Spring‐Ford Counseling Services, Inc. Financial Statements June 30, 2016 and 2015
Spring‐Ford Counseling Services, Inc. Table of Contents June 30, 2016 and 2015 Independent Accountants’ Review Report Statements of Financial Position Statements of Activities Statements of Functional Expenses Statements of Cash Flows Notes to Financial Statements Page 1 2 3 4 5 6 Independent Accountants’ Review Report To the Board of Directors Spring‐Ford Counseling Services, Inc. Royersford, Pennsylvania We have reviewed the accompanying financial statements of Spring‐Ford Counseling Services, Inc. (a nonprofit organization) which comprise the statements of financial position as of June 30, 2016 and 2015, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error. Accountants’ Responsibility Our responsibility is to conduct the review engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion. Accountants’ Conclusion Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America. Gallagher, McDevitt, Schalleur & Surgent, LLC Devon, Pennsylvania December 6, 2016
237 Lancaster Avenue • Suite 1000 • Devon, PA 19333 Tel: 610.975.9122 • Fax: 610.975.9132 • www.gmssurgent.com Spring‐Ford Counseling Services, Inc.
Statements of Financial Position
June 30, 2016 and 2015
Assets
2016
2015
Current assets
Cash and cash equivalents
Accounts receivable, net of allowances
Prepaid expenses
$ 113,043
9,296
1,421
$ 128,885
12,114
‐
Total current assets
123,760
140,999
Property and equipment
Furniture and fixtures
Accumulated depreciation
65,464
(61,079)
65,464
(58,156)
Net property and equipment
4,385
7,308
Total assets
$ 128,145
$ 148,307
Current liabilities
Accounts payable
Accrued expenses
$ 1,003
13,486
$ 1,634
17,923
Total current liabilities
14,489
19,557
Net assets
Unrestricted
Temporarily restricted
112,990
666
128,750
‐
Total net assets
113,656
128,750
Total liabilities and net assets
$ 128,145
$ 148,307
Liabilities and Net Assets
See independent accountants' review report.
The accompanying notes are an integral part of the financial statements.
‐ 2 ‐
Spring‐Ford Counseling Services, Inc.
Statements of Activities
Years Ended June 30, 2016 and 2015 2016
Unrestricted
Temporarily
Restricted
Public support and revenue
Donations
Grants
Schools, teen parenting and drug‐fee
Montgomery County programs
Client fees, net of contractual allowance
Interest income
Net assets released from restrictions
$ 14,115
45,334
‐
‐
158,198
178
‐
$ ‐
666
‐
‐
‐
‐
‐
Total public support and revenue
217,825
2015
Total
Unrestricted
Temporarily
Restricted
$ ‐
‐
‐
‐
‐
‐
‐
$ 14,115
46,000
‐
‐
158,198
178
‐
$ 19,302
37,930
18,000
90,150
150,489
157
441
$ ‐
‐
‐
‐
‐
‐
(441)
$ ‐
‐
‐
‐
‐
‐
‐
$ 19,302
37,930
18,000
90,150
150,489
157
‐
666
‐
218,491
316,469
(441)
‐
316,028
146,426
‐
‐
146,426
232,763
‐
‐
232,763
146,426
‐
‐
146,426
232,763
‐
‐
232,763
82,505
4,654
‐
‐
‐
‐
82,505
4,654
59,893
5,167
‐
‐
‐
‐
59,893
5,167
Total supporting services
87,159
‐
‐
87,159
65,060
‐
‐
65,060
Total expenses
233,585
‐
‐
233,585
297,823
‐
‐
297,823
Change in net assets
(15,760)
666
‐
(15,094)
18,646
(441)
‐
18,205
‐
‐
128,750
110,104
441
‐
110,545
$ 666
$ ‐
$ 113,656
$ 128,750
$ ‐
$ ‐
$ 128,750
Expenses
Program services:
Community services
Total program services
Supporting services:
Management and general Fundraising
Net assets, beginning of year
Net assets, end of year
128,750
$ 112,990
Permanently
Restricted
See independent accountants' review report.
The accompanying notes are an integral part of the financial statements.
