big brothers big sisters of ulster county, inc. financial

Big Brothers Big Sistersof Ulster County, Inc.

Financial Statements

December 31, 2008

500 Mamaroneck Avenue, Harrison, NY 10528 Tel: 914-381-8900 Fax: 914-381-8910www.ODMD.com

Independent Auditor's Report

Board of Directors ofBig Brothers Big Sisters of Ulster County, Inc.

We have audited the accompanying statement of financial position of Big Brothers Big Sisters of Ulster County, Inc. (“the Organization”) as of December 31, 2008, and the related statements of activities, functional expenses and cash flows for the period from July 1, 2008 through December 31, 2008. These financial statements are the responsibility of the Big Brothers Big Sisters of Ulster County, Inc.'s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 consideration of internal control over financial reporting as a basis for designing auditing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Big Brothers Big Sisters of Ulster County, Inc., at December 31, 2008, and the changes in its net assets and its cash flows for the period from July 1, 2008 through December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The June 30, 2008 information has been derived from the Organization’s June 30, 2008 financial statements, and in our report dated December 22, 2008, we expressed an unqualified opinion on those financial statements.

Harrison, New YorkNovember 1, 2009

www.ODMD.com

ASSETSCash 829$ Investments 1,902 Accounts receivable, net 8,130 Contracts and grants receivable 75,280 Promises to give, net 37,404 Prepaid expense 4,767 Property, plant and equipment, net 2,312

130,624$

LIABILITIES AND NET ASSETS (DEFICIT)Liabilities

Accounts payable and accrued expenses 64,382$ Due to related parties 39,952

Total Liabilities 104,334

Net Assets (Deficit)Unrestricted

Designated for operations (11,039) Investment in property, plant and equipment 2,312

Total Unrestricted (8,727)

Temporarily restricted 35,017

Total Net Assets (Deficit) 26,290

130,624$

Big Brothers Big Sisters of Ulster County, Inc.

Statement of Financial Position

December 31, 2008

See notes to financial statements 2

Temporarily Unrestricted Restricted Total

OPERATING REVENUEContracts and grants 346,516$ -$ 346,516$ Contributions 16,642 46,652 63,294 Rental income 598 - 598 Interest and dividend income 246 - 246 Realized and unrealized loss on investments (1,173) - (1,173) Net assets released from restrictions 18,185 (18,185) -

Total Operating Revenue 381,014 28,467 409,481

EXPENSESProgram Services

Case management 327,403 - 327,403

Supporting ServicesManagement and general 46,575 - 46,575 Fundraising 7,733 - 7,733

Total Expenses Before Depreciation 381,711 - 381,711

Depreciation - program related 378 - 378

Total Expenses 382,089 - 382,089

Change in Net Assets (1,075) 28,467 27,392

NET ASSETS (DEFICIT)Beginning of period (7,652) 6,550 (1,102)

End of period (8,727)$ 35,017$ 26,290$


Statement of Activities

Period from July 1, 2008 Through December 31, 2008


ProgramServices

Management Total Case and Supporting

Management General Fundraising Services TotalPERSONNELSalaries 80,755$ 2,750$ 2,750$ 5,500$ 86,255$ Fringe benefits 16,029 564 564 1,128 17,157

Total Personnel Costs 96,784 3,314 3,314 6,628 103,412

OTHER THAN PERSONNEL COSTSProfessional fees 3,300 3,850 - 3,850 7,150 Supplies and office expenses 5,789 - - - 5,789 Contractual services 86,347 - - - 86,347 Travel and meetings 4,648 - - - 4,648 Dues and subscriptions 6,201 - - - 6,201 Insurance 3,556 505 - 505 4,061 Telephone 3,145 - - - 3,145 Postage 857 - - - 857 Rent and occupancy 6,048 - - - 6,048 Building and equipment repairs 93 - - - 93 Interest 585 - - - 585 Advertising 110,050 - - - 110,050 Events and fieldtrips - - 627 627 627 Management fees - 38,906 - 38,906 38,906 Development fees - - 3,792 3,792 3,792

Total Expenses Before Depreciation 327,403 46,575 7,733 54,308 381,711

Depreciation 378 - - - 378

Total Expenses 327,781$ 46,575$ 7,733$ 54,308$ 382,089$


Statement of Functional Expenses


Supporting Services


CASH FLOWS FROM OPERATING ACTIVITIESChange in net assets 27,392$ Adjustments to reconcile change in net assets to net cash

from operating activitiesDepreciation 378 Realized and unrealized loss on investments 1,173 Change in operating assets and liabilities

