christ church greenwich financial statements years...

CHRIST CHURCH GREENWICH

FINANCIAL STATEMENTS

YEARS ENDED

DECEMBER 31,2015 AND 2014

MICHAEL A DUCA COMPANYCertified Public Accountants, P.C.

TABLE OF CONTENTS

DESCRIPTION Page No.

Independent Auditors'Report 1-2

FINANCIAL STATEMENTS

- Statements of Financial Position 3

- Statement of Activities and Changes in Net Assets - 2015 4

- Statement of Activities and Changes in Net Assets - 2014 5

- Statements of Cash Flows 6

- Notes to the Financial Statements 7-24

SUPPLEMENTARY INFORMATION

- Combining Statement of Financial Position by Fund Group 25

- Combining Statement of Activities andChange in Net Assets by Fund Group 26

MICHAEL A DUCA COMPANYCertified Public Accountants, P.C.

666 Old Country Road, Suite 601Garden City, New York 11530

MICHAEL A. DUCATelephone 516-227-6660Facsimile 516-227-1126

Independent Auditors' Report

To the Wardens and VestryChrist Church Greenwich

Greenwich, CT 06830

We have audited the accompanying financial statements of Christ Church Greenwich, which comprise theStatements of Financial Position as of December 31,2015 and 2014, and the related Statements of Activities andChanges in Net Assets and Statements of Cash Flows for the years then ended, and the related notes to the financialstatements.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance withaccounting 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 arefree from material misstatement, whether due to fraud or error.

Auditor's ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. We conducted ouraudits in accordance with auditing standards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial positionof Christ Church Greenwich as of December 31,2015 and 2014, and the changes in its net assets and its cash flowsfor the years then ended in accordance with accounting principles generally accepted in the United States ofAmerica.

Page 1

Other Matter

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. Thesupplementary information is presented for purposes of additional analysis and is not a required part of the financialstatements. Such information is the responsibility of management and, except for that portion marked "unaudited,"was derived from and relates directly to the underlying accounting and other records used to prepare the financialstatements. The information, except for that portion marked "unaudited," has been subjected to the auditingprocedures applied in the audits of the financial statements and certain additional procedures, including comparingand reconciling such information directly to the underlying accounting and other records used to prepare thefinancial statements or to the financial statements themselves, and other additional procedures in accordance withauditing standards generally accepted in the United States of America. In our opinion, except for that portion marked"unaudited," on which we express no opinion or any assurance, the information is fairly stated in all materialrespects in relation to the financial statements as a whole.

Emphasis ofMatter

As discussed in Note 17 to the financial statements, the 2014 financial statements have been restated to correct amisstatement. Our opinion is not modified with respect to this matter.

ifUcJuuH d.Garden City, New YorkOctober 17, 2016

Page 2


STATEMENTS OF FINANCIAL POSITION


ASSETS

2015 2014

(Restated)

CURRENT ASSETS

Cash and Cash Equivalents $ 1,602,917 $ 2,211,106

Accounts Receivable 438,998 554,484

Pledges Receivable (Net of allowance for uncollectible pledges of$108,370 in 2015 and $77,967 in 2014) 888,144 1,625,037

Inventory 189,374 144,259

Prepaid Expenses and Other Current Assets 5,172 900

Total Current Assets 3,124,605 4,535,786

PROPERTY AND EQUIPMENT, Net 12,841,276 8,759,435

OTHER ASSETS

Long-Term Investments 9,988,825 10,872,303

Pledges Receivable, Noncurrent (Net of discount and allowance foruncollecitble pledges of $145,123 in 2015 and $624,818 in 2014) 1,018,191 2,664,760

Total Other Assets 11,007,016 13,537,063

TOTAL ASSETS $ 26,972,897 $ 26,832,284

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Accounts Payable and Accrued Expenses $ 338,081 $ 394,142

Deferred Revenue 996,569 952,648

Notes and Loan Payable 2,673,107 1,723,273

Total Current Liabilities 4,007,757 3,070,063

TOTAL LIABILITIES 4,007,757 3,070,063

NET ASSETS

Unrestricted:

Undesignated (989,219) 3,847,127

Net Investment in Property and Equipment 12,774,047 8,617,675

Vestry and Board-Designated 3,349,296 88,168

Total Unrestricted Net Assets 15,134,124 12,552,970

Temporarily Restricted 1,875,920 1,157,708

Permanently Restricted 5,955,096 10,051,543

Total Net Assets 22,965,140 23,762,221

TOTAL LIABILITIES AND NET ASSETS $ 26,972,897 $ 26,832,284

See independent auditors' report and accompanying notes to financial statements.

Page 3


STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2015

Temporarily Permanently

Unrestricted Restricted Restricted Total

REVENUES. GAINS AND OTHER SUPPORT

Contributions and Bequests $ 1,539,149 $ 1,553,038 $ 6,861 $ 3,099,048

Investment Loss (22,811) (17,572) (494,097) (534,480)

Special Event Revenues 26,794 21,134 -47,928

Special Event Expenses (8,094) - -(8,094)

Bookstore 102,183 - -102,183

Nursery School 881,356 - -881,356

Usage Fees 194,454- -

194,454

Net Assets Released from Restrictions:

Satisfaction of Donor Restrictions 1,179,152 (838,388) (340,764)-

Satisfaction of Vestry Restrictions 3,268,447 - (3,268,447) -

Total Revenue, Gains and Other Support 7,160,630 718,212 (4,096,447) 3,782,395

EXPENSES

Program Services:

Cliristian Education 261,197 - - 261,197

Music 352,011 - - 352,011

Outreach 382,716 - - 382,716

Pastoral and Worship 405,902 - -405,902

Bookstore 208,100 - -208,100

Nursery School 1,040,698 - -1,040,698

Supporting Services:

Management and General 1,708,056- -

1,708,056

Fundraising 220,796 - - 220,796

Total Expenses 4,579,476 - - 4,579,476

CHANGES IN NET ASSETS 2,581,154 718,212 (4,096,447) (797,081)

NET ASSETS, beginning of year 12,552,970 1,157,708 10,051,543 23,762,221

NET ASSETS, end of year $ 15,134,124 $ 1,875,920 $ 5,955,096 $ 22,965,140


Page 4


STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS (RESTATED)

FOR THE YEAR ENDED DECEMBER 31, 2014

Temporarily Permanently

Unrestricted Restricted Restricted Total

REVENUES. GAINS AND OTHER SUPPORT

Contributions and Bequests $ 2,896,324 $ 600,408 $ 32,899 $ 3,529,631

Investment Income 3,680 31,394 452,993 488,067

Special Event Revenues 43,573 18,553 -62,126

Special Event Expenses (7,145) - -(7.145)

Bookstore 98,385 - -98,385

Nursery School 840,688 - -840,688

Program Fees 203,992- -

203,992

Usage Fees - - - -

Net Assets Released from Restrictions:

Satisfaction of Donor Restrictions 857,982 (599,826) (258,156) -

Total Revenue, Gains and Other Support 4,937,479 50,529 227,736 5,215,744

EXPENSES

Program Services:

Christian Education 282,173 - - 282,173

Music 316,401 - - 316,401

Outreach 483,916 - - 483,916

Pastoral and Worship 382,234 - -382,234

Bookstore 128,723 - - 128,723

Nursery School 970,555 - -970,555

Supporting Services:

Management and General 1,624,780 - -1,624,780

Fundraising 163,482 - - 163,482

Total Expenses 4,352,264 - - 4,352,264

CHANGES IN NET ASSETS 585,215 50,529 227,736 863,480

NET ASSETS, beginning of year 11,967,755 1,107,179 9,823,807 22,898,741

NET ASSETS, end of year $ 12,552,970 $ 1,157,708 $ 10,051,543 $ 23,762,221


Page 5


STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

2015 2014

(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES

Change in net assets $ (797,081) $ 863,480

Adjustments to reconcile change in net assets to net

cash provided (used) by operating activities:Depreciation expense 652,837 427,913

Realized losses on investments 48,539 199,791

Unrealized (gains)/losses on investments (860,854) 10,803

Decrease (Increase) in operating assets:

Pledges receivable 2,383,462 625,473

Accounts receivable 115,486 (9,179)

Inventory (45,115) (38,014)

Other assets (4,272) 2,500

(Decrease) Increase in operating liabilities:Accounts payable and accrued expenses (56,061) 154,144

Deferred revenue 43,923 (42,875)

NET CASH PROVIDED BY OPERATING ACTIVITIES 1,480,864 2,194,036

CASH FLOWS FROM INVESTING ACTIVITIES

Net brokerage investment activity 1,695,793 (535,832)

Additions in construction in progress -26,437

Payments for the purchase of property (4,734,678) (1,724,608)

NET CASH USED IN INVESTING ACTIVITIES (3,038,885) (2,234,003)

CASH FLOWS FROM FINANCING ACTIVITIES

New borrowings 1,305,694 3,401,531

Repayment of promissory notes (355,862) (3,159,184)

NET CASH PROVIDED BY FINANCING ACTIVITIES 949,832 242,347

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (608,189) 202,380

CASH AT BEGINNING OF YEAR 2,211,106 2,008,726

CASH AT END OF YEAR $ 1,602,917 $ 2,211,106

SUPPLEMENTAL DISCLOSURES OF CASH INFORMATION

Cash paid during the year for:

Interest $ 25,694 $ 21,602


Page 6


NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2015 AND 2014

Note 1 - Nature of Activities and Significant Accounting Policies

Nature of Activities:Christ Church Greenwich ("the Church") is an affiliated member of the Diocese of theNational Episcopal Church. The mission of the Church is to seek and serve God in allpersons and to welcome all who desire a sacred home for worship, spiritual growth, andcommunity. The Church provides its community with a place of worship and a meetingplace for various community activities. The Church is supported primarily through donorcontributions and various ftindraising activities. The Church also operates a nursery

school and a bookstore.

Basis of Accounting:The Church's financial statements are presented on the accrual basis of accounting,utilizing separate funds to account for specific types of transactions, in accordance withgenerally accepted accounting principles.

Basis of Presentation:The Church is required to report information regarding its financial position and activitiesaccording to three classes of net assets: unrestricted net assets, temporarily restricted netassets and permanently restricted net assets.

Fair Value of Financial Instruments:Unless otherwise indicated, the fair values of all reported assets and liabilities whichrepresent financial instruments (none of which are held for trading purposes) approximatethe carrying values of such amounts.

Cash and Cash Equivalents:For purposes of the statements of cash flows, cash consists of monies in the Church'schecking, savings, money market accounts, CDs and petty cash. In addition, marketablesecurities that are highly liquid and have maturities of three months or less at the date ofpurchase are classified as cash equivalents.

Investments:

Investments in marketable securities with readily detemiinable fair market values and allinvestments in debt securities are reported at fair market value in the statement offinancial position. Unrealized gains and losses are included in the change in net assets.Investment income and gains and losses restricted by a donor are reported as increases ordecreases in unrestricted net assets if the restrictions are met (either by passage of time orby use) in the reporting period in which the income and gains are recognized.

