RICHMOND ADDICTION SERVICES SOCIETY Financial Statements … · 2016-09-29 · RICHMOND ADDICTION SERVICES SOCIETY Statement of Revenues and Expenditures For the Year Ended March

RICHMOND ADDICTION SERVICES SOCIETY

Financial Statements

Year Ended March 31, 2016

A~'ISAR I CHARTERED PROFESSIONAL ACCOUNTANTS


Index to Financial Statements


INDEPENDENT AUDITOR'S REPORT

FINANCIAL STATEMENTS

Statement of Financial Position

Statement of Changes in Net Assets

Statement of Revenues and Expenditures

Statement of Cash Flows

Notes to Financial Statements

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CHARTERED PROFESSIONAL ACCOUNTANTS

A~'ISAR I CHARTERED PROFESSIONAL ACCOUNTANTS

INDEPENDENT AUDITOR'S REPORT

To the Members of Richmond Addiction Services Society

S~ ART B SINESS SOLUTIONS. S LID Fl NCIAL RESULTS:

We have audited the accompanying financial statements of Richmond Addiction Services Society, which comprise the statement of financial position as at March 31, 2016 and the statements of revenues and expenditures, changes in net assets and cash flows for the year then ended, and a summary of significant accounting 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 accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an op1mon 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 comply with ethical requirements and 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 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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.

Basis for Qualified Opinion

In common with many charitable organizations, the Society derives revenue from donations and membership fees, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the Society. We were unable to determine whether any adjustments might be necessary to revenues other than grants, excess of revenue over expense, assets and fund balances.

Suite 302-804 7 199 Street Langley BC V2Y OE2

TEL: 604.513.5707 TOL FREE: 1.888.513.5707 FA ! 604.513.5708

clien [email protected] www. avisar.ca

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A Division of Avisar Business Advisory Group Inc.

Independent Auditor's Report to the Members of Richmond Addiction Services Society (continued)

Qualified Opinion

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Richmond Addiction Services Society as at March 31, 2016 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Other Matter

The financial statements for the year ended March 31, 2015 were audited by Vander Molen & Co. Chartered Accountant, which was acquired by Avisar Chartered Professional Accountants, who expressed a qualified opinion on those financial statements on June 18, 2015 for the reasons described in the Basis for Qualified Opinion paragraph.

Langley, British Columbia July 13, 2016

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A ~'ISAR I CHARTERED PROFESSIONAL ACCOUNTANTS


Statement of Financial Position

March 31, 2016

2016

ASSETS

CURRENT Cash $ 341,261 $ Term deposits 117,371 Accounts receivable 7,895 Interest receivable 11 Prepaid expenses 11,924

478,462

CAPITAL ASSETS (Note 3) 3,156

$ 481,618 $

LIABILITIES

CURRENT Accounts payable (Note 4) $ 121,367 $ Deferred revenue 256,395 Unexpended gaming funds (Note 6) 50,447 Current portion of capital lease obligation (Note 7) 1,275

429,484

CAPITAL LEASE OBLIGATION (Note 7)

429,484

NET ASSETS Invested in capital assets 3,156 Internally restricted (Note 2) 60,000 Unrestricted (11,022}

52,134

$ 481,618 $

LEASE COMMITMENTS (Note 8)

The accompanying notes form an integral part of these financial statements

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2015

334,486 177,197

9,030 617

9,765

531,095

8,249

539,344

121,273 257,527 100,000

3,082

481,882

974

482,856

8,249 60,000

{11,761}

56,488

539,344



Statement of Changes in Net Assets


Funded Programs Fund RASS Fund 2016 Restricted for

Invested in contingency capital assets Unrestricted reserve Unrestricted Total

NET ASSETS · BEGINNING OF YEAR $ 8,249 $ (134,390) $ 60,000 $ 122,629 $ 56,488 $

(Deficiency) Excess of revenue over expenses (6,967) (30,898) - 33,511 (4,354)

Investment in capital assets (net) 1,874 (1 ,874) lnterfund transfers - 30,401 - {30,401}

NET ASSETS ·END OF YEAR $ 3,156 $ (136,761) $ 60,000 $ 125,739 $ 52,134 $


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2015

Total

85,714

(29,226)

56,488



Statement of Revenues and Expenditures

For the Year Ended March 31, 2016

Funded Programs Fund RASS Fund

2016 2016 2016

REVENUE Vancouver Coastal Health $ 749,981 $ $ 749,981 $ Municipal grants 204,368 204,368 Gaming grant 99,553 99,553 Variety Club recovery school

grant 21,618 21,618 Civil Forfeiture grant 20,784 20,784 Donations, fundraising 200 15,976 16,176 Telus recovery school grant 14,500 14,500 Membership dues, fees,

workshops, rent 11,948 11,948 Interest and sundry 528 5,587 6,115 Other grants

1 '111 ,532 33,511 1,145,043

EXPENSES Salaries and benefits 863,774 863,774 Program expenses 123,993 123,993 Rent 86,129 86,129 IT support and internet 14,888 14,888 Telephone and utilities 14,817 14,817 Office, postage, courier and

