Please, Please solve these questions......................................

1. Seoul Specialty Hospital (SSH) has just purchased a five-year membership in the Korean Hospital Association (KHA). The membership costs $10,000 and KHA has sent SSH a bill that must be paid within ninety days. How would SSH record this transaction. (Hint: Be sure to distinguish between the long and short term aspects of the transaction.) 2. KUC has just completed its annual fund-raising drive. It received $1,750,000 of pledges. $750,000 was paid to KUC either in cash or by credit card. KUC sent invoices to the remaining donors. From past experience, KUC knows that 15% of these pledges will never be received. How would KUC record this transaction? 3. KUC's policy is to write off any uncollected pledges from prior years campaigns at the completion of the next year's annual appeal. At the end of this year's campaign, there was $275,000 worth of uncollected pledges from last year's appeal. How would KUC record this in its accounts? 4. Which of the following would be recognized as a liability of the statement of financial condition (balance sheet) of Community Services, Inc.? a) b) c) d) Samil & Co., a CPA firm, has performed its audit of Community Services' financial statements and has not yet been paid for its services. Community Service billed Mr. Kim, a client, $100 for the counseling services that he received last week. Mr. Park, who was recently fired by Community Services, has filed a $2,000,000 wrongful discharge suit. Community Services received a $52,000 grant from the Field Foundation that is restricted as support for Community Services' counseling program. 1 5. Each of the following results in a decrease in operating cash as reported on the cash flow statement EXCEPT: a) b) c) d) e) 6. Which of the following results in an increase in cash from investing activities: a) b) c) d) 7. Purchase of fixed assets Sale of fixed assets Purchase of marketable securities Sale of marketable securities Grant receipts b) and d) b), d), and e) An increase in the long-term notes payable is reported on the statement cash flows as a) b) c) d) 9. Purchase of fixed assets Sale of fixed assets Purchase of marketable securities Sale of marketable securities Which of the following is not considered cash flows from investing: a) b) c) d) e) f) g) 8. Increase in Accounts Receivable Increase in Prepaid Expense Decrease in Wages Payable Increase in Deferred Revenues All of the above result in a decrease in reported operating cash. Cash from Operations Cash from Investing Activities Cash from Financing Activities An increase in long-term notes payable is not reported on the statement of Cash flows. Which of the following statements about expenses are true under accrual basis of accounting? a) b) c) d) Expenses represent the resources an organization uses during a period of time. All expenses reflect cash outflows by the organization at the time they are recognized. Expenses cannot be incurred before an organization pays for a resource. Expenses result in a decrease in net assets for a non-profit organization. 10. Which of the following conditions must be met before revenue is recognized? 2 a) b) c) d) goods and/or services must be delivered to the customer the amount to be collected must be objectively measurable the customer must be happy with the service there can be no possibility that the customer will not pay the bill 11. Which of the following statements about bad debts are true? a) the amount of money in the allowance for bad debts must be equal to the current year's bad debt expense b) the amount of money that is written off in a given year must be equal to that year's bad debt expense a) the amount of money added to the allowance bad debts must be equal to the current year's bad debt expense. 12. Which of the following statements about depreciation are correct? a) depreciation represents the amount of cash that the organization paid out this year to use its long-lived assets. b) depreciation expenses perfectly reflect the amount of long-lived assets that were used by an organization. c) depreciation represents the allocation of the cost of a capital asset over its life based on a specific method of accounting (straight line, accelerated etc). 