ELI WHITNEY MUSEUM, INC.
FINANCIAL STATEMENTS
AUGUST 31, 2010
ELI WHITNEY MUSEUM, INC.
TABLE OF CONTENTS
Page
Exhibit Number
1
Independent Auditors' Report
Financial Statements:
Balance Sheet
A
2
Statement of Activities
B
3
Statement of Cash Flows
C
4
5-1 1
Notes to Financial Statements
Schedule
Schedule of Functional Expenses
1
12
[
j
A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS
100 BRADLEY ROAD • WOODBRIDGE, CONNECTICUT 06525-2394
203 389-5371 • FAX 203 389-4430
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Eli Whitney Museum, Inc.
Hamden, CT 06517
We have audited the accompanying statement of financial position of Eli Whitney Museum,
Inc., (a non-profit organization) as of August 31, 2010 and the related statements of
activities, and cash flows for the year then ended. These financial statements are the
responsibility of Eli Whitney Museum, Inc.'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 the Organization's 2009 financial statements
and, in our report dated October 23, 2009; we expressed an unqualified opinion on those
financial statements.
We conducted our audits 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 that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of the Eli Whitney Museum, Inc. as of August 31, 2010 and
the changes 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 schedule of functional expenses on page 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 a a whole.
LE TSKY & B RNEY, P.C.
Ce fied Publi Accountants
November 9, 2010
1
IOW • •
11111
WM MO I= MO • MI NM MN MO MI MIN MO I=
EXHIBIT A
ELI WHITNEY MUSEUM, INC.
STATEMENT OF FINANCIAL POSITION
AUGUST 31, 2010
WITH COMPARATIVE TOTALS FOR 2009
Unrestricted
Permanently
Restricted
Totals
2010
2009
Assets:
Current Assets
Cash and Cash Equivalents
Accounts Receivable - Net
Promises to Give
Construction Bond Receivable
217,515
2,197
23,180
242,892
Total Current Assets
6,797
224,312
2,197
188,212
18,753
6,797
23,180
249,689
23,180
230,145
35,992
1,864,027
101,211
2,001,230
Non-Current Assets
Intangible Assets - Net
Property and Equipment - Net
Collections
32,999
1,873,411
Total Non - Current Assets
1,906,410
101,211
101,211
32,999
1,873,411
101,211
2,007,621
2,149,302
108,008
2,257,310
2,231,375
12,864
1,027
13,891
12,864
1,027
13,891
12,554
12,290
24,844
$
200,000
1,935,411
$
2,135,411
108,008
108,008
200,000
1,935,411
108,008
2,243,419
199,464
1,900,059
107,008
2,206,531
2,149,302
108,008
2,257,310
2,231,375
Total Assets
Liabilities and Net Assets:
Liabilities:
Accounts Payable
Other Liabilities
Total Liabilities
Net Assets:
Unrestricted:
Designated
Undesignated
Permanently Restricted
Total Net Assets
Total Liabilities and Net Assets
The accompanying notes are an integral part of the financial statements.
2
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MN MS
EXHIBIT B
ELI WHITNEY MUSEUM, INC.
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED AUGUST 31, 2010
WITH COMPARATIVE TOTALS FOR 2009
Unrestricted
Permanently
Restricted
Totals
2010
2009
Revenues and Other Support:
Contributions
Capital Contributions
Workshops
Admissions
Membership Dues
Projects
Rental Income
Investment Income
In-Kind
Net Assets Released From Restrictions
$
Total Revenues and Other Support
$
126,988
1,048,412
126,988
678,444
13,865
27,774
117,332
57,832
378
25,799
1,048,412
1,087,348
849,148
849,148
921,066
162,376
1,011,524
162,376
1,011,524
205,571
1,126,637
36,888
36,888
678,444
13,865
27,774
117,332
57,832
378
25,799
153,275
11,000
670,236
13,531
26,195
131,801
53,991
869
26,450
-
Expenses:
Program (Schedule 1) (Including depreciation of $91,318
and amortization of $2,750)
Administrative (Schedule 1) (Including depreciation
of $30,439 and amortization of $917)
Total Expenses
Total Revenues and Other Support Over
Expenses - Change In Net Assets
$
(39,289)
Net Assets - September 1, 2009 & 2008
2,098,523
108,008
2,206,531
2,245,820
Net Assets - August 31, 2010 & 2009
2,135,411
108,008
2,243,419
2,206,531
The accompanying notes are an integral part of the financial statements.