Accounts receivable (5,805) Contracts and grants receivable 21,104 Promises to give 461 Prepaid expense (1,544) Accounts payable and accrued expenses (1,091) Due to related party (41,997)

Net Cash from Operating Activities 71

CASH FLOWS FROM INVESTING ACTIVITIESPurchases of investments (71)

Net Change in Cash -

CASHBeginning of period 829

End of period 829$

SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest 585$


Statement of Cash Flows




Notes to Financial Statements

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1. Organization

Big Brothers Big Sisters of Ulster County, Inc. (the "Organization") was incorporated October 21, 1974 under the Not-for-Profit Corporation Law of the State of New York. The Organization's purpose is to offer support to school age children from single parent families who can benefit from a one to one relationship with a volunteer adult model. No fees are collected.

Effective January 1, 2004, Families First New York, Inc. (“FFNY”) became the sole member of the Organization. Families First New York, Inc., provides capacity building and intermediary services to its affiliates and other not-for-profit agencies.

The Organization is a charitable organization that is exempt from Federal taxes under Section 501(c)(3) of the Internal Revenue Code. Under this ruling from the IRS, the Organization is not a "private foundation" within the meaning of Section 509(a) of the Internal Revenue Code.

As adopted by the Board of Directors the Organization has changed its year end from June 30 to December 31. The period from July 1, 2008 through December 31, 2008 is the first period since the Organization’s change of its year end.

2. Summary of Significant Accounting Policies

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.

Basis of Presentation

Net assets, revenues, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Unrestricted amounts are those currently available at the discretion of the board for use in the Organization's operations. When a restriction expires, temporarily restricted net assets are classified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted amounts are donor imposed restrictions to be maintained permanently by the Organization.

Investments

The Organization follows FASB 157 “Fair Value Measurements” which established a fair value hierarchy organized into three levels based upon the input assumptions used in pricing assets. Level 1 assets have the highest priority and include assets with quoted prices in an active market. As of and for the period ended December 31, 2008 all of the Organization’s



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2. Summary of Significant Accounting Policies (continued)

investments, bought, sold and held were valued using Level 1 inputs and consisted of mutual funds. Investments in mutual funds are valued at their fair values in the statement of financial position. Unrealized gains and losses are included in the statement of activities.

Revenue Recognition

The Organization conducts activities under grants and contracts received from various federal, state, local and private sources. Revenue is recognized when grant and contract conditions are fulfilled, such as when program expenses for the grant or contract are incurred. Advance payments for contracts or grants are accounted for as refundable advances until the related expenses are incurred, at which time they are recognized as revenue. Client service fees are recognized as revenue when earned.

Accounting for Uncertainty in Income Taxes

The Organization’s accounting policy is to provide liabilities for uncertain tax positions when a liability is probable and estimable. Management is not aware of any violation of its tax status as an organization exempt from income taxes, nor of any exposure to unrelated business income tax.

Promises to Give

Promises to give that are expected to be collected in future years are recorded at the present value of the estimated future cash flows net of discount. The discount is amortized using an effective yield over the expected collection period of the receivables.

Property and Equipment

All acquisitions of property and equipment in excess of $1,000 and all expenditures that materially prolong the useful lives of assets are capitalized. Property and equipment are carried at cost, if purchased, or at fair market value on the date of acquisition, if received through donation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from three to five years.

The Organization capitalizes furniture and equipment purchased with grant funds. The grantor agencies reserve the right to request a return of these assets in the event the funded programs are discontinued.



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2. Summary of Significant Accounting Policies (continued)

Functional Allocation of Expenses

The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services based on benefits received.

Advertising

Advertising costs are expensed as incurred.

Donated Services

The Organization receives significant amounts of services donated by local volunteers. No amounts have been reflected in the financial statements for those donated services because they do not meet the criteria for recognition under Statement of Financial Accounting Standards No. 116, Accounting for Contributions Received and Contributions Made.

3. Promises to Give

Promises to give receivable consist of the following at December 31, 2008:

Due within one year 42,173$ Due within two to five years 500 Allowance for uncollectible promises (5,247) Discount to present value (22)

37,404$

Promises to give are discounted at 4.5%.