‐ 3 ‐
Permanently
Restricted
Total
Spring‐Ford Counseling Services, Inc.
Statements of Functional Expenses
Years Ended June 30, 2016 and 2015 Program Services
Supporting Services
Community Services
Management
and General
Fundraising
Total Supporting Services
Advertising
Bank charges and miscellaneous
Bad debt expense
Business licenses and fees
Contracted services Depreciation
Employee benefits
Insurance
Maintenance and repairs
Office expense
Payroll taxes
Postage and printing
Professional fees
Rent
Salaries
Telephone and utilities
Meetings and training
$ ‐
889
5,173
86
60,767
‐
1,558
707
228
290
3,932
98
11,509
9,840
48,664
1,805
880
$ ‐
284
‐
527
‐
2,923
1,749
2,829
3,097
2,244
4,143
49
8,893
2,160
51,066
2,207
334
$ ‐
433
‐
‐
‐
‐
70
‐
‐
‐
198
‐
1,519
‐
2,434
‐
‐
Total functional expenses
$ 146,426
$ 82,505
$ 4,654
2016
2015
$ ‐
717
‐
527
‐
2,923
1,819
2,829
3,097
2,244
4,341
49
10,412
2,160
53,500
2,207
334
$ ‐
1,606
5,173
613
60,767
2,923
3,377
3,536
3,325
2,534
8,273
147
21,921
12,000
102,164
4,012
1,214
$ 200
1,618
‐
1,225
92,008
5,126
4,802
3,945
2,911
3,518
9,400
787
32,494
12,000
121,930
3,891
1,968
$ 87,159
$ 233,585
$ 297,823
See independent accountants' review report.
The accompanying notes are an integral part of the financial statements.
‐ 4 ‐
Spring‐Ford Counseling Services, Inc.
Statements of Cash Flows
Years Ended June 30, 2016 and 2015 2016
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net
cash provided by (used in) operating activities:
Depreciation expense
(Increase) decrease in accounts receivable, net of allowances
(Increase) decrease in prepaid expenses
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
2015
$ (15,094)
$ 18,205
2,923
2,818
(1,421)
(631)
(4,437)
5,126
(811)
2,738
1,535
284
Cash provided by (used in) operating activities
(15,842)
27,077
Cash flows from investing activities
Cash paid for purchase of property and equipment
‐
(761)
Cash provided by (used for) investing activities
‐
(761)
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
(15,842)
128,885
26,316
102,569
Cash and cash equivalents, end of year
$ 113,043
$ 128,885
See independent accountants' review report.
The accompanying notes are an integral part of the financial statements.
‐ 5 ‐
Spring‐Ford Counseling Services, Inc. Notes to Financial Statements June 30, 2016 and 2015 NOTE 1 ‐ NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Spring‐Ford Counseling Services, Inc. (the “Organization”) is a non‐profit corporation. Its mission is to provide therapeutic, professional, and educational services to all people requesting assistance in the area of mental health and substance abuse in the most ethical and confidential manner possible. Basis of Accounting The Organization prepares its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Revenues are recognized in the period in which they are earned. Expenses are recognized in the period in which they are incurred. Cash and Cash Equivalents The Organization considers all unrestricted highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Client Fee Revenue Recognition and Accounts Receivable Client fees include amounts billed through insurance and amounts billed and collected directly by the Organization. Client fees billed through insurance are recorded net of estimated contractual allowances and bad debt reserves, and may not represent amounts ultimately collected. Contractual allowances result from the differences between the rates charged for services performed and reimbursement by insurance companies for such services. Accounts receivable are stated at the amount management expects to collect. The Organization maintains an allowance for doubtful accounts based upon any specific payoff collection issues that have been identified and the aging of client accounts receivable balances. The estimated bad debt reserves and contractual allowances are reviewed annually and adjusted accordingly. Depending on changes made in the contractual allowance rates, net revenue may increase or decrease. For the year ended June 30, 2016, gross client fees billed through insurance were $285,795 before $172,343 contractual allowances. As of June 30, 2016, gross accounts receivable were $20,982 before contractual allowances and bad debt totaling $11,686. For the year ended June 30, 2015, gross client fees billed through insurance were $256,305 before $147,557 contractual allowances. As of June 30, 2015, gross accounts receivable were $22,822 before contractual allowances of $10,708. Public Support and Revenue Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted net assets depending on the existence or nature of any donor restrictions. Contributions are generally available for unrestricted use unless specifically restricted by the donor. 