3
EXHIBIT C
ELI WHITNEY MUSEUM, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31, 2010 AND 2009
August 31,
2010
2009
Cash Flows From Operating Activities:
Increase (Decrease) In Net Assets (Exhibit B)
Adjustments To Reconcile Change In Net Assets To
Net Cash Provided (Used) By Operating Activities:
Depreciation and Amortization
(Increase) Decrease in Accounts Receivable
(Increase) Decrease In Pledges Receivable
Increase (Decrease) In Accounts Payable
Increase (Decrease) In Other Liabilities
36,888
(39,289)
53,066
16,556
125,424
(17,824)
310
(11,263)
3,698
6,966
95,557
78,975
$
(59,457)
(110,982)
Net Cash Provided (Used) By Investing Activities
$
(59,457)
(110,982)
Net Increase (Decrease) In Cash
$
36,100
(32,007)
188,212
220,219
224,312
188,212
Net Cash Provided (Used) By Operating Activities
Cash Flows From Investing Activities:
Acquisitions Of Property, Plant And Equipment
Cash and Cash Equivalents at Beginning of Year
$
Cash and Cash Equivalents at End of Year
The accompanying notes are an integral part of the financial statements.
4
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 1 - Summary of Significant Accounting Policies
A. Nature of Activities
The Eli Whitney Museum, Inc. (the "Museum") is a non-profit corporation
established in 1979 to provide exhibits of historical, educational, and cultural
value, as well as, provide workshops to promote hands-on learning experiences
to students and the community. The Museum is primarily funded through
workshop fees, grant revenues and contributions made by the public.
B. Basis of Accounting
The Museum's financial statements are presented on the accrual basis of
accounting in accordance with generally accepted accounting principles.
C. Financial Statement Presentation
Under SFAS No. 117, the Museum is required to report information regarding its
financial position and activities according to three classes of net assets:
unrestricted net assets, temporarily restricted net assets, and permanently
restricted net assets.
Unrestricted net assets represent net operating income as well as any income
free of donor imposed restrictions.
Temporarily restricted net assets represent amounts subject to donor-imposed
stipulations that may or will be met, either by actions of the Museum or the
passage of time. When a restriction expires, temporarily restricted net assets
are reclassified to unrestricted net assets. As of August 31, 2009 the Museum
had no temporarily restricted funds.
Permanently restricted net assets represent amounts subject to donor-imposed
stipulations that they are maintained permanently by the Museum, generally
with all or part of any income earned being used by the Museum. As of August
31, 2010 the Museum had $108,008 of permanently restricted funds.
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 1 - Summary of Significant Accounting Policies (Continued)
D. Comparative Totals — August 31, 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 generally
accepted accounting principles. Accordingly, such information should be read
in conjunction with the Organization's financial statements for the year ended
August 31, 2009, from which the summarized information was derived.
E. Contributions
Contributions are recognized as revenue when they are received or
unconditionally pledged. The Organization has also adopted SFAS No. 116,
Accounting for Contributions Received and Contributions Made. Contributions
received are recorded as unrestricted, temporarily restricted or permanently
restricted support depending on the existence or nature of any donor
restrictions.
The Museum reports gifts of cash and other assets as restricted support if they
are received with donor stipulations that limit the use of the donated assets.
When a donor restriction expires, that is, when a stipulated time restriction ends
or the purpose restriction is accomplished, restricted net assets are reclassified
to unrestricted net assets and reported in the statement of activities as net
assets released from restrictions.
