«lkatherine gluck - the lgbtq center long beach · 2017. 2. 7. · «|katherine gluck ^ certified...

«l KATHERINE GLUCK^ CERTIFIED PUBLIC ACCOUNTANT

One in Long Beach, Inc.

dba LGBTQ Center of Long Beach

Audited Financial Statements

December 31, 2015 and 2014

«| KATHERINE GLUCK^ CERTIFIED PUBLIC ACCOUNTANT

Independent Auditor's Report

To the Board of Directors

One in Long Beach, Inc.:

I have audited the accompanying financial statements of One in Long Beach, Inc. (dba LGBTQ Center of LongBeach) (a nonprofit organization), which comprise the statement of financial position as of December 31, 2015,and the related statements of activities, functional expenses, and cash flows for the year then ended, and therelated notes to the financial statements.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordancewith 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 financialstatements that are free from material misstatement, whether due to fraud or error.

Auditor's ResponsibilityMy responsibility is to express an opinion on these financial statements based on my audit. I conducted my auditin accordance with auditing standards generally accepted in the United States of America. Those standards requirethat I plan and perform the audit to obtain reasonable assurance about whether the financial statements are freefrom 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 therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, I express nosuch opinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

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

Opinion

In my opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of One in Long Beach, Inc. as of December 31, 2015, and the changes in its net assets and its cash flows forthe year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information

I have previously audited One in Long Beach, Inc.'s 2015 financial statements, and I expressed an unmodified auditopinion on those audited financial statements in my report dated June 26, 2015. In my opinion, the summarized

comparative information presented herein as of and for the year ended December 31, 2014, is consistent, in allmaterial respects, with the audited financial statements from which it has been derived.

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ONE IN LONG BEACH, INC.

STATEMENTS OF FINANCIAL POSITION

DECEMBER 31, 2015 AND 2014

2015 2014

ASSETS

Cash and cash equivalents $ 424,189 $ 336,052Accounts receivable, net 140,328 134,210

Prepaid expenses 11,450 11,869Fixed assets, net 410,805 413,362

Other assets 5,788 6,047

TOTAL ASSETS 992,560 901,540

LIABILITIES

Accounts payable

Accrued expenses

Note payable

TOTAL LIABILITIES

NET ASSETS

Unrestricted

Temporarily restricted

TOTAL NET ASSETS

TOTAL LIABILITIES AND NET ASSETS

17,905 12,161

92,704 55,166

124,595 212,389

235,204 279,716

733,856 595,324

23,500 26,500

757,356 621,824

992,560 901,540

See accompanying notes and accountant's audit report.


STATEMENTS OF ACTIVITIES

FOR THE YEARS ENDED DECEMBER31, 2015 AND 2014

2015 2014UNRESTRICTED NET ASSETS

Unrestricted revenues

Contributions and grants

Program services, net

Special events, net

Rental income

Other income

Interest income

Total unrestricted revenues

Net assets released from restrictions

TOTAL UNRESTRICTED SUPPORT

EXPENSES

Program services

Fundraising

Management and general

TOTAL EXPENSES

CHANGE IN UNRESTRICTED NET ASSETS

TEMPORARILY RESTRICTED NET ASSETS

Contributions

Net assets released from restrictions

CHANGE IN TEMPORARILY RESTRICTED NET ASSETS

NET ASSETS AT BEGINNING OF YEAR

NET ASSETS AT END OF YEAR

CHANGE IN NET ASSETS

$ 175,487 $ 152,673

670,269 523,721

115,268 74,781

17,356 18,356

1,677 11,776

1,132 75

981,189 781,382

23,000 5,500

1,004,189 786,882

638,284 457,519

58,550 26,267

168,823 147,424

865,657 631,210

138,532 155,672

20,000 22,500

(23,000) (5,500)

(3,000) 17,000

135,532 172,672

621,824 449,152

757,356 621,824



STATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2015 and 2014

(With Comparative Totals for 2014)

