year ended september 30, 2014 - the samaritan · pdf fileyear ended september 30, 2014 ......

SAMARITAN INN, INC.

Annual Financial Report

Year Ended September 30, 2014

Samaritan Inn, Inc.

Annual Financial Report


Contents

Independent Auditors’ Report .................................................................................................... 1 - 2

Consolidated Statement of Finanical Position ................................................................................ 3

Consolidated Statement of Activities and Changes in Net Assets ...................................................4

Consolidated Statement of Cash Flows ...........................................................................................5

Consolidated Statement of Functional Expenses .............................................................................6

Notes to the Financial Statements……………………………………………………………7 - 13

Michael G. Vail, CPA

Chris E. Knauth, CPA

Charles T. Gregg, CPA

Don E. Graves, CPA

Pamela C. Moore, CPA

Courtney N. Cooper, CPA

Members:

American Institute of CPAs

Texas Society of CPAs

1801 Gateway Blvd., Suite 212

Richardson, TX 75080

(972) 234-3333

www.vailknauth.com 323 East Highway 199 – P.O. Box 1859

Springtown, TX 76082

(817) 220-8700

Report of Independent Auditors

To the Board of Directors

Samaritan Inn, Inc.

We have audited the accompanying consolidated financial statements of Samaritan Inn, Inc. (a

nonprofit organization) which comprise the statement of financial position as of September 30,

2014, and the related statements of activities and cash flows for the year then ended, and the

related notes to the financial statements.

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.

Auditor’s Responsibility

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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material 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 financial

statements in order to design audit procedures that are appropriate in the circumstances, but not

for the purpose of expressing 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 of significant accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of Samaritan Inn, Inc. as of September 30, 2014, and the changes in its net

Michael G. Vail, CPA

Chris E. Knauth, CPA

Charles T. Gregg, CPA

Don E. Graves, CPA

Pamela C. Moore, CPA

Courtney N. Cooper, CPA

Members:

American Institute of CPAs

Texas Society of CPAs

1801 Gateway Blvd., Suite 212

Richardson, TX 75080

(972) 234-3333

www.vailknauth.com 323 East Highway 199 – P.O. Box 1859

Springtown, TX 76082

(817) 220-8700

assets and its cash flows for the year then ended in accordance with accounting principles

generally accepted in the United States of America.

Other Matter

Our audit was conducted for the purpose of forming an opinion on the financial statements as a

whole. The schedule of functional expenses on page 6 is presented for purposes of additional

analysis and is not a required part of the financial statements. Such information is the

responsibility of management and was derived from and relates directly to the underlying

accounting and other records used to prepare the financial statements. The information has been

subjected to the auditing procedures applied in the audit of the financial statements and certain

additional procedures, including comparing and reconciling such information directly to the

underlying accounting and other records used to prepare the financial statements or to the

financial statements themselves, and other additional procedures in accordance with auditing

standards generally accepted in the United States of America. In our opinion, the information is

fairly stated in all material respects in relation to the financial statements as a whole

Dallas, Texas

January 30, 2014

3

The accompanying notes are an integral part of these financial statements.

Unrestricted

Temporarily

Restricted Total

Friends of the Inn

Thrift Store

North Texas

Gateway

Apartments

Consolidated

Total

ASSETS

CURRENT ASSETS

Cash and Cash Equivalents 516,759$ 81,532$ 598,291$ 71,048$ -$ 669,339$

Prepaid Expenses 65,987 - 65,987 - - 65,987

Gift Cards for Resident Use 42,404 - 42,404 - - 42,404

Due from Others 1,059 - 1,059 - - 1,059

Total Current Assets 626,209 81,532 707,741 71,048 - 778,789

INVESTMENTS

SI Foundation Donations - 2,570,340 2,570,340 - - 2,570,340

Endowment Fund Cash and Cash Equivalents - 596,261 596,261 - - 596,261

Endowment Fund Investments - 2,060,595 2,060,595 - - 2,060,595

Total Investments - 5,227,196 5,227,196 - - 5,227,196

PROPERTY, PLANT and EQUIPMENT `

Property, Plant and Equipment 3,221,853 - 3,221,853 883,260 1,725,246 5,830,358

Accumulated Depreciation (889,339) - (889,339) (282,348) (384,278) (1,555,964)

Total Property & Equipment 2,332,514 - 2,332,514 600,912 1,340,969 4,274,395

Total Assets 2,958,722$ 5,308,728$ 8,267,450$ 671,961$ 1,340,968$ 10,280,380$

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Accounts and Credit Card Payables 24,621$ -$ 24,621$ 5,946$ -$ 30,567$