F. Accounts Receivable
Accounts receivables are stated at the amount management expect to collect
from outstanding balances. Management provides for probable uncollectible
amounts through a provision for bad debt expense and an adjustment to a
valuation allowance based on its assessment of the current status of individual
receivables from grants, contracts, and others. Balances that are still
outstanding after management has used reasonable collection efforts are
written off through a charge to the valuation allowance and a credit to the
applicable accounts receivable. The allowance for doubtful accounts at August
31, 2010 was $0. Changes in the valuation allowances have not been material
to the financial statements.
6
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 1 - Summary of Significant Accounting Policies (Continued)
G. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect certain reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period. Actual results could differ from those estimates.
H. Concentration of Credit Risk - Cash
The Museum maintains checking accounts that are insured by the Federal
Deposit Insurance Corporation (FDIC) up to $250,000. As of August 31, 2010,
the bank balances in these accounts were $239,625, which were fully insured.
The following is a summary of cash at August 31, 2010 and 2009:
Checking-Non-Interest Bearing
On Hand
Money Fund Account - Sweep
Total Cash
I.
2010
51,741
40
172,534
2009
4,640
40
183,532
$ 224,315
188,212
$
Cash and Cash Equivalents
For the statement of cash flows, cash and cash equivalents consist of all cash
on hand, and deposited in financial institutions with maturities of three months
or less.
J. Income Taxes
The Eli Whitney Museum, Inc. is exempt from federal income taxes under
Section 501(c)(3) of the Internal Revenue Service Code. In addition, the
Museum has been determined by the Internal Revenue Service not to be a
"private foundation" within the meaning of Section 509(a) of the Code.
7
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 1 - Summary of Significant Accounting Policies (Continued)
K. Promises To Give
Contributions are recognized when the donor makes a promise to give to the
Museum that is, in substance, unconditional. Contributions that are restricted
by the donor are reported as increases in unrestricted net assets if the
restrictions expire in the fiscal year in which the contributions are recognized.
All other donor-restricted contributions are reported as increases in temporarily
or permanently restricted net assets depending on the nature of the restrictions.
When a restriction expires, temporarily restricted net assets are reclassified to
unrestricted net assets.
The Museum uses the allowance method to determine uncollectible
unconditional promises receivable. The allowance is based on prior years'
experience and management's analysis of specific promises made.
L. Expense Allocation
The costs of providing various programs and other activities have been
summarized on a functional basis in the Statement of Activities and in the
Schedule of Functional Expenses. Accordingly, certain costs have been
allocated among the programs and supporting services benefited.
8
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 2 - Property, Plant, and Equipment
Management capitalizes any fixed assets with a cost of $250 and an estimated life
exceeding one year. Property, plant and equipment are stated at cost, or if
donated, based upon fair market value at the date of the contribution. Depreciation
is computed using the straight-line method over the assets estimated useful lives as
follows:
Buildings
Leasehold Improvements
Exhibits
Furniture and Equipment
25-40 Years
40 Years
31 Years
3-10 Years
Changes in property, plant, and equipment for the year ended August 31, 2010 is
as follows:
Beginning
Balance
Land
Building and Improvements
Furniture & Equipment
Total
$
$
220,281
2,097,927
201,512
2,519,720
Additions
Ending
Balance
Deletions
220,281
2,139,475
219,421
2,579,177
41,548
17,909
59,457
Less Accumulated Depreciation
705,766
Property and Equipment — Net
$
1,873,411
Repairs and maintenance that do not improve or extend the useful lives of the
respective assets are expensed currently. Donated property is recorded at the fair
market value of the asset at the time the gift was received.
Note 3 - Intangible Assets
Intangible assets are comprised of copyrights and works of art related to the
creation of the Eli Whitney Press. The Whitney Press was created as part of the
capital campaign and at August 31, 2010 and 2009 amounted to $32,999 and
$36,666, net of accumulated amortization of $22,001 and $18,334, respectively.
Amortization expense is being recorded over 15 years using the straight-line
method and totaled $3,667 for the year ended August 31, 2010.
9
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 4 - Collections
The Museum's collections are made up of firearms of historical significance which
are held for educational, research, and curatorial purposes. Each of the items is
cataloged, preserved, and cared for. The collection is subject to a policy that
requires proceeds from the sale to be used to acquire other items for collection.