PROGRAM SERVICES SUPPORTING SERVICES

TotalHealth Youth Domestic Community Total Mgmt. and Supporting 2015 2014

Services

$ 1,173

Services

$ 476

Violence

$ 51

Linkage

$ 117

Programs

$ 1,817

Fundraising

$ 194

General

$ 565

Services Total TotalAdvertising $ 759 $ 2,576 $ 1,267Bank fees

- - -- - - 2,474 2,474 2,474 1,818

Computer maintenance 19,235 7,814 835 1,920 29,804 3,174 9,262 12,436 42,240 31,475Contract services

- - 29,359 - 29,359 - - - 29,359 _Depreciation and amortization 10,600 4,306 461 1,057 16,424 1,749 5,104 6,853 23,277 23,472Dues and subscriptions 450 -

- - 450 - 455 455 905 2,430Employee benefits 14,012 5,692 608 1,398 21,710 2,312 6,747 9,059 30,769 21,380Grants

- -- 1,950 1,950 - - - 1,950 1,121

Insurance 9,092 3,694 395 907 14,088 1,500 4,378 5,878 19,966 13,530Interest 3,539 1,438 154 353 5,484 584 1,704 2,288 7,772 12,348Miscellaneous 1,199 426 46 105 1,776 4,336 1,110 5,446 7,222 10,771Payroll taxes and worker's comp. 19,932 8,097 865 1,989 30,883 3,289 9,598 12,887 43,770 36,429Postage and delivery 701 285 30 70 1,086 116 338 454 1,540 969Printing 2,782 1,130 121 278 4,311 459 1,340 1,799 6,110 3,864Professional services 30,345 453 48 111 30,957 2,557 14,037 16,594 47,551 36,766Program support and supplies 84,385 4,997 166 5,109 94,657 631 1,841 2,472 97,129 31,082Property taxes 682 277 30 68 1,057 113 328 441 1,498 1,490Repairs and maintenance 1,036 421 45 103 1,605 171 499 670 2,275 2,796Salaries and wages 203,956 82,855 8,854 20,354 316,019 33,654 98,213 131,867 447,886 361,918Staff and volunteer development 5,917 2,404 257 591 9,169 977 2,850 3,827 12,996 4,208Telephone and internet 2,810 1,142 122 280 4,354 463 1,353 1,816 6,170 7,315Travel, conferences and meetings 4,382 1,780 190 437 6,789 723 2,110 2,833 9,622 5,872Utilities 9,381 3,811 407 936 14,535 1,548 4,517 6,065 20,600 18,889

Total expenses 425,609 131,498 43,044 38,133 638,284 58,550 168,823 227,373 865,657 631,210



STATEMENTS OF CASH FLOWS

FOR THEYEARS ENDED DECEMBER 31, 2015 AND 2014

2015 2014

Cash flows from operating activities:Change in net assets

Adjustments to reconcile change in net assets to netcash provided by operating activities:

Depreciation and amortization

(Increase) decrease in accounts receivables(Increase) decrease in prepaid expensesIncrease (decrease) in accounts payableIncrease (decrease) in accrued expenses

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of equipment (20,461) (17,907)Net cash used by investing activities (20,461) (17,907)

Cash flows from financing activities:

Payments on note payable (87,794) (142,933)Net cash used by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginningof year

Cash and cash equivalents at end of year

$ 135,532 $ 172,672

23,277 23,472

(6,118) (38,735)

419 (378)

5,744 (11,640)

37,538 7,722

196,392 153,113

(87,794) (142,933)

88,137 (7,727)

336,052 343,779

424,189 336,052

Supplemental disclosure of cash flow information:

In-kind contributions $ 29,500 $ 25,500Interest paid 7,772 12,348


ONE IN LONG BEACH, INC.NOTES TO THE FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND ACTIVITIES

One In Long Beach, Inc. (the Center) is a public benefit corporation organized under California law in1980. The Center provides support to inform and connect the lesbian, gay, bisexual, transgender, andquestioning communities through the following four core service areas: information and education,health and well-being, cultural and social activities, and social justice.