Current Portion of Note Payable (312) - (312) - - (312)

Deferred Income 107,500 - 107,500 - - 107,500

Accured Payroll 60,648 - 60,648 11,033 71,681

Accrued Liabilities 1,736 - 1,736 - - 1,736

Accrued Compensation Absences 37,083 - 37,083 5,017 - 42,100

Other Current Liabilities - - - - 14,641 14,641

Total Current Liabilities 231,276 - 231,276 21,996 14,641 267,913

NON-CURRENT LIABILITIES

Note Payable 473,549 - 473,549 - - 473,549

Total Liabilities 704,824$ -$ 704,824$ 21,996$ 14,641$ 741,461$

NET ASSETS

Unrestricted 2,253,898$ -$ 2,253,898$ 649,965$ 1,326,328$ 4,230,191$

Temporarily Restricted Funds - 2,738,388 2,738,388 - - 2,738,388

Permanently Restricted Funds - 2,570,340 2,570,340 - - 2,570,340

Total Net Assets 2,253,898 5,308,728 7,562,626 649,965 1,326,328 9,538,919

Total Liabilities and Net Assets 2,958,722$ 5,308,728$ 8,267,450$ 671,961$ 1,340,968$ 10,280,380$

Samaritan Inn & Samaritan Inn Foundation

Samaritan Inn, Inc.

Consolidated Statement of Financial Position

September 30, 2014

4


Unrestricted

Temporarily

Restricted Total

Friends of the Inn

Thrift Store

North Texas

Gateway

Apartments

Consolidated

Total

Support & Revenue

Contributions 736,607$ -$ 736,607$ 550$ 91,907$ 829,063$

Fundraisers 1,933,299 - 1,933,299 - 1,933,299

Service contributions - - - - - -

Thrift store sales - - - 487,615 - 487,615

SI Foundation Donations - 2,570,340 2,570,340 - - 2,570,340

Grants - 65,443 65,443 - - 65,443

United Way - 110,420 110,420 - - 110,420

Interest & dividends 2,963 55,274 58,237 - - 58,237

Rent and utilities - - - - -

Other Income 5,965 5,965 - - 5,965

Gain (loss) on investments - 120,933 120,933 - - 120,933

6,181,316

Total support and revenue 2,678,834 2,922,410 5,601,244 488,165 91,907 6,181,316

Release from restrictions (150,245) (94,492) (244,737) 21,137 (5,776) (229,376)

Expenses

Program 2,036,657 - 2,036,657 511,267 139,753 2,687,678

General & Management 565,013 - 565,013 - - 565,013

Fundraising 288,620 - 288,620 - - 288,620

Total expenses 2,890,291 - 2,890,291 511,267 139,753 3,541,311

Change in net assets (361,702) 2,827,918 2,466,216 (1,965) (53,622) 2,410,629

Net assets - beginning 2,615,600 2,480,810 5,096,410 651,930 1,379,950 7,128,290

Net assets - ending 2,253,898$ 5,308,728$ 7,562,626$ 649,965$ 1,326,328$ 9,538,919$

Samaritan Inn & Samaritan Foundation

Samaritan Inn, Inc.

Consolidated Statement of Activities and Changes in net Assets


5


CASH FLOWS FROM OPERATING ACTIVITIES

Change in Net Assets 2,410,629$

Adjustments to Reconcile Net Assets to Net cash

Provided by Operations:

Depreciation and Amortization 196,729

Gain on Investments (2,746,386)

Add:

Decrease in Prepaid Expenses (47,502)

Decrease in Resident Gift Cards 26,522

Less:

Increase in Other Receivables 5,674

Decrease in Accounts Payable (7,265)

Decrease in Deferred Revenue 105,000

Decrease in Payroll Liabilities 71,681

Decrease in Other Payables (3,389)

Decrease in Accrued Compensated Absences 12,009

Net Cash Provided by (Used) Operating Activities 23,703

Cash Flows From Investing Activities

Purchase of property and equipment (6,793)

Net Cash Provided (Used) Investing Activities (6,793)

Cash Flows from Financing Activites

Payments on long term debt (43,425)

Net Cash Provided (Used) by Financing Activities (43,425)

Net Increase (Decrease) in Cash and Cash Equivalents (26,516)

Cash and Cash Equivalents, September 30, 2013 695,855

Cash and Cash Equivalents, September 30, 2014 669,339$

Supplemental cash flow information

Interest paid 24,854$

Samaritan Inn, Inc.

