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Report of Independent Auditors and Financial Statements with OMB Circular A-133 Audit Reports and Supplementary Information

June 30, 2013 and 2012

CONTENTS

PAGE

REPORTOFINDEPENDENTAUDITORS.......................................................................................................................................................................................1

FINANCIALSTATEMENTS

Statementsoffinancialposition.................................................................................................................................................................................................3

Statementsofactivities..................................................................................................................................................................................................................4

Statementsoffunctionalexpenses............................................................................................................................................................................................6

Statementsofcashflows...............................................................................................................................................................................................................8

Notestofinancialstatements......................................................................................................................................................................................................9

SUPPLEMENTARYINFORMATION

Scheduleofexpendituresoffederalawards......................................................................................................................................................................22

Notestoscheduleofexpendituresoffederalawards....................................................................................................................................................23

REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIALREPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS......................................................................................................24

REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJORFEDERALPROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCE..............................................................................................................................................................................26

SCHEDULEOFFINDINGSANDQUESTIONEDCOSTS..........................................................................................................................................................28

REPORTOFINDEPENDENTAUDITORSTotheBoardofDirectorsUnitedWayoftheBayArea

ReportontheFinancialStatements

We have audited the accompanying financial statements of UnitedWay of the Bay Area (“UWBA”) whichcomprise the statements of financial position as of June30, 2013 and 2012 and the related statements ofactivities,functionalexpenses,andcashflowsfortheyearsthenended,andtherelatednotestothefinancialstatements.

Management’sResponsibilityfortheFinancialStatements

Management is responsible for the preparation and fair presentation of these financial statements inaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthedesign, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free frommaterialmisstatement, whether due to fraud orerror.

Auditor’sResponsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudits.WeconductedourauditsinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthestandards applicable to financial audits contained in Government Auditing Standards, issued by theComptrollerGeneraloftheUnitedStates.Thosestandardsrequirethatweplanandperformtheauditstoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthose risk assessments, the auditor considers internal control relevant to UWBA’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances,butnot for thepurposeof expressinganopinionon theeffectivenessofUWBA’s internalcontrol.Accordingly,weexpressnosuchopinion.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofsignificantaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionofUnitedWayoftheBayAreaasofJune30,2013and2012,andthechangesinitsnetassetsanditscashflowsfortheyearsthenendedinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

OtherMatters

ReportonSupplementaryInformation

Ourauditwasconductedforthepurposeof forminganopiniononthefinancialstatementsasawhole.ThescheduleofexpendituresoffederalawardsasrequiredbyU.S.OfficeofManagementandBudgetCircularA‐133,AuditsofStates,LocalGovernments,andNon‐ProfitOrganizations,ispresentedforpurposesofadditionalanalysisandisnotarequiredpartofthefinancialstatements.Suchinformationistheresponsibilityofmanagementandwas derived from and relates directly to the underlying accounting and other records used to prepare thefinancialstatements.Theinformationhasbeensubjectedtotheauditingproceduresappliedintheauditofthefinancial statementsandcertainadditionalprocedures, includingcomparingandreconcilingsuch informationdirectly to the underlying accounting and other records used to prepare the financial statements or to thefinancial statements themselves, and other additional procedures in accordance with auditing standardsgenerallyacceptedintheUnitedStatesofAmerica.Inouropiniontheinformationisfairlystated,inallmaterialrespects,inrelationtothefinancialstatementsasawhole.

OtherReportingRequiredbyGovernmentAuditingStandards

In accordance with Government Auditing Standards, we have also issued our report dated November7,2013, on our consideration of UWBA’s internal control over financial reporting and on our tests of itscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrantagreementsandothermatters.Thepurposeofthatreportistodescribethescopeofourtestingofinternalcontroloverfinancialreportingand compliance and the results of that testing, and not to provide an opinion on internal control overfinancialreportingoroncompliance.Thatreport isan integralpartofanauditperformedinaccordancewithGovernmentAuditingStandards in consideringUWBA’s internal controlover financial reportingandcompliance.SanFrancisco,CaliforniaNovember7,2013

FINANCIALSTATEMENTS

_________

UNITEDWAYOFTHEBAYAREA

Seeaccompanyingnotes.Page3

STATEMENTSOFFINANCIALPOSITIONJune30,2013and2012

2013 2012

ASSETS

Cashandcashequivalents 2,298,055$ 1,528,299$Pledgesreceivable,netofprovisionforuncollectiblepledges

of$631,000and$558,000,atJune30,2013and2012,respectively 5,564,037 6,918,831Grantsreceivable,netofdiscount 4,074,756 2,092,510Investments 11,630,889 11,594,329Prepaidsandotherreceivables 657,107 313,063Furniture,equipment,andleaseholdimprovements,net 1,108,675 241,864

Totalassets 25,333,519$ 22,688,896$

LIABILITIESANDNETASSETS

LIABILITIESDonordesignationspayable 3,121,545$ 2,908,065$Allocationspayable ‐ 152,500Operatingpayablesandaccruals 3,995,412 1,587,392Accruedvacationandrelatedcosts 378,862 477,019Deferredrent 398,927 76,914Accruedpensioncosts 3,158,730 7,058,415

Totalliabilities 11,053,476 12,260,305

NETASSETSUnrestricted

Undesignated 9,072,183 9,385,233Boarddesignated 3,861,279 3,809,890Pensionliabilityinexcessofintangiblepensionassets (4,635,018) (7,945,650)

Totalunrestrictednetassets 8,298,444 5,249,473

Temporarilyrestricted 2,091,624 1,290,143Permanentlyrestricted 3,889,975 3,888,975

Totalnetassets 14,280,043 10,428,591

Totalliabilitiesandnetassets 25,333,519$ 22,688,896$



STATEMENTOFACTIVITIESFortheYearEndedJune30,2013

Temporarily PermanentlyUnrestricted Restricted Restricted Total

PUBLICSUPPORTANDREVENUEPublicSupport:

Grosscampaignresults 29,645,436$ 1,318,618$ 1,000$ 30,965,054$Lessdonordesignations (21,894,270) ‐ ‐ (21,894,270)

Campaignrevenue 7,751,166 1,318,618 1,000 9,070,784

Lessprovisionforuncollectiblepledges (631,000) ‐ ‐ (631,000)

Netcampaignrevenue 7,120,166 1,318,618 1,000 8,439,784

Grants 72,039 6,055,332 ‐ 6,127,371Miscellaneouscontributions 823,027 1,450,433 ‐ 2,273,460Plannedgiving 63,784 25,411 ‐ 89,195Netassetsreleasedfromrestrictionsandreclassifications 8,596,769 (8,596,769) ‐ ‐

Totalpublicsupport 16,675,785 253,025 1,000 16,929,810

Servicefees 391,819 ‐ ‐ 391,819Investmentincome,net 190,852 96,559 ‐ 287,411Netrealizedandunrealizedgainsoninvestments 348,484 423,397 ‐ 771,881Otherincome 5,271 28,500 ‐ 33,771

Totalpublicsupportandrevenue 17,612,211 801,481 1,000 18,414,692

ALLOCATIONSANDEXPENSESProgramservices:

Grossfundsawarded/allocatedtoagencies 19,567,525 ‐ ‐ 19,567,5252‐1‐1initiative 1,092,042 ‐ ‐ 1,092,042SparkPointinitiative 4,408,641 ‐ ‐ 4,408,641Othercommunityservices 6,649,269 ‐ ‐ 6,649,269Communitycapacitybuilding 1,044,677 ‐ ‐ 1,044,677Laborcommunityservices 457,128 ‐ ‐ 457,128Donordesignations (21,894,270) ‐ ‐ (21,894,270)

‐Totalprogramservices 11,325,012 ‐ ‐ 11,325,012

Supportservices:Managementandgeneral 3,595,876 ‐ ‐ 3,595,876Fundraising 2,952,984 ‐ ‐ 2,952,984

Totalsupportservices 6,548,860 ‐ ‐ 6,548,860

Totalallocationsandexpenses 17,873,872 ‐ ‐ 17,873,872

CHANGEINNETASSETSBEFOREPENSIONRELATEDCHANGES (261,661) 801,481 1,000 540,820

PENSIONRELATEDCHANGESOTHERTHANNETPERIODICPENSIONCOST 3,310,632 ‐ ‐ 3,310,632

CHANGEINNETASSETS 3,048,971 801,481 1,000 3,851,452

NETASSETS,beginningofyear 5,249,473 1,290,143 3,888,975 10,428,591

NETASSETS,endofyear 8,298,444$ 2,091,624$ 3,889,975$ 14,280,043$



STATEMENTOFACTIVITIESFortheYearEndedJune30,2012

Temporarily PermanentlyUnrestricted Restricted Restricted Total

PUBLICSUPPORTANDREVENUEPublicSupport:

Grosscampaignresults 28,044,781$ 1,196,360$ ‐$ 29,241,141$Lessdonordesignations (18,793,932) ‐ ‐ (18,793,932)

Campaignrevenue 9,250,849 1,196,360 ‐ 10,447,209

Lessprovisionforuncollectiblepledges(net) (235,388) ‐ ‐ (235,388)

Netcampaignrevenue 9,015,461 1,196,360 ‐ 10,211,821

Grants 913,000 2,086,084 ‐ 2,999,084Miscellaneouscontributions 388,578 923,557 ‐ 1,312,135Plannedgiving 84,115 ‐ ‐ 84,115Netassetsreleasedfromrestrictions 3,964,528 (3,964,528) ‐ ‐

Totalpublicsupport 14,365,682 241,473 ‐ 14,607,155

Servicefees 370,653 ‐ ‐ 370,653Investmentincome,net 277,929 131,390 ‐ 409,319Netrealizedandunrealizedlossesoninvestments (173,777) (238,365) ‐ (412,142)Otherincome 41,807 81,400 ‐ 123,207

Totalpublicsupportandrevenue 14,882,294 215,898 15,098,192

ALLOCATIONSANDEXPENSESProgramservices:

Grossfundsawarded/allocatedtoagencies 17,254,836 ‐ ‐ 17,254,8362‐1‐1initiative 2,045,799 ‐ ‐ 2,045,799SparkPointinitiative 4,836,220 ‐ ‐ 4,836,220Othercommunityservices 3,015,010 ‐ ‐ 3,015,010Communitycapacitybuilding 955,273 ‐ ‐ 955,273Laborcommunityservices 450,877 ‐ ‐ 450,877Donordesignations (18,793,932) ‐ ‐ (18,793,932)

Totalprogramservices 9,764,083 ‐ ‐ 9,764,083

Supportservices:Managementandgeneral 2,787,291 ‐ ‐ 2,787,291Fundraising 3,119,779 ‐ ‐ 3,119,779

Totalsupportservices 5,907,070 ‐ ‐ 5,907,070

Totalallocationsandexpenses 15,671,153 ‐ ‐ 15,671,153

CHANGEINNETASSETSBEFOREPENSIONRELATEDCHANGES (788,859) 215,898 ‐ (572,961)

PENSIONRELATEDCHANGESOTHERTHANNETPERIODICPENSIONCOST (4,064,182) ‐ ‐ (4,064,182)

CHANGEINNETASSETS (4,853,041) 215,898 ‐ (4,637,143)

NETASSETS,beginningofyear 10,102,514 1,074,245 3,888,975 15,065,734

NETASSETS,endofyear 5,249,473$ 1,290,143$ 3,888,975$ 10,428,591$

‐



STATEMENTOFFUNCTIONALEXPENSESFortheYearEndedJune30,2013

FundsAwarded/ Other Community Labor Total Management TotalAllocated 2‐1‐1 SparkPoint Community Capacity Community Donor Program and SupporttoAgencies Initiative Initiative Services Building Services Designations Services General Fundraising Services Total

ALLOCATIONSANDEXPENSESSalaries ‐$ 342,719$ 809,764$ 1,373,616$ 486,451$ 291,017$ ‐$ 3,303,567$ 1,752,409$ 1,290,653$ 3,043,062$ 6,346,629$Payrolltaxesandemployeebenefits ‐ 121,040 292,711 447,416 179,701 117,888 ‐ 1,158,756 688,148 462,235 1,150,383 2,309,139

Subtotal ‐ 463,759 1,102,475 1,821,032 666,152 408,905 ‐ 4,462,323 2,440,557 1,752,888 4,193,445 8,655,768‐

Professionalservices ‐ 233,552 276,143 605,750 69,349 2,275 ‐ 1,187,069 314,060 317,147 631,207 1,818,276Supplies ‐ 2,800 18,486 40,308 8,262 2,065 ‐ 71,921 17,095 18,641 35,736 107,657Telephone ‐ 35,795 27,858 19,159 16,737 7,411 ‐ 106,960 39,758 39,871 79,629 186,589Postage,warehouse,anddelivery ‐ 1,799 2,899 4,300 2,267 706 ‐ 11,971 10,595 12,359 22,954 34,925Occupancy ‐ 70,474 136,424 67,365 136,803 2,448 ‐ 413,514 314,962 337,863 652,825 1,066,339Furniture,equipment,andleaseholdimprovements ‐ 11,452 35,153 15,051 17,520 5,646 ‐ 84,822 37,342 36,266 73,608 158,430Mediaandprinting ‐ 107,629 141,074 172,667 27,271 384 ‐ 449,025 40,974 122,180 163,154 612,179Travel ‐ 3,008 28,500 40,805 16,125 1,853 ‐ 90,291 28,524 31,304 59,828 150,119Conference,training,andmeetings ‐ 17,487 56,816 104,405 22,231 238 ‐ 201,177 29,556 140,333 169,889 371,066Bank,interest,merchant,andotherfees ‐ 949 2,500 2,412 864 ‐ ‐ 6,725 63,049 2,833 65,882 72,607Miscellaneous ‐ 194 643 1,291 769 135 ‐ 3,032 3,953 1,459 5,412 8,444UnitedWayWorldwidedues ‐ 18,475 34,107 17,054 34,107 14,211 ‐ 117,954 79,583 86,690 166,273 284,227Movingcosts ‐ 3,705 8,023 3,755 7,016 2,850 ‐ 25,349 15,994 17,419 33,413 58,762Uncollectiblepledgeexpense ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 134,520 ‐ 134,520 134,520Depreciationandamortizationexpense,lossonsale/abandonmentoffurniture,equipment,andleaseholdimprovements,net ‐ 20,964 42,656 9,820 19,204 8,001 ‐ 100,645 44,805 48,806 93,611 194,256Costrecoveryreimbursements ‐ ‐ ‐ ‐ ‐ ‐ ‐ (19,451) (13,075) (32,526) (32,526)

Total ‐ 992,042 1,913,757 2,925,174 1,044,677 457,128 ‐ 7,332,778 3,595,876 2,952,984 6,548,860 13,881,638

Allocations/awards/designations 19,567,525 100,000 2,494,884 3,724,095 ‐ ‐ (21,894,270) 3,992,234 ‐ ‐ ‐ 3,992,234

TOTALALLOCATIONSANDEXPENSES 19,567,525$ 1,092,042$ 4,408,641$ 6,649,269$ 1,044,677$ 457,128$ (21,894,270)$ 11,325,012$ 3,595,876$ 2,952,984$ 6,548,860$ 17,873,872$

ProgramServices SupportServices



STATEMENTOFFUNCTIONALEXPENSESFortheYearEndedJune30,2012

FundsAwarded/ Other Community Labor Total Management TotalAllocated 2‐1‐1 SparkPoint Community Capacity Community Donor Program and SupporttoAgencies Initiative Initiative Services Building Services Designations Services General Fundraising Services Total

ALLOCATIONSANDEXPENSESSalaries ‐$ 912,505$ 867,329$ 1,205,696$ 445,679$ 304,048$ ‐$ 3,735,257$ 1,358,480$ 1,586,136$ 2,944,616$ 6,679,873$Payrolltaxesandemployeebenefits ‐ 320,597 276,685 365,207 151,721 111,248 ‐ 1,225,458 514,642 511,357 1,025,999 2,251,457

Subtotal ‐ 1,233,102 1,144,014 1,570,903 597,400 415,296 ‐ 4,960,715 1,873,122 2,097,493 3,970,615 8,931,330