other 13,495 13,495 Staff development 7,110 7,110 Amortization of capital assets 6,967 6,967 Automobile and travel 5,261 5,261 Audit and accounting 5,010 5,010 Janitorial services and

maintenance 4,054 4,054 Insurance 3,899 3 899

1 '149,397 1,149,397

(DEFICIENCY) EXCESS OF REVENUE OVER EXPENSES $ ~37,865l $ 33,511 $ (4,354} $


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2015

741,658 203,345 118,197

729 6,255

15,896 3,338

16,048 9,635

41,075

1,156,176

887,480 140,958 86,555 13,649 14,442

11,676 5,092 6,993 5,196 5,400

4,178 3,783

1,185,402

~29,226l



Statement of Cash Flows


2016

OPERATING ACTIVITIES Deficiency of revenue over expenses $ (4,354) $ Items not affecting cash:

Amortization of capital assets 6,967

2,613

Changes in non-cash working capital: Term deposits 59,826 Accounts receivable 1,135 Interest receivable 606 Prepaid expenses (2,159) Accounts payable 94 Deferred revenue (1 '132) lnterfund transfers

58,370

Cash flow from operating activities 60,983

INVESTING ACTIVITIES Purchase of capital assets (1,874) Decrease in unexpended gaming funds {49,553}

Cash flow used by investing activities (51,427}

FINANCING ACTIVITY Capital lease obligation {2,781}

Cash flow used by financing activity {2,781}

INCREASE (DECREASE) IN CASH FLOW 6,775

Cash- beginning of year 334,486

CASH - END OF YEAR $ 341,261 $


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2015

(29,226)

6,993

{22,233}

(98,750) 20,246

(599) (2,315) 37,946 19,242

{24,230}

{46,463}

(832) {18,197}

{19,029}

{2,869}

{2,869}

(68,361)

402,847

334,486





1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Richmond Addiction Services Society (the Society or "RASS") is a non-profit community social service organization based in Richmond, British Columbia and is registered under the Income Tax Act as a charitable organization and, as such, is exempt from income taxes and able to issue donation receipts for income tax purposes.

The Funded Programs fund provides alcohol and drug treatment, prevention of substance use and other addictive behaviours, and other related services funded under contracts with Vancouver Coastal Health Authority, the British Columbia provincial government, and the City of Richmond as well as other programs for which specific funding has been obtained.

The RASS Fund is used for funds raised to pay for services and resources related to the Society's programs that are not specifically funded by government sources.

The financial statements were prepared in accordance with Canadian accounting standards for notfor-profit organizations (ASNFPO).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income taxes

For income tax purposes, the Society is a Registered Charity exempt from income taxes under Section 149(1 )(f) of the Canadian Income Tax Act.

Capital assets

Capital assets are stated at cost or deemed cost less accumulated amortization. Capital assets are amortized over their estimated useful lives on a straight-line basis at the following rates and methods:

Equipment Computer hardware Leasehold improvements Computer hardware under

capital lease

20% 33% 10% 33%

The Society regularly reviews its capital assets to eliminate obsolete items. Government grants are treated as a reduction of capital assets cost.

Capital assets acquired during the year but not placed into use are not amortized until they are placed into use.

Contributed services and materials

Volunteers contribute their services to assist the Society in carrying out its service delivery activities. Because of the difficulty of determining their fair market value, contributed services are not recognized in the financial statements.

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CHARTERED PROFESSIONAl ACCOUNTANTS




. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Employee future benefits

As part of the union contract that the Society is a party to, the Society has certain obligations with respect to sick leave and severance benefits. The accrued benefit obligation is based on the most recent actuarial valuation report prepared for funding purposes.

Internally restricted net assets

The board of directors has restricted $60,000 of the net assets as a fund for the Society to use in the event that the Society experiences a delay in receipt of its funding sources or experiences the cancellation of a contract or a reduction in funds from its funding sources. The board reviews the adequacy of this fund on an annual basis.

Revenue recognition

The Society follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.

Measurement uncertainty

The preparation of financial statements in conformity with Canadian accounting standards for not-forprofit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Such estimates are periodically reviewed and any adjustments necessary are reported in earnings in the period in which they become known. Actual results could differ from these estimates.

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3. CAPITAL ASSETS

2016 Cost Accumulated Net book

amortization value

Equipment and furniture $ 46,071 $ . 43,980 $ 2,091 Computer hardware 50,302 49,237 1,065 Computer hardware under capital lease 12,107 12,107

$ 108,480 $ 105,324 $ 3,156

2015 Cost Accumulated Net book

amortization value

Equipment and furniture $ 80,912 $ 78,092 $ 2,820 Computer hardware 141,069 139,676 1,393 Computer hardware under capital lease 12,107 8,071 4,036

$ 234,088 $ 225,839 $ 8,249

4. EMPLOYEE FUTURE BENEFITS

The Society has obligations to certain of its employees in respect of accrued sick leave and severance benefits. The amounts recorded by the Society are based on figures and information supplied by Mercer (Canada) Limited.