Consolidated Statement of Cash Flows


6


Friends of the

Inn Thrift Store

North Texas

Gateway

Apartments

Samaritan Inn

Operations Total

General &

Management Fundraising

Consolidated

Total

Salaries and Wages 232,074$ -$ 994,830$ 1,226,905$ 213,467$ -$ 1,440,372$

Donated Services - - 329,582 329,582 - - 329,582

Donated Food/Items - - 351,270 351,270 - - 351,270

Depreciation 32,192 51,237 92,907 176,336 20,394 - 196,730

Individual and Family Assistance - - - - - 154,622 154,622

Utility 17,787 34,317 80,710 132,814 17,717 - 150,531

Payroll Taxes 18,493 - 87,156 105,649 19,132 - 124,781

Insurance - - 50,666 50,666 11,122 - 61,788

Office and Other Supplies 6,101 396 91,133 97,629 20,005 6,087 123,721

Contract Labor 990 - 38,903 39,893 8,540 - 48,433

Employee Benefits 14,127 - 111,548 125,675 24,486 - 150,161

Repair/Maintenace & Storage - 58,080 - 58,080 - - 58,080

Professional Fees 600 - 13,933 14,533 3,058 - 17,592

Transportaton & Travel 2,669 - 13,566 16,234 2,978 - 19,212

Hotel and Venue Expenses - - - - - 43,141 43,141

Advertising & Printing 1,539 - 3,970 5,508 - 7,130 12,638

Meals & Entertainment 151 - 3,708 3,859 814 - 4,673

Credit Card & Permit Fees 7,177 - 6,495 13,671 1,426 - 15,097

Conference Fees & Related Expenses - - 6,845 6,845 1,503 - 8,347

Criminal and Background Checks 216 - 2,975 3,191 653 - 3,844

Rent & Lease Expenses 0 (4,510) - (4,510) - - (4,510)

Miscellaneous & Other Expenses 152,298 232 848 153,378 186 77,641 231,205

Total Expenses 486,413$ 139,753$ 2,281,044$ 2,907,210$ 345,480$ 288,620$ 3,541,311$

Programs

Samaritan Inn, Inc.

Consolidated Statement of Functional Expenses


Samaritan Inn, Inc.

Notes To Consolidated Financial Statements

September 30, 2014

7

Note 1 – Nature of Activities and Significant Accounting Policies

Nature of Activities

Samaritan Inn, Inc. (Organization) is located in McKinney, Texas and is a Texas nonprofit

corporation that is classified by the Internal Revenue Service as tax-exempt under Section

501(c)(3) of the Internal Revenue Code. The Organization was chartered on July 23, 1984 to

provide transitional refuge for individuals and families experiencing homelessness. These people,

who are in a crisis, are primarily from Collin County, desire self-sufficiency and require

temporary emergency shelter.

Friends of the Inn, Inc. operates as a thrift store. Thrift store profits are transferred to Samaritan

Inn to support the organization’s mission of providing emergency shelter.

Samaritan Inn Foundation, also known as the Endowment Fund, was established as a separate

legal entity on July 24, 2004. The Endowment Fund was established to provide resources for

Samaritan Inn.

North Texas Gateway Apartments was officially opened on May 1, 2008 to graduates of

Samaritan Inn. The apartments were established to allow formerly homeless people a reduced-

rent housing while they transitioned into mainstream housing. Tenants in North Texas Gateway

Apartments are responsible for rent payments that equal 30% of the tenants’ income; tenants may

stay in the apartment for a maximum of 18 months from the move-in date.

The Board of Directors for Samaritan Inn, Friends of the Inn, North Texas Gateway Apartments

and Samaritan Inn Foundation are under common control. Organizations with identical board

members are required to consolidate financial statements, but may elect to report on a single

entity as a component unit. Samaritan Inn and Samaritan Inn Foundation are presented as

combined operations; Friends of the Inn and North Texas Gateway Apartments are presented as

component units.

Summary of Significant Accounting Policies

The summary of significant accounting policies of the Organization is presented to assist in

understanding the financial statements. The financial statements and notes are representations of

the Organization’s management, which is responsible for their integrity and objectivity. These

accounting policies conform to accounting principles generally accepted in the United States of

America and have been consistently applied in the preparation of the financial statements. The

Samaritan Inn, Inc.

Notes to Consolidated Financial Statements (continued)

8

Summary of Significant Accounting Policies (continued)

financial statements of the organization have been prepared on the accrual basis of accounting as

a voluntary not for profit organization.