4. Property, Plant and Equipment

Property, plant and equipment consist of the following at December 31, 2008:

Furniture and equipment 35,939$ Accumulated depreciation (33,627)

2,312$



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5. Pension Plan

The Organization participates in a noncontributory defined contribution pension plan covering all full time employees. Contributions to the plan are calculated as a percentage of the employee's regular salary for the plan year. Pension expense amounted to $4,596 for the period from July 1, 2008 through December 31, 2008.

6. Lease Commitment

The Organization has various lease agreements for office copiers and office space. The leases expire at various times through 2011. Related rent expense totaled $6,048 for the period ended December 31, 2008. Future minimum lease payments required under these agreements as of December 31, 2008 are as follows:

2009 15,449$ 2010 8,393 2011 838

24,680$

7. Economic Dependency

The Organization derives approximately 95% of its revenue from federal, state and local agencies. This revenue is received through a highly diversified portfolio of government contracts. The Organization is economically dependent on these funds to continue these programs. The Organization is also dependent on FFNY for financing its working capital needs.

8. Related Party Transactions

The Organization is an affiliate of Families First New York, Inc. Families First New York, Inc. also has three other affiliates, Family Services, Inc., Hudson Valley Mental Health, Inc. and Family Partnership Center, Inc. The related party transactions during the year consisted of rental income of $598, contributions of $250, interest of $207 and management fees and development fees of $38,906 and $3,792, respectively.

9. Temporarily Restricted Net Assets

Temporarily restricted net assets are available for the following purposes at December 31, 2008:

Restructuring assessment 5,808$ Other programs 29,209

35,017$

Net assets released by incurring expenses satisfying the time and purpose restrictions specified by donors were $18,185 for the period ended December 31, 2008.



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10. Unrestricted Net Assets (Deficit)

Unrestricted net assets (deficit) consist of the following at December 31, 2008:

Operations (11,039)$ Investment in property and equipment 2,312

(8,727)$

11. Concentration of Credit Risk

The financial instruments that potentially subject the Organization to concentration of credit risk consist primarily of cash accounts and temporary cash investments in financial institutions which, from time to time, exceed the Federal Deposit Insurance Coverage ("FDIC") limit.

The Organization provides program services that are covered under various payor agreements. Receivables from such arrangements are included in contracts and grants receivable balance at December 31, 2008. Collections are expected in the normal course of business.

12. Commitments and Contingencies

The Organization and its affiliates, pursuant to a $1.6 million credit facility, participate in a zero balance banking arrangement whereby their cash is swept/advanced daily by FFNY based upon each entities’ cash needs. The excess cash that is swept along with cash short falls are reflected as a related party receivable/payable. FFNY draws on this line of credit based upon its consolidated banking needs. The Organization, its affiliates and FFNY are guarantors of all borrowings under the line. The line of credit bears interest at LIBOR plus 1.75% or the bank’s prime rate of interest and is renewed annually. The line is collateralized by substantially all of the assets of FFNY and its affiliates except real property. The total amount owed on this line of credit as of December 31, 2008 was $817,000. The organization has not recorded a liability for the guarantee, as in the opinion of management it is not probable that the Organization will be required to perform under the guarantee.

Amounts received or receivable from grantor agencies are subject to audit and adjustment principally by Federal, State and local governments. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable program.

The Organization, in the normal course of business, is exposed to various potential claims and assessments which in the opinion of management, in the event of an unfavorable outcome, would be covered by insurance.


Supplementary Information

December 31, 2008

December 31, 2008 June 30, 2008

ASSETSCash 829$ 829$ Investments 1,902 3,004 Accounts receivable, net 8,130 2,325 Contracts and grants receivable 75,280 96,384 Promises to give, net 37,404 37,865 Prepaid expense 4,767 3,223 Property, plant and equipment, net 2,312 2,690

130,624$ 146,320$

LIABILITIES AND NET ASSETS Liabilities

Accounts payable and accrued expenses 64,382 65,473 Due to related parties 39,952 81,949

Total Liabilities 104,334 147,422

Net Assets (Deficit) Unrestricted

Designated for operations (11,039) (10,342) Investment in property, plant and equipment 2,312 2,690

Total Unrestricted (8,727) (7,652)

Temporarily restricted 35,017 6,550

Total Net Assets (Deficit) 26,290 (1,102)

130,624$ 146,320$


Schedule of Financial Positions

December 31, 2008 and June 30, 2008

See independent auditor's report 11

big brothers big sisters of ulster county, inc. financial

Business

basic financial statements

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financial statementsdecember

unqualified opinion

total net assets deficit

total liabilities

reasonable basis

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