Edmonton String Players Association

214, 10301-104 Street

Edmonton, Alberta, T5J 1B9

Opinion on the Financial Statement of the Edmonton String Players' Association

Member Auditor's Report

We have audited the accompanying financial statements and the financial records associated with

them in accordance with the bylaws of the Edmonton String Players' Association. Neither of the

auditors is a member of the executive or has signing authority for the organization, and both

undersigned auditors are arms' length from all executive members.

The audit protocol involved a review of the bank statements for the associated accounts, a

review of selected sample transactions supporting the financial statements, and comparison of

the financial summary data to the detailed records. This audit included review of the

organizations signing procedures as well as determination that the expenses were made

appropriately within the mandate of the organization.

The financial statements are the responsibility of the organization's executive. Our responsibility

is to express an opinion on the financial statements and transactions based on our audit.

Through the audit, we have obtained reasonable assurance that the financial statements are free

of material misstatement. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements attached represent fairly, in all material respects, the

financial situation and expenditures of the Edmonton String Players Association.

Name:

Signature:

Date:

L~O, Jell(

Edmonton. SWnfj fI~ (U~ociati(JnNOTES TO FINANCIAL STATEMENTS

For the Year Ended August 31, 2014

1. Purpose of Organization

From July 30, 2013 onward, the Objectives of the society (Association) are to support andpromote musical strings (violin, viola, cello, bass) education amongst the youth of the greaterEdmonton area by:

(a) organizing and arrangmg for strings group instruction and ensemble playingopportunities;

(b) providing financial support for the engagement ofinstructors/conductors/accompanists, as well as for the purchase/rental/repair of stringinstruments, purchase/rental of music, payment of festival entry and venue rental fees,and payment of touring costs beyond direct parent funding;

Cc) providing communications relevant to the program such as newsletters;

(d) promoting the program throughout the Edmonton area;

(e) providing logistical support in the arranging of concerts, tours, etc.; and

(f) operating without purpose of gain for members, as all profits or other accretions tothe Society shall be used in promoting objects (a-e).

From July 30, 2013 onward, the Bylaws of the society (Association) were modified tocomply to Alberta Gaming and Liquor Commission's requirements that the Associationrestructure as a community arts and education group, rather than a parent advisory council onstring music for the Edmonton Public School Board. This required that membership of theAssociation be more broadly defined to include not only the parents of students registered inMusic Enrichment Program, but also adult students registered in Music Enrichment Program.Further, associate membership shall be granted to any community member interested infurthering the Objectives of the Association upon payment of fees, as set out by theAssociation from time to time, and upon approval of the Executive.

2. Significant Events

On May 1, 2013 the Edmonton Public School Board (E.P.S.B.) announced without warningto the Association that it was withdrawing its funding for Music Enrichment Program. In itsannouncement, E.P.S.B. indicated this withdrawal of its funding meant the end of the MusicEnrichment Program, which E.P.S.B. had administered and partially funded since 1959.

Through a series of informal public meetings which culminated on May 29, 2013, theAssociation determined by consensus to ensure the continuity of Music Enrichment Programthrough the Association's assumption of all administration and financing of the Program.

This decision expanded the roles and duties of the Association and its Executive, which wasverbally accepted by the A.G.L.C. at a meeting the Association on June 5, 2013. Thisrevision of the Association's purpose required the July 30, 2013 Special Meeting and theadoption of revised objectives and bylaws of the Association. The revised objectives andbylaws were forwarded for filing with Alberta Registries prior to the end of the fiscal year.

3. Significant Accounting Policies

a. General Statement on Financial StatementsThe Association is a not-for-profit entity with no employees, pension plans, financialinstruments or investments. Revenues are quite small, less than $500,000 per year.

New accounting standards for not-for-profit organizations in Canada are mandatory for fiscalyears beginning on or after January 1, 2012. For private sector N.P.O.s (any N.P.O. that isnot part of government), two choices can be made. Either they can adopt the AccountingStandards for Not-for-Profit Organizations contained in Part III of the Canadian Institute ofChartered Accountants (C.LC.A.) Handbook, or they can adopt International FinancialReporting Standards (LF.R.S.). The Association adopted the former.

The Accounting Standards for Not-for-Profit Organizations also require the application ofPart II of the Handbook - Standards for Private Enterprises for recognition of financial assets(investments), financial liabilities, future employee benefits, hedge accounting and non-controlling interests. The Association was not affected by any of these or any other itemsfrom Part II of the Handbook. LF.R.S. are the same standards which apply to publiccompanies and are significantly different and more demanding in many areas fromHandbook, Parts Il and Ill. The E.S.P.A. Executive choose to adopt Accounting Standardsfor Not-for-Profit Organizations, rather than LF.R.S.

As per the Handbook, financial statements for non-far-profit organizations normally include:a) a statement of financial position (balance sheet);b) a statement of operations (income statement);c) a statement of changes in net assets (fund balances) ; and,d) a statement of cash flows.

The Association has had for many years a statement of financial position. In prior years, theAssociation has also had a statement of members' equity that was similar to a statement ofchanges in fund balances. Also in prior years, the Association had a statement of receiptsand expenditures for each of the Association's two funds (Casino and General) that wassimilar to a statement of operations. For the prior year (F.Y.E. August 31, 2012), theAssociation had revised the format of these three statements to bring them into conformitywith Section 4400 of the old Handbook. The new Handbook would not require any furtherchanges for the Association beyond this. The statement of operations and the statement ofchanges in fund balances have been combined into one statement as specifically allowed forby the Handbook. Amounts for all years have been restated as per the revised statements forconsistency.

The Association does not have a statement of cash flows, which is meant to group inflowsand outflows of cash based transactions by operating, financing and investing activities.However, given that the Association has no financing or investment activities there wouldappear to be little value in preparing a statement of cash flows.

Notes to the financial statements are not optional, but a required, integral part of all financialstatements, even for not for profit organizations. In years prior to T.Y.E. December 31,2012, E.S.P.A.'s Financial Statements did not contain any explanatory notes.

b. Fund AccountingThe Association uses fund accounting to organize and present its financial information. Fundaccounting separates the moneys of an organization into seperate groups. Each group has itsown self-balancing set of accounts. The Association has two funds: the unrestricted GeneralFund; and, the restricted "Casino" Fund. Each fund has its own accounts (books and records)as well as its own bank account. The receipt of revenues by the "Casino" Fund, and thespending of those revenues, are restricted by the Alberta Gaming and Liquor Commission(AG.L.C.). The restrictions are described in the AG.L.C.'s Charitable Gaming PoliciesHandbook. The General Fund has no restrictions upon either its receipt of revenues or itsexpenditures.

c. Restricted Fund MethodThe Association has used the restricted fund method of presentation for many years. Therestricted fund method is a type of fund accounting the reports the general and the restrictedfund (or funds) seperately in the financial statements. In the E.S.P.A Financial Statements,the General Fund and the Casino Fund are reported separately within each statement.

e. Capital AssetsFor the purposes of reporting capital assets (a.k.a fixed assets) on the statement of financialposition, the Association is defined as a "Small Organization" in the Handbook. That is, theaverage of annual revenues recognized in the statement of operations for the current and prioryear was less than $500,000. The expensing of capital assets and even donations in kind ispermissible for "Small Organizations". The Association has always expensed its very fewcapital assets and never reported them on the statement of financial position. Prior to May I,the Association did not own any capital assets, except for a digital HD videocamera andcamera stand purchased prior to the 2008 Singing Strings trip to Cuba for an expenditure ofapproximately $1,600.

All musical instruments used in Music Enrichment Program prior to the end of the 2012/13season on June 9, 2013 belonged to the Edmonton Public School Board. When newinstruments are purchased prior to May 1, 2013, E.P.S.B. paid the vendors directly, thenpresented an invoice to the Association with the supporting third party invoices attached, onthe understanding that the Association had agreed to provide a reimbursement to E.P.S.B.

When the Association determined that it would fully administer and finance MusicEnrichment Program, it was graciously gifted by from E.P.S.B. 359 instruments (220 violins,58 violas, 64 cellos and 15 basses). These were received by the Association on July 30. For

E.P.S.B. Instrument Technician Judy Lewis provided the Association on August 9, 2013 witha fair market value of $94,000 (selling value) and $189,000 (replacement value) for theinstrument collection.

The Association was also gifted a string music library from Edmonton Public Schoolscontaining 750 boxed string orchestra scores, sheet music and thousands of assorted books.On August 9, 2013 Judy Lewis provided the Associaton with a fair market value of $20,000for the boxed orchestral scores, $10,000 for the books purchased over the last 6 years (whichE.S.P.A had reimbursed E.P.S.B. for during those 6 years) and $1,000 for the remainder ofthe library's collection.

The Association was also gifted 81 portable music stands and 50 Manhasset music stands,plus three music stand carriers by Edmonton Public Schools. These stands were thenreturned by the Association to the Edmonton Public and other host schools to share withthese schools, as a mutual benefit. The average replacement cost of these stands would be$40 for a total replacement value of $5,240.

To house the Music Library, musical instruments, unused stands and sundry materials, theAssociation purchased 15 steel framed shelving units after the fiscal year end for use at theleased storage facility. The shelving units cost $1,200 in the current fiscal year.

In February 2014, Edmonton Public Schools graciously gifted Music Enrichment Program afurther 81 instruments (59 violins and 22 cellos), 24 empty violin cases and three cello racks.Based on the prior year assessments, the estimated fair market value was $21,000 (sellingvalue) and $43,000 (replacement value) for this donation.

In April 2014, Music Enrichment Program introduced a guitar program. Although fiveguitars were ordered by August 31, 2014, these were not delivered or paid for until thefollowing fiscal year.

f. RevenuesFrom May 1, 2013 onward, the Association took full control of the administration andfinancing of Music Enrichment Program. This included the setting of registration fees andinstrument rental fees and the collection of these fees

AG.L.C. authorizes a casino fundraiser once every two years for a not-for-profitorganization. Funds from the casino are to be expended on approved uses within 2 fiscalyears (i.e. the 2013 casino will fund the 2014115 and 2015116 fiscal years). The distributionof funds within that time frame is at the Association's discretion. Carryover of funding to anew casino period requires prior approval from AG.L.C.

The Association conducted a casino fundraiser during this fiscal year on November 17 and18,2013. The funds were released by the A.G.L.C. on February 18,2014. These funds areeligible for approved expenditures until February 28, 2016.

A fundraiser concert and silent auction was conducted in March 16,2014 to specifically fundthe Singing Strings Orchestra's tour of Europe from March 28 to April 6, 2014. There werealso several other fundraisers throughout the fiscal year, including gift card sales, Regal GiftCatalogue sales, chocolate sales, private donations and silent auctions at both the December15,2013 orchestra concert and the Orchestra Year-End Concert of June 3, 2014.

4. Subsequent Events

A $17,000 grant was received from The Professional Arts Coalition of Edmonton onSeptember 17, 2014. This was part of the Mayor's Celebration of the Arts for 2014.

Edmonton String Players AssociationStatement of Financial Position

For the Year Ended August 31, 2014(Audited)

Assets

Assets

0010 General Fund

0020 Casino AccountTotal Assets

101,919.86

28,885.19130,805.05

Liabilities & Fund Balances

Liabilities

Fund Balance

5010 General Fund Balance

5020 Casino Fund Balance

101,919.86

28,885.19130,805.05

76,726.20

57,268.05133,994.25

76,726.20

57,268.05133,994.25

14,278.24

91,811.24106,089.48

14,278.2491,811.24

106,089.48

Edmonton String Players AssociationStatement of Operations and Changes in Fund Balances

For the Year Ended August 31, 2014(Audited)

(1)

Total General Account Casino AccountRevenues

6010 Registration and Instrument Rental Fees 101,302.51 101,302.51

6020 Grants 28,592.93 28,592.93

6030 Fundraising - Gift Cards 17,332.63 17,332.63

6032 Fundraising - Chocolates 3,503.85 3,503.85

60:J4 Fundraising - SSO 11,437.12 11,437.12

6036 Fundraising - Silent Auction 3,048.00 3,048.00

6040 Donations - General 5,126.85 5,126.85

6050 Bingo 1,000.00 1,000.00

6055 Casino Fund 76,885.90 76,885.90

6060 Interest Revenue 83.70 65.06 18.64

6080 Tour Contribution - SSO 60,037.95 60,037.95

6084 Tour Contribution - Others 2,418.92 2,418.92

Total Revenues 310,770,36 233,865.82 76,904.54

Expenses7010 Instrument R&M 3,205.74 2,682.84 522.90

7012 Musical Supplies 281.61 281.61

7016 Program Registration 1,827.50 1,827.50

7018 Rent - Storage 10,800.00 10,800.00

7020 Rent - Venue 1,215.00 1,215.00

8010 Honorarium -Instructors and Conductors 110,35607 2,097.18 108,258.89

8011 Honorarium - Program Admin 21,594.00 20,269.00 1,325.00

8012 Honorarium - Instrument Technicial 6,979.00 5,919.00 1,060.00

8013 Honorarium -Instructor Co. 4,150.00 4,150.00

8014 Honorarium - others 4,520.00 4,250.00 270.00

8410 Bank charges - Pay pal 1,720.14 1,720.14

8412 Bank/Financial Charges 454.05 339.44 114.61

8420 Insurance 9,705.00 9,705.00

8430 Office & Admin 2,332.09 1,698.66 633.43

8432 Police info Search 966.00 822.00 144.00

8440 Gift and Meeting Hospitality 563.40 514.67 48.73

8450 Advertising & Promotion 3,176.65 2,978.20 198.45

9080 Tour Expense - SSO 100,221.00 107,721.00 (7,500.00) (2)

9082 Tour - YE School Tour 1,375.02 1,375.02

9084 Tour Expense - Others 7,480.07 7,480.07

9130 Fundraising Expense - Gift Card 17,669.45 17,669.45

9132 Fundraising Expense - Chocolates 3,103.38 3,103.38

9134 Casino Expense 264.39 53.00 211.39

Total Expenses 313.959,56 208,672.16 105,287.40

Excess(Dificiency) of Revenue over Expenses (3,189.20) 25,193.66 (28,382.86)

Fund Balance, Beginning of Year 133,994.25 76,726.20 57,268.05Fund Balance, End of Year 130,805.05 101,919.86 28,885.19

Notes:

(1) 2013-2014 is the first year E.S.P.A took over the operation of Music Enrichment Program. Financial data from perviousyear is not on this statement.

."",

(1) $7500 was paid for SSO tour before A.G.L.C informed E.S.P.A Casino fund could not spend on out of ountry tour.The amount was reimbursed by General account this year.