13. If the cost of medical supplies are rising and an organization chooses to use the LIFO method for valuing its medical supplies inventory, it medical-supply expenses will be ______________________ if it used FIFO. a) greater than b) equal to c) less than 14. Non-profit organizations must segregate assets that are subject restrictions imposed by a) b) c) d) management board of trustees customers donors 15. Which of the following services would be recorded as both support and an expense in a non-profit organization? a) a volunteer who comes in to help set up for the annual fund-raising ball b) a parent who is an accountant who volunteers to keep the organization's books c) a physician who volunteers to serve on a community health service center's board. 3 16. The Metropolitan Opera starts the year with $2,000,000 in pledges receivable and $300,000 in its allowance for uncollectibles. Thus, net pledges receivable are equal to $1.7million. During the year, $500,000 in new contributions are received in cash and $500,000 in new pledges are made, but cash is not received. Experience shows that 10% of pledges that are not immediately paid in cash are never collected and therefore considered a bad debt expense annually. In transactions worksheet form, show the beginning balances, transactions, and ending balances based on the above information. Use the following transaction worksheet to write your answer. Cash Pledges Receivable Allowance for Uncollectible s = Liab Net Assets (Account) Beginnin g Balance Ending Balance 17. The Indiana Hospital uses pharmaceuticals for their patients. They started the year on January 1, with an inventory of 1,000 doses of an antibiotic drug that cost $17 per dose. On January 2 they purchased another 300 doses for $21 each. From January 3 through June 30 they used 800 doses. On July 1 they bought 500 more doses at $23 each. From July 2 through the end of the year they used 400 doses. What is the inventory value at the end of the year, assuming FIFO? What is the 4 value assuming LIFO? Refer to St. Catherine's Center for Children (SCC) Financial statements 18. Is SCC's audit opinion unqualified or qualified? information? Where did you find the 19. What method of depreciation does SCC use? Where did you find the information? 20. What percentage of SCC's Land, Building and Equipment has been depreciated? Where did you find the information? 21. How much does SCC owe on its long-term debt at the end of fiscal year 2010? How much of SCC's long-term debt was repaid in fiscal years 2009 and 2010? Where did you find that information? 22. What was the percentage increase or decrease in cash flow from operations between fiscal years 2009 and 2010? Where did you find the information? 23. How much did SCC's overall cash flow increase or decrease between fiscal years 2009 and 2010? What was the primary reason for that change in SCC's cash balance? Support your answers with the appropriate numbers from the statements. Where did you find the information? 5 24. What were SCC's current ratios in fiscal years 2009 and 2010? Are the current ratios above or below the rule of thumb? Is the trend favorable or unfavorable? Support your answer with the appropriate numbers from the statements and to state what you included as current assets and liabilities. Where did you find the information? (Hint: Current ratio=current assets/current liabilities) 25. How many days of cash did SCC have on hand at the end of fiscal years 2009 and 2010? Is the trend favorable or unfavorable? Support your answer with the appropriate numbers from the statements. Where did you find the information? 6 ST. CATHERINE'S CENTER FOR CHILDREN FINANCIAL STATEMENTS and INDEPENDENT AUDITOR'S REPORT June 30, 2010 ST. CATHERINE'S CENTER FOR CHILDREN FINANCIAL STATEMENTS and INDEPENDENT AUDITOR'S REPORT June 30, 2010 CONTENTS Page INDEPENDENT AUDITOR'S REPORT 1 FINANCIAL STATEMENTS Statement of Financial Position Statement of Activities Statement of Cash Flows Notes to Financial Statements 2 3 4 5-10 SUPPLEMENTAL INFORMATION Functional Expenses Functional Expenses as Presented in New York State Cost Reports 11 12 BOLLAM, SHEEDY, TORANI & CO. LLP Certified Public Accountants Albany, New York INDEPENDENT AUDITOR'S REPORT Board of Directors St. Catherine's Center for Children Albany, New York We have audited the accompanying statement of financial position of St. Catherine's Center for Children (a New York not-for-profit corporation) as of June 30, 2010, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of St. Catherine's Center for Children's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from St. Catherine's Center for Children's June 30, 2009, financial statements and, in our report dated August 21, 2009, we expressed an unqualified opinion on those financial statements. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial 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 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 St. Catherine's Center for Children as of June 30, 2010, and the change 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. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information presented on pages 11 and 12 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Albany, New York August 26, 2010 An Independent Member of the RSM McGladrey Network Page 1 ST. CATHERINE'S CENTER FOR CHILDREN STATEMENT OF FINANCIAL POSITION June 30, 2010 (comparative totals for 2009) 2010 2009 ASSETS Cash Accounts receivable, net Prepaid expenses Due from related party Interest in net assets of The Foundation of St. Catherine's Center for Children Land, buildings, and equipment, net Total assets LIABILITIES Lines-of-credit Accounts payable, trade Accounts payable, related parties Accrued expenses Deferred revenue Due to funding sources Long-term debt $ 178,026 1,599,548 57,080 - $ 159,455 1,620,781 18,635 33,502 482,347 2,112,173 439,688 2,236,634 $ 4,429,174 $ 4,508,695 $ $ 628,753 273,358 4,442 592,833 103,958 154,386 1,757,730 390,329 390,026 11,545 781,977 22,267 6,974 168,122 1,771,240 COMMITMENTS AND CONTINGENCIES NET ASSETS Unrestricted Unrestricted, Board designated Temporarily restricted Total liabilities and net assets 2,164,942 2,164,942 506,502 2,671,444 2,270,254 3,565 2,273,819 463,636 2,737,455 $ 4,429,174 $ 4,508,695 The accompanying Notes to Financial Statements are an integral part of these statements. Page 2 ST. CATHERINE'S CENTER FOR CHILDREN STATEMENT OF ACTIVITIES Unrestricted Operating REVENUES AND OTHER SUPPORT Board and care Homeless shelter Medical assistance Preventive services Tuition Other program revenue Contributions Investment earnings Miscellaneous Gain on sale of equipment Net assets released from restrictions Satisfaction of donor and release of Board restrictions Total revenues and other support EXPENSES Program services Group residence Copson Foster care Group home Medical Special education Clinic Family based treatment Prevention Transitional housing Community based services 231 Sherman Street Access and visitation Total program services Management and general Bad debts, net Total expenses CHANGE IN NET ASSETS BEFORE CHANGE IN INTEREST IN NET ASSETS OF THE FOUNDATION OF ST. CATHERINE'S CENTER FOR CHILDREN Change in interest in net assets of The Foundation of St. Catherine's Center for Children CHANGE IN NET ASSETS NET ASSETS, beginning of year NET ASSETS, end of year $ 4,991,331 1,270,872 1,715,531 1,137,960 2,807,952 359,893 50,891 634 38,241 2,976 Year Ended June 30, 2010 (comparative totals for 2009) Unrestricted Board Temporarily 2010 Designated Restricted Totals $ 52,842 12,429,123 $ (3,565) (3,565) 1,407,450 2,334,124 392,413 563,853 539,590 2,447,903 589,080 383,271 666,879 1,144,337 407,710 141,777 46,549 11,064,936 1,469,499 12,534,435 - (3,565) - 207 2,270,254 $ $ 4,991,331 1,270,872 1,715,531 1,137,960 2,807,952 359,893 100,166 843 38,241 2,976 $ 5,401,450 1,104,483 1,716,173 1,208,624 3,110,076 424,466 45,077 1,952 9,067 - 12,425,765 13,021,368 1,407,450 2,334,124 392,413 563,853 539,590 2,447,903 589,080 383,271 666,879 1,144,337 407,710 141,777 46,549 11,064,936 1,469,499 12,534,435 1,340,125 2,496,190 376,267 694,124 666,110 2,856,811 603,885 384,849 788,768 1,027,677 300,202 151,181 59,930 11,746,119 1,408,272 7,967 13,162,358 (108,670) (140,990) 42,659 42,659 (103,142) (3,565) 42,866 (66,011) (244,132) 3,565 463,636 2,737,455 2,981,587 506,502 $ 2,671,444 $ 2,737,455 - (105,312) 49,275 209 (49,277) 207 - (105,312) $ 2,164,942 - 2009 Totals - $ The accompanying Notes to Financial Statements are an integral part of these statements. Page 3 ST. CATHERINE'S CENTER FOR CHILDREN STATEMENT OF CASH FLOWS Year Ended June 30, 2010 (comparative totals for 2009) 2010 2009 CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided (used) by operating activities Depreciation Change in interest in the net assets of The Foundation of St. Catherine's Center for Children Gain on sale of equipment (Increase) decrease in Accounts receivable Prepaid expenses Due from related party Increase (decrease) in Accounts payable, trade Accounts payable, related parties Accrued expenses Deferred revenue Due to funding sources $ CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES Acquisition of equipment Proceeds from the sale of equipment CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES Lines-of-credit, net Repayments of long-term debt Net increase (decrease) in cash CASH, beginning of year (66,011) $ (244,132) 197,417 210,402 (42,659) (2,876) 103,142 - 21,233 (38,445) 33,502 88,249 (14,980) (10,943) (116,668) (7,103) (189,144) 81,691 (6,974) (136,037) (10,935) 