Professionalservices ‐ 208,987 271,261 714,804 131,357 6,144 ‐ 1,332,553 227,230 400,716 627,946 1,960,499Supplies ‐ 2,709 25,440 29,837 8,681 129 ‐ 66,796 25,239 32,319 57,558 124,354Telephone ‐ 39,214 12,411 49,500 5,988 3,925 ‐ 111,038 50,016 21,091 71,107 182,145Postage,warehouse,anddelivery ‐ 2,163 2,082 8,934 1,335 198 ‐ 14,712 8,893 11,113 20,006 34,718Occupancy ‐ 142,685 96,411 57,074 104,636 7,198 ‐ 408,004 269,632 294,882 564,514 972,518Furniture,equipment,andleaseholdimprovements ‐ 11,485 3,591 48,543 2,328 106 ‐ 66,053 46,119 10,719 56,838 122,891Mediaandprinting ‐ 38,392 108,436 75,444 37,512 1,587 ‐ 261,371 30,061 77,596 107,657 369,028Travel ‐ 8,224 27,595 25,957 10,738 2,152 ‐ 74,666 33,742 35,043 68,785 143,451Conference,training,andmeetings ‐ 11,866 44,431 74,296 22,052 1,290 ‐ 153,935 14,952 59,392 74,344 228,279Bank,interest,merchant,andotherfees ‐ 2,247 2,261 1,507 1,507 15 ‐ 7,537 68,589 754 69,343 76,880Miscellaneous ‐ 504 1,631 2,970 1,132 49 ‐ 6,286 1,431 1,583 3,014 9,300UnitedWayWorldwidedues ‐ 39,668 31,168 14,167 28,334 12,750 ‐ 126,087 75,086 82,170 157,256 283,343Depreciationandamortizationexpense,loss ‐onsale/abandonmentoffurniture,equipment,andleaseholdimprovements,net ‐ 4,553 4,751 1,826 2,273 38 ‐ 13,441 79,162 958 80,120 93,561Costrecoveryreimbursements ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ (15,983) (6,050) (22,033) (22,033)

Total ‐ 1,745,799 1,775,483 2,675,762 955,273 450,877 ‐ 7,603,194 2,787,291 3,119,779 5,907,070 13,510,264

Allocations/awards/designations 17,254,836 300,000 3,060,737 339,248 ‐ ‐ (18,793,932) 2,160,889 ‐ ‐ ‐ 2,160,889

TOTALALLOCATIONSANDEXPENSES 17,254,836$ 2,045,799$ 4,836,220$ 3,015,010$ 955,273$ 450,877$ (18,793,932)$ 9,764,083$ 2,787,291$ 3,119,779$ 5,907,070$ 15,671,153$

ProgramServices SupportServices



STATEMENTSOFCASHFLOWSFortheYearsEndedJune30,2013and2012

2013 2012

CASHFLOWSFROM(USEDIN)OPERATINGACTIVITIESChangeinnetassets 3,851,452$ (4,637,143)$Adjustmentstoreconcilechangeinnetassetstonetcashfrom(usedin)operatingactivities

Provisionforuncollectiblepledges(net) 631,000 235,388Changeindiscountongrantsreceivable (304) (3,337)Depreciationandamortization 177,391 93,561

Lossonabandonment/saleofpropertyandequipment,net 16,866 ‐Netrealizedandunrealized(gains)lossesoninvestments (771,881) 412,142Pensionrelatedchangesotherthannetperiodicpensioncosts (3,310,632) 4,064,182Changesinassetsandliabilities

Pledgesreceivable 723,794 (2,055,604)Grantsreceivable (1,981,942) (1,167,116)Prepaidsandotherreceivables (344,044) (126,613)Donordesignationsandallocationspayable 60,980 (5,924)Operatingpayablesandaccruals 2,408,020 799,127Accruedvacationandrelatedcosts (98,157) (35,274)Deferredrent 322,013 (102,552)Accruedpensioncosts (589,053) (688,450)

Netcashfrom(usedin)operatingactivities 1,095,503 (3,217,613)

CASHFLOWS(USEDIN)FROMINVESTINGACTIVITIESPurchasesofinvestments (1,893,946) (1,941,025)Proceedsfromsaleofinvestments 2,629,267 4,760,000Purchasesoffurniture,equipment,andleaseholdimprovements (1,061,068) (178,278)

Netcash(usedin)frominvestingactivities (325,747) 2,640,697

CHANGEINCASHANDCASHEQUIVALENTS 769,756 (576,916)

CASHANDCASHEQUIVALENTS,beginningofyear 1,528,299 2,105,215

CASHANDCASHEQUIVALENTS,endofyear 2,298,055$ 1,528,299$

UNITEDWAYOFTHEBAYAREANOTESTOFINANCIALSTATEMENTS

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NOTE1–ORGANIZATIONANDPURPOSE

United Way of the Bay Area (“UWBA”), incorporated in California in 1955, is an independent, locally managed nonprofitorganization.Ithasbeengrantedtax‐exemptstatusunderSection501(c)(3)oftheInternalRevenueCodeandSection23701doftheCaliforniaRevenueandTaxationCode.UWBAhasalsomadethe501(h)electionundertheIRScode.Accordingly,noprovisionforincometaxesisincludedinthefinancialstatements.

AsUWBAapproachesitscentennial,itisproudtobecontinuingalongtraditionofleadershipinthelocalnonprofitcommunitybyencouraging philanthropy and investing those dollars in programs to serve the health and human services needs of Bay Arearesidents.UWBAcurrentlyservesAlameda,ContraCosta,Marin,Napa,SanFrancisco,SanMateo,andSolanoCounties.

TheBayAreaCommunityFund(“BACF”)iscomprisedoftheunrestrictedfundsdonatedtoUWBAtosupporttheachievementofitsCommunityImpactgoals.UWBAiscommittedtocreatingcommunitychangebypositioningitselfasaninclusivecommunityleaderinthesevenBayAreacountiesserved,whilehonoringdonors’philanthropicinterests.UWBA’sfive‐yearCommunityImpactgoalswere identified in 2008 through a process of staff and partner research, community input sessions, and board and constituentdiscussion.

Inresponsetotheneedsofthecommunity,UWBAfocusesitsgoalsanditsuseofresources.Indoingso,itmay,fromtimetotime,discontinuethemanagementofspecificprograms.Discontinuancemayincludeclosing,merging,orestablishingtheindependenceofprograms.Whensuchtransitionstakeplace,thepurposehasbeenandwillcontinuetobeenhancingtheabilityoftheUWBAtoconcentrateitseffortsonhelpingtocutthenumberoffamilieslivinginpoverty.Theorganizationpursuesaselected,targetedsetofprogramsthathelppeoplesurvivethestrugglesofpovertyandmovetowardeconomicsuccess.Eachoftheseprogramsalsohasaroleinhelpingtoevolvethepublicandprivatesystemsaroundthemtobetterservepeopleinpoverty.UWBA’sprogramsmaytake the form of providing direct service to clients, issuing grants to organizations to provide services, and/or engaging incollaborativepartnerships.GrantproposalsareevaluatedonthebasisoftheiralignmentwithUWBA’sstrategicplanaswellastheagency’sabilitytodemonstratehighstandardsinfiscalandprogrammaticoperations,andoverallorganizationalstrength.Grantsandthefocusofgrant‐makingactivitiesarereportedtoandapprovedbyUWBA’sBoardofDirectors.

ThefollowingarespecificprogramsandstrategiesmanagedbyUnitedWayoftheBayArea:

211–Asaneasy‐to‐rememberphonenumberthatcanbedialedfromlandorcellphones,211providescallerswithinformationaboutandreferralstoessentialservices.211isalsoaccessibleontheInternet.211strengthensthecommunitybyaddressingthechallengespeople faceobtainingneededhealth andhumanservices in everyday life and in timesofpersonal crisis. In timesofdisaster,211becomesanessentialpartofourresponseandrecovery.Trainedstaffmaintainanup‐to‐datedatabaseofpublicandprivatenonprofitresourcestomeetawiderangeofneeds.211alsoanswerscallstwenty‐fourhoursaday,sevendaysaweek,withtheabilitytorespondinthecaller’slanguagethroughbilingualstaffandtele‐interpretingservices.UWBAreceivesphonecallsforfiveof thecountiesweserve–Marin,Napa,SanFrancisco,SanMateo,andSolano–and fundsthe local211serviceprovider inAlamedaandContraCostacounties.Infiscalyear2013,theBayArea‐widesystemtooknearly200,000calls,withalmosthalfofthose forwhichwehavedemographicdata coming frompeople inpoverty.Themainneedspeople called about included food,shelter,employment,andotherservicesrelatedtosurvivingandmovingoutofpoverty.

