fahfo [iryC.
Penticton, BC
May 19, 2017
www.hlw-cpa.com The Sum of Excellence
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENSTATEMENT OF FINANCIAL POSITION
as at December 31,2016
CURRENT ASSETS
Cash
Investments - Note 3
Accounts receivable
Prepaid expensesDue from funds - Note 4
CAPITAL ASSETS-Note 5
CURRENT LIABILITIES
Accounts payable - Note 6Due to funds - Note 4
INVESTED IN CAPITAL ASSETS
EXTERNALLY RESTRICTED
- Note 7
INTERNALLY RESTRICTED - Note 8
UNRESTRICTED
FUNDS HELD IN TRUST - Note 9
APPROVED BY THE BOARD:
ASSETS
Income and
Operating Restricted Grants Endowment 2016
Fund Fund Fund Fund Total
2015
Total
$ 27,782 $ 136,999 $ 55,042 $ 586,658 $ 806,481 $ 240,31477,426
1,393
5,956
31,983
1,243
517f965 1,364,778
9,228,561 9,305,987
2,636
5,956
9,042,445
1,988
1,389
144,540 654,964 1,421,063 9,815,219 10,121,060 9,286,136
1,989 : : : 1,989 1,614
S 146.529 £ 654.964 S 1.421.063 £ 9.815.219 S 10.123.049 $9.287.750
LIABILITIES
$ 17,522 $
17,522
FUND BALANCES
1,989
654,964 1,421,063
$ - $ 17,522 $ 14,7161,914,726 : -
1,914,726 17,522 14,716
1,989 1,614
5,102,227 7,178,254 6,540,862
2,798,266 2,798,266 2,598,211
127,018 - 127.018 132.347
129,007 654,964 1,421,063 7,900,493 10,105.527 9.273,034
§ 146.529 $ 654.964 JLLdZM^,,,^815,219 $10,123,049 ? 9,287,750
. PRESIDENT ^TREASURER
See accompanying notes to financial statements
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENSTATEMENT OF CHANGES IN FUND BALANCES
year ended December 31,2016
Income and
Operating Restricted Grants Endowment 2016 2015
Fund Fund Fund Fund Total Total
Beginning balance $ 133,960 $ 640,408 $ 1,213,648 $ 7,285,018 $ 9,273,034 $ 9,062,687
Excess (deficiency) of revenue over
expenses (102,248) 21,592 320,894 592,255 832,493 210,347
Interfund transfers - Note 11 97,295 (7,036) (113,479) 23,220 : -
Ending balances S 129.007 £ 654.964 $ 1.421.063 £ 7.900.493 £10.105.527 S 9.273.034
See accompanying notes to financial statements
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENSTATEMENT OF OPERATIONS
year ended December 31,2016
Income and
Operating Restricted Grants Endowment 2016 2015
Fund Fund Fund Fund Total Total
REVENUES
Donations $ $ 223,843 $ $ 592,255 $ 816,098 $ 245,993Investment income - Note 3 18,341 2,561 705,100 - 726,002 464,679
Grants and sponsorships 68,901 11,168 9,703 - 89,772 100,118
Fundraising events 73,223 270 - - 73,493 84,479Managed funds fees 4,751 - - - 4,751 4,539
165,216 237,842 714,803 592,255 1,710,116 899,808
EXPENSES
Amortization of capital assets 1,021 - - - 1,021 1,247
Bank charges 106 - - - 106 73
Contract work 24,003 20,250 - - 44,253 22,378
Employee benefits 6,947 - - - 6,947 7,508
Entertainment 321 - - - 321 491
Events and seminars - 3,347 - - 3,347 8,383Fundraising activities 40,669 - - - 40,669 43,848
Grants paid - 191,416 340,813 - 532,229 331,644
Insurance 1,543 - - - 1,543 1,660Investment management fee - - 53,096 - 53,096 52,110
Licences, dues and fees 4,957 - - - 4,957 12,879Office and sundry 14,168 1,193 - - 15,361 23,669Professional development 1,901 - - - 1,901 5,821
Professional fees 21,031 - - - 21,031 15,526
Publicity and promotion 11,148 44 - - 11,192 27,609
Rent 10,800 - - - 10,800 7,200Telephone 2,971 - - - 2,971 2,623
Travel 4,931 - - - 4,931 6,118
Wages 120,947 - - - 120,947 118,674
267,464 216,250 393,909 : 877,623 689,461
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENSES £ (102.248) £ 21.592 £ 320.894 £ 592.255 £ 832.493 £ 210.347
See accompanying notes to financial statements
JJLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENSTATEMENT OF CASH FLOWS
year ended December 31,2016
Income and
Operating Restricted Grants Endowment 2016 2015
Fund Fund Fund Fund Total Total
OPERATING ACTIVITIES
Cash receipts from fundraising $ 70,904 $ 270 $ $ - $ 71,174 $ 102,258Cash received from contributors 37,601 175,936 9,703 - 223,240 97,844Cash receipts from contributors for
endowments - - - 552,778 552,778 199,429Cash receipts from interest and
dividends 333 98 - 707,563 707,994 630,723Cash paid for administration (229,634) (24,686) - - (254,320) (268,766)Grants paid - (191,416) (340,813) - (532,229) (331,644)
' (120,796) (39,798) (331,110) 1,260,341 768,637 429,844