Page 7




Note 1 - Nature of Activities and Significant Accounting Policies (Continued)

Accounts and Pledges Receivable:Management reviews the balances of accounts receivable for tuition and pledges receivableon a regular basis. Accounts receivable amounts are expected to be fully collectible;therefore, there is no allowance for doubtful accounts. For capital campaign pledgesreceivable, management has estimated that approximately five percent of pledges receivablefor the year ended December 31, 2015 and 2014 are uncollectible, based on prior experience,and has therefore adjusted the allowance for doubtful pledges accordingly. For annualpledges receivable, management has estimated that approximately five percent of totalpledges for the year ended December 31, 2015 are uncollectible, based on prior experience,and has therefore adjusted the allowance for doubtful pledges accordingly. An allowance fordoubtful pledges was not estimated for the year ended December 31, 2014

Inventory:

Inventory consists of books, recordings, and other items in the bookstore. They are valued atthe lower of cost or market on a specific identification method.

Fixed Assets and Depreciation:Fixed assets are carried at cost, if purchased or at fair value at the date of gift, if donated.Assets are depreciated on a straight-line basis over their respective useful lives ranging from5 to 25 years. Acquisitions of property and equipment, other than collections, where cost is$ 1,000 or more are capitalized. The Church reports gifts of long-lived assets as unrestrictedsupport unless explicit restrictions that specify how the assets are to be used are stipulated.Absent explicit donor stipulations about how long donated assets must be maintained, theChurch records expirations of donor restrictions when donated or acquired long-lived assetsare placed in service. Repairs and maintenance to existing facilities are expensed as incurred.Asset lives are as follows:

Asset Class Years

Land Improvements 10

Buildings 40-50

Building Improvements 15-40

Equipment 5-7

Furniture and Fixtures 5-7

Income Taxes:

The Church is exempt from income taxes under Section 501(c)(3) of the Internal RevenueCode and has been classified as an organization that is not a private foundation under Section509(a).

Page 8





Use of Estimates:The preparation of financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect the reportedamounts 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 thereporting period. The Church regularly assesses these estimates and, while actual resultsmay differ from these estimates, management believes that material changes will not occur inthe near term.

Advertising:

The Church expenses advertising costs as incurred. For the period ended December 31, 2015and 2014 there was advertising expense of $50,351 and $54,530 respectively.

Revenue Recognition:

Contributions received are recorded as unrestricted, temporarily restricted, or permanentlyrestricted support, depending on the existence and/or nature of any donor restrictions.

All contributions are recognized as unrestricted support unless their use is specificallyrestricted by the donor. When a donor restriction expires, the stipulated time restriction ends,or the purpose of the restriction is accomplished, temporarily restricted net assets arereclassifled to unrestricted net assets and reported in the Statements of Activities and Changein Net Assets as net assets released from restrictions.

Amounts received that are designated for future periods or restricted by the donor for specificpurposes are recognized as temporarily restricted or permanently restricted support thatincreases those net asset classes. However, if a restriction is fulfilled in the same time periodin which the contribution is received, the Church recognizes the support as unrestricted. It isthe Church's policy that unrestricted pledges and gifts to the Annual Commitment Appeal areavailable for use in the year for which the Annual Commitment Appeal was made.Accordingly, such pledges and gifts are treated as an increase in temporarily restricted netassets in the fiscal year received and reclassified to unrestricted net assets in the followingfiscal year.

Promises to Give:

Unconditional promises to give are recognized as revenue in the period received andrecorded as assets or decreases of liabilities or expenses, depending on the form of thebenefits received. Conditional promises to give are recognized when the conditions on whichthey depend are substantially met.

Page 9





Donated Services:

The Church receives a substantial amount of volunteer services in carrying out its programsand activities. Volunteers perform various administrative, program, and fundraisingfunctions. However, no amounts have been reflected in the financial statements for thoseservices since they do not meet the criteria for recognition. Contributed services are notrecognized unless the donated services create or enhance non-financial assets or requirespecialized skills that would typically be purchased if not donated. In-kind contributions aremeasured at the fair value of the asset transferred to the Church, or the liability cancelled orsettled.

Collections:

The Church collects historical and religious materials related to the Church and its history inthe Town of Greenwich. The collections, which were acquired through contributions andpurchases since the Church's inception, are not recognized as assets in the Statements ofFinancial Position. Contributed collection items are not reflected in the financial statements.

Purchases of collection items are recorded as decreases in unrestricted net assets in the yearin which the items are acquired or as decreases in temporarily or permanently restricted netassets if the assets used to purchase the items are restricted by donors. Proceeds fromdeaccessions or insurance recoveries are reflected as increases in the appropriate net assetclasses. The Church's collections are maintained for public exhibition, education, andreligious observance in furtherance of the Church's mission rather than for financial gain.Collections are valuable assets of the Church and are protected, kept unencumbered, caredfor, and preserved. As a matter of policy, the proceeds of items in collections that are soldare used to acquire other items for collections.