Financial Statement Presentation

The Organization’s financial statements are presented in accordance with FASB ASC 958 which

requires the Organization to report its financial position and activities using three classes of net

assets: unrestricted, temporarily restricted and permanently restricted. Accordingly, net assets

and changes therein are classified as follows:

Unrestricted Funds – Net assets not subject to donor-imposed stipulations.

Temporarily Restricted Funds – Net assets subject to donor-imposed stipulations that

may or will be met by actions of the Organization and/or the passage of time. Temporarily

restricted net assets are donations received from individuals, foundations, churches, and

private groups, which are designated by the donor for specific expenditures.

Permanently Restricted Funds – The Organization has no permanently restricted net

assets.

Revenues are reported as increases in unrestricted net assets unless use of the related assets is

limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net

assets. Expirations of temporarily restricted net assets (i.e., the donor-stipulated purpose has been

fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between

the applicable classes of net assets. Contributions are recognized as revenues in the period

unconditional promises to give are received.

Basis of Accounting

The financial statements of the organization are reported on the accrual basis of accounting.

Under the accrual basis of accounting, revenues are recognized when earned and expenses are

recognized when the obligation is incurred.

Budgetary Control

Annual budgets are adopted by the organization and approved by the Board of Directors. The

adopted budgets are prepared on a basis consistent with generally accepted accounting principles.

Samaritan Inn, Inc.


9

Use of Estimates

Management uses estimates and assumptions in preparing financial statements. Those estimates

and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent

assets and liabilities, and reported revenues and expenses. Accordingly, actual results could differ

from those estimates. Significant estimates used in the preparation of these financial statements

include the assumption in recording depreciation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and demand and time deposit accounts at

financial institutions.

For purposes of the statement of cash flow, the organization considers all highly liquid

investments available for current use with an initial maturity of three months or less to be cash

equivalents.

Endowment Fund and Investments

Investments in marketable securities with readily determinable fair values and all investments in

debt securities are reported at their fair values in the Statement of Financial Position. Unrealized

gains and losses are included in the change in net assets.

On July 24, 2004, the Board of Directors established limited funds with endowment funds.

Withdrawals from the fund are approved by the Board of the Executive Committee, who is

appointed by the Board of Directors. An investment policy has been approved and the funds are

held in an account with investment advisors. Investment earnings are reinvested in the fund.

Inventory

The Samaritan Inn’s inventory consists of purchased and donated perishable and non-perishable

food items, toiletries, linens and other supplies required for the operation of a homeless shelter.

Inventory of the Friends of the Inn Thrift Stores consist of recycled clothing and house wares

obtained through charitable donations. The inventory balance at fiscal year-end September 30,

2014 is immaterial and not recorded on the consolidated statement of financial position.

Accrued Compensated Absences

The organization has adopted a policy that allows employees to accrue compensated absences

caused on the length of employment. Sick leave is forfeited upon separation of employment.

Accrued vacation, capped at 40 hours, is payable to the employee upon separation, provided the

employee meets the criteria based on company policy. Estimated accrued liabilities resulting

from this policy are reflected in the financial statements.

Samaritan Inn, Inc.


10

Measurement Focus and Basis of Accounting

Measurement focus refers to what is being measured; basis of accounting refers to when revenues

and expenditures are recognized in the accounts and reported in the financial statements. Basis

of accounting related to the timing of the measurement made, regardless of the measurement

focus applied.

The Statement of Financial Position, Statement of Activities, Statement of Functional Expense

and Statement of Cash Flows for the organization are reported using the economic resources

measurement focus and the accrual basis of accounting. The economic resources measurement

focus means all assets and liabilities (whether current or non-current) are included on the

Statement of Financial Position. Under the accrual basis of accounting, revenues are recognized

when earned; expenses are recognized at the time the liability is incurred.

Capital Assets

Depreciation expense for the year ended September 30, 2014 was $196,730.

Capital assets, which include property, vehicles, furniture, and equipment, are reported in the

applicable financial statements. All capital assets are valued at historical costs or estimated

historical cost if actual historical is not available. Donated assets are valued at their fair market

value on the date of donation. Repairs and maintenance are recorded as expenses.

Depreciation has been calculated on each class of depreciable property using the straight-line

method. Estimated useful lives are as follows:

Buildings & Improvements 30 Years

Apartments 27.5 Years

Shelter Equipment 5 to 10 Years

Office Equipment 5 to 10 Years

Office Furniture 5 to 10 Years

September 30, September 30,

2013 Additions Retirements 2014

Land 1,260,097$ -$ -$ 1,260,097$

Buildings & Improvements 2,576,792 1,480 - 2,578,272

Apartments 1,537,110 - - 1,537,110

Equipment 449,566 5,313 - 454,880

Total 5,823,565 6,793 - 5,830,358

Accumulated Depreciation (1,359,234) (196,730) - (1,555,964)

Net Property and Equipment 4,464,331$ (189,937) -$ 4,274,394$

Items

Samaritan Inn, Inc.