The cost of preserving the existing items was $2,375 during the current year and
has been added to the cost of the collections at August 31, 2010.
During the current fiscal year, no collection items were acquired nor disposed. The
current fair market value of collections at August 31, 2010 was appraised at
$101,211.
Note 5 - Commitments and Contingencies
The management of the Eli Whitney Museum, Inc. has stated that there are no
pending or contemplated litigation involving the Museum, which would materially
effect its financial statements in an adverse manner as of August 31, 2010.
Note 6 — Designated Net Assets
Designations of net assets are volunteer board approved segregations of
unrestricted net assets for specific purposes. Since designations are voluntary and
may be reversed by the governing board at any time, the designated portion of net
assets are not considered temporarily or permanently restricted.
On November 13, 2007 the Board approved the following designations:
Adverse Draw
Emergency Capital
Cash Reserve
Collections
Total Designations
60,000
54,000
50,000
36,000
200,000
10
ELI WHITNEY MUSEUM, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Note 7 - Leases
On July 17, 2004 the Museum entered into a two year operating lease, with two 25
year renewal options, with the United Illuminating Company, Inc. for a land
easement. The Museum is using the easement as the main entrance to the
Museum. The lease requires annual rental payments of $4,500 for the initial two
year term. During any additional term the annual rent will be adjusted annually by
the consumer price index change from the previous year. At no point will the rent
be lower than the previous year. Rental expense for the year ended August 31,
2010 was $5,247.
The Museum leases the land located at 915 Whitney Avenue from the Town of
Hamden for $1 a year. The current lease has three twenty-five year renewal
options.
Future minimum lease payments under operating leases that have remaining terms
in excess of one year as of August 31, 2009 are:
2011
2012
2013
2014
$
5,247
5,247
5,247
5,247
The Museum subleases a portion of the property to the Regional Water Authority
under an operating lease agreement. The Authority is able to renew the lease
annually, with the ability to terminate the agreement with a six month notice. During
the fiscal year ended August 31, 2010, the Museum received $25,147 in rental
income from the lease of property.
Note 8 — Deferred Compensation Plan
The Museum offers a deferred compensation plan under section 401(k) for the
internal revenue service code. All full time employees are eligible to participate
after 12 months of employment. Under the program, eligible participants may elect
to contribute up to the maximum percentage of your gross pay allowable by law.
Management does not offer an employer's match to the program, however the
Museum pays the administrative costs associated with the program, which was
$956 for fiscal year ended August 31, 2010.
11
SCHEDULE 1
ELI WHITNEY MUSEUM, INC.
SCHEDULE OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED AUGUST 31, 2010
WITH COMPARATIVE TOTALS FOR 2009
August 31,
Program
Salaries
Educators
Stipends
Payroll Taxes
Events
Miscellaneous
Train Exhibit
Special Projects
Materials
Depreciation
Amortization
Utilities
Insurances
Repairs and Maintenance
Bank Charges
Office Expense and Supplies
Dues, Subscriptions & Licenses
Legal and Professional Fees
Printing
Postage and Shipping
Telephone
Site/Drive/Landscape
Travel and Conferences
Virtual Museum
In-Kind Expense
Total
$
Administrative
271,822
126,437
152,739
30,846
10,399
181
5,109
58,594
10,282
111,693
35,264
2,750
15,586
37,898
11,754
917
5,195
12,633
13,993
18,112
14,154
2,280
9,767
2,675
1,053
967
8,024
3,159
2,902
3,330
5,210
25,799
162,376
849,148
12
2010
330,416
126,437
152,739
41,128
10,399
181
5,109
111,693
47,018
3,667
20,781
50,531
13,993
18,112
14,154
2,280
9,767
10,699
4,212
3,869
2009
338,431
129,792
144,825
49,643
9,756
1,652
2,853
551
124,584
121,757
3,667
25,592
49,687
15,971
14,293
13,992
1,166
25,733
13,669
6,451
1,291
3,330
5,210
25,799
4,831
26,450
1,011,524
1,126,637