frankie lemmon foundation, inc. and …...cash and equivalents - end of year $ 200,358 frankie...

FRANKIE LEMMON FOUNDATION, INC. AND

FRANKIE LEMMON SCHOOL ANDDEVELOPMENTAL CENTER, INC.

Raleigh, North Carolina

CONSOLIDATEDAUDITED FINANCIAL STATEMENTSAND ADDITIONAL INFORMATION

FOR THE YEAR ENDED JUNE 30, 2015

CONTENTS

PAGES

Independent Auditor's Report 2-3

Financial Statements - Exhibits:

"A" Consolidated Statement Financial Position 4

"B" Consolidated Statement of Activities and Changes in Net Assets 5

"C" Consolidated Statement of Cash Flows 6

"D" Consolidated Statement of Functional Expenses 7

Notes to Consolidated Financial Statements 8-15

Additional Information 16

Supplemental Consolidating Financial Statements – Statements:

"1" Consolidating Statement of Financial Position 17

"2" Consolidating Statement of Activities and Changes in Net Assets 18

"3" Consolidating Statement of Cash Flows 19

"4" Consolidating Statement of Functional Expenses 20

INDEPENDENT AUDITOR’S REPORT

Page 1 of 2

To the Board of Directors ofFrankie Lemmon Foundation, Inc. and Frankie Lemmon School and Developmental Center, Inc.Raleigh, North Carolina

We have audited the accompanying consolidated financial statements of Frankie Lemmon Foundation, Inc., (a nonprofit organization) and Frankie Lemmon School and Developmental Center, Inc., (a nonprofit organization), which comprise the consolidated statement of financial position as of June 30, 2015, and the related consolidated statements of activities and changes in net assets, cash flows, and functional expenses for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated 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 consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements.

3

Page 2 of 2

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Frankie Lemmon Foundation, Inc. and Frankie Lemmon School and Developmental Center, Inc., as of June 30, 2015, and the changes in their net assets and their 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 consolidated financial statements as a whole. The consolidating information on pages 17 through 20 is presented for purposes of additional analysis of the consolidated financial statements rather than to present the financial position, results of operations, cash flows, and functional expenses of the individual companies, and it is not a required part of the consolidated 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 consolidated financial statements. The consolidating information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated 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 consolidated financial statements as a whole.

Chapel Hill, North CarolinaFebruary 29, 2016

4

EXHIBIT A

CURRENT ASSETS:

Cash and equivalents 200,358$

Investments 3,021,529

Accounts receivable 316,578

Promises to give, net 8,000

Inventory 4,625

Prepaid expenses 21,329

TOTAL CURRENT ASSETS 3,572,419

PROPERTY AND EQUIPMENT:

Furniture and fixtures 51,290

Leasehold improvements 9,358

Office equipment 13,804

Less: accumulated depreciation (55,958)

NET PROPERTY AND EQUIPMENT 18,494

TOTAL ASSETS 3,590,913$

CURRENT LIABILITIES:

Accounts payable and accrued expenses 78,406$

Accrued salaries and wages 1,015

TOTAL CURRENT LIABILITIES 79,421

NET ASSETS:

Unrestricted net assets:

Board designated operating reserves 1,500,000

Undesignated 1,593,069

Total unrestricted 3,093,069

Temporarily restricted 404,599

Permanently restricted 13,824

TOTAL NET ASSETS 3,511,492

TOTAL LIABILITIES AND NET ASSETS 3,590,913$

For the Year Ended June 30, 2015

ASSETS

LIABILITIES AND NET ASSETS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION


FRANKIE LEMMON SCHOOL AND DEVELOPMENTAL CENTER, INC.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

5

EXHIBIT B

Temporarily Permanently

Unrestricted Restricted Restricted Totals

SUPPORT AND REVENUE:

Contributions 284,996$ 38,500$ -$ 323,496$

Special events:

Contributions 1,260,036 - - 1,260,036

Event income 233,146 - - 233,146

Less: direct expenses (327,001) - - (327,001)

Special events income, net 1,166,181 - - 1,166,181

Satellite program income 324,789 - - 324,789

Wake County Public Schools 260,879 - - 260,879

Interest and dividends 126,625 - - 126,625

Realized and unrealized loss on investments (111,552) - - (111,552)

Other income 15,586 - - 15,586

2,067,504 38,500 - 2,106,004

Net assets released from restrictions 25,500 (25,500) - -

TOTAL SUPPORT AND REVENUE 2,093,004 13,000 - 2,106,004

EXPENSES:

Program 1,696,513 - - 1,696,513

Management and general 467,967 - - 467,967

Fundraising 250,198 - - 250,198

TOTAL FUNCTIONAL EXPENSES 2,414,678 - - 2,414,678

Bad debt expense 3,000 - - 3,000

TOTAL EXPENSES 2,417,678 - - 2,417,678

CHANGES IN NET ASSETS (324,674) 13,000 - (311,674)

NET ASSETS - BEGINNING OF PERIOD 3,417,743 391,599 13,824 3,823,166

NET ASSETS - END OF PERIOD 3,093,069$ 404,599$ 13,824$ 3,511,492$




CONSOLIDATED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS


6

EXHIBIT C

CASH FLOWS FROM OPERATING ACTIVITIES

Changes in net assets (311,674)$

Adjustments to reconcile changes in net assets to net cash

used in operating activities:

Depreciation and amortization 8,198

Realized and unrealized loss on investments 111,552

Changes in assets and liabilities:

Accounts receivable (13,166)

Promises to give (5,266)

Inventory 1,570

Prepaid expenses (19,647)

Accounts payable and accrued expenses 26,682

Accrued salaries and wages 1,015

NET CASH USED IN OPERATING ACTIVITIES (200,736)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment (3,590)

Sale of investments 4,842,390

Purchases of investments (4,915,188)

NET CASH USED IN INVESTING ACTIVITIES (76,388)

NET DECREASE IN CASH AND EQUIVALENTS (277,124)

CASH AND EQUIVALENTS - BEGINNING OF YEAR 477,482

CASH AND EQUIVALENTS - END OF YEAR 200,358$



CONSOLIDATED STATEMENT OF CASH FLOWS



7

EXHIBIT D


Program Management 2015

Services and General Fundraising Total

Salaries 625,664$ 251,522$ 128,011$ 1,005,197$

Rent 647,451 27,206 - 674,657

Special event expenses - - 327,001 327,001

Grants 165,000 - - 165,000

Subcontractors 77,281 9,006 17,702 103,989

Payroll taxes 51,376 20,599 10,419 82,394

Insurance 44,010 27,324 - 71,334

Bank fees - 32,566 38,168 70,734

Office expenses 10,771 17,050 20,179 48,000

Employee benefits 19,805 15,281 12,416 47,502

Professional fees 5,731 33,449 3,001 42,181

Travel 3,954 9,682 8,959 22,595

Materials and supplies 9,042 2,918 8,683 20,643

School lunches 12,631 - - 12,631

Summer school program 11,661 - - 11,661

Miscellaneous - 9,387 - 9,387

Educational supplies 6,556 1,853 - 8,409

Depreciation and amortization 3,626 1,912 2,660 8,198

Training 145 7,701 - 7,846

Bad debt expense - 3,000 - 3,000

Repairs and maintenance 1,567 443 - 2,010

Dues and subscriptions 242 68 - 310

Total expenses 1,696,513 470,967 577,199 2,744,679

Less expense included with revenues

on the statement of activities - - (327,001) (327,001)

Less bad debt expense - (3,000) - (3,000)