Note 2 - Pledges Receivable

During the years ended December 31, 2015 and 2014, the Church raised funds as part of its2013 capital campaign for capital projects and endowment. Pledges receivable for the capitalcampaign and endowment at December 31, 2015 and 2014, representing unconditionalpromises to give, were as follows:

2015 2014

Receivable in one year $ 926,191 $ 1,559,350Receivable after one year 1.163.314 3.289.578

2,089,505 4,848,928

Allowance for uncollectible pledges ( 104,475) ( 242,446)Discount to present value at 5% ( 86.957) ( 460.339)Capital Campaign Pledges Receivable, net $ 1.898.073 $ 4.146.143

Page 10




Note 2 - Pledges Receivable (continued)

During the years ended December 31, 2015 and 2014, the Church raised funds as part of itsannual appeal for general purposes. Pledges receivable for the annual appeal at December 31,2015 and 2014, representing unconditional promises to give were as follows:

2015 2014

Receivable in one year or lessAllowance for uncollectible pledgesAnnual Pledges Receivable, net

70,323

62.06 n

8.262

$ 1.906.335Total Pledges Receivable, net

Note 3 - Property and Equipment

Property and equipment consisted of the following at December 31:

$ 143,654

143.654

$ 4.289.797

2015 2014

Land $ 954,000 $ 954,000

Land Improvements 286,681 279,831

Building 4,256,871 4,256,871

Building Improvements 12,330,229 7,635,099

Equipment 695,969 681,020

Furniture and Fixtures 326.781 306.551

18,850,531 14,113,372

Less: Accumulated Depreciation ( 6.009.2551 ( 5.353.9371

Total Property and Equipment, net S 12.841.276 S 8.759.435

Note 4 - Investments

Investments are stated at fair market value and consisted of the following as of December 31:

Bond Funds

Stock Funds

Hedge FundsStocks

Total Investments

2015

$ 1,365,8431,834,188

6.788.794

$ 9.988.825

2014

$ 1,452,8932,026,705

22,626

7.370.079

S 10.872.303

Page 11




Note 4 - Investments (continued!

Investment income consisted of the following as of December 31:

2015 2014

Dividends and interest $ 277,835 $ 279,690Realized and unrealized (loss)/gains ( (812,315) 210,594Investment fees ( z) ( 2,217)

Total Investment (Loss) Income $ (534.480) $ 488.067

Note 5 - Fair Value Measurements

Generally accepted accounting principles establish a framework for measuring fair values.That framework provides a fair value hierarchy that prioritizes the inputs to valuationtechniques used to measure fair value. The hierarchy gives the highest priority to unadjustedquoted prices in active markets for identical assets or liabilities (level 1 measurements) andthe lowest priority to unobservable inputs (level 3 measurements). The three levels of the fairvalue hierarchy are described as follows:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assetsor liabilities in active markets that the Church has the ability to access.

Level 2: Inputs to the valuation methodology include:• Quoted prices for similar assets or liabilities in active markets;• Quoted prices for identical or similar assets or liabilities in inactive markets;• Inputs other than quoted prices that are observable for the asset or liability;• Inputs that are derived principally from or corroborated by observable market data by

correlation or other means.

If the asset or liability has a specified (contractual) term, the level 2 input must beobservable for substantially the full tenn of the asset or liability.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fairvalue measurement.

The asset or liability's fair value measurement level within the fair value hierarchy is basedon the lowest level of any input that is significant to the fair value measurement. Valuationtechniques maximize the use of relevant observable inputs and minimize the use ofunobservable inputs.

The following is a description of the valuation methodologies used for assets measured at fairvalue. There have been no changes in the methodologies used at December 31, 2015 and2014.

Page 12




Note 5 - Fair Value Measurements (continued)

Mutualfunds: Valued at the net asset value of shares held at year-end.

Exchange traded products and common stocks: Valued at the closing price reported on theactive market where individual securities are traded.

Hedge funds: The Church uses NAV or the equivalent to determine the fair value of allinvestments which do not have readily determinable fair value and have financial statementsprepared consistent with the measurement principles of an investment company or haveattributes of an investment company.

The value as of December 31, 2015 is as follows:

Fair Value Redemption Frequency Redemption Notice(if currently eligible) Period

Absolute return hedge funds _$ ^0^ N/A N/ATotal $ -0-

The value as of December 31, 2014 is as follows:

Fair Value Redemption Frequency Redemption Notice(if currently eligible) Period

Quarterly - SemiAbsolute return hedge funds $ 22,626 Annually 95 days

Total $ 22,626

This category invests in hedge funds that pursue multiple strategies to diversify risks andreduce volatility using multi-manager portfolios. These strategies include distressed andnon-distressed securities, relative value multi-strategy, event driven multi-strategy, and creditopportunities.

The methods described above may produce a fair value calculation that may not be indicativeof net realizable value or reflective of future fair values. Furthermore, while the Churchbelieves its valuation methods are appropriate and consistent with other market participants,the use of different methodologies or assumptions to determine the fair value of certainfinancial instruments could result in a different fair value measurement at the reporting date.

Page 13




Note S - Fair Value Measurements (continued!

The following table summarizes the valuation of the Church's investments by GAAPhierarchy as described above as of December 31,2015;

Quoted Prices inActive Markets

for Identical

Assets

Fair Value

Significant OtherObservable

Inputs

(Level 2)

SignificantUnobservable

Inputs(Level 3)

Cash & Cash Equivalents $Mutual Funds

Stock Funds

Bond Funds

1,602,917

1,834,188

1,365,843

$ 1,602,917

1,834,188

1,365,843

$ $

Total Mutual Funds 3,200,031 3,200,031

Exchange Traded ProductsStocks

6,203,738

585,056

6,203,738

585,056

Total Investments 9,988,825 9,988,825

Total $ 11,591,742 $ 11,591,742 $ $

The following table summarizes the valuation of the Church's investments by GAAPhierarchy as described above as of December 31, 2014:

Fair Value

Cash &, Cash Equivalents

Mutual Funds

Stock Funds

Bond Funds

Hedge FundsTotal Mutual Funds

Exchange Traded ProductsStocks

Total Investments

$ 2,211,106

2,026,705

1,452,893

Quoted Prices in

Active Markets

for Identical

Assets

(Level 1)

$

Significant OtherObservable

Inputs(Level 2)

2,211,106 $

2,026,705

1,452,893

SignificantUnobservable

Inputs(Level 3)

$

3,502,224 3,479,598

6,551,390

818,689

6,551,390

818,689

10,872,303 10,849,677

$ 13,083,409 $ 13,060,783 $ $ 22,626

Page 14




Note 6 - Endowment

The Church has adopted the provisions of "Endowments of Not-for-Profit Organizations: NetAsset Classification of Funds Subject to an Enacted Version of the Uniform PrudentManagement of Institutional Funds Act, and Enhanced Disclosures for All EndowmentFunds" of the Accounting Standards Codification.