INVESTING ACTIVITIES
Proceeds from sale of investments - 103,414 - 403,075 506,489 340,000Purchase of capital assets (1,396) - - - (1,396) (1,241)Purchase of investments - - - (707,563) (707,563) (676,895)
(1.396) 103,414 _ (304,488) (202,470) (338,136)
INCREASE (DECREASE) IN CASH (122,192) 63,616 (331,110) 955,853 566,167 91,708
CASH, BEGINNING OF YEAR 60,243 20,845 57,754 101,472 240,314 148,606
Interfund adjustments 89,731 52,538 328,398 (470,667) . _
CASH, END OF YEAR £ 27.782 £ 136.999 £ 55.042 £ 586.658 £ 806.481 $ 240.314
See accompanying notes to finan@& statements
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEEN
NOTES TO FINANCIAL STATEMENTS
December 31,2016
1. NATURE OF THE FOUNDATION
The Community Foundation of the South Okanagan Similkameen (the "Foundation") is dedicated tobuilding healthy, vibrant, and livable communities across the South Okanagan Similkameen. TheFoundation makes beneficial and lasting improvements by connecting gifts of energy, ideas, time andmoney with the needs and opportunities of our communities.
The Foundation sees itself operating three "lines of business". As "brokers" we achieve our goalsthrough supporting others to achieve their legacies, primarily by working with donors to fulfill theirgiving goals. As "catalysts" we act and engage in social change, working as philanthropic leaders to builda culture of giving, and proactively conducting research to better understand community needs. As"facilitators" we encourage others to join as groups to create their dreams by collaborating andconvening with community partners to fulfill identified community needs.
The Foundation accepts donations received as contributions to its operations, endowment funds,restricted funds, or managed funds, as directed by donors. Grants are made to charitable organizationsthroughout the South Okanagan Similkameen using income earned from the investment of donatedassets.
The Foundation was incorporated on December 18,1991 under the Society Act of British Columbia andbecame a registered charity under the Income Tax Act on August 10,1992. As a result of its status as acharity, the Foundation is exempt from income taxes and may issue tax receipts to donors as long as itcomplies with the rules and regulations of the Income Tax Act.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of accounting
These financial statements have been prepared in accordance with Canadian accountingstandards for not-for-profit organizations (ASNPO).
b) Fund accounting
The Foundation follows the restricted fund method of accounting for contributions.
The Operating Fund reports the operating and administrative activities of the Foundation. Thisfund reports unrestricted resources and restricted administrative contributions includingdonations and investment income designated for administrative activities.
The Restricted Fund reports contributions for purposes designated or advised by the donor andthat are not to be held in perpetuity, grants designated for specific charitable purposes and therelated program expenses and grants to organizations.
The Income and Grants Fund reports all investment income earned from endowments that is notdesignated for administrative purposes, grants received for non-specific charitable activities,grants paid, and investment management fees.
The Endowment Fund reports resources contributed with the restriction that they be held inperpetuity. This fund also reports amounts that have been internally restricted for endowmentpurposes.
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEEN
NOTES TO FINANCIAL STATEMENTS
December 31,2016
2. SIGNIFICANTACCOUNTING POLICIES (continued)
c) Revenue recognition
Unrestricted contributions are recognized as revenue of the Operating Fund in the year receivedor receivable if the amount to be received can be reasonably estimated and collection isreasonably assured.
Restricted contributions designated for general operations are recognized as revenue of theOperating Fund in the year in which the related expenses are incurred. All other restrictedcontributions are recognized as revenue of the appropriate restricted fund.