Total functional expenses 1,696,513$ 467,967$ 250,198$ 2,414,678$



CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES


8FRANKIE LEMMON FOUNDATION, INC. AND


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Page 1 of 8

ORGANIZATION

Frankie Lemmon School and Developmental Center, Inc. (the “School”) is a nonprofit corporation that trains and educates children with developmental disabilities. The School provides life-changing education and support that leads to successful participation in family and community life and achievement of the child’s full potential. Frankie Lemmon Foundation, Inc. (the “Foundation”) is a nonprofit corporation organized to provide support to the School.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

A. Basis of Accounting.

The consolidated financial statements include the accounts of the School and Foundation(hereafter, the “Organization”), after elimination of all intercompany accounts and transactions.The consolidated financial statements are presented on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require the use of certain estimates made by the Organization’s management. Accordingly, revenues are recognized when earned, and expenses are recognized when the obligation is incurred.

The Organization reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarilyrestricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

B. Cash and Equivalents.

Cash and equivalents consist of monies on deposit at financial institutions, and other highly liquid investments with maturities of three months or less. At times, the Organization places deposits with high-quality financial institutions that may be in excess of federally insured amounts. The Organization has not experienced any financial loss related to such deposits.

C. Investments.

Investments in marketable securities are stated at fair value based on readily available published fair market values. The resulting unrealized gain or loss is reflected in the statement of activities.

D. Accounts Receivable.

Accounts receivable are carried at net realizable value. The Organization provides an allowance for doubtful accounts equal to the estimated losses that are expected to be incurred during collection. The allowance is based on historical collection experience and a review by management of the current status of the existing receivables. As of June 30, 2015, all receivables were deemed collectible by management.




Page 2 of 8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (CONTINUED)

E. Promises to Give.

Unconditional promises to give are recognized as support and assets in the period received. Conditional promises to give are recognized when the conditions on which they depend are substantially met. Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows.

The Organization provides an allowance for uncollectible accounts equal to the estimated losses that are expected to be incurred in collection. The allowance is based on historical collection experience and a review by management of the current status of the existing promises to give. The allowance totaled $3,000 at June 30, 2015.

F. Inventory.

Inventory is stated at the lower of cost or market, determined by the first-in, first-out method. Inventory consists of various items such as wine and glassware.

G. Property and Equipment.

Property and equipment are stated at cost for purchased assets and at fair value on the date of the gift for donated assets. Property and equipment are capitalized if the life is expected to be greater than one year and if the cost exceeds $1,000. Depreciation is calculated using the straight-line method over estimated lives of 5 to 15 years.

H. Revenue Recognition.

Revenue from grants which are deemed to be unconditional contributions is recognized when the grantor makes a promise to give to the Organization. Contributions that are restricted by the grantor are reported as increases in temporarily restricted net assets. Conditional grant revenues are recognized when the conditions upon which they depend are substantially met.

I. Net Assets.

Unrestricted - Resources of the Organization that are not restricted by donors or grantors as to use or purpose. These resources include amounts generated from operations, undesignated gifts, and investments in property and equipment.

Temporarily Restricted - Resources that carry a donor-imposed restriction that requires the Organization to use or expend the donated assets as specified. The restrictions are satisfied by the passage of time or by actions of the Organization.




Page 3 of 8

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (CONTINUED)

I. Net Assets (Continued).

Permanently Restricted - Resources that carry a donor-imposed restriction that stipulates that donated assets be maintained in perpetuity, but may permit the Organization to use or expend part or all of the income derived from the donated assets.

J. Income Taxes.

The Foundation and School are exempt organizations under Section 501(c)(3) of the Internal Revenue Code and have been classified as other than private foundations. The Organization reports any interest and penalties for uncertain tax positions as miscellaneous expense.

K. Estimates.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

INVESTMENTS

The Organization’s investments at June 30, 2015, are as follows:

Fair Value Cost

Mutual funds 1,606,390$ 1,680,503$

Exchange traded funds 1,293,606 1,282,545

Alternative funds 121,533 104,842

3,021,529$ 3,067,890$

2015

As of June 30, 2015, the total accumulated market depreciation was $46,361. Realized gains of $343,937, unrealized losses of ($455,489), and investment income of $126,625 were reported as of June 30, 2015. Investment fees of $31,544 are recorded on the statement of activities as of June 30, 2015.




Page 4 of 8

FAIR VALUE OF ASSETS

U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Organization. Unobservable inputs reflect the Organization’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 - Quoted prices are available in active markets for identical assets as of the reporting date.

Level 2 - Valuations based on inputs other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, are valued at prices for similar assets or liabilities in markets that are not active, or determined through the use of models or other valuation methodologies.

Level 3 - Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset. Fair value for these assets is determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the asset was acquired, the nature of the asset, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance and financing transactions subsequent to the acquisition of the asset. The inputs into the determination of fair value require significant management judgment. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these assets existed.

There were no changes during the year ending June 30, 2015, to the Organization’s valuation techniques used to measure asset values on a recurring basis.

The Organization’s investments are classified as Level 1 or Level 2. No assets or liabilities were classified as Level 3.




Page 5 of 8

FAIR VALUE OF ASSETS (CONTINUED)

The following table summarizes the assets of the Organization for which fair value is determined on a recurring basis as of June 30, 2015. As required by U.S. GAAP, the assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Level 1 Level 2 Level 3 Total

Mutual Funds:

Multi-alternative 235,708$ -$ -$ 235,708$

Foreign large blend 511,883 - - 511,883

Intermediate term bond 174,692 - - 174,692

Nontraditional blend 72,952 - - 72,952

Commodities broad basket 150,350 - - 150,350

Multisector bond 188,141 - - 188,141

Interval fund 150,144 - - 150,144

Long-term reinsurance blend 122,520 - - 122,520

Exchange Traded Funds:

Foreign large blend 186,089 - - 186,089

Small blend 104,882 - - 104,882

Real estate 111,371 - - 111,371

Large blend 743,736 - - 743,736

Mid-cap blend 147,528 - - 147,528

Alternative - 121,533 - 121,533

2,899,996$ 121,533$ -$ 3,021,529$

BOARD DESIGNATED NET ASSETS

The Organization has designated net assets for future operating expenses in the amount of $1,500,000 as of June 30, 2015.

TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets for the year ended June 30, 2015, consists of:

Capital fund 259,418$

Playground 91,729

Operational 50,000

Other 3,452

404,599$




Page 6 of 8

PERMANENTLY RESTRICTED NET ASSETS

Permanently restricted net assets totaling $13,824 at June 30, 2015, consists of cash endowments maintained in investments for the purposes of student activities.

RETIREMENT PLAN

The Organization has a SIMPLE IRA retirement plan which allows employees to defer a portion of their gross income annually. Employees must have worked 60 days prior to enrollment on either January 1 or July 1 to be eligible to participate in the plan. The Organization makes a non-elective contribution of 2% of the employees’ salary. The Organization contributed $17,646 to employee accounts for the year ended June 30, 2015.

OPERATING LEASE

The Organization leases office equipment and a postage meter under a non-cancelable operating leases with monthly payments of $464 and expiring January 2018 and quarterly payments of $115 and expiring June 2018. Rent expense under the lease agreements totaled $6,615 for the year endedJune 30, 2015. In May 2015, the Foundation entered into a 15-year building lease in Raleigh, North Carolina commencing on January 1, 2016, and expiring December 31, 2030. Monthly payments total $27,083 for the first year of the agreement. Annual rent increases of 1.75% will commence the first day of the second year of the agreement. There was no rent expense incurred under this agreement for the year ended June 30, 2015.

Minimum lease payments are as follows:

Year Ending June 30

2016 168,531$

2017 332,979

2018 334,896

2019 339,419

2020 345,359

Thereafter 4,011,244

Total minimum lease payments 5,532,428$

The Organization leases office and storage under a month-to-month operating lease at approximately $2,000 a month. The Organization may vacate the premise without penalty with a 30-day notice. Rent expense under the lease agreement for the year ended June 30, 2015, totaled $23,400.