11

Shelter Furniture 3 to 10 Years

Source of Support and Revenues

Major sources for the support of Samaritan Inn include: rents collected from the operation of

North Texas Gateway Apartments, sales of recycled clothing and house wares from Friends of

the Inn thrift store, and sales of Greater Goodies products. Other major support sources include

contributions from the United Way, local churches, service clubs, newsletter recipients, pledged

donations, private foundation support, governmental assistance, donated services, and

fundraising events.

Donated Services and Materials

The Samaritan Inn records the value of donated materials, which consists primarily of food

pantry items, at the cost per the donor. Samaritan Inn records the value of donated services based

on volunteer hours, level of expertise and department served. Departments include

administration, arts and crafts, direct service, donations, kitchen, maintenance, counseling, public

relations, Samaritan Inn-dustires, and Friends of the Inn.

Friends of the Inn

Revenues from the sale of recycled clothing, furniture and house wares are received from the

public at the thrift stores. Sales tax is recorded net at the time of final sale and is remitted to the

State on a monthly basis. Sales tax remitted for the year ended September 30, 2014 was

approximately $42,000.

North Texas Gateway Apartments

Revenues from the collection of rent from tenants of the apartments are collected.

Functional Allocation of Expenses

The cost of providing programs and supporting services have been summarized on a functional

basis in the Consolidated Statement of Functional Expenses. Costs are directly charged to the

various programs and support services with certain costs being allocated to General &

Management support services based on estimates made by management.

Income Taxes

The Organization is a not-for-profit corporation that is exempt from federal income taxes under

Section 501 (c)(3) of the Internal Revenue Code as per I.R.S. letter dated June 1, 2005. For the

year ended September 30, 2014, the Samaritan Inn did not conduct any activities that would be

subject to federal income taxes.

Samaritan Inn, Inc.


12

Note 2 – Cash

As of September 30, 2014, the Samaritan Inn maintains all bank accounts and certificates of

deposit in financial institutions that are members of the FDIC. At fiscal year end, the

organization’s deposits in its depository banks totaled $669,339.

Note 3 – Investments

Investments in marketable securities with readily determinable fair values and all investments in

debt securities are reported at their fair values in the statement of financial position. Unrealized

gains and losses are included in the change in net assets. Investment income and gains restricted

by a donor are reported as increases in unrestricted net assets if the restrictions are met (either by

passage of time or by use) in the reporting period in which the income and gains are recognized.

The mutual fund advisory program for Samaritan Inn was initiated on July 7, 2005. The

investment summary of this fund for the year ended September 30, 2014 is as follows:

Note 4 - Fair Value of Measurements

The “Fair Value Measurements and Disclosures” Topic of the FASB ASC (Topic 820) defines

fair value as exchange price that would be received for an asset or paid to transfer a liability (an

exit price) in the principal or most advantageous market for the asset or liability in an orderly

transaction between market participants at the measurement date. Topic 820 also establishes a

three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This

hierarchy requires entities to maximize the use of observable inputs and minimize the use of

unobservable inputs. These three levels of inputs used to measure fair value are as follows:

Level 1 – Quoted prices for in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level I, such as quote

prices for similar assets and liabilities in active markets; Quoted prices for identical or

similar assets and liabilities in markets that are not active; or other inputs that are

observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that

are significant to the fair value of the assets or liabilities. This includes certain pricing

models, discounted cash flow methodologies and similar techniques that use significant

unobservable inputs.

Samaritan Inn, Inc.


13

The carrying value of cash and cash equivalents, receivables, gift cards, accounts payable and

accrued expenses approximates fair value due to the relatively short-term nature of the financial

instruments. Investments in marketable securities debt securities are reported at their fair values

in the statement of financial position.

Note 5 – Pension Plan

As of July 5, 2007, employees are eligible to participate in an optional 403(b) retirement plan.

The plan is not governed by ERISA. Employees may contribute up to $16,500 per year.

Contributions to the optional plan may be made via payroll deduction.

Note 6 – Subsequent Events

Subsequent events have been evaluated through January 30, 2014, the report issuance date.

year ended september 30, 2014 - the samaritan · pdf fileyear ended september 30, 2014 ......

Documents