1. Restricted Funds & Transaction Analysis
hodya75m3s
frank_gir_financials.pdf
11/10/2011
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The Basics of Nonprofit
Financial Statements
Presented by Jacki Frank, Shareholder
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Generate a list of questions
about nonprofit financial
statements.
Explain basic financial terms
as they relate to nonprofit
organizations
Learn to navigate standard
nonprofit financial statements
Questions and Answers
Evaluate
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Assets Financial resources for use in accomplishing our
organization’s mission. These can be either Current Assets which are readily accessible (like cash), or Long- Term Assets which take more time and effort to access (like certain stock investments or property and equipment).
Liabilities Financial obligations owed by our organizations. These
can take many forms such as accounts payable, salaries payable, payroll taxes payable, deferred revenue for work not yet performed, or any other service or money owed to another party.
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Support and Revenue For nonprofits, the important question is: When do we count the income as income?
Hoped for vs. Pledged vs. Committed vs. Received
Is it restricted to a specific purpose or condition?
Is it restricted to a specific time?
Expenses Like revenue, we need to know when to
report: Did we receive an invoice?
When did the activity covered by the expense occur?
Was the expense related to a specific grant or other specific source of revenue?
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Net Assets and Their Classifications Unrestricted Contributions received that have no donor-imposed restrictions.
Often referred to as general support.
May also refer to the amount released from a temporary restriction.
Temporarily Restricted Contributions received which have restrictions placed on their use by
the donor. These restrictions can be satisfied by passage of specified time or fulfillment of specified purpose.
Permanently Restricted Most often associated with endowments, these contributions are
permanently restricted such that the principal balance of the gift may not be invaded. Examples could include a) endowed funds whose principal is allowed to accrue interest or income for the use of the organization or b) a gift of a building for permanent use as the organization’s offices but not to be sold.
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One of the most important line items to monitor for any
nonprofit organization is the Unrestricted Fund
Balance or
Total Unrestricted Net Assets
You may find this line item on both the
Statement of Activities and Statement of Financial Position
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Statement of Financial Position Basic financial report showing assets and
liabilities as of a given date. This is a snapshot
of your available resources and outstanding
obligations, showing you what you have to work
with.
This report is the equivalent of a balance sheet
in a for-profit business and this information is
recorded in the IRS Form 990, Part X, “Balance
Sheet” section.
This report is required in order for your audited
financial statements to be prepared in
accordance with generally accepted accounting
standards (GAAP).
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Dec 31, 06 Dec 31, 05 $ Change % Change
ASSETS
Current Assets
Checking/Savings 145,819 35,644 110,174 309%
Accounts Receivable 19,478 9,014 10,465 116%
Other Current Assets 58,000 138 57,862 42051%
Total Current Assets 223,297 44,796 178,502 398%
Fixed Assets (net of depreciation) 524 294 230 78%
TOTAL ASSETS 223,821 45,090 178,732 396%
LIABILITIES AND NET ASSETS
Liabilities
Accounts Payable 3,725 946 2,779 294%
Other Current Liabilities 12,536 8,081 4,456 55%
Total Liabilities 16,262 9,026 7,235 80%
Net Assets
Unrestricted Net Assets 45,107 26,916 18,191 68%
Tem porarily Restricted Net Assets 162,453 9,147 153,305 1676%
Total Net Assets 207,560 36,063 171,496 476%
TOTAL LIABILITIES AND NET ASSETS 223,821 45,090 178,732 396%
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Statement of Activities Basic financial report showing support and revenue, expenses, and
the net effect on total assets for a given period. This is an historical
record of activity for a given time period.
Similar to Income Statement or Profit & Loss Statement of a for-profit
business, except that activity is separated based on its net asset
classification: unrestricted, temporarily restricted, and permanently
restricted. The unrestricted column of this report is reported on Part
VIII, “Statement of Revenue” and Part IX, “Statement of Functional
Expenses” of the new IRS Form 990.
This report is required in order for your audited financial statements to
be prepared in accordance with generally accepted accounting
standards (GAAP).
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Unrestricted Tem p Restricted Total
Support and Revenue
Mem bership Dues 58,180 0 58,180
Conference / Training Revenue 79,201 0 79,201
Program Fees 14,368 0 14,368
Foundations 0 200,832 200,832
All other sources 17,336 0 17,336
Net assets released from restrictions 47,527 (47,527) 0
Total Support and Revenue 216,611 153,305 369,916
Expenses
Payroll Expenses 113,898 0 113,898
Contracted Services 40,842 0 40,842
Travel 8,344 0 8,344
Occupancy 7,513 0 7,513
All other expenses 27,823 0 27,823
Total Expenses 198,420 0 198,420
Increase (decrease) in net assets 18,191 153,305 171,496
Net assets at beginning of year 26,916 9,147 36,063
Net assets at end of year 45,107 162,453 207,560
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Revenue
Expenses
Change in Net
Assets
Assets
minus
equals
minus
equals
Liabilities
Net Assets
Statement of Activities Statement of Financial Position
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Budget vs. Actual Report comparing actual expenses for a given period to
the budget for that same period. The actual expense column of this report is basically the same as the “Unrestricted” column on the Statement of Activities.
Statement of Functional Expenses Basic report listing expenses by function: programs
services, fundraising, and management and general (administration). This report is required on IRS Form 990 and is commonly included in audited financial statements.
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Actual Budget $ Variance % Variance
Support and Revenue
Mem bership Dues 58,180 48,500 9,680 20.0%
Conference / Training Revenue 79,201 49,000 30,201 61.6%
Program Fees 14,368 13,000 1,368 10.5%
Foundations 0 69,500 (69,500) -100.0%
All other sources 17,336 6,750 10,586 156.8%
Net assets released from restrictions 47,527 60,000 (12,473) -20.8%
Total Support and Revenue 216,611 246,750 (30,139) -12.2%
Expenses
Payroll Expenses 113,898 107,958 5,940 5.5%
Contracted Services 40,842 49,300 (8,458) -17.2%
Travel 8,344 21,650 (13,306) -61.5%
Occupancy 7,513 6,216 1,297 20.9%
All other expenses 27,823 45,170 (17,347) -38.4%
Total Expenses 198,420 230,294 (31,874) -13.8%
Increase (decrease) in net assets 18,191 16,456 1,735 10.5%
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Supporting Services
Program Managem ent
Total Services & General Fundraising
Functional expenses
Salaries and w ages 99,139 90,023 6,389 2,726
Benefits and taxes 14,759 14,174 417 168
Contracted services 1,050 939 90 21
Supplies 2,566 2,427 133 6
Telephone 2,314 2,170 118 27
Postage and shipping 1,957 1,901 6 50
Occupancy 7,638 7,015 464 159
Equipm ent rental and m aintenance 328 309 15 4
Printing and publications 7,954 7,940 0 13
Travel 6,324 6,285 35 4
Conferences, conventions & m eetings 41,035 41,035 0 0
Depreciation expense 294 269 17 8
Other expenses 13,063 12,855 168 40
Total functional expenses 198,420 187,341 7,852 3,226
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Jacki Frank, CPA, Shareholder
Anderson ZurMuehlen & Co., P.C.
Helena Office
406.442.1040 office