The Organization supports students in two locations, Hayes Barton Baptist Church and Methodist Home for Children’s Jordan Child and Family Enrichment Center. The accompanying financial statements do not recognize any amount related to the usage of space or equipment provided by Hayes Barton Baptist Church, the value of which is not reasonably determinable. For the year ended June 30, 2015, rent expense includes $644,642 to provide students an inclusive setting at the Methodist Home for Children’s Jordan Child and Family Enrichment Center. This includes the cost of salaries, utilities, food and administrative costs for the school year.




Page 7 of 8

COMMITMENTS AND CONTINGENCIES

In June 2015, the Foundation obtained approval of interim funding of an equipment term loan from a financial institution to fund building up-fit costs up to $1,000,000. The agreement enabled the Foundation to draw funds on equipment and then convert the outstanding balance to a fixed loan at a later date. During the interim funding period, the interest rate on the outstanding balance will be LIBOR plus 2.75%. There were no draws on the loan at June 30, 2015.

The loan was converted to a 60 month fixed loan on February 1, 2016, in the amount of $130,281. Interest on the outstanding balance is 3.3%. Monthly principal and interest payments total $2,358.

DONATED SERVICES

The Organization recognizes donated services that create or enhance nonfinancial assets or that require specialized skills, and would typically need to be purchased if not provided by donation. No services meeting these requirements for recognition in the financial statements were received during the year ended June 30, 2015. However, numerous volunteers have donated significant amounts of their time and services to the Organization for program and supporting activities.

FUNCTIONAL ALLOCATION OF EXPENSES

The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited based on management’s estimates.

RELATED ORGANIZATION

During 1983, the Organization formed a separate nonprofit corporation, the Sunshine Development Corporation (the “Corporation”), to act as the sponsor of a Housing and Urban Development financed housing project. The housing project is to provide apartment housing units for elderly or handicapped residents with low or moderate income. The Organization does not receive income or pay any expenses for the Corporation.

INCOME TAXES

The Organization may recognize the tax benefit from a tax position only if it is more likely than not the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. Management has analyzed its tax positions taken for filings with the Internal Revenue Service. Management believes that the Organization’s income tax filing positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse affect on the Organization's financial condition, results of operations, or cash flows. Accordingly, the Organization has not recorded any tax assets or liabilities, or related accruals for interest and penalties, for uncertain income tax positions for the year ended June 30, 2015.




Page 8 of 8

SUBSEQUENT EVENTS

In September 2015, the Organization obtained a $1,000,000 line of credit collateralized by unrestricted investments maintained with CapFinancial Securities. Interest will accrue monthly on the outstanding balance at a rate equal to LIBOR.

Management has evaluated subsequent events for recognition or disclosure through February 29, 2016, the date the financial statements were available to be issued. Management did not identify any additional events that occurred subsequent to year-end that require disclosure in the financialstatements.

16

ADDITIONAL INFORMATION


17

STATEMENT 1

Foundation School Eliminations Total

CURRENT ASSETS:

Cash and equivalents 163,164$ 37,194$ -$ 200,358$

Investments 3,021,529 - - 3,021,529

Accounts receivable 317,154 2,997 (3,573) 316,578

Promises to give, net 8000 - - 8,000

Inventory 4,625 - - 4,625

Prepaid expenses 4,683 16,646 - 21,329

TOTAL CURRENT ASSETS 3,519,155 56,837 (3,573) 3,572,419

PROPERTY AND EQUIPMENT:

Furniture and fixtures 5,885 45,405 - 51,290

Leasehold improvements 5,679 3,679 - 9,358

Office equipment 11,090 2,714 - 13,804

Less: accumulated depreciation (14,608) (41,350) - (55,958)

- -

NET PROPERTY AND EQUIPMENT 8,046 10,448 - 18,494

- - -

TOTAL ASSETS 3,527,201$ 67,285$ (3,573)$ 3,590,913$



CONSOLIDATING STATEMENT OF FINANCIAL POSITION


ASSETS


See Independent Auditor's Report.

CURRENT LIABILITIES:

Accounts payable and accrued expenses 8,583$ 73,396$ (3,573)$ 78,406$

Accrued salaries and wages 115 900 - 1,015

TOTAL CURRENT LIABILITIES 8,698 74,296 (3,573) 79,421

NET ASSETS:

Unrestricted net assets:

Board designated operating reserves 1,500,000 - - 1,500,000

Undesignated 1,611,300 (18,231) - 1,593,069

Total unrestricted 3,111,300 (18,231) - 3,093,069

Temporarily restricted 393,379 11,220 - 404,599

Permanently restricted 13,824 - - 13,824

TOTAL NET ASSETS 3,518,503 (7,011) - 3,511,492

TOTAL LIABILITIES AND NET ASSETS 3,527,201$ 67,285$ (3,573)$ 3,590,913$



18

STATEMENT 2

Temporarily Permanently Temporarily Eliminations

Unrestricted Restricted Restricted Subtotal Unrestricted Restricted Subtotal Entries Total

SUPPORT AND REVENUE:

Contributions 284,996$ 38,500$ -$ 323,496$ -$ -$ -$ -$ 323,496$

Income from Foundation - - - - 884,200 - 884,200 (884,200) -

Special events:

Contributions 1,260,036 - - 1,260,036 - - - - 1,260,036

Event income 233,146 - - 233,146 - - - - 233,146

Less: direct expenses (327,001) - - (327,001) - - - - (327,001)

Special events income, net 1,166,181 - - 1,166,181 - - - - 1,166,181

Satellite program income - - - - 324,789 - 324,789 - 324,789

Wake County Public Schools - - - - 260,879 - 260,879 - 260,879

Interest and dividends 126,625 - - 126,625 - - - - 126,625

Realized and unrealized loss on investments (111,552) - - (111,552) - - - - (111,552)

Other income 74 - - 74 15,512 - 15,512 - 15,586

1,466,324 38,500 - 1,504,824 1,485,380 - 1,485,380 (884,200) 2,106,004

Net assets released from restrictions 25,500 (25,500) - - - - - - -

TOTAL SUPPORT AND REVENUE 1,491,824 13,000 - 1,504,824 1,485,380 - 1,485,380 (884,200) 2,106,004

EXPENSES:

Program 1,212,365 - - 1,212,365 1,368,348 - 1,368,348 (884,200) 1,696,513

Management and general 269,371 - - 269,371 198,596 - 198,596 - 467,967

Fundraising 250,198 - - 250,198 - - - - 250,198

TOTAL FUNCTIONAL EXPENSES 1,731,934 - - 1,731,934 1,566,944 - 1,566,944 (884,200) 2,414,678

Bad debt expense 3,000 - - 3,000 - - - - 3,000

TOTAL EXPENSES 1,734,934 - - 1,734,934 1,566,944 - 1,566,944 (884,200) 2,417,678

CHANGES IN NET ASSETS (243,110) 13,000 - (230,110) (81,564) - (81,564) - (311,674)

NET ASSETS - BEGINNING OF PERIOD 3,354,410 380,379 13,824 3,748,613 63,333 11,220 74,553 - 3,823,166

NET ASSETS - END OF PERIOD 3,111,300$ 393,379$ 13,824$ 3,518,503$ (18,231)$ 11,220$ (7,011)$ -$ 3,511,492$

Foundation School



CONSOLIDATING STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS



19

STATEMENT 3

Foundation School Eliminations Total

CASH FLOWS FROM OPERATING ACTIVITIES

Changes in net assets (230,110)$ (81,564)$ -$ (311,674)$

Adjustments to reconcile changes in net assets to net cash

used in operating activities:

Depreciation and amortization 3,547 4,651 - 8,198

Realized and unrealized loss on investments 111,552 - - 111,552

Changes in assets and liabilities:

Accounts receivable (13,963) (2,776) 3,573 (13,166)

Promises to give, net (5,266) - - (5,266)

Inventory 1,570 - - 1,570

Prepaid expenses (3,001) (16,646) - (19,647)

Accounts payable and accrued expenses (1,488) 31,743 (3,573) 26,682

Accrued salaries and wages 115 900 - 1,015

NET CASH USED IN OPERATING ACTIVITIES (137,044) (63,692) - (200,736)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment (1,029) (2,561) - (3,590)

Sale of investments 4,842,390 - - 4,842,390

Purchases of investments (4,915,188) - - (4,915,188)

NET CASH USED IN INVESTING ACTIVITIES (73,827) (2,561) - (76,388)

NET DECREASE IN CASH AND EQUIVALENTS (210,871) (66,253) - (277,124)

CASH AND EQUIVALENTS - BEGINNING OF YEAR 374,035 103,447 - 477,482

CASH AND EQUIVALENTS - END OF YEAR 163,164$ 37,194$ -$ 200,358$



CONSOLIDATING STATEMENT OF CASH FLOWS



20

STATEMENT 4

Program Management Program Management

Services and General Fundraising Subtotal Services and General Subtotal Eliminations Total

Salaries 135,542$ 112,950$ 128,011$ 376,503$ 490,122$ 138,572$ 628,694$ -$ 1,005,197$

Rent - 26,412 - 26,412 647,451 794 648,245 - 674,657

Special event expenses - - 327,001 327,001 - - - - 327,001

Grants 165,000 - - 165,000 - - - - 165,000

Subcontractors - 9,006 17,702 26,708 77,281 - 77,281 - 103,989

Payroll taxes 11,032 9,193 10,419 30,644 40,344 11,406 51,750 - 82,394

Insurance - - - - 44,010 27,324 71,334 - 71,334

Bank fees - 32,158 38,168 70,326 - 408 408 - 70,734

Office expenses 3,445 14,979 20,179 38,603 7,326 2,071 9,397 - 48,000

Employee benefits 13,146 10,955 12,416 36,517 6,659 4,326 10,985 - 47,502

Professional fees - 31,829 3,001 34,830 5,731 1,620 7,351 - 42,181

Travel - 8,564 8,959 17,523 3,954 1,118 5,072 - 22,595

Materials and supplies - 362 8,683 9,045 9,042 2,556 11,598 - 20,643

School lunches - - - - 12,631 - 12,631 - 12,631

Summer school program - - - - 11,661 - 11,661 - 11,661

Miscellaneous - 4,657 - 4,657 - 4,730 4,730 - 9,387

Educational supplies - - - - 6,556 1,853 8,409 - 8,409

Depreciation and amortization - 887 2,660 3,547 3,626 1,025 4,651 - 8,198

Training - 7,419 - 7,419 145 282 427 - 7,846

Bad debt expense - 3,000 - 3,000 - - - - 3,000

Repairs and maintenance - - - - 1,567 443 2,010 - 2,010

Dues and subscriptions - - - - 242 68 310 - 310

Transfer to School 884,200 - - 884,200 - - - (884,200) -

Total expenses 1,212,365 272,371 577,199 2,061,935 1,368,348 198,596 1,566,944 (884,200) 2,744,679

Less expense included with revenues

on the statement of activities - - (327,001) (327,001) - - - - (327,001)

Less bad debt expenses - (3,000) - (3,000) - - - - (3,000)

Total functional expenses 1,212,365$ 269,371$ 250,198$ 1,731,934$ 1,368,348$ 198,596$ 1,566,944$ (884,200)$ 2,414,678$

Foundation School



CONSOLIDATING STATEMENT OF FUNCTIONAL EXPENSES



frankie lemmon foundation, inc. and …...cash and equivalents - end of year $ 200,358 frankie...

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