7,238 159,871 (8,277) (28,181) 251,454 (32,352) 6,787 (25,565) (74,918) (74,918) 238,424 (58,251) 180,173 (145,467) (52,028) (197,495) 18,571 (20,959) 159,455 180,414 CASH, end of year $ 178,026 $ 159,455 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the year for: Interest Noncash financing and operating activity: Acquired vehicles in exchange for long-term debt $ 47,997 $ 43,947 44,515 54,500 The accompanying Notes to Financial Statements are an integral part of these statements. Page 4 ST. CATHERINE'S CENTER FOR CHILDREN NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 1 - SUMMARY OF ACCOUNTING POLICIES a. Description of Organization St. Catherine's Center for Children (Center) is a private not-for-profit corporation operated under the auspices of the Roman Catholic Diocese of Albany (Diocese). The Center provides a variety of residential, community, and school based programs for children and families directed toward the prevention of personal and family dysfunction. Included are services to assess and treat children with mental illness, as well as education and support for parents of these children. The Center offers a comprehensive visitation program for non-custodial parents coordinated with Albany County Family Court. In addition to providing a special education program for children ages five to twelve with social, emotional, and/or intellectual developmental conditions, the Center offers residential programs such as group care housing, specialized foster families for children, shelters for homeless families, and other educational programs. A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. b. Accounting Method The financial statements are prepared on the accrual basis of accounting. On June 30, 2010, the Center adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The ASC is an aggregation of previously issued authoritative accounting principles generally accepted in the United States of America (GAAP) in one comprehensive set of guidance organized by subject area. In accordance with the ASC, references to previously issued accounting standards have been replaced by ASC references. Subsequent revisions to GAAP will be incorporated into the ASC through Accounting Standards Updates. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. c. Fair Value Measurement The Center reports certain assets at fair value. Fair value is defined as an exchange price that would be received for an asset or paid to transfer a liability (an \"exit\" price) in the principal or most advantageous market for the asset or liability between market participants on the measurement date. d. Accounts Receivable Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer's financial condition, credit history, and current economic conditions. The allowance for doubtful accounts was $45,000 at June 30, 2010. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. An account receivable is considered to be past due if any portion of the receivable balance is outstanding for more than 90 days. Interest is not charged on outstanding accounts receivable. Page 5 ST. CATHERINE'S CENTER FOR CHILDREN NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 1 - SUMMARY OF ACCOUNTING POLICIES - Continued e. Land, Buildings, and Equipment Acquisition of land, buildings, and equipment and expenditures, which materially change capacities or extend useful lives are reported at cost, net of accumulated depreciation. Routine maintenance and repairs and minor replacement costs are charged to expense as incurred. When buildings and equipment are retired or otherwise disposed of, the appropriate accounts are relieved of costs and accumulated depreciation, and any resultant gain or loss is included in the Center's change in net assets. Depreciation is provided for in amounts to relate the cost of depreciable assets to expenses over their estimated useful lives on the straight-line method. The estimated lives used in determining depreciation vary from three to fifty years. Long-lived assets to be held and used are tested for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the excess of the asset's carrying amount over the fair value of the asset. Certain long-lived assets to be disposed of by sale are reported at the lower of carrying amounts of fair value less cost to sell. f. Recognition of Donor Restrictions Support is reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. The Center had no permanently restricted net assets as of June 30, 2010. g. Tax Status The Center is exempt from income tax under Section 501(c)(3) of Internal Revenue Code and comparable New York State law. Contributions to