This standard provides guidance on classifying the net assets associated with donor-restrictedendowment funds held by organizations subject to the Uniform Prudent Management ofInstitutional Funds Act ("UPMIFA"), passed by the State of Connecticut, and also requiresadditional disclosures about endowments for both donor-restricted funds and board-designated funds.

Under the UPMIFA, the Church classifies as permanently restricted net assets: (a) theoriginal value of gifts donated to its permanent endowment; (b) the original value ofsubsequent gifts to its permanent endowment; and, (c) the accumulations to its permanentendowment made in accordance with the directions of the applicable donor gift instrument, atthe time the accumulation is added to the fund.

The remaining portion of the donor-restricted endowment fund that is not classified aspermanently restricted net assets is classified as temporarily restricted net assets until suchamounts are appropriated for expenditure by the Church in a manner consistent with thestandard of prudence prescribed by UPMIFA.

In accordance with UPMIFA, the Church considers the following factors in making adetermination to appropriate or accumulate donor-restricted endowment funds: the durationand preservation of the fund, the purpose of the fund, general economic conditions, thepossible effect of inflation or deflation, the expected total return from income and theappreciation of investments, other resources of the Church, the investment policies of theChurch and, where appropriate, alternatives to spending from donor-restricted endowmentfunds and the possible effect on the Church.

The Endowment annual drawdown and other spending shall be approved or modified byVestry recommendation and/or a formal Parish vote. The Church has a draw down policy ofappropriating for distribution each year approximately 5% of the average of the principal inthe Endowment over the prior three years, calculating by averaging the balances as of June30 in each of the previous three years, not counting the current year of the endowment fundseligible for drawdown to the general fund. In establishing this policy, the Church consideredthe long-term expected investment return on its endowment. Accordingly, over the long term,the Church anticipates its current spending policy to allow its general endowment fund togrow at least by the annual rate of inflation, after the planned 5% drawdown but prior to theeffect of other additions or withdrawals. This is consistent with the Church's objective tomaintain the purchasing power of the endowment assets as well as to provide additional realgrowth through investment return.

Page 15




Note 6 - Endowment (Continued)

To achieve that objective, the Church has adopted an investment policy that seeks tomaximize total return consistent with a prudent level of risk.

Endowment assets are invested in a diversified asset mix, via investments primarily in mutualfunds, ETFs, and vestry-approved separately managed accounts and private investmentpartnerships that are intended to result in a consistent inflation-protected rate of return thathas sufficient liquidity to make an annual distribution of approximately 5% to each of thefunds, while growing the fund, if possible. Accordingly, the Church anticipates itsendowment assets, over time, to produce an average rate of return after planned drawdown ofat least the annual rate of inflation, prior to the effect of unanticipated additions orwithdrawals. Actual returns in any given year may vary from this amount. Investment risk ismeasured in terms of the total endowment fund; investment assets and allocation betweenasset classes and strategies are managed to not expose the fund to unacceptable levels of risk.

As of December 31, 2015, the Vestry had designated $3,349,296 of unrestricted net assets asa general endowment fund to support the mission of the Church. Since that amount resultedfrom an internal designation and is not donor-restricted, it is classified and reported asunrestricted net assets.

Composition of net endowment assets for the year ended December 31, 2015 were asfollows:

Total Net

Temporarily Permanently EndowmentUnrestricted Restricted Restricted Assets

Vestry Designated $ 3,349,296 $ - $ - $ 3,349,296Donor Restricted ; 327.844 5.955.096 6.282.940

Total Funds $ 3.349.296 $ 327.844 $ 5.955.096 $ 9.632.236

Changes in net endowment assets for the year ended December 31,2015 were as follows:Total Net

Temporarily Permanently EndowmentUnrestricted Restricted Restricted Assets

Net Endowment Assets,

Beginning of Year $ 88,168 $ 357,526 $ 10,051,543 $ 10,497,237Contribution - - 6,861 6,861Investment Income, Net of

Expenses 2,253 9,137 256,893 268,283Realized Gains 394 1,596 44,880 46,870Net Depreciation (6,980) (28,305) (795,870) (831,155)Amounts Appropriated for

Expenditure 3.265.461 (12.110^ (3.609.21 D (355.860)Net Endowment Assets,

End of Year $ 3.349.296 $ 327.844 $ 5.955.096

Page 16




Note 7 - Restrictions on Assets and Net Asset Designations

Temporarily restricted net assets were available for the following donor restrictions at theend of December 31:

Endowment Funds:

Various Specified Purposes:Wood-Cahusac ScholarshipOutreach - Green Memorial

Total Various Specified Purposes

Music Programs:Allison/Blossom Organ

Total Music Programs

Total Temporarily Restricted -Endowment Funds

2015

34,482

(4331

34.049

293.795

293.795

327.844

2014

37,604

(4721

37.132

320.394

320.394

357.526

Capital Campaign Funds:Organ Fund

Total Temporarily Restricted -Capital Campaign Funds

Operating Funds:Various Specified Purposes:Christian Formation - Children

Christian Fonnation - Youth

Community EventsCommunity MinistriesCommunity Ministries - Courage & FaithOutreach - Events