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Page11

Communityschools–UnitedWaypromotesandsupportsthe‘communityschools’strategy,whichplacesservicesforlow‐incomechildren and families at thepublic schools they attend. Community schools areprovenby research to increase attendance andacademicachievement, and to improve families’healthandwell‐being.UnitedWaygivesgrants toeffective communityschoolsacrossthecountiesweserve.Wealsoworkcloselywithselectedschoolsanddistrictstoplanandlaunchnewcommunityschoolsprograms,andprovidetechnicalassistancetopeople inthefield. Inthefiscalyear2013,UnitedWayconnectedourCommunitySchoolsandSparkPointprogramsbypioneeringaninnovativeversionofacommunityschoolthatincludestheeconomicservicesofferedataSparkPoint,andthatrefersfamiliestotheirlocalSparkPointCenter.Infiscalyear2013,thecommunityschoolsthatUnitedWayfundsandpartnerswithservedmorethan3,000individuals.

Communitycapacitybuilding–CommunitycapacitybuildingrepresentsUWBAstaffandotheroperatingcostsindevelopingandmanaging UWBA programs, and engaging in other community activities in partnership with nonprofit and public sectororganizationsandlaborcouncils.

Laborcommunityservices–LaborcommunityservicesprimarilyrepresentthecostofUWBAstaff–laborcommunityservicesliaisons–whoareplacedatlaborcouncilofficesinthecountiesofAlameda,ContraCosta,Marin,andSanFrancisco.Theliaisonsareresponsibleforprovidinginformationandreferraltounionmembersandothersinneedintheirlocalcommunities;offeringcasemanagement support for individualswith intensiveneeds; andhelping topromote and support theUnitedWayprogramslisted above that operate in their counties.Muchof theworkof the liaisons either directly benefits people in poverty or helpspreventworkingfamiliesfromfallingintopoverty.

NOTE2–SIGNIFICANTACCOUNTINGPOLICIES

Basis of accounting – The accompanying financial statements have been prepared in accordance with accounting principlesgenerallyacceptedintheUnitedStatesofAmerica(“GAAP”)andwiththefinancialstatementstandardsofUnitedWayWorldwide.UnitedWayWorldwide standards are required formembership and fully complywithU.S. Statements of Financial AccountingStandardsapplicablefornot‐for‐profitorganizations.

Useofestimates–Management is requiredtomakeestimatesandassumptions thataffect thereportedamountsofassetsandliabilitiesandcontingenciesatthedateofthefinancialstatementsandthereportedamountsofrevenueandexpensesduringthereporting period. Actual results could differ from management’s estimates. Significant estimates include the provision foruncollectible pledges, useful lives of furniture, equipment, and leasehold improvements, fair value of investment, allocation offunctionalexpenses,andtheunfundedpensionliabilities.Thefairvalueofinvestmentsandpensionassetsaresubjecttomaterialvolatilitybasedonmarketconditions.Thiscouldhaveasignificanteffectonthesefinancialstatements.

Classesofnetassets–Theaccompanyingfinancialstatementsarepresentedonthebasisofunrestricted,temporarilyrestricted,andpermanentlyrestrictednetassets.

Unrestricted net assets – Unrestricted net assets include resources available to support UWBA operations and temporarilyrestrictedresourceswhichbecomeavailableforusebyUWBAinaccordancewiththe intentionsof thedonors.UnrestrictednetassetsaredesignatedbyUWBA’sBoardofDirectorsforspecifiedpurposesasfollows:

2013 2012

Futuregrantsandprograms 3,295,000$ 3,295,000$Generaluse 566,279 514,890

3,861,279$ 3,809,890$

AsofJune30,2013,theBoardofDirectorsapprovedafullyear’sgrantsallocationashadbeenthepracticeinyearsprior.

Temporarilyrestrictednetassets–Temporarily restrictednetassets include resourceswithdonor‐imposed restrictions thatwillbefulfilledbyactionsofUWBAand/orbecomeunrestrictedbythepassageoftime.UWBA’stemporarilyrestrictednetassetsincludemulti‐yearpledgesaswellasgrantsrestrictedforspecificUWBAcommunityprojects.Whenthedonorortimerestrictionis fulfilled, temporarily restricted net assets are released to unrestricted net assets and are reported in the accompanyingstatementsofactivitiesasnetassetsreleasedfromrestrictions.Temporarilyrestrictedcontributionsreceivedinthesameperiodastherestrictionsaremetarereportedastemporarilyrestrictedsupportandnetassetsreleasedfromrestrictionsinthatperiod.


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Permanently restricted net assets – Permanently restricted net assets are comprised of the historical dollar value ofcontributionsthatwerereceivedwithdonorrestrictionsrequiringtheassetsbemaintainedinperpetuityandthatonlytheincomegeneratedfromtheseassetsismadeavailableforgrants,programs,orsupportservicesinaccordancewiththedonorrestrictions.

Cashandcashequivalents–Allhighlyliquidinvestments,withanoriginalmaturityofthreemonthsorlesswhenpurchasedandnotheldthroughtheinvestmentaccount,areconsideredtobecashequivalents.Substantiallyallofthecashequivalentbalancesheld in financial institutions at June30, 2013 and 2012, exceeded federal depository insurance coverage. UWBA has notexperiencedanylossesinsuchaccounts.

Pledges receivable – Pledges receivable consist of unconditional promises to give by donors and are recorded at fair value.Pledgesreceivablearenetofprovisionsforuncollectiblepledges.

Provisionsforuncollectiblepledges–Theprovisionforuncollectiblepledgesiscomputedbaseduponhistoricalaveragesandmanagement’sconsiderationofcurrenteconomicfactorsthatcouldaffectpledgecollections.Usingthiscriteria,theprovisionasofJune30,2013and2012,wasdeterminedtobe6%and5%ofgrosscampaignpledges,respectively.ForyearendedJune30,2013,therewasnobaddebtrecovery.ForyearendedJune30,2012,therewasabaddebtrecoveryof$322,612,asaresultofclosingoutthe prior year campaign. This recovery is netted against the gross provision for uncollectible pledges on the statements ofactivities.

Grantsreceivable–Grantsreceivableconsistofunconditionalpromisestogivebygrantingorganizations.Unconditionalpromisestogive thatareexpected tobecollectedduring the following fiscalyearare recordedat theamountcontributed.Unconditionalpromisestogivethatareexpectedtobecollectedinfutureyearsarerecordedatthefairvalueoftheirestimatedfuturecashflows.Thediscountsonthoseamountsarecomputedusingrisk‐free interestratesapplicable intheyears inwhichthosepromisesarereceived.Thediscountratesrange from0.22%to .41%.Grantsreceivablearenetofdiscountsof$2,620and$2,924at June30,2013and2012,respectively.

Investments–UWBA’sinvestmentsarestatedatfairvaluebasedonquotedmarketpricesatfiscalyearend.Investmentsincludemoneymarketfundsandmarketablesecuritiesheldprincipally for investmentpurposes.Unrealizedgainsandlossesthatresultfrom market fluctuations are recognized in the period such fluctuations occur in the accompanying statements of activities.Realizedgainsandlossesthatresultfromsalesormaturitiesofsecuritiesduringtheyeararecalculatedonanadjustedcostbasisandare reflected in theaccompanying statementsof activities.Marketable securities receivedasdonationsare recordedat fairvalueatthedateofthedonation,andaregenerallysoldassoonaspracticalafterreceipt.

Fairvalueofassetsandliabilities–FairValueMeasurementsdefinefairvalueasthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Italsoestablishesafairvaluehierarchywhichrequiresanentitytomaximizetheuseofobservableinputsandminimizetheuseofunobservableinputswhenmeasuringfairvalue.Thestandarddescribesthreelevelsofinputthatmaybeusedtomeasurefairvalue:

Level1: Quotedpricesinactivemarketsforidenticalassetsorliabilities.

Level2: ObservableinputsotherthanLevel1prices,suchasquotedpricesforsimilarassetsorliabilities;quotedpricesinactivemarketsthatarenotactive;orotherinputsthatareobservableorcanbecorroboratedbyobservablemarketdataforsubstantiallythefulltermoftheassetsorliabilities.

Level3: Unobservableinputsthataresupportedbylittleornomarketactivityandthataresignificanttothefairvalueoftheassetsorliabilities.

Thefollowingisadescriptionofthevaluationmethodologiesusedforinstrumentsmeasuredatfairvalueonarecurringbasisandrecognizedintheaccompanyingstatementsoffinancialposition,aswellasthegeneralclassificationofsuchinstrumentspursuanttothevaluationhierarchy.