it are tax deductible within the limitations prescribed by the Code. The Center has been classified as a publicly supported organization, which is not a private foundation under Section 509(a) of the Code. This exemption from taxes is under the terms of an annual group ruling granted to the United States Catholic Conference. Management evaluated the Center's tax positions, including that the Center is exempt from taxes and not subject to income taxes on unrelated business income, and concluded that the Center had taken no tax positions that required adjustment in its financial statements. Forms 990 filed by the Center are subject to examination by the Internal Revenue Service up to three years from the extended due date of each return. Forms 990 filed by the Center are no longer subject to examination for the fiscal years ended June 30, 2006, and prior. h. Subsequent Events In preparing the financial statements and notes thereto, the Center has considered subsequent events through August 26, 2010, the date the financial statements were issued. i. Comparative Totals Summarized Financial Information for 2009 The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with (GAAP). Accordingly, such information should be read in conjunction with the financial statements for the year ended June 30, 2009, from which the summarized information was derived. Page 6 ST. CATHERINE'S CENTER FOR CHILDREN NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 2 - LAND, BUILDINGS, AND EQUIPMENT, NET A summary of the Center's land, buildings, and equipment, net, is as follows: June 30, 2010 Furnishings and equipment Land, buildings, and improvements Leasehold improvements Vehicles $ Less accumulated depreciation Land, buildings, and equipment, net 944,693 3,351,956 245,725 554,384 5,096,758 2,984,585 $ 2,112,173 NOTE 3 - INTEREST IN NET ASSETS OF THE FOUNDATION OF ST. CATHERINE'S CENTER FOR CHILDREN a. Net Assets The Foundation of St. Catherine's Center for Children (Foundation) was organized to engage in activities to promote the purposes, goals, and objectives of the Center to solicit contributions to carry out those purposes. The Center is required to report its ongoing economic interest in the net assets of the Foundation. Each year the change in this interest is reported in the statement of activities. A summary of Foundation's financial position and liquidity is as follows: June 30, 2010 Total assets $ 483,259 Liabilities $ 912 Net assets, unrestricted Net assets, temporarily restricted for specific Center programs Net assets, permanently restricted for specific Center programs Total liabilities and net assets 331,671 140,676 10,000 482,347 $ 483,259 A summary of the Foundation's change in net assets is as follows: Year Ended June 30, 2010 Revenues, gains, and other support Expenses $ 263,972 221,313 Change in net assets $ 42,659 Page 7 ST. CATHERINE'S CENTER FOR CHILDREN NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 3 - INTEREST IN NET ASSETS OF THE FOUNDATION OF ST. CATHERINE'S CENTER FOR CHILDREN - Continued b. Service Agreement The Center has an agreement with the Foundation to provide personnel, office space, and certain administrative services to the Foundation. The agreement is renewable on an annual basis. Reimbursement for these services totaled $85,854 during the year ended June 30, 2010. The Center received unrestricted contributions totaling $48,523. In addition, the Center received temporarily restricted contributions totaling $49,275, which were used in the Center's program services in accordance with the donors' wishes. NOTE 4 - LINES-OF-CREDIT The Center has available a $1,300,000 line-of-credit with First Niagara Bank, of which $628,753 was outstanding at June 30, 2010. The line-of-credit expires December 1, 2010, and is secured by accounts receivable. Interest is charged at the bank's prime rate with a floor of 4.0% (4.0% at June 30, 2010) or the three-month LIBOR rate plus 2.5%, with a floor of 4.0% (4.0% at June 30, 2010) at the election of management. The Center is required to maintain a zero balance for 30 consecutive days during the loan year. The Center also has a $250,000 equipment line-of-credit with First Niagara Bank, of which $148,121 is available at June 30, 2010. The line-of-credit expires December 1, 2010, and is collateralized by the related equipment purchased. Interest is charged at the bank's prime rate plus .25% with a floor of 4.0% (4% at June 30, 2010) or at the Federal Home Loan Bank rate plus 2.25% (4.0% at June 30, 2010) at the election of management. Any outstanding amounts on the line-ofcredit are converted, at the time of the