Outreach - GivingOutreach - ProgramsParish Events

Pastoral Ministries

Prepaid PledgesPropertyVarious Memorials

WorshipTotal Various Specified Purposes

739.594

739.594

(89)(5,977)(184)4,863

22,919

40,761

212,854

6,606139,387

1,200

209,553

8,046

39,8774.576

684.392

(89)(3,176)(184)

10,977

9,126

34,254176,1796,606

111,470

1,200

251,9678,046

37,4073.716

647.499

Page 17

CHmST CHURCH GREENWICH



Note 7 - Restrictions on Assets and Net Asset Designations (continued)

2015 2014

Music Programs:

Concerts and Events 3,699 3,699

Music Fund 120.391 148,984

Total Music Programs 124.090 152.683

Total Temporarily Restricted -Operating Funds 808.482 800.182

Total Temporarily Restricted Funds -All Funds $ 1.875.920 .S 1.157.708

Permanently restricted net assets, from which the income is expendable for specificprograms, were as follows at December 31, 2015 and 2014:

Endowment Funds: 2015 2014

Children's Ministries $ 19,250 $ 20,993

Christian Formation - Seniors CC '88 - 819,630

Christian Formation - Youth CC '88 - 723,929

Christian Formation - M. Vitton Youth Fund 38,287 44,753

Christian Formation - Rev Loren Gregory Fund 4,959 -

Community Ministries - CCG Camp 37,410 40,797

Community Ministries - Speakers Fund 146,111 159,339

General Purpose 3,315,634 3,617,125

Memorials - Richter Christmas Tree 27,196 29,658

Music - Allen 10,313 11,247

Music - Anonymous 288,859 315,011

Music - Casey Memorial 43,663 45,708

Music - CC '88 -140,795

Music - Maulsby Estate 172,307 187,907

Music - Parke Gray 66,143 72,131

Music - SATB Choir Alumni-Scholarship 8,710 9,498

Music - St. Cecilia-Scholarship 34,624 37,759

Music-Wood 14,700 16,031

Music - Wood Memorial Music Fund 29,379 32,039

Outreach - Ailee 433,880 473,162

Outreach - Baker 7,054 7,693

Outreach — CC '88 - 879,201

Outreach - Clergy Discretionary 277,458 302,578

Outreach - Friends of ABC 92,138 100,480

Outreach - Gateway (2,081) (2,269)

Outreach — Grace Vesey Brown 5,629 6,139

Property - CC '88 - 999,752

Property - Memorial Garden/Peipetual Care 93,210 101,649

Property - Plant M &. I 517,495 564,346




Note 7 - Restrictions on Assets and Net Asset Designations (continued!

Worship - Altar 17,014 18,554Worship - Burr 255.754 278.908

Total Permanently Restricted Net Assets $ 5.955.096 $10.051.543

The Vestry has designated unrestricted net assets for future program services and general andadministrative costs in the amount of $3,349,296 and $88,168 for the years ended December31, 2015 and 2014, respectively.

Note 8 - Net Assets Released from Donor Restrictions

Net assets for the years ended December 31, 2015 and 2014, were released from restrictionsby incurring expenses satisfying the restricted purpose or by occurrence of other eventsspecified by donors.

2015 2014

Children's Ministries $ 712 $ 361

Christian Formation - Children - 2,092

Christian Formation - Seniors CC '88 27,821 23,541

Christian Formation - Youth 15,201 5,410

Christian Formation - Youth CC '88 24,541 19,755

Christian Formation - M. Vitton 1,415 253

Community Ministries - CCG Camp Seabury 1,383 1,645

Community Ministries - Speakers Fund 5,402 4,334

Community Ministries 9,222 10,890

Community Ministries - Courage and Faith 412,950 450,187

General Purpose 122,600 99,647

Memorials - Richter Christmas Tree 1,005 (448)Music - Allen Memorial 381 309

Music - Allison Blossom Organ 10,861 (4,635)Music - Anonymous CC 10,679 8,398

Music-CC'88 4,773 3,980

Music - Concerts and Events - 19,284Music - Maulsby Memorial 6,370 5,082Music - Parke Gray Memorial 2,445 1,977Music - SATB Choir Alumni - Scholarship 322 263

Music Fund 105,245 14,387Music - Wood 543 417

Music - Wood Memorial 1,086 205

Music - Casey Memorial 1,550 (660)Music - St. Cecilia 1,280 1,020Organ Fund 10,406 -

Outreach - Baker Memorial 261 602

Outreach - CC '88 29,805 24,073Outreach - Clergy Discretionary 10,257 8,293

Page 19

Note 8




- Net Assets Released from Donor Restrictions (continued)

2015 2014

Outreach - Events $ 805 $ 3,636

Outreach - Friends of ABC 3,406 (1,520)

Outreach - Gateway (77) 35

Outreach - Giving 19,008 76,860

Outreach - Grace Vesey Brown 208 172

Outreach - Green Memorial (16) 7

Outreach - Ailee 16,040 12,793

Parish Events 361 22,276

Various Memorials 1,080 -

Prepaid Pledges 251,967 -

Property - CC '88 33,892 27,007

Property - Memorial Garden/Perpetual Care 3,446 (1,538)

Property - Plant M & I 19,132 15,847

Wood-Cahusac Scholarship 1,275 (568)

Worship - Altar 629 (281)

Worship - Burr Memorial 9.480 2.594

Total Net Assets Released

from Donor Restrictions $ 1.179.152 $ 857.982

Note 9 - Net Assets Released from Vestrv Restrictions

The Vestry had designated net assets from the Capital Campaign in 1988 as Vestrydesignated permanently restricted. In 2015, the Vestry voted to release these fromrestrictions:

2015 2014

$ 752,549 $

663,829 -

129,106 -

806,211 -

916.752 -

$ 3.268.447 $

Christian Formation - Seniors CC '88

Christian Formation - Youth CC '88

Music - CC '88

Outreach - CC '88

Property - CC '88Total Net Assets Released

from Vestry Restrictions

Note 10 - Fixed Assets

Under the Church Canons, the Diocese is considered the owner of all Parish assets, andwould take over managing the Endowment along with all other assets if the Parish was toexperience difficulties operating. The National Church's existing rights, which relateprimarily to non-financial matters, extend to direct involvement in Parish administration andfinances in certain circumstances.