Wherequotedmarketpricesareavailable inanactivemarket,securitiesareclassifiedwithinLevel1ofthevaluationhierarchy.Level 1 securities include cash and cash equivalents, fixed income securities, and exchange traded equities. Level 2 securitiesincludeinvestmentsheldinpooledincomefundsandarevaluedatmarketpriceasprovidedbythecustodianofthefunds.


Page13

Furniture,equipment,andleaseholdimprovements–Furniture,equipment,andleaseholdimprovementsarestatedatcost,ifpurchased, or if donated, at fair value at the date of the donation for items exceeding $5,000. Depreciation is computed on astraight‐line basis over the estimated useful lives of the assets, ranging from three to ten years. Leasehold improvements areamortized over the lesser of the useful life of the asset or the term of the lease. Total depreciation and amortization expenseamountedto$177,391and$93,561fortheyearsendedJune30,2013and2012,respectively.

Deferredrent–CertainleasesofUWBAcontainleaseincentivesandfixedescalations.UWBArecognizestherelatedrentexpenseona straight‐linebasisover the lifeof the leaseand records thedifferencebetween theexpense included in theaccompanyingstatementsofactivitiesandtheamountrecordedasdeferredrent.FortheyearendedJune30,2013,deferredrentrelatedtothreeUWBA locations: 550Kearny St., SanFrancisco; 1970Broadway, Suite 400,Oakland; and8200Bancroft,Oakland. For the yearendedJune30,2012deferredrentrelatedonlytothe221MainSt.,SanFranciscoofficelease.

Grosscampaignresults–GrosscampaignresultsconsistofcashandunconditionalpromisestogivetoUWBAduringtheannualfundraisingcampaignsand includecontributionsprocessedby third‐partyprocessors.Donordesignationsand theprovision foruncollectiblepledgesaredeductedfromgrosscampaignresultstoarriveatcampaignrevenue.

Donordesignationsandservicefeerevenue–Donordesignations,contributionsthataredesignatedbythedonortononprofitorganizationsotherthanUWBAincludingcontributionsprocessedbythird‐partyprocessors,aredeductedfromgrosscampaignresults to arrive at net campaign revenue.Donor designations are paid to the designated organizations on amonthly basis, byelectronicfundstransfer(“EFT”)asinformationallowsandonaquarterlybasisbycheckforallothers,aspledgesarecollected.Proportionatesharesofthereceiptsaredistributedouttotheagenciesnetofservicefees.Servicefeerevenueisreportedintheaccompanying statement of activities. This designation processing is inclusive of pledges and payments processed as part ofUWBA’s role as a federation for the Combined Federal Campaign as well as other state and local government‐sponsoredfundraisingcampaigns.

Plannedgifts–PlannedgiftsthatareirrevocablearerecognizedasareceivablewhenamountsduetoUWBAcanbereasonablyestimated.AsofJune30,2013and2012,UWBAhasonlyonetypeofplannedgift–pooledincomefunds.Assetsassociatedwiththesegiftstotaled$161,595and$160,665asofJune30,2013and2012,respectively,atfairvalueandareincludedininvestmentsin the accompanying statements of financial position. Liabilities associated with these gifts totaled $28,198 and $29,477 as ofJune30, 2013 and 2012, respectively, at fair value and are included in operating payables and accruals in the accompanyingstatementsoffinancialposition.

Donatedgoodsandservices –UWBArecognizes thevalueofdonatedequipmentand/or suppliesat the fairvalue for similaritems. Donated goods and services for the years ended June30, 2013 and 2012, of $448,380 and $756,514, respectively,werereflected inmiscellaneous income in the accompanying statements of activities. UWBAwill recognize the fair value of donatedservices if theservicesmeet therecognitioncriteriawhich include:a)requiringspecializedskills;b)providedbysomeonewiththose skills; and c) would have to be purchased if they were not donated. Although UWBA receives a significant amount ofcontributedtimefromvolunteers,thistimedoesnotmeettherecognitioncriteria.Accordingly,thevalueofthiscontributedtimeisnotreflectedintheaccompanyingfinancialstatements.

Grossfundsawarded/allocatedtoagencies–Theamountshownontheaccompanyingstatementsofactivitiesincludesgrantstofundlocalcommunitypartners,UWBAinitiativesandprogramswhichamountedto$3,000,000and$4,205,000duringtheyearsendedJune30,2013and2012,respectively.Thesegrantshavebeenrecommendedbystaffworkingwithasub‐committeeoftheBoardofDirectorsandhavebeenapprovedbytheBoard.However,tocomplywithfinancialstatementpresentationrequirements,thesegrantsareshownnetofanoffsetamounttopreventrevenueduplicationbetweenunrestrictedandtemporarilyrestrictedaccounts.

Functionalallocationofexpenses–Themajorityofexpensescanbedirectlyidentifiedwiththeprogramorsupportingservicestowhich they relateandare chargedaccordingly.Otherexpenseshavebeenallocatedamongprogramandsupporting servicesclassificationbasedon theaveragenumberof full‐timeemployees, the timestudyallocationmethod,andonadirectcostbasis.ThisisconsistentwiththestandardsforallocationoffunctionalexpensesinaccordancewithGAAPandUnitedWayWorldwide.

Concentrationsofrisk–UWBAreceivesapproximately48%ofitsgrosscampaignrevenuefromfiveemployers.Allfiveoftheseemployers are nationally aligned through United WayWorldwide; therefore, the risk of loss of these employers by UWBA isremote.


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Incometaxes–UWBAisexemptfromfederalincometaxunderSection501(c)(3)oftheInternalRevenueCode(IRC)andSection23701doftheRevenueandTaxationCodeexcepttotheextentofunrelatedbusinesstaxableincomeasdefinedunderIRCsections511through515.SinceUWBAhasnounrelatedbusinesstaxableincome,noprovisionforincometaxeshasbeenprovidedinthesefinancialstatements.UWBAhasnounrecognizedtaxbenefitsoruncertaintaxpositionsasofJune30,2013.Withfewexceptions,UWBAisnolongersubjecttoUnitedStatesfederalorstate/localincometaxexaminationsbytaxauthoritiesforfiscalyearsbefore2008.

Subsequentevents–Subsequenteventsareeventsor transactionsthatoccurafter thestatementof financialpositiondatebutbefore financial statements are issued. UWBA recognizes in the financial statements the effects of all subsequent events thatprovideadditionalevidenceaboutconditionsthatexistedatthedateofthestatementsoffinancialposition,includingtheestimatesinherentintheprocessofpreparingthefinancialstatements.UWBA’sfinancialstatementsdonotrecognizesubsequenteventsthatprovideevidenceaboutconditionsthatdidnotexistatthedateofthestatementsoffinancialpositionbutaroseafterthestatementoffinancialpositiondateandbeforethefinancialstatementsareavailabletobeissued.

UWBAhasevaluatedsubsequenteventsthrough_____________________,whichisthedatethefinancialstatementsareavailabletobeissued.

NOTE3–GRANTSRECEIVABLE

UWBAexpectedtoreceivegrantsreceivableatJune30,2013and2012,respectively,areasfollows:

2013 2012Amountdue:

Inthenextyear 3,537,376$ 1,449,600$Betweentwoandfiveyears 540,000 645,834

4,077,376 2,095,434Discount (2,620) (2,924)

Grantsreceivable,net 4,074,756$ 2,092,510$

NOTE4–INVESTMENTS

InvestmentsconsistedofthefollowingatJune30:2013 2012

Balancedfund 780,342$ 758,501$Domesticequities 1,910,800 2,634,165Smallcapfunds 925,379 ‐Commodities/naturalresourcesfund 408,103 435,672Internationalequity 1,842,979 1,915,994Lowdurationandintermediatebonds 4,146,011 4,566,417Internationalglobalbonds 900,596 883,015Cashandcashequivalents 555,084 239,900Pooledincomefunds 161,595 160,665

Total 11,630,889$ 11,594,329$

NetunrealizedandrealizedgainsareasfollowsfortheyearsendedJune30:

2013 2012

Unrealizedgains(losses) 410,062$ (541,334)$Realizedgains 361,819 129,192

Netrealizedandunrealizedgains(losses)oninvestments 771,881$ (412,142)$


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InvestmentincomeisasfollowsfortheyearsendedJune30:2013 2012

Interestanddividendincome 330,032$ 454,635$Lessinvestmentmanagementfees (42,621) (45,316)

Totalinvestmentincome,net 287,411$ 409,319$

UWBA’slongtermassetallocationpolicywasdevelopedbystaffandapprovedbytheBoardtomanagemarketfluctuationsovertime.UWBAisawaretherearechallengesinthecurrentfinancialmarketsandcontinuestomonitorrelatedvolatility.