advance, to a term loan with payment periods not to exceed sixty months at the election of management (Note 5). NOTE 5 - LONG-TERM DEBT A summary of the Center's long-term debt is as follows: June 30, 2010 First Niagara Bank (Note 4) Nine notes payable, in total monthly installments of $3,571, including interest at rates ranging from 4.59% to 7.35%, maturing at various dates from February 2012 through November 2013 (a)(b) Saratoga National Bank Two notes payable, in total monthly installments of $1,026, including principal and interest at rates ranging from 6.40% to 6.78%, maturing at various dates in December 2010 and February 2011 (b) GMAC Financing Four notes payable for vehicles, in total monthly installments of $2,085, including principal and interest at rates ranging from 6.90% to 7.50%, maturing at various dates in May 2012 and June 2012 (b) $ 101,879 7,233 45,274 $ 154,386 (a) Secured by equipment. (b) Secured by vehicles. Page 8 ST. CATHERINE'S CENTER FOR CHILDREN NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 5 - LONG-TERM DEBT - Continued A summary of the Center's future minimum annual maturities of long-term debt is as follows: For the year ending June 30, 2011 2012 2013 2014 $ 67,838 60,782 22,347 3,419 $ 154,386 NOTE 6 - RELATED PARTY TRANSACTIONS The Center is affiliated with the Diocese. At times, the Center receives cash advances from the Diocese for working capital purposes. Interest on cash advances to the Center from the Diocese is charged at a rate of 5%. Interest paid and expensed to the Diocese totaled $9,271 for the year ended June 30, 2010. The Center is also a member of a multiemployer pension plan administered by the Diocese and rents office space from the Diocese as more fully described in Notes 7 and 9, respectively. The Center's indebtedness to the Diocese as a result of these transactions totaled $3,918 at June 30, 2010, and is classified as accounts payable, related parties. NOTE 7 - PENSION PLAN The Center is a member of a multiemployer defined benefit plan. The plan is administered by the Diocese. This plan is available to all eligible lay employees of the Diocese and all Diocesan-related parties. Employees who work at least 20 hours per week (1,000 hours per year) are immediately eligible to participate in this plan at their own cost of 2% of their salary. Management of the plan has established an employer contribution based on 7% of an employee's salary upon completion of three years of service. An employee is vested upon completion of five years of service. The retirement plan is a Church Plan, and as such, it is not subject to the minimum funding requirements of ERISA. Pension costs totaled $129,757 for the year ended June 30, 2010. NOTE 8 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes: June 30, 2010 Program and renovations, capital projects Interest in net assets of The Foundation of St. Catherine's Center for Children $ 24,155 482,347 $ 506,502 NOTE 9 - COMMITMENTS AND CONTINGENCIES a. Leases The Center leases office space at 40 North Main Avenue, Albany, New York, from the Diocese, a related party, on an annual basis. The lease required payments of $7,246 per month for the year ended June 30, 2010. Rent expense on this space totaled $83,913 for the year ended June 30, 2010. The lease for the year ending June 30, 2011, requires monthly payments of $7,353 per month. Page 9 ST. CATHERINE'S CENTER FOR CHILDREN NOTES TO FINANCIAL STATEMENTS June 30, 2010 NOTE 9 - COMMITMENTS AND CONTINGENCIES - Continued a. Leases - Continued The Center leases program space at 401 New Scotland Avenue, Albany, New York, from St. Teresa of Avila Church, a related party. The lease required payments of $6,438. The lease expires during November 2012. The Center has one additional five-year renewal option, with monthly rental payments of $6,631. Rent expense on this lease was $77,250 for the year ended June 30, 2010. The Center leased program space at 994 Madison Avenue, Albany, New York, from the Church of St. Vincent DePaul, a related party. The lease required monthly payments of $1,320 during the first year increasing to $1,358 during the second year, to $1,400 in the final year. The lease was set to expire March 31, 2010. During July 2009, the Center vacated this property. Rent expense on this lease was $1,400 for the year ended June 30, 2010. A summary of the Center's future annual minimum rental payments due under the terms of its operating leases is as follows: For the year ending June 30, 2011 2012 2013 $ 165,486 77,250 25,750 $ 268,486 b. Concentration of Credit Risk The Center maintains cash balances in several financial