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. Unconditional promises to give are recorded as received and are recorded at the present value of their net realizable value, using risk‐free interest rates applicable to the years in which the promises are received to discount the amounts. The Organization uses an allowance method to determine uncollectible promises receivable. The allowance is based on prior years’ experience and management’s analysis of specific promises made. Voluntary designations of net assets by the governing board of the Organization (such as a board‐designated endowment) are considered to be unrestricted since the designations are voluntary and may be reversed by the governing board at any time. ‐ 6 ‐ Spring‐Ford Counseling Services, Inc. Notes to Financial Statements June 30, 2016 and 2015 NOTE 1 ‐ NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Public Support and Revenue (continued) Contributions are reported as temporarily 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 purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Endowment contributions and investments are permanently restricted by the donor. Investment earnings available for distribution are recorded in unrestricted net assets. Investment earnings with donor restrictions are recorded in temporarily or permanently restricted net assets based on the nature of the restrictions. Property and Equipment Furniture and fixtures are recorded at cost. Depreciation is computed using the straight line method over a five year recovery period. Depreciation expense for the years ended June 30, 2016 and 2015 was $2,923 and $5,126, respectively. Expenditures for major renewals and betterments that extend the useful life of property and equipment are capitalized. The Organization has no formal capitalization policy other than assets with a life of greater than one year are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Functional Allocation of Expenses The costs of providing the Organization’s program and supporting services have been summarized on a functional basis in the statements of functional expenses. Accordingly, certain costs have been allocated between the program and supporting services benefited. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the 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 reporting period. Actual results could differ from those estimates. Tax Status The Organization is exempt from income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3). Certain unrelated business income is subject to Federal income taxes. The Organization follows the income tax standard for uncertain tax positions. As a result, the Organization has not identified any uncertain tax positions and therefore no amounts have been accrued at year end. The Organization’s income tax returns are subject to review and examination by federal authorities. The Organization is not aware of any activities that would jeopardize its tax‐exempt status. The 2012 and subsequent years are open to examination by federal authorities. Subsequent Events The Organization has evaluated subsequent events through December 6, 2016, which is the date the financial statements were available to be issued. ‐ 7 ‐ Spring‐Ford Counseling Services, Inc. Notes to Financial Statements June 30, 2016 and 2015 NOTE 2 ‐ LEASES The Organization conducts its operations from facilities that are leased under a month‐to‐month operating lease. Rent expense amounted to $12,000 and $12,000 for the years ended June 30, 2016 and 2015, respectively (see Note 7). NOTE 3 ‐ THIRD PARTY REIMBURSEMENTS The Organization had an agreement with Montgomery County to provide counseling services for the Drug and Alcohol program for the year ending June 30, 2015. This agreement was not renewed in 2016. NOTE 4 ‐ TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes or periods at June 30, 2016 and 2015: 2016
2015
Restricted as to purpose and period
$ 666
$ 441
Total temporarily restricted net assets
$ 666
$ 441
NOTE 5 ‐ RETIREMENT PLANS The Organization has in effect a tax sheltered annuity plan pursuant to Section 403(b) of the Internal Revenue Code. Benefits under the plan are provided by and through annuity contracts. The contributions are funded through employee deferrals and employer contributions. For the years ended June 30, 2016 and 2015, the Board of Directors elected to make a contribution by the Organization for each employee. This contribution is voted on each year. Employer contributions for the years ended June 30, 2016 and 2015 were $3,377 and $4,802, respectively. NOTE 6 ‐ CONCENTRATION OF CREDIT RISK The Organization maintains its cash balances in two financial institutions. The balances are insured at each institution by the Federal Deposit Insurance Corporation up to $250,000. As of June 30, 2016, the Organization did not have any uninsured balances. NOTE 7 ‐ RELATED PARTY The Organization leases its building from the President of the Organization (see Note 2). ‐ 8 ‐