The following tables present the investments carried at fair value on the accompanying statements of financial position as ofJune30,2013and2012,byvaluationhierarchy:

FairValueMeasurementInputs Level1 Level2 Total

Equities 5,867,603$ ‐$ 5,867,603$Fixedincomesecurities 5,046,607 ‐ 5,046,607Cashandcashequivalents(heldforinvestment) 555,084 ‐ 555,084Pooledincomefunds ‐ 161,595 161,595

Total 11,469,294$ 161,595$ 11,630,889$

June30,2013


Equities 5,744,332$ ‐$ 5,744,332$Fixedincomesecurities 5,449,432 ‐ 5,449,432Cashandcashequivalents(heldforinvestment) 239,900 ‐ 239,900Pooledincomefunds ‐ 160,665 160,665

Total 11,433,664$ 160,665$ 11,594,329$

June30,2012

NOTE5–FURNITURE,EQUIPMENT,ANDLEASEHOLDIMPROVEMENTS

Furniture,equipment,andleaseholdimprovementsconsistedofthefollowingatJune30:2013 2012

Computersoftwareandequipment 800,701$ 788,986$Officefurniture 490,022 475,049Equipment 208,667 167,940Leaseholdimprovements 396,095 48,736Vehicles 24,240 24,240

Total 1,919,725 1,504,951

Lessaccumulateddepreciationandamortization (811,050) (1,263,087)

Totalfurniture,equipment,andleaseholdimprovements,net 1,108,675$ 241,864$


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NOTE6–MISCELLANEOUSCONTRIBUTIONS

MiscellaneouscontributionsarecomprisedofthefollowingasofJune30:2013 2012

UnrestrictedDonatedgoodsandservices 195,272$ 84,756$Non‐campaigndonations 281,210 163,088Prioryearcampaignrevenue 19,694 42,527Revenue‐otherUnitedWays 94,393 93,671Specialeventsincome 8,578 2,036Sponsorshipfees 223,880 2,500

823,027 388,578Temporarilyrestricted

Donatedgoodsandservices 253,108 671,758Non‐campaigndonationsandmiscellaneousincome 533,010 181,796Specialeventsincome ‐ 8,003Sponsorshipfees 664,315 62,000

1,450,433 923,557

Totalmiscellaneouscontributions 2,273,460$ 1,312,135$

NOTE7–COMMITMENTS

UWBA leases office space under noncancelable operating leases expiring at various dates through March31, 2023. Leaseagreementsgenerallyprovide forboth renewaloptionsandescalation clauses for increasedoperatingexpensesand real estatetaxes.OnOctober15,2012,UWBAsigneda10yearleaseforanewSanFranciscoofficelocatedat550KearnySt.Suite1000,SanFrancisco.OnJanuary13,2013,UWBAsignedaneightyearleaseforanewOaklandofficelocatedat1970Broadway,Suite400,Oakland.UWBAsubleasesaportionofitsSanFranciscoandOaklandofficespacetoothernonprofitorganizationsonamonth‐to‐monthbasis.Sublease incomefor theyearsendedJune30,2013and2012,was$9,600and$20,100,respectively.UWBAisalsocommittedundernoncancelableoperatingleasesforvariousofficeequipment.OnJuly30,2012,UWBAsignedanamendmenttoitsexistingleasewithEastmontTowneCenter,Oakland,thatextendedthetermto7yearsandreducedboththesquarefootageandtherentforitsOaklandSparkPointCenter.

FutureminimumcommitmentsundernoncancelableoperatingleaseshavingleasetermsinexcessofoneyearasofJune30,2013,areasfollows:

YearsEndingJune30,

2014 927,147$2015 1,246,6582016 1,255,0552017 1,224,7002018 1,169,882Thereafter 5,483,857

Total 11,307,299$

RentexpensefortheyearsendedJune30,2013and2012,was$1,057,904and$987,059,respectively.


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NOTE8–PENSIONPLAN

ThePensionPlanofUnitedWayoftheBayArea(the“Plan”)isasingleemployerdefinedbenefitpensionplanwithUWBAasplansponsor.

ThePlanwasamendedto freezeparticipationandbenefitaccrualsunderthePlaneffectiveDecember31,2006.Accordingly,noemployeeswillbecomeparticipantsaftertheDecember1,2006entrydate,andparticipants’PlanbenefitswillnotincreaseafterDecember31,2006.InnoeventwilltheaccruedbenefitofanyparticipantbelessthanthatcalculatedasofDecember31,2006.

AccruedpensioncostsconsistofthefollowingatJune30:2013 2012

Definedbenefitpensionplanliabilities 3,014,123$ 6,961,736$Definedearlyretirementmedicalandlongtermcarebenefitplans 144,607 96,679

Totalaccruedpensioncosts 3,158,730$ 7,058,415$

The following information sets forth the Plan’s projected benefit obligation, fair value of plan assets, unfunded status, andaccumulatedbenefitobligationasofJune30:

2013 2012ProjectedbenefitobligationBeginningofyear 18,465,482$ 14,470,264$Servicecost 168,237 180,234Interestcosts 697,845 785,797Actuarial(gain)loss (2,390,448) 3,595,836Benefitspaid (1,323,553) (439,575)Administrativeexpensespaid (201,007) (127,074)

Endofyear 15,416,556$ 18,465,482$

FairvalueofplanassetsBeginningofyear 11,503,746$ 10,903,595$Actualreturnonplanassets 1,458,834 234,133Employercontributions 964,414 932,667Benefitspaid (1,323,553) (439,575)Administrativeexpensespaid (201,007) (127,074)

Endofyear 12,402,434$ 11,503,746$

FundedstatusofthePlanatyear‐end(underfunded) (3,014,122)$ (6,961,736)$

Amountsrecognized for thedefinedpensionplanonly in theaccompanyingstatementsof financialpositionareas followsasofJune30:

2013 2012

Prepaidbenefitcost 1,620,895$ 983,914$

Additionalaccruedpensionliabilityforpensionplanswithabenefitobligationinexcessofplanassets (4,635,018) (7,945,650)

Definedbenefitpensionliabilities (3,014,123)$ (6,961,736)$

Unrestrictednetassets,pensionliabilityinexcessofintangiblepensionassets 4,635,018$ 3,881,468$


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AmountsreflectedintheaccompanyingstatementsofactivitiesareasfollowsfortheyearsendedJune30:

2013 2012

Servicecost 168,237$ 180,234$Interestcost 697,845 785,797Expectedreturnonassets (921,638) (876,635)Amortizationloss 382,989 174,156

Netperiodicpensioncost 327,433$ 263,552$

Theprojectedunitcreditcostmethodwasutilizedformeasuringnetperiodicpensioncostovertheemployee’sestimatedservicelife.ThefollowingtablesummarizestheassumptionsusedincomputingthepresentvalueofprojectedbenefitobligationsandnetperiodiccostasofJune30:

2013 2012

AssumptionsusedincomputingbenefitobligationDiscountrate 4.50% 3.85%Rateofcompensationincrease N/A N/A

AssumptionsusedincomputingthenetperiodicpensioncostsDiscountrate 3.85% 5.40%Expectedreturnonassets 8.00% 8.00%Rateofcompensationincrease N/A N/A

TheinvestmentobjectiveforthePlanistomaximizetotalreturnwithinreasonableandprudentlevelsofrisk.ThePlan’sweighted‐averageassetallocationsareasfollowsasofJune30:

2013 2012AssetcategoryCommonandcollectivetrusts Equity 60.3% 60.8%Debt 37.6% 36.8%Cashandcashequivalents 2.1% 2.4%

Total 100.0% 100.0%

ThefairvaluesoftheUWBA’sdefinedbenefitplanassetsatJune30,2013,byassetcategory,areasfollows:


Cashandcashequivalents 265,552$ ‐$ 265,552$Largecapequitiesfund ‐ 3,968,919 3,968,919Smallcapequitiesfund ‐ 603,052 603,052Midcapfund ‐ 1,054,971 1,054,971Internationalequitiesfund ‐ 1,842,811 1,842,811Fixedincomesecurities ‐ 4,667,127 4,667,127

Total 265,552$ 12,136,880$ 12,402,432$


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ThefairvaluesoftheUWBA’sdefinedbenefitplanassetsatJune30,2012,byassetclassareasfollows:


Cashandcashequivalents 278,313$ ‐$ 278,313$Largecapequitiesfund ‐ 4,187,383 4,187,383Smallcapequitiesfund ‐ 1,054,773 1,054,773Midcapfund ‐ ‐ ‐Internationalequitiesfund ‐ 1,753,708 1,753,708Fixedincomesecurities ‐ ‐ ‐Bondfund ‐ 4,229,569 4,229,569

Total 278,313$ 11,225,433$ 11,503,746$

The estimated minimum benefit payments which reflect expected future service, as appropriate, to be paid by UWBA are asfollows:

YearEndingJune30,

2014 626,180$2015 734,0512016 742,8152017 776,9062018‐2020 5,395,813

8,275,765$

UWBAcontributed$964,414 and$932,667tothePlanduringtheyearsendedJune30,2013and2012,respectively.