institutions located in the Northeast. Accounts at each institution are insured, up to certain limits, by the Federal Deposit Insurance Corporation (FDIC). At times, the Center has bank deposits in excess of amounts insured by the FDIC. c. Significant Concentration Approximately 53% of the Center's total revenue and other support was derived from three funding sources. Accounts receivable due from these payers was approximately $856,000 at June 30, 2010. No other funding source accounted for more than 10% of the Center's total revenue and other support. d. Funding Sources The Center is subject to audits and reviews of reimbursable costs by various governmental agencies. The outcome of these audits and reviews may have the effect of retroactively increasing or decreasing daily rates charged for various services. These charges, if any, will be recognized in accordance with the rules and guidelines established by the various funding sources. Page 10 ST. CATHERINE'S CENTER FOR CHILDREN SUPPLEMENTAL INFORMATION - FUNCTIONAL EXPENSES Year Ended June 30, 2010 (comparative totals for 2009) Group Residence Salaries and wages Payroll taxes, fringe benefits, vacation accrual Transportation and worker expense Children's activities/program supplies Purchase of services Purchase of health services Food Clothing Bedding/linen/uniforms Supplies and equipment Supplies and equipment, medical Rent, occupancy Rent, equipment and fixtures Utilities Repairs and maintenance, plant Repairs and maintenance, equipment Repairs and maintenance, vehicles Telephone and telegraph Postage Dues/licenses/permits Office supplies Subscriptions/publications Conference expense Administrative Staff development Publicity Grant expense Audit/legal and advisory Insurance Interest Boarding home payments Clothing/activity/special payments Replace reserve/amortization Total expenses before depreciation $ Depreciation, buildings Depreciation, equipment Depreciation, vehicles Total expenses $ 997,609 Foster Care Copson $ 1,643,678 $ 111,200 Group Home $ 391,271 Special Education Medical $ 144,604 $ 1,806,487 Clinic $ 379,554 Family Based Treatment $ 159,615 Prevention $ 482,181 Transitional Housing Community Based Services 231 Sherman St. $ $ $ 691,007 276,498 93,190 Total Program Services Access and Visitation $ 32,986 $ 7,209,880 Management and General $ 901,989 2010 Totals $ 8,111,869 2009 Totals $ 8,489,808 209,202 10,220 28,104 2,215 30,452 12,401 13,836 5,846 2,223 18,269 13,066 4,841 13,527 204 3,270 199 1,761 15,310 6,099 1,082 602 1,390,338 322,396 27,003 47,931 4,265 49,944 20,773 25,053 75,470 3,151 12,124 13,635 13,998 13,593 752 5,751 417 3,155 21,478 6,882 1,044 16,659 2,329,152 23,126 23,213 4,864 746 987 5,229 1,007 917 2,509 6,280 1,149 3,128 337 100 897 947 1,401 590 187,699 8,774 385,100 76,835 4,270 13,536 850 14,828 6,225 8,666 2,061 1,962 8,056 3,012 3,600 6,106 533 1,908 136 801 6,126 4,387 294 288 555,751 29,080 3,583 279 390 140,690 302 171,989 165 4,197 7,638 228 7,421 2,793 1,063 267 1,728 516,417 322,169 2,675 35,532 19,467 5,275 63,129 18,121 1,088 3,073 34,801 27,181 459 2,018 13,115 241 10,281 11,534 9,502 4,322 8,968 979 2,400,417 65,352 638 4,931 440 73,625 77 4,428 6,286 1,306 544 8,573 7,516 1,218 7,868 253 2,863 441 1,296 3,878 3,130 502 574,719 27,946 6,940 2,068 761 20,400 10,359 2,828 972 1,040 2,509 6,280 55 3,072 936 100 1,210 1,059 358 29 130,184 378,721 83,387 33,688 4,464 715 8,820 319 24,702 713 11 3,054 8,829 169 4,334 775 2,645 1,175 1,878 752 662,611 138,311 10,164 14,850 64,299 44 1,217 39,558 326 2,315 61,918 23,080 5,183 12,309 278 7,102 3,314 1,069 140 31,714 2,360 9,931 1,120,489 57,170 6,622 22,849 5,471 7,305 333 6,423 6,308 385 603 2,008 213 3,532 1,695 397,415 17,072 2,193 2,029 65 456 3,043 66 5,174 3,875 2,249 4,020 147 380 1,028 645 541 136,173 12,804 130 154 2 473 46,549 1,384,850 131,209 181,437 99,814 248,810 158,474 52,418 121,383 178,275 120,237 16,504 158,130 111,574 459 44,016 99,769 4,235 39,485 21,994 23,743 52,429 70,722 9,868 317,883 8,774 27,480 10,893,852 176,387 687 4,250 86,089 43 42,343 1,655 5,987 19,128 16,343 36,032 21,040 176 1,093 7,197 4,691 18,048 76,964 2,444 38,129 524 1,461,239 1,561,237 131,896 185,687 185,903 248,810 158,474 52,418 121,426 178,275 162,580 18,159 158,130 117,561 459 44,016 118,897 16,343 40,267 60,525 176 1,093 29,191 28,434 18,048 129,393 73,166 47,997 317,883 8,774 28,004 12,355,091 1,582,416 119,904 260,364 136,108 280,525 203,805 60,094 97,490 261,034 178,596 14,208 172,927 100,517 1,771 38,317 115,936 13,796 43,040 115,985 42 5,160 38,821 45,259 16,664 102,980 76,750 43,947 301,748 16,046 27,719 12,961,777 10,001 405 6,706 280 1,011 3,681 4,393 2,920 7,300 268 534 11,666 8,917 2,590 42,269 1,851 3,366 11,580 1,703 1,078 4,393 157 4,268 5,983 8,563 9,302 10,295 1,082 503 4,019 - 98,947 23,221 48,916 1,717 6,543 - 100,664 29,764 48,916 99,608 34,405 58,601 1,407,450 $ 2,334,124 $ 392,413 $ 563,853 $ 539,590 $ 2,447,903 $ 589,080 $ 383,271 $ 666,879 $ 1,144,337 $ 407,710 $ 141,777 $ 46,549 $ 11,064,936 $ 1,469,499 $ 12,534,435 $ 13,154,391 See Independent Auditor's Report. 