arusha centre society financial statements year ended ... · 12/31/2018 · statement of cash...

ARUSHA CENTRE SOCIETY

Financial Statements

Year Ended December 31, 2018


Index to Financial Statements


Page

INDEPENDENT AUDITOR'S REPORT 1 - 2

FINANCIAL STATEMENTS

Statement of Financial Position 3

Statement of Revenues and Expenditures and Changes in Net Assets 4 - 5

Statement of Cash Flows 6

Notes to Financial Statements 7 - 11

103, 2308 CENTRE ST NCALGARY, ALBERTA T2E 2T7T: 403-204-1544F: 403-204-1545MASONEANDCOMPANY.COM

INDEPENDENT AUDITOR'S REPORT

To the Members of Arusha Centre Society

I have audited the accompanying financial statements of Arusha Centre Society, which comprise thestatement of financial position as at December 31, 2018 and the statements of revenues and expendituresand changes in net assets and cash flows for the year then ended, and a summary of significantaccounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements inaccordance with Canadian accounting standards for not-for-profit organizations, and for such internalcontrol as management determines is necessary to enable the preparation of financial statements that arefree from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conductedmy audit in accordance with Canadian generally accepted auditing standards. Those standards requirethat I comply with ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by management, as well as evaluating theoverall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for myaudit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position ofArusha Centre Society as at December 31, 2018 and the results of its operations and its cash flows forthe year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

(continues)

[email protected]@masoneandcompany.com www.masoneandcompany.comwww.masoneandcompany.com

1

Independent Auditor's Report to the Members of Arusha Centre Society (continued)

Calgary, AB ANTONIO MASONE PROFESSIONAL CORPORATIONMay 2, 2019 CHARTERED PROFESSIONAL ACCOUNTANT

2


Statement of Revenues and Expenditures and Changes in Net Assets


Operating Open Streets TAG C$ FCSS Capital assets Total Total(Restated)

2018 2018 2018 2018 2018 2018 2018 2017

REVENUESDonations and grants $ 50,684 $ (212) $ 17,921 $ 59,114 $ 43,154 $ - $ 170,661 $ 154,152Event services 7,234 39,189 - - - - 46,423 30,212Rental revenues -programs 39,481 10 - 10 - - 39,501 18,689Other Income - 100 - 10,750 - - 10,850 -Interest income 3,913 - - - - - 3,913 2,303

101,312 39,087 17,921 69,874 43,154 - 271,348 205,356

EXPENSESSalaries and benefits 35,100 9,499 4,500 32,383 14,104 - 95,586 115,176Project administration 21,819 14,717 1,500 12,585 8,004 - 58,625 39,722Events, projects and development 10,277 5,386 11,921 660 1,689 - 29,933 14,948Consulting fees 113 5,377 - 20,721 18,095 - 44,306 9,644Rent 12,973 - - - - - 12,973 12,919Office expenses 6,984 1,663 - 1,718 915 - 11,280 14,848Professional fees 4,500 - - - - - 4,500 5,738Advertising and promotion - 857 - 1,667 347 - 2,871 679Amortization - - - - - 2,197 2,197 3,110Repairs and maintenance - 600 - - - - 600 -Bank charges 588 - - - - - 588 -Insurance - 416 - 140 - - 556 -Telephone and utilities - 522 - - - - 522 -Memberships - 50 - - - - 50 -

92,354 39,087 17,921 69,874 43,154 2,197 264,587 216,784

NET EXCESS (DEFICIENCY) OF REVENUESOVER EXPENSES 8,958 - - - - (2,197) 6,761 (11,428)

NET ASSETS - BEGINNING OF YEAR 119,525 482 - - - 7,584 127,591 139,019

119,525 482 - - - 7,584 134,352 127,591

- - - - - - - -

(continues)

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Statement of Cash Flows


Total Total(Restated)

2018 2017

OPERATING ACTIVITIES Excess (deficiency) of revenues $ 6,761 $ (428) Item not affecting cash:

Amortization of capital assets 2,197 3,110

8,958 2,682

Changes in non-cash working capital: Accounts receivable (7,189) (2,013) Accounts payable (10,662) 8,276 Deferred income (8,779) 2,088 Prepaid expenses 693 24 Goods and services tax payable 29 223

(25,908) 8,598

Cash flow from operating activities (16,950) 11,280

INVESTING ACTIVITY Long term Investments (40,031) 31

Cash flow from (used by) investing activity (40,031) 31

INCREASE (DECREASE) IN CASH FLOW (56,981) 11,311

Cash - beginning of year 199,038 187,727

CASH - END OF YEAR 142,057 199,038

CASH CONSISTS OF: Cash $ 142,057 $ 159,007 Term deposits - 40,031

$ 142,057 $ 199,038

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Notes to Financial Statements


1. PURPOSE OF THE ORGANIZATION

The Arusha Center Society (the "Society") is a not-for-profit organization dedicated to the publicunderstanding of issues of social justice and how they relate to the choices we take in our communityand community-based programming. The Society is registered as a charitable organization under theIncome Tax and as such is exempt from income taxes.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNFPO).

Fund accounting

Arusha Centre Society reports operations by programs as follows:

Operating - reports activity related to general program delivery and administrative activities.

Open Streets - reports activity related to the Open Streets program.

Calgary Dollars / FCSS - reports activity related to the Calgary Dollar program funded specifically byFCSS.

Calgary Dollars - reports activity related to the Calgary Dollar program funded by CIP, the CalgaryFoundation, and the Seaview Fund.

TAG - reports activity related to Take Action Program funded by the Calgary Foundation.

Financial instruments policy

Financial instruments are recorded at fair value when acquired or issued. In subsequent periods,financial assets with actively traded markets are reported at fair value, with any unrealized gains andlosses reported in income. All other financial instruments are reported at amortized cost and testedfor impairment at each reporting date. Transaction costs on the acquisition, sale, or issue of financialinstruments are expensed when incurred.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, in bank balances and in short term depositsconvertible to cash within ninety days. All are denominated in Canadian dollars and are held with theSociety's financial institutions.

(continues)

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Capital assets

Capital assets are stated at cost or deemed cost less accumulated amortization. Capital assets areamortized over their estimated useful lives on a declining balance basis at the following rates andmethods:

Furniture and fixtures 20% declining balance methodComputer equipment 30%-50% declining balance method

The Society regularly reviews its capital assets to eliminate obsolete items.

Capital assets acquired during the year but not placed into use are not amortized until they are placedinto use.

Revenue recognition

Arusha Centre Society follows the deferral method of accounting for contributions.

Restricted contributions are recognized as revenue in the year in which the related expenses areincurred. Unrestricted contributions are recognized as revenue when received or receivable if theamount to be received can be reasonably estimated and collection is reasonably assured.Endowment contribution are recognized as direct increases in net assets.

Restricted investment income is recognized as revenue in the year in which the related expenses areincurred. Unrestricted investment income is recognized as revenue when earned.

Fees and charges are recognized as revenue on accrual basis.

Allocation of expenses

Direct expenses are recorded to the programs directly; salaries and benefits, project administrationare allocated to the programs based on the time spent.

The Society's fundraising costs are included in event, project and development costs. All generalexpenses are included in office and general expense.

Measurement uncertainty

The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect thereported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses during the period.Such estimates are periodically reviewed and any adjustments necessary are reported in earnings inthe period in which they become known. Actual results could differ from these estimates.

Contributed services

Volunteers contributes a significant number of hours each year to assist the Society in carrying out itsobjectives. Because of the difficulty of determining their fair value, contributed services are notrecognized in the financial statements.

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3. INVESTMENT

Common share investments in First Calgary Financial represent equity or capital in First CalgaryFinancial. Unlike term deposits which are 100% guaranteed by the Credit Union Deposit GuaranteeCorporation, Common Shares are not 100% guaranteed. The Common Share risk, however, isbalanced by the strong performance of First Calgary Financial. The redemption policy for CommonShares allows members to redeem their shares once per calendar year, up to a maximum of 20% ofthe member's Common Share balance. Terms and conditions apply.

4. CAPITAL ASSETS 2018 2017

Cost Accumulated Net book Net bookamortization value value

Furniture and fixtures $ 34,621 $ 29,235 $ 5,386 $ 7,583Computer equipment 12,928 12,928 - -

$ 47,549 $ 42,163 $ 5,386 $ 7,583

5. DEFFRRED CONTRIBUTIONS

The Society received in advance grants and donations of $98,590 (2017 - $96,369) which representsunexpended contributions for the following programs:

Fund name

Opening

balance

Grants

2018

Match to

expenses

Ending

balance

Casino fund 64,616 - (31,284) 33,332

Open Streets and Arusha Student 11,000 18,234 6,191 35,425

The Calgary Foundation (TAG grant) 4,710 19,000 (17,920) 5,790

C$ Digital - 12,000 (10,750) 1,250

Housing fund - 42,500 (27,575) 14,925

Police Fund - 19,000 (11,131) 7,869

FCSS 10,788 32,366 (43,154) -

CIP grants 14,237 - (14,237) -

The Seaview fund 2,019 - (2,019) -

Total 107,369 143,100 (151,879) 98,590

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6. RECONCILIATION OF FUND BALANCES

Operating

fund

Open Streets

fund

Capital

assets Total

Beginning 119,525 482 7,584 127,591 Excess(deficiency) of

revenue over expenses 8,958 (2,197) 6,761

Amortization transfer - -

128,483 482 5,387 134,352

7. MANAGEMENT OF CAPITAL The Society defines capital as the amounts included in net assets.

The Society sets the amount of net assets balances in proportion on risk, manages the net assetsstructure and makes adjustments in light of changes in economic conditions and the riskcharacteristics of the underlying assets.

The Society's objectives, when managing capital, is to safeguard its ability to sustain itself as a goingconcern so that it can continue to provide the appropriate level of benefits and services to itscommunity and stakeholders.

Management and the Board of Directors carefully consider contributions, being donations, grants andfundraising income to ensure that sufficient funds will be available to meet the society's short andlong-term objectives.

8. CALGARY $

The Society uses "Calgary Dollars", which is a complementary currency system that brings togetherlocal talents and resources to strengthen the local economy and build community. In 2018, theSociety received "Calgary Dollar" as payment for various types of services performed totaled $6,716and used "Calgary Dollar" in payment of various expenses were $6,972. All "Calgary Dollars" aretransacted at fair value.

9. FINANCIAL INSTRUMENTS

The Society is exposed to various risks through its financial instruments and has a comprehensiverisk management framework to monitor, evaluate and manage these risks. The following analysisprovides information about the Society's risk exposure and concentration as of December 31, 2018.

Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. The Societyis exposed to credit risk from customers. In order to reduce its credit risk, the Society reviews a newcustomer's credit history before extending credit and conducts regular reviews of its existingcustomers' credit performance. An allowance for doubtful accounts is established based uponfactors surrounding the credit risk of specific accounts, historical trends and other information. TheSociety has a significant number of customers which minimizes concentration of credit risk.

(continues)

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9. FINANCIAL INSTRUMENTS (continued)

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated withfinancial liabilities. The Society is exposed to this risk mainly in respect of its receipt of funds from itscustomers and other related sources, and accounts payable.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by achange in the interest rates. In seeking to minimize the risks from interest rate fluctuations, theSociety manages exposure through its normal operating and financing activities. The Society isexposed to interest rate risk primarily through its floating interest rate bank indebtedness and creditfacilities.

10. RESTATED 2017 FINANCIAL STATEMENTS

Deferred income was restated in order to present more accurate and comparable figures.

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arusha centre society financial statements year ended ... · 12/31/2018 · statement of cash...

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