Effective January1,2007,UWBAestablishedtheUWBA401(k)Plan.Eligibleemployeesbecome401(k)Planparticipantsonthefirst day of the calendar quarter following date of hire. 401(k) Plan participantsmay elect to reduce their compensation by aspecificpercentageordollaramountandhavethatamountcontributedtothe401(k)Planonapre‐taxbasisasasalarydeferral.UWBA matches 100% of participants' salary deferral contributions, up to a maximum of 2% of compensation (temporarilysuspendedduringtheperiodJanuary1–December31,2010,accordingtotheCollectiveBargainingAgreementdatedApril1,2009toMarch31,2012). Inaddition,UWBAmakesanemployer“nonelective”contributionaccording toa formula that isbasedonaparticipant'sageplusservice.ForemployeeshiredbeforeJanuary1,2010,matchingandemployernonelectivecontributionswillbe100%vestedaftertwoyearsofservice(orage65,ifearlier).EmployeeshiredafterJanuary1,2010,willbe50%vestedaftertwoyearsofserviceand100%vestedafterfouryearsofservice(orage65,ifearlier).

UWBA instituted a voluntary long term care insurance program in fiscal year 2013. As a part of that program, it madearrangementstopay83%ofthecostofthelongtermpremiumsfortheCEOfromMarch2013untilherdeath.Theestimatedcostoffuturepremiumsis$52,856.

UWBAhadadefinedbenefitearlyretirementmedicalbenefitsplanthatcoveredcertainfull‐timeemployeeswhoretiredasofJune30, 1993. UWBAdoes not contribute to this plan except to reimburse certainmedical and other costs submitted by the Plan’sretireesasdefinedwithintheagreement.TheestimatedcostoffuturemedicalandotherpaymentsasofJune30,2013and2012,is$91,751and$96,679, respectively,and is included inaccruedpensioncosts. InApril2012, theBoardofDirectorsunanimouslypassedaresolutiontofreezethe403(b)planandacceptnonewcontributions.InOctober2013,theBoardofDirectorsvotedtounanimouslyterminatetheplan.

UWBA also has a defined contribution retirement plan under Section 403(b) of the Internal Revenue Code, available to thoseemployeeswhoarenoteligibletoparticipateinthe401(k).UWBAdoesnotprovideanymatchingcontributionstothisplan.


Page20

NOTE9–TEMPORARILYRESTRICTEDNETASSETS

TemporarilyrestrictednetassetswereavailableforthefollowingpurposesasofJune30:2013 2012

UWBAcommunityprogramsSparkPoint 38,047 481,642Othercommunityprograms 1,324,922 613,326Endowmentactivity 728,655 195,175

Total 2,091,624$ 1,290,143$

NOTE10–ENDOWMENTDISCLOSURES

Interpretation of relevant law – The Board of Directors of UWBA has interpreted the California Prudent Management ofInstitutionalFundsAct (“CPMIFA”)asrequiring thepreservationof the fairvalueof theoriginalgiftasof thedateof thedonorrestrictedendowmentfunds,absentexplicitdonorstipulationstothecontrary.Asaresultofthisinterpretation,UWBAclassifiesaspermanently restrictednetassets: (a)theoriginalvalueofgiftsdonated to thepermanentendowment; (b)theoriginalvalueofsubsequentgiftstothepermanentendowment;and(c)accumulationstothepermanentendowmentmadeinaccordancewiththedirectionoftheapplicabledonorgiftinstrumentatthetimetheaccumulationisaddedtothefund.Theremainingportionofthedonor‐restrictedendowmentfundthatisnotclassifiedinpermanentlyrestrictednetassetsisclassifiedastemporarilyrestrictednetassetsuntilthoseamountsareappropriatedforexpenditurebytheUWBABoardofDirectorsinamannerconsistentwiththestandard prudence prescribed by CPMIFA. In accordance with CPMIFA, UWBA considers the following factors in making adeterminationtoappropriateoraccumulatedonor‐restrictedendowmentfunds:

a. Thedurationandpreservationofthefund

b. ThepurposesofUWBAandthedonor‐restrictedendowmentfund

c. Generaleconomicconditions

d. Thepossibleeffectofinflationanddeflation

e. Theexpectedtotalreturnfromincomeandtheappreciationofinvestments

f. OtherresourcesofUWBA

g. TheinvestmentpoliciesofUWBA

Spendingpolicyandhowtheinvestmentobjectivesrelatetospendingpolicy–Theendowmentfundhasaspendingpolicyofappropriatingallof thenet incomeearnedonthe investmentof these funds fordistributionaccordingtothe instructionsof thedonor at the time the gift ismade. The original value of the gifts donated to the permanent endowment is to be classified aspermanentlyrestrictedandanyearningsareclassifiedastemporarilyrestricteduntilappropriatedforexpenditure.

Fundswithdeficiencies–Fromtimetotime,thefairvalueofassetsassociatedwithindividualdonor‐restrictedendowmentfundsmayfallbelowthelevelthatthedonororCPMIFArequiresUWBAtoretainasafundofperpetualduration.AsofJune30,2013and2012,therewerenodeficiencies.


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ThecompositionandchangesintheendowmentnetassetsasofJune30,2013and2012,areasfollows:

UnrestrictedTemporarilyRestricted

PermanentlyRestricted

TotalNetAssets

Endowmentnetassets,June30,2011 ‐$ 798,591$ 3,888,975$ 4,687,566$

Investmentincome ‐ 115,298 ‐ 115,298Netappreciation ‐ (290,204) ‐ (290,204)

Amountsappropriatedforexpenditure 261,322 (428,510) ‐ (167,188)

Endowmentnetassets,June30,2012 261,322 195,175 3,888,975 4,345,472

Contribution ‐ ‐ 1,000 1,000Investmentincome ‐ 164,963 ‐ 164,963Netappreciation ‐ 283,266 ‐ 283,266

Amountsappropriatedforexpenditure (85,251) 85,251 ‐ ‐

Endowmentnetassets,June30,2013 176,071$ 728,655$ 3,889,975$ 4,794,701$

NOTE11–RELATEDPARTYTRANSACTIONS

UWBA’s volunteer members of the Board of Directors participate in fundraising events, activities and by making privatecontributions.UWBAmayalsohaveBoardmembersthathaveotherdirecttransactionswiththeorganization.AllrelatedpartiesofUWBA are annually required to read and sign a conflict of interest policywhich covers any relationshipwith boardmembers,volunteers,andstaff.

Infiscalyear2013,UWBAutilizedtheservicesofthelawfirmofPaulHastings,LLP.ABoardmemberofUWBAwasalsoaPartnerofthefirm.Thefirmwaspaid$10,000and$0fortheyearsendedJune30,2013and2012,respectively.Thefirmalsoprovidedcontributed services of $160,197 and $ 166,665 during the years ended June2013 and 2012, respectively, are included inmiscellaneousincomeintheaccompanyingstatementsofactivities.

In fiscal year 2013, UWBA utilized the services of law firm of Gordon & Rees, LLP. A Board member of UWBA was also ashareholderofthefirm.Thefirmwaspaid$2,000and$0fortheyearsendedJune30,2013and2012respectively.ThefirmdidnotcontributeadditionalservicestoUWBAin2013orin2012.

NOTE12–LINEOFCREDIT

UWBAenteredintoalineofcreditagreementwithafinancialinstitutioneffectiveAugust9,2013.Thetermsofthisagreementcallfor thepledging of securities andother investmentsmaintained in the financial institution for any andall obligations takenbyUWBAunderthisagreement.Theagreementprovidesforacreditlimitof$3,500,000withinterestchargedataratedeterminedbythelenderonaperiodicbasis.