The summary of significant accounting policies of the Center is presented to assist in understanding theCenter's financial statements. The financial statements and notes are representations of the Center'smanagement, who is responsible for their integrity and objectivity.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Center have been prepared in accordance with accounting principlesgenerally accepted in the United States of America on the accrual basis of accounting and, accordingly,reflect all significant receivables, payables, and other liabilities.

Basis of Presentation

The financial statements are presented in accordance with the provisions of the Financial AccountingStandards Board (FASB) Accounting Standards Codification, ASC 958, Not-for-Profit Entities. Under ASC958, the Center is required to report information regarding its financial position and activities in threeclasses of net assets as follows:

•

•

Tax Status

Unrestricted net assets are forms of unrestricted revenue and expenditures related tothe general operations of the Center that are not subject to donor-imposed restrictions.

Temporarily restricted net assets are net assets subject to donor-imposed restrictionsthat can be fulfilled by actions of the Center pursuant to those restrictions or that expireby the passage of time. Temporarily restricted resources whose restrictions are met inthe same reporting period are recorded as unrestricted.

Permanently restricted net assets are utilized to record resources received that arepermanently restricted as to use by the donor or grantor. As of December 31, 2015 and2014, the Center had no permanently restricted net assets.

The Center is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code.In addition, the Center qualifies for the charitable contribution deduction under Section 170(b)(1)(A) andhas been classified as an organization that is not a private foundation under Section 509(a)(2). TheCenter also is exempt from state income taxes under Section 23701(d) of the Revenue and TaxationCode of the State of California.



Tax Status (continued)

The Center has applied the provisions of Financial Accounting Standard Board's Accounting Codification(ASC) 740-10, Accounting for Uncertainty in Income Taxes. Under ASC 740-10, nonpublic enterprises,including nonprofit organizations, are required to record a tax liability when substantial uncertaintiesexist as to whether certain income isexempt from federal, state, and local tax. As of December 31,2015and 2014, the Center had no substantial uncertain income tax positions. The Center's federal returnsare subject to examination by federal taxing authorities, generally for three yearsafter theyare filed andstate returns are subject to examination by state taxing authorities, generally for four years after theyare filed.

Cash and Cash Equivalents

The Center considers all highly liquid investments available for current use with an initial maturity ofthree months or less to be cash equivalents. As of December 31, 2015 and 2014, the Center's cash andcash equivalents includecash held in bank checking, savings, and money market accounts.

Accounts Receivable & Promises to Give

Accounts receivable and promises to give are recorded at net realizable value if they are expected to becollected within one year and at net present value if they are expected to be collected in more than oneyear.

Concentrations of Credit and Market Risk

Financial instruments that potentially expose the Center to concentrations of credit and market riskconsist primarily of cash equivalents and accounts receivable. Cash accounts at banking institutions areinsured by the Federal Deposit Insurance Corporation up to $250,000 and, at times, balances mayexceed federally insured limits. The Center has not experienced any losses on its cash or cashequivalents.

The Center operates in Long Beach, California and is dependent upon governmental funding. For theyears ended December 31, 2015 and 2014, the Center received 51% and 57% of its unrestricted fundingfrom governmental contracts, respectively.

Property and Equipment

Property and equipment are stated at cost or at the fair value at the date of donation in the case ofdonated assets. The acquisition of property and equipment and expenses for repairs, maintenance,renewals, and betterments that materially prolong the useful lives of assets in excess of $1,000 arecapitalized. The Center provides for depreciation and amortization of property and equipment by use ofthe straight-line method over the estimated useful lives as follows:

Furniture, fixtures & equipment 3 to 10 yearsBuildings 31.5 yearsImprovements 5 to 39 years



Property and Equipment (continued)

Contributions of long-lived assets, or of cash or other assets that must be used to acquire long-livedassets, are reported as increases in temporarily restricted net assets. Restrictions are considered met,and an appropriate amount reclassified to unrestricted net assets, over the useful life of the long-livedassets as determined by the Center's depreciation policy.

Property and equipment are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable. There were no impairments in either 2015 or2014.

Contributions

All contributions are considered to be available for unrestricted use unless specifically restricted by thedonor. Contributions received that are restricted for future periods or restricted by the donor forspecific purposes are reported as temporarily restricted or permanently restricted support thatincreases those net asset classes.

When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restrictionis accomplished, temporarily restricted net assets are reclassified to unrestricted net assets andreported in the statement of activities as net assets released from restrictions. Donor-restrictedcontributions whose restrictions are met in the same reporting period are reported as unrestrictedsupport.

Program Services Revenue

The Center is reimbursed for services provided to its clientele under certain programs funded bygovernmental contracts. Laws and regulations governing these contracts are complex and subject tointerpretation. Compliance with such contracts can be subject to future governmental review andinterpretation. The Center believes that it is in compliance with its governmental contracts.

The Center's governmental contracts provide for final settlements determined after an audit of therelated contract by the respective governmental agency. An estimated provision to approximate the fullexpected settlements, after review by the governmental agency, is included in the accompanyingfinancial statements. Estimation differences between final settlements and amounts accrued inprevious years are reported as adjustments of the current year's net program services revenue.

Donated Services

The Center has a generous volunteer base that contributes their time and energy to the Center'sactivities. As prescribed by Generally Accepted Accounting Principles, contributions of services arerecognized if the services received require specialized skills, are provided by individuals possessing thoseskills and would typically need to be purchased if not provided by donation. Contributed services thatdo not meet the criteria are not recognized.

Risks and Uncertainties



Certain of the Center's services are governed by program agreements with governmental agencies.There can be no assurances that the Center will be able to obtain future contract agreements asdeemed necessary by management. The loss of some of the current contracts or the inability to obtainfuture contracts could have an adverse effect on the Center's financial position and results of activities.Historically, the Center has successfully obtained all of the contracts it has deemed necessary tocontinue its operations.

Comparative Financial Information

The financial statements include certain prior-year summarized comparative information in total but notby net asset class. Such information does not include sufficient detail to constitute a presentation inconformity with U.S. generally accepted accounting principles. Accordingly, such information should beread in conjunction with the Center's financial statements for the year ended December 31, 2014, fromwhich the summarized information was derived.

Fair Value Measurements

The Center follows the provisions of Financial Accounting Standards Board (FASB) issued ASC Topic 820,Fair Value Measurements and Disclosures, for fair value measurements of financial assets and financialliabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fairvalue in the financial statements on a recurring basis. In accordance with ASC Topic 820, fair value isdefined as the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date.

ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques usedto measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in activemarkets for identical assets or liabilities (Level I measurements) and the lowest priority tomeasurements involving significant unobservable inputs (Level III measurements).

The three levels of the fair value hierarchy are as follows:

• Level I inputs are quoted prices in active markets for identical assets or liabilities that thereporting entity has the ability to access at the measurement date.

• Level II inputs are inputs other than quoted prices included within Level I that areobservable for the related asset or liability, quoted prices in markets that are not active, orother observable inputs that can be corroborated by observable market data.

• Level III inputs are unobservable inputs that are supported by little or no market activity andthat are significant to the fair value of the related asset or liability.

The Center has determined that the fair value of its financial instruments, which include cash and cash

equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate the carryingvalues of such at December 31, 2015 and 2014 based on the short-term maturities and/or termsavailable to the Center in financial markets.

Use of Estimates



The preparation of financial statements in conformity with generally accepted accounting principlesrequires management to make estimates and assumptions that affect certain reported amounts anddisclosures. Accordingly, actual results could differ from those estimates.

Expense Allocation

The cost of providing various programs and other activities has been summarized on a functional basis inthe statements of activities and the statements of functional expenses. Accordingly, certain costs havebeen allocated among the programs and supporting services benefited.

Reclassification

Certain amounts in the prior year financial statements have been reclassified to conform to the currentyear presentation.

NOTE 3 - ACCOUNTS RECEIVABLE

Accounts receivable at December 31, 2015 and 2014 consisted of the following:

2015 2014

Accounts receivable $ 140,328 $ 134,210Less allowance for uncollectible accounts (-) (-)

Total accounts receivables, net 140,328 134,210

Accounts receivable at December 31, 2015 and 2014 were due as follows:

2015 2014

Less than one year $ 140,328 $ 134,210

NOTE 4 - FIXED ASSETS

Fixed assets consisted of the following at December 31, 2015 and 2014:

2015 2014

Land $ 148,157 $ 148,157

Building and improvements 488,881 488,881Furniture and equipment 144,895 124,431

781,933 761,469

Less accumulated depreciation (371,128) (348,107)

Total property and equipment, net 410,805 413,362

10



NOTE 5-OTHER ASSETS

Other assets at December 31, 2015 and 2014 consisted of debt issuance as follows:

2015 2014

Debt issuance costs $ 6,399 $ 6,399

Less accumulated amortization (611) (352)

Total debt issuance costs, net 5,788 6,047

NOTE 6-NOTE PAYABLE

On August 14, 2013, the Center refinanced its existing mortgage due on November 1, 2013. The termsof its current promissory note include an initial principal balance of $365,000 bearing interest of 4.5%,scheduled monthly payments of $2,042, and a maturity date of August 14, 2038. The note is secured bythe building and parking lot owned by the Center. Future scheduled principal payments are as follows:

2015

Year ending December 31:

2016 $ 19,297

2017 20,1832018 21,110

2019 22,080

2020 23,095

Thereafter 18,830

124,595

NOTE 7 - TEMPORARILY RESTRICTED NET ASSETS

As of December 31, 2015 and 2014, donors restricted net assets were as follows:

2015 2014

Temporarily restricted net assets:

Program or time restricted $ 20,000 $ 22,500

Equipment 3,500 4,000

Total temporarily restricted net assets 23,500 26,500

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NOTE 8 - IN-KIND CONTRIBUTIONS

During the year ended December 31, 2015 and 2014, noncash contributions have been reflected in thefinancial statements as follows:

2015 2014

Fundraising materials $ 29,500 $ 25,500

Total in-kind contributions 29,500 25,500

NOTE 9 - CONTINGENCIES

As of December 31, 2015, the Center was awarded various contracts from governmental agencies. Asthe funding of these contracts is dependent on future conditions relating to the completion of services,these contracts have not been recorded as receivables at year-end. Management believes the funds willbe fully realized in future periods upon completion of the required services.

The Center's contracts are subject to inspection and audit by the appropriate governmental fundingagency in order to determine whether program funds were used in accordance with their respectiveguidelines and regulations. The potential exists for disallowance of previously funded program costs.The Center had a provision of $35,000 accrued for the possible disallowance of program costs on itsfinancial statements as of December 31, 2015 and 2014.

The Center, from time to time, is subject to claims arising in the ordinary course of business. In theopinion of management, the ultimate resolution of claims currently pending against the Center will nothave a material adverse effect on the accompanying financial statements.

NOTE 10 - SUBSEQUENT EVENT

The Center has evaluated subsequent events from the statement of financial position date through June29, 2016, the date which these financial statements were available to be issued. During this period theCenter signed a revolving line of credit agreement secured by the building and parking lot owned by theCenter. The line of credit expires on May 9, 2018 and has a principal limit of $250,000 with a variableinterest rate based on the prime rate plus 1.750%. As of June 29, 2016, the line of credit balance waszero.

Also subsequent to December 31, 2015, the Center began a building renovation estimated at $150,000.The building improvements are expected to be completed in 2016.

Lastly, during the first quarter of 2016, the Center received an unconditional promise to give of$100,000.

No other subsequent events occurred that require disclosure in the financial statements.

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