Contributions for endowment purposes, including contributions of financial instruments, arerecognized as revenue in the Endowment Fund when received or receivable if the amount to bereceived can be reasonably estimated and collection is reasonably assured.
All other revenues are recorded when earned or when the amounts can be reasonably estimatedand collection is reasonably assured.
d) Cash and cash equivalents
Cash and cash equivalents include cash on hand, balances with banks and short-term depositswith original maturities of three months or less.
e) Financial instruments
Financial instruments are recorded at fair value on initial recognition.
Investments in term deposits and investment certificates are subsequently measured atamortized cost based on stated interest rates. Income from financial assets measured at
amortized cost and realized gains and losses are reported in net income. Transaction costs onfinancial assets measured at amortized cost are capitalized.
Investments in equity instruments that are quoted in an active market are subsequentlymeasured at fair value based on quoted market prices. Income from financial assets measured atfair value and gains and losses, whether realized or unrealized, are reported in net income.Transaction costs on financial assets measured at fair value are expensed when incurred.
Financial assets are assessed for impairment on an annual basis at the end of the fiscal year ifthere are indicators of impairment. If there is an indicator of impairment, managementdetermines if there is a significant adverse change in the expected amount or timing of futurecash flows from the financial asset. If there is a significant adverse change in the expected cashflows, the carrying value of the financial asset is reduced to the highest of the present value ofthe expected cash flows, the amount that could be realized from selling the financial asset or theamount realized by exercising its right to any collateral. If events and circumstances reverse in afuture period, an impairment loss will be reversed to the extent of the improvement, notexceeding the initial carrying value. Impairment losses, if any, are reported in net income in theyear the impairment is identified.
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENNOTES TO FINANCIAL STATEMENTS
December 31,2016
2. SIGNIFICANTACCOUNTING POLICIES (continued)
f) Capital assets
Purchased capital assets are reported at cost. Contributed capital assets are recorded at the fairmarket value of the asset at the date of contribution. Amortization expense is recorded in theOperating Fund. Amortization has been recorded at the following rates, which have beenestablished by estimates of useful lives.
Furniture and equipment 20% decliningbalanceComputer equipment 100% declining balanceComputer software 5 year straight-line
Amortization is recorded at half the normal rate in the year of acquisition and no amortization istaken in the year of disposition.
Impairment of capital assets is reviewed whenever events or changes in the circumstancesindicate that the carrying value may not be recoverable. If the total of the estimatedundiscounted future cash flows is less than the carrying value of the asset, an impairment loss isrecognized for the excess of the carrying value over the fairvalue of the asset during the year theimpairment occurs.
g) Use of estimates
When preparing financial statements in accordance with ASNPO, the Foundation's managementis required to make estimates and assumptions relating to the:
• Reported amounts of revenue and expenses for the year;• Reported amounts of assets and liabilities; and
• Disclosure of contingent assets and liabilities at the report date.
Management's assumptions are based on a number of factors, including historical experience,current events and actions that the Foundation may undertake in the future, and otherassumptions that are believed to be reasonable under the circumstances. Actual results coulddiffer from those estimates under different conditions and assumptions. Estimates were usedwhen accounting for certain items, such as the useful livesof capital assets.
h) Donated supplies and services
The Foundation benefits from the value of volunteer time which has not been recognized in thefinancial statements, but the value of donated supplies and services, when the amount can bereasonably estimated has been recorded at fair market value.
8
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEEN
NOTES TO FINANCIAL STATEMENTS
December 31,2016
HLW
INVESTMENTS
The carrying amounts of investments are comprised of the following:
2016 2015
At amortized cost:
Term deposits, including accrued interest in the amount of $212.(2015-$263) $ 77,426 $ 180,408
At fair value:
Portfolio of marketable securities with a cost of $8,223,054 (2015$8,338,002) 9,228,561 8,862,037
£ 9.305.987 $ 9.042.445
Term deposits are issued by TD Bank and earn interest at 0.40%. They have maturity dates betweenApril 15, 2017 and May 18, 2017.