Page 20




Note 11 - Notes Payable

In 2011, Christ Church Greenwich entered into a margin agreement with FidelityInvestments. There is no set repayment schedule as long as the required level of equity ismaintained in the account. Interest charges are incurred monthly. The base margin rate was7.35% and the current interest rate was 1.25% at December 31, 2015 and 2014. The value ofavailable investments for the margin account was $7,852,277 and $8,447,523 at December31, 2015 and 2014, respectively. The additional amount that may be borrowed based on theChurch's holdings was $1,766,328 and $2,660,588 at December 31, 2015 and 2014,respectively. The principal balance was $2,673,107 and $1,723,273 at December 31, 2015and 2014, respectively.

Note 12 - Major Contributors

The Church is primarily financed through contributions from the congregation and is notdependent on any single contributor.

Note 13 - Employee Retirement Plans

Full-time lay employees are eligible to participate in the Christ Church Lay EmployeesDefined Contribution Plan (the "Pension Plan") with the National Episcopal Church PensionPlan. All employees who are employed for one year, work a minimum of 1,000 hours a year,and are at least eighteen years of age are eligible for participation in the Pension Plan. TheChurch contributes 5% of eligible employees' salaries, as defined in the Pension Plan.Employees may contribute up to 11% of their salaries; the Church matches the employees'contributions up to a maximum 4%. The Church employees' contributions are immediatelyvested.

The Church provides a Retirement Savings Plan (the "Savings Plan") for those employeeswho are eligible for the Pension Plan. Eligible employees may contribute an unlimitedamount to the Savings Plan; the Church matches the contributions at 50% of the first 5% ofemployee contributions. The Church contributed $147,298 and $164,293 to the employeeretirement plans during the years ended December 31, 2015 and 2014, respectively.

Note 14 - Related Party Transactions

A company partially owned by a certain member of the property commission providesservices to the Church. The aggregate total paid to this company from the Church was $-0-and $284,972 during the years ended December 31, 2015 and 2014 respectively.

Page 21




Note 15 - Lease Commitments

The Church leases office equipment under various operating leases agreements and incurredexpenses of $61,656 and $58,277 for the years ended December 31, 2015 and 2014,respectively.

The total minimum rental commitment as of December 31,2015 due in future years is asfollows:

Years Ending December 31:

2016 $ 73,179

2017 45,042

2018 30,5502019 15,9702020 12.280

$ 177.021

Note 16 - Risks and Uncertainties

The Church maintains cash and cash equivalent balances at various financial institutions.Cash accounts maintained at banking institutions are insured by the Federal DepositInsurance Corporation up to $250,000. Cash and securities are insured up to $500,000,including a maximum of $250,000 for cash held in the account by the Securities InvestorProtection Corporation (SIPC). The Church's uninsured cash and cash equivalent accountbalances totaled $1,121,771 and $1,690,890 for the years ended December 31, 2015 and2014, respectively.

The Church invests in various investment securities. Investment securities are exposed tovarious risks such as interest rate, market, and credit risks. Due to the level of risk associatedwith certain investment securities, it is at least reasonably possible that changes in the valuesof investment securities will occur in the near term and that such change could materiallyaffect the amounts reported in the statement of financial position.

Page 22




Note 17 - Prior Period Adjustments

The Church has determined that the following restatement as of and for the year endedDecember 31, 2014 is appropriate to modify the method of accounting for the legacybequests pledged in connection with the 2013 capital campaign. When the capital campaignbegan, the legacy bequest gifts were recognized as a noncurrent receivable and contributionrevenue. In order to recognize contribution revenue, a pledge must be unconditional. Thelength of time in order to receive these legacy bequests is not determinable and increases thelikelihood of financial statement misrepresentation. Due to the length of time involved,accounting internal control procedures cannot be relied upon to avoid thesemisrepresentations. Therefore, the legacy bequests will be recognized when received. Therestatement is as follows:

Statement of Financial Position as ofDecember 31, 2014

As

PreviouslyStated

Increase

(Decrease) As Restated

Pledges Receivable, Current $ 1,703,004 $ $ 1,703,004

Allowance for uncollectible pledges,current (335.247) 257.280 (77.967)

Total Pledges Receivable, Current S 1.367.757 $ 257.280 $ 1.625.037

Pledges Receivable, Noncurrent $ 5,145,578 $(1,856,000) $ 3,289,578

Allowance for uncollectible pledges, noncurrent - (164,479) (164,479)

Discount on pledges receivable (997.667) 537.328 (460.339)

Total Pledges Receivable, Noncurrent $4,147,911 $n.483.15n $ 2.664.760

Undesignated Net Assets $ 5,072,998 $(1,225,871) $ 3,847,127

Statement of Activities and Changes in Net Assets for the year ended December 31, 2014

As

PreviouslyStated

Increase

As Restated

Contributions and Bequests (Unrestricted) $ 3,585,776 $ (689,452) $ 2,896,324

Change in Net Assets (Unrestricted) $ 1,274,667 $ (689,452) $ 585,215

Net Assets, Beginning of Year (Unrestricted) $ 12,504,174 $ (536,419) $ 11,967,755

Net Assets, End of Year (Unrestricted) $ 13,778,841 $ (1,225,871) $ 12,552,970

Page 23




Note 18 - Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in thefinancial statements through October 17, 2016, the date the financial statements were issued.Management has determined that there are no material events that require disclosure in thefinancial statements through this date.

Note 19 - Reclassifications

Certain financial statement amounts have been reclassified. Such reclassifications had no

material effect on the financial statements.

Page 24

SUPPLEMENTARY INFORMATION


COMBINING STATEMENT OF FINANCIAL POSITION - BY FUND GROUP (UNAUDITED)DECEMBER 31.20IS

A.SSETS

Operating Fund Plant Fund

Endow meat

Fund Bookstore Fund

Nursery SchoolFund

CapitalCampaign Fund Total

CURRENT ASSETS

Cash and Cash EquivalentsAccounts Receivable

Pledges Receivable (Net of Allowance for Uncollectible Pledges)InventoryPrepaid Expenses and Other Current Assets

Total Current Assets

5 451.284

29.022

8.263

1.878

S $ 5 13.855

2.010

189.374

S 238.438

407.966

(20.000)

3.294

5 899X0

899.881

5 1.602.917

438.998

888,144

189,374

5.172

490.447 205.239 629.698 1,799,221 3.124,605

PROPERTY AND EQUIP.MENT, NET 12.774.047•

49.791 17.438■

12.84 U76

OTHER ASSETS

Long-Term InvestmentsPledges Receivable. Noncurreni (Net of Diseount)Total Other Assets

9.632.236 356.589

(40.000) 1.058.191

9.988.825

1.018.191

9.632.236 316.589 1.058.191 11.007.016

TOTAL ASSETS S 490.447 S 12.774.047 5 9.632.236 S 255.030 5 963.725 S 2.857.412 S 26.972.897

I.IABII.ITIF.S AND NET ASSETS

CURRENT LIABILITIES

Accounts Payable and Accnicd ExpensesDcfened Rescnuc

Notes Payable and taian

Due (0 (From) Other Funds

Total Cuircnl Uabitllics

TOTAL UABILITIES

314.50!

1.3«9.<)I14

(76.785)

10.772 12.808

995.569

2,264

1.011.641

1.011.641

1.283.123

15.000

1.298.123

338.081

996.569

2.673.107

4.007.757

NET ASSETS

Unrestricted;

UttdcsignatedNet investment in property and equipmentVestry and board-designatedTotal Unrestricted Net Assets

Temporarily restrictedPermanently restrictedTotal Net Assets

TOTAL LIABILITIES AND NET ASSETS

(1,945.735) (47,916) (989,219)12,774,047

(1.945.735)

808.482

12.774.047 3.349.296

327.844

5.955.096

184.737 (47.916) 819.695

739,594

15.134.124

1,875,920

5.955.096

(1.137.253) 12.774.047 9.632.236 184.737 (47.916) 1.559.289 22.965.140

I 490.447 S 12.774.047 S 9.632.236 S 255.030 S 963.725 S 2.857.412 S 26.972.897

See independent audilon' report.

Page 25


COMBINING STATEMENT OF ACTIVITIES AND CHANGE IN NET ASSETS - BY FOND CROUP (UNAUDITED)VF^R ENDED DECEMBER 31,2015

Niintry Ctpittl

Operating Plant Endowmcnl Bookitorc Schuol Campaign

Fund Fund Fund Fund Fund Fund Total

REVENUES. CAINS AND OTHER SUPPORT

Conlribulioiu and bcqucsU;Unreslricted S I.37Z.92I S S S 51.500 S (100.000) S 214.723 i 1.539.149

Temporarily rcstcieted S03.038 -

750.000 1.553,038

Pcmtancnlly restricted 6.86! - • 6.861

Tola! Conlribulioiii and Bequests 2.17S.9J9 6.361 51,500 (100,000) 964.728 3.099.048

Investment loss . (516.002) . (18.478) (534.480)

Special event revenues:Unrestricted S9S • 26.199

-26,794

Temporarily Restricted 21.134 - • -

21.134

Special event expenses -(8,094)

•(8,094)

Btrokslore - • 102.133 -102.183

Nursery school - ■ -881,356 88IJ56

Usage Tecs 324.454 ■(130,000) 194.454

Net assets released from restrictions:

Satisiactian oTdonor restrictions 340.764 (340.764) -

Total Revenue, Gains, and Other Support 2.362.906 (849.905) 153.683 650,983 964,728 3.782,395

EXPENSES

Program Services:261.197Christian Education 233.796 22.401 • •

Music 333.973 18.038 -352.011

Outreach 350,3X6 32.330 - • 332.716

Pastoral and Worship 315.115 90.787 -405.902

Bookstore 26.214 4.969 176.917 208,100

Nursery School 113.620 79.876 847.202 1.040,698

Supporting Services:Management and General 1.314.962 380.761 • 12.333 1.708.056

Fundraising 175.201 1.435 • 44.160 220.796

Total Expenses 2.868.267 630.597 176,917 847.202 56.493 4.579.476

CHANGE IN NET ASSETS (5J61) (630.597) (349.905) (23.234) (196.219) 908.235 (797.081)

NET ASSETS, beginning of year (184.023) 3.617.675 10.497^37 207.971 143.303 4.475.062 23.762.220

Traitsfers (947.864) 4.786.969 115,096) (3.824.009) •

NET ASSETS, end ol year S (1.137.253) S 12,774,047 S 9,632,236 5 184,737 5 (47.916) 5 1.559.288 S 22.965.139

See indcpendcni auditora' repoit.

Page 26

christ church greenwich financial statements years...

Documents