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CATHERINE'S CENTER FOR CHILDREN FUNCTIONAL EXPENSES AS PRESENTED IN NEW YORK STATE COST REPORTS Group Residence Salaries and wages Payroll taxes, fringe benefits, vacation accrual Transportation and worker expense Children's activities/program supplies Purchase of services Purchase of health services Food Clothing Bedding/linen/uniforms Supplies and equipment Supplies and equipment, medical Rent, occupancy Rent, equipment and fixtures Utilities Repairs and maintenance, plant Repairs and maintenance, equipment Repairs and maintenance, vehicles Telephone and telegraph Postage Dues/licenses/permits Office supplies Subscriptions/publications Conference expense Administrative Staff development Publicity Grant expense Audit/legal and advisory Insurance Interest Boarding home payments Clothing/activity/special payments Replace reserve/amortization Total expenses before depreciation $ Depreciation, buildings Depreciation, equipment Depreciation, vehicles Total expenses $ 1,115,518 Foster Care Copson 156,109 10,630 15,262 71,603 44 671 40,108 4,424 2,444 61,916 23,692 4,783 14,162 1,582 3,767 9,138 17 106 4,130 1,523 1,747 7,590 31,951 6,040 9,981 1,265,908 19,308 2,202 2,083 1,161 3,499 539 88 5,174 3,951 2,249 4,261 207 606 647 2 14 92 1,088 230 980 676 1,026 7 154,639 63,630 6,985 22,899 9,496 2 8,879 394 222 6,084 7,019 607 1,723 1,385 7 41 2,276 387 670 2,859 3,622 3,111 19 452,222 14,221 6 35 831 499 16 49 629 133 293 172 1 7 58 38 146 627 19 311 5 58,389 8,111,869 1,561,237 131,896 185,687 185,903 248,810 158,474 52,418 121,426 178,275 162,580 18,159 158,130 117,561 459 44,016 118,897 16,343 40,267 60,525 176 1,093 29,191 28,434 18,048 129,393 73,166 47,997 317,883 8,774 28,004 12,355,091 10,224 1,253 6,706 641 2,385 3,681 4,454 235 2,920 7,389 606 534 11,751 9,234 2,590 42,654 3,323 3,366 11,672 2,054 1,078 4,454 232 157 95 362 4,268 6,149 9,197 9,302 1,104 586 4,019 64 243 10,295 14 53 - 100,664 29,764 48,916 $ 2,006,363 2,773,882 $ $ 427,137 668,509 $ $ 191,288 432,456 $ $ 531,816 $ 93,134 33,726 4,698 5,482 8,820 321 27,046 804 342 3,054 9,888 905 2,164 5,499 10 61 1,175 2,905 999 5,437 2,014 2,863 29 743,192 610,907 $ $ 34,181 7,008 2,219 3,817 20,400 9,541 1,034 2,475 1,099 2,509 6,492 11 3,752 580 2,215 852 6 39 1,466 1,226 641 2,732 444 1,383 130,184 19 427,613 $ 188,350 747,917 $ 782,488 1,290,556 $ 104,549 160,348 $ $ 309,905 462,824 $ $ 40,293 2010 Totals 74,783 674 6,572 5,133 73,625 77 4,431 6,286 3,580 633 8,573 7,837 1,218 8,895 878 2,188 3,993 9 59 759 1,548 969 8,010 3,261 2,549 28 653,705 639,540 $ Access and Visitation 361,683 2,829 35,075 38,834 5,275 63,129 18,131 10,614 3,445 34,801 28,528 459 2,018 17,417 3,677 8,347 15,014 40 246 13,158 10,557 4,060 21,636 9,518 9,567 118 2,724,539 $ 437,723 Community Based Services 37,604 3,616 486 4,629 140,690 304 171,989 2,055 276 4,198 7,897 228 8,349 793 1,749 3,814 9 53 1,414 495 876 3,735 1,848 1,850 25 587,332 447,953 $ Prevention 231 Sherman St. 85,894 4,305 13,754 5,290 14,828 6,226 8,668 4,245 2,048 8,057 3,320 3,600 7,094 843 2,390 2,993 9 56 509 1,043 931 10,095 4,514 2,261 315 631,011 $ 143,657 Clinic Transitional Housing 29,437 22,457 5,126 3,839 2,806 6,024 2,528 976 2,509 6,495 1,932 3,815 587 1,632 852 6 39 1,157 1,115 649 2,766 1,488 1,960 187,699 8,774 19 440,344 2,642,240 $ Medical Family Based Treatment 359,278 27,148 48,823 22,341 49,944 20,773 25,062 84,360 3,498 12,124 14,894 13,998 17,609 3,432 8,318 10,168 37 230 1,932 4,140 3,790 37,638 7,395 9,050 16,769 2,635,533 $ 1,832,782 Special Education 231,975 10,310 28,655 13,447 30,452 12,401 13,842 11,336 2,438 18,269 13,842 4,841 16,007 2,119 4,875 5,998 23 142 1,065 2,369 2,340 25,288 6,416 6,026 670 1,580,664 1,598,847 $ Group Home 58,456 $ $ 12,534,435 2009 Totals $ 8,489,808 1,582,416 119,904 260,364 136,108 280,525 203,805 60,094 97,490 261,034 178,596 14,208 172,927 100,517 1,771 38,317 115,936 13,796 43,040 115,985 42 5,160 38,821 45,259 16,664 102,980 76,750 43,947 301,748 16,046 27,719 12,961,777 99,608 34,405 58,601 $ 13,154,391 See Independent Auditor's Report. 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