Reconciliation of Accrued Benefit Obligation Accrued Benefit Obligation - beginning Current service cost Interest cost Actuarial (gain) loss

Accrued Benefit Obligation - end

Reconciliation of Funded Status Surplus (deficit) at end of year Net actuarial (gain) loss

Accrued benefit asset (liability)

$

$

$

$

2016

71,230 $ 7,900 2,070

(20,690)

60,510 $

(60,510) $

(60,510) $

2015

59,110 9,190 3,030 (100)

71,230

(71 ,230) 15,792

(55,438)

This is included as part of the total Accounts Payable balance of $121,367 (2015- $121 ,273).

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5. PENSION PLAN FOR EMPLOYEES

The Society and its employees contribute to the Municipal Pension Plan (a jointly trusteed pension plan). The board of trustees of the Municipal Pension Plan, representing plan members and employers, is responsible for administering the plan, including investment of assets and administration of benefits. The plan is a multi-employer defined benefit pension plan. Basic pension benefits provided are based on a formula. As at December 31, 2014, the plan has about 185,000 active members and approximately 80,000 retired members.

The most recent actuarial valuation as at December 31, 2012, indicated a $1,370 million funding deficit for basic pension benefits. The next valuation was December 31 , 2015, with results expected later in 2016.

Employers participating in the plan record their pension expense as the amount of employer contributions made during the fiscal year (defined contribution pension plan accounting). This is because the plan records accrued liabilities and accrued assets for the plan in aggregate, resulting in no consistent and reliable basis for allocating the obligation, assets and cost to individual employers participating in the plan.

The Society paid $59,788 for employer contributions to the plan in the 2016 fiscal year. This amount is included as part of the Salaries and Benefits amount on the Statement of Revenues and Expenditures.

6. GAMING FUND REVENUE AND EXPENSES AND FUND BALANCE

Received from the British Columbia Gaming Commission Expenditures

Contributions to funded programs

Decrease during year Balance at beginning of year

Balance at end of year

$

$

2016

50,000 $

(99,553)

(49,553) 100,000

50,447 $

2015

100,000

(118,197)

(18,197) 118,197

100,000

The Society applied for and received a grant from the B.C. Gaming Commission of $50,000 (2015-$100,000) during the month of March 2016. As in the prior year, this will be spent on salaries and other program expenses in accordance with the terms of the grant. This grant must be spent within one year of the receipt of the funds.

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7. CAPITAL LEASE OBLIGATION

2016

Dell Financial Services Canada equipment lease, 36-month lease commencing September 2013; payable at $24 7 per month

Less: current portion due within one year

8. LEASE COMMITMENTS

$

$

1,275 $ (1 ,275)

$

2015

4,056 (3,082)

974

The Society is subject to minimum future lease payments for certain equipment and its premises. The lease for the premise expires October 2016 and the monthly cost includes a proportional share of operating expenses and property taxes. The future lease payments occur during the next four years as follows:

Year ended March 31, 2017 Year ended March 31, 2018 Year ended March 31, 2019 Year ended March 31, 2020

9. FINANCIAL INSTRUMENTS

$ 67,669 14,757

8,051 6,709

$ 97.186

The Society's financial instruments consist of cash, term deposits, accounts receivable, accounts payable and accrued liabilities. Financial instruments are recorded at fair value on initial recognition and are subsequently recorded at cost or amortized cost, unless management has elected to carry its investments, if any, at fair value. Financial assets are assessed for impairment on an annual basis at the end of the fiscal year. If there is a significant adverse change in the expected amount or timing of future cash flows from the financial asset, the carrying value of the financial asset is reduced to the highest of the present value of the expected cash flows, the amount that could be realized from selling the financial asset or the amount the Society expects to realize by exercising its right to any collateral. If events and circumstances reverse in a future period, an impairment loss will be reversed to the extent of the improvement, not exceeding the initial carrying value.

Risk management relates to the understanding and active management of risks associated with all areas of the Society's activities and the associated operating environment. Financial instruments are primarily exposed to interest rate, credit and liquidity risks.

Interest rate risk exposure The Society's investments are in instruments that bear interest at market rates. The Society is minimally exposed to the risk of lower investment returns if the prevailing market interest rates change significantly. There has been no change to the risk exposure from 2015.

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9. FINANCIAL INSTRUMENTS (continued)

Credit risk exposure It is management's opinion that the Society is not exposed to significant credit risks from these financial instruments because accounts receivable is comprised mainly of amounts receivable from provincial and federal government agencies. There has been no change to the risk exposure from 2015.

Liquidity risk Liquidity risk is the risk that the Society will not be able to meet a demand for cash or fund its obligations as they become due. The Society meets its liquidity requirements by preparing and monitoring forecasts of cash flows from operations, anticipating investing and financing activities and holding assets that can be readily converted into cash. There has been no change to the risk exposure from 2015.

10. COMPARATIVE FIGURES

Some of the comparative figures have been reclassified to conform to the current year's presentation.

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Documents

RICHMOND ADDICTION SERVICES SOCIETY Financial Statements … · 2016-09-29 · RICHMOND ADDICTION SERVICES SOCIETY Statement of Revenues and Expenditures For the Year Ended March