Included in investment income are the following:2016 2015
Interest income $ 89,608 $ 83,662Income from investments carried at fair market value 262,158 564,486
Unrealized gains (losses) from investments carried at fair marketvalue 374,236 (183,469)
£ 726.002 $ 464.679
DUETO (FROM) FUNDS
Operating Restricted
Income and
Grants Endowment
Designated and donor advised funds $ - $ 516,511 $ $ (516,511)Friends of the Foundation donation 9,750 - - (9,750)Fair market value adjustments - - 1,364,778 (1,364,778)Expenses 22,233 1,454 : (23,687)
£ 31.983 £ 517.965 £1.364.778 £(1.914.726)
The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENNOTES TO FINANCIAL STATEMENTS
December 31,2016
5. CAPITAL ASSETS
Furniture and equipmentComputer equipmentComputer software
ACCOUNTS PAYABLE
Trade payablesVacation pay payableWorkers compensation payable
Accumulated Net Book Value
Cost Amortization 2016 2015
$ 2,457 $ 1,166 $ 1,291 $ 1,6143,220 2,522 698 -
6.150 6.150 - -
-i. 11.827 J- 9.838 $ 1,989 S 1.614
2016 2015
$ 15,745 $ 13,4691,500 980
277 267
17.522 ± 14.716
EXTERNALLY RESTRICTED FUNDS
The Endowment Fund is subject to donor restrictions which state that the capital must be held inperpetuity. The earnings may be utilized to meet the Foundation's goals or reinvested in theendowment. The net assets in the Restricted Fund are restricted for future distributions in accordance
with the general wishes of the donors. The net assets in the Income and Grants Fund are restricted forthe distribution of grants to qualified donees.
8. INTERNALLY RESTRICTED FUNDS
Internally restricted funds represent amounts the Foundation's board of directors internally restrictedto be held for endowment purposes.
HLW
FUNDS HELD IN TRUST
The Foundation holds funds in trust for the Making a Difference Foundation in the amount of $930,323,and for the South Okanagan Performing Arts Centre (SOPAC) in the amount of $11,781. These assets, aswell as the related investment income and unrealized gains, are not reflected in the financialstatements of the Foundation.
10
The Sum of Excel lenc www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENNOTES TO FINANCIAL STATEMENTS
December 31,2016
10. VANCOUVER FOUNDATION
The Board of Directors has established an endowment fund of $200,000 with the VancouverFoundation. The capital of the fund is held permanently in trust by the Vancouver Foundation. Theendowment is invested with the income paid at least annually to the Community Foundation of theSouth Okanagan Similkameen for distribution to non-profit charitable organizations and for such othercharitable purposes contributing to the mental, moral, cultural and physical improvement of theinhabitants of the South Okanagan. The Foundation received $9,703 in 2016 ($9,210 in 2015).
As the Vancouver Foundation controls the endowment, the principal of that endowment is not includedon the statement of financial position.
11. INTERFUND TRANSFERS
Transfers between funds are made to allocate to the Operating Fund the notional fee foradministration of investments, and to record the reinvestment of income in the Endowment Fund.
12. DISBURSEMENT POLICY
The Foundation seeks to maximize annual granting while also covering costs, protecting againstinflation, and working towards having a market value buffer that ensures two years of granting inreserve. When determining the buffer the Foundation considers the five year annualized return oninvestments, the five year average inflation rate, and the administration fee as set by the Board ofDirectors from time to time.
13. WAGES AND BENEFITS
During the year, the executive director was paid wages and benefits totaling $80,000 ($72,500 in2015).
14. REQUEST FOR REFUND OF ENDOWMENT
The Foundation has received a petition and affidavit filed in the Supreme Court of British Columbiaon behalf of the Duokhobor Heritage Retreat Society. The Society is asking the Foundation toterminate the agency endowment agreement and transfer the capital of the Allan P. MarkinWhatshan Retreat Fund to the petitioner. The current market value of the fund is $111,423. Thepetition is scheduled to be heard on June 1, 2017.
11
HLW The Sum of Excellence www.hlw-cpa.com
COMMUNITY FOUNDATION OF THE SOUTH OKANAGAN SIMILKAMEENNOTES TO FINANCIAL STATEMENTS
December 31,2016
15. FINANCIAL RISKS
The Foundation manages its investment portfolio to earn investment income and invests according toan investment policy approved by the Board. The Foundation is not involved in any hedgingrelationships through its operations and does not hold or use any derivative financial instruments fortrading purposes.
The Foundation manages interest-rate, market, credit and cash flow risk from its financial instrumentsby investing in a diversified portfolio managed by a nationally based investment counsel firm.
Additionally, the Foundation believes it is not exposed to significant liquidity risk as all investments areheld in instruments that are highly liquid and can be disposed of to settle commitments.
16. COMPARATIVE FIGURES
Certain of the comparative figures have been reclassified to conform to the current year'spresentation.
12
HLW The Sum of Excellence www.hlw-cpa.com