NOTE13–LABORUNIONCONTRACT

UBWA'snon‐managementemployeesaresubjecttoacollectivebargainingagreement.Thecontractisathree‐yearagreementthatexpiredonMarch31,2012,andwasmutuallyextendedtoMarch31,2013.CurrentlyanewcontractisbeingnegotiatedbetweenUWBAandOfficeandProfessionalEmployeesInternationalUnionLocal#3.

SUPPLEMENTARYINFORMATION

_________

UNITEDWAYOFTHEBAYAREASCHEDULEOFEXPENDITURESOFFEDERALAWARDSYearEndedJune30,2013

Page22

FederalCFDANumber FundingAgent

FederalContract/GrantNumber

2013Amount

DepartmentoftheTreasury21.009 DepartmentofTreasury V12012 359,500$

TotalDepartmentofTreasury 359,500

USDepartmentofAgriculture

SupplementalNutritionAssistanceProgram 10.561 CaliforniaDepartmentofSocialServices 12‐3058 59,430

TotalDepartmentofAgriculture 59,430

DepartmentofHomelandSecurity97.024 UnitedWayWorldwide Alameda:30‐0634‐00 24,573

Oakland:30‐0646‐00ContraCosta:30‐0660‐00SanFrancisco:30‐0858‐00SanMateo:30‐0866‐00Solano:30‐0902‐00Napa:30‐0780‐00Marin:30‐0762‐00

TotalDepartmentofHomelandSecurity 24,573

CorporationforNationalandCommunityServiceVISTAProgram 94.013 CorporationforNational&CommunityService 10VSPCA003 17,480NonprofitCapacityBuilding 94.022 CorporationforNational&CommunityService 10CBHCA001 26,792

TotalCorporationforNational&CommunityService 44,272

DepartmentofHealthandHumanServicesCommunityServicesBlockGrant‐ACAP 93.569 CityofOakland 62,365

TotalDepartmentofHealthandHumanServices 62,365

TotalFederalAwards 550,140$

Title

UNITEDWAYOFTHEBAYAREANOTESTOSCHEDULEOFEXPENDITURESOFFEDERALAWARDS

YearEndedJune30,2013

Page23

NOTE1–BASISOFPRESENTATION

TheaccompanyingScheduleofExpendituresofFederalAwards(the“Schedule”)includesthefederalgrantactivityoftheUnitedWayoftheBayArea(“UWBA”)underprogramsofthefederalgovernmentfortheyearendedJune30,2013.TheinformationinthisscheduleispresentedinaccordancewiththerequirementsoftheOfficeofManagementandBudget(“OMB”)CircularA‐133AuditsofStates,LocalGovernments,andNon‐ProfitOrganizations. Because the schedulepresents only a selected portion of theoperationsofUWBA,itisnotintendedtoanddoesnotpresentthefinancialposition,changesinnetassetsorcashflowsofUWBA.

NOTE2–SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

ExpendituresreportedontheSchedulearereportedontheaccrualbasisofaccounting.Suchexpendituresarerecognizedfollowingthe cost principles contained in OMB Circular A‐122, Cost Principles for Non‐profit Organizations, wherein certain types ofexpendituresarenotallowableorarelimitedastoreimbursement.Pass‐throughentityidentifyingnumbersarepresentedwhereavailable.

REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIALREPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDITOF

FINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS

TotheBoardofDirectorsUnitedWayoftheBayArea

We have audited, in accordance with the auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing StandardsissuedbytheComptrollerGeneraloftheUnitedStates,thefinancialstatementsofUnitedWayoftheBayArea (“UWBA”),whichcomprise thestatementsof financialpositionasof June30,2013,and therelatedstatementsofactivities,functionalexpenses,andcashflowsfortheyearthenended,andtherelatednotestothefinancialstatements,andhaveissuedourreportthereondatedNovember7,2013.

InternalControlOverFinancialReporting

Inplanningandperformingourauditofthefinancialstatements,weconsideredUWBA’s internalcontrolover financial reporting (internal control) todetermine theauditprocedures that are appropriate in thecircumstances for the purpose of expressing our opinion on the financial statements, but not for thepurposeofexpressinganopinionontheeffectivenessofUWBA’sinternalcontrol.Accordingly,wedonotexpressanopinionontheeffectivenessofUWBA’sinternalcontrol.

Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallowmanagementor employees, in the normal course of performing their assigned functions, to prevent, or detect andcorrect, misstatements on a timely basis. A material weakness is a deficiency, or a combination ofdeficiencies, ininternalcontrolsuchthatthereisareasonablepossibilitythatamaterialmisstatementofthe entity's financial statements will not be prevented, or detected and corrected, on a timely basis. Asignificantdeficiencyisadeficiency,oracombinationofdeficiencies,ininternalcontrolthatislessseverethanamaterialweakness,yetimportantenoughtomeritattentionbythosechargedwithgovernance.

Ourconsiderationof internalcontrolwas for the limitedpurposedescribed inthe firstparagraphof thissection and was not designed to identify all deficiencies in internal control that might be materialweaknesses or significant deficiencies. Given these limitations, during our auditwe did not identify anydeficienciesininternalcontrolthatweconsidertobematerialweaknesses.However,materialweaknessesmayexistthathavenotbeenidentified.

ComplianceandOtherMatters

As part of obtaining reasonable assurance about whether UWBA’s financial statements are free frommaterialmisstatement,weperformedtestsof itscompliancewithcertainprovisionsof laws,regulations,contracts, and grant agreements, noncompliance which could have a direct and material effect on thedeterminationof financial statement amounts.However, providing an opinionon compliancewith thoseprovisionswas not an objective of our audit, and accordingly, we do not express such an opinion. Theresults of our tests disclosed no instances of noncompliance or other matters that are required to bereportedunderGovernmentAuditingStandards.

PurposeofthisReport

Thepurposeofthisreportissolelytodescribethescopeofourtestingofinternalcontrolandcomplianceandtheresultsofthattesting,andnottoprovideanopinionontheeffectivenessofUWBA’sinternalcontrolor on compliance. This report is an integral part of an audit performed in accordancewithGovernmentAuditing Standards in considering the entity’s internal control and compliance. Accordingly, thiscommunicationisnotsuitableforanyotherpurpose.SanFrancisco,CaliforniaNovember7,2013

REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJORFEDERALPROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCE

TotheBoardofDirectorsUnitedWayoftheBayArea

ReportonCompliancefortheMajorFederalProgram

We have audited United Way of the Bay Area’s (“UWBA”) compliance with the types of compliancerequirements described in the OMB Circular A‐133 Compliance Supplement that could have a direct andmaterial effectonUWBA’smajor federalprogram for theyearended June30,2013.UWBA'smajor federalprogramisidentifiedinthesummaryofauditor'sresultssectionoftheaccompanyingscheduleoffindingsandquestionedcosts.

Management’sResponsibility

Managementisresponsibleforcompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletoitsmajorfederalprogram.

Auditor’sResponsibility

Ourresponsibility is toexpressanopiniononcompliance forUWBA’smajor federalprogrambasedonourauditof the typesof compliancerequirements referred toabove.Weconductedourauditof compliance inaccordance with auditing standards generally accepted in the United States of America; the standardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards,issuedbytheComptrollerGeneralof the United States; and OMB Circular A‐133, Audits of States, Local Governments, and Non‐ProfitOrganizations.ThosestandardsandOMBCircularA‐133requirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhethernoncompliancewiththetypesofcompliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectonthemajorfederalprogramoccurred.Anauditincludesexamining,onatestbasis,evidenceaboutUWBA’scompliancewiththoserequirementsandperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.

Webelieve thatourauditprovidesa reasonablebasis forouropiniononcompliance for themajor federalprogram.However,ourauditdoesnotprovidealegaldeterminationonUWBA’scompliance.

OpinionontheMajorFederalProgram

Inouropinion,UWBAcomplied,inallmaterialrespects,withthetypesofcompliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectonitsmajorfederalprogramfortheyearendedJune30,2013.

ReportonInternalControlOverCompliance

Management of UWBA is responsible for establishing and maintaining effective internal control overcompliancewith the types of compliance requirements referred to above. In planning and performing ouraudit,weconsideredUWBA’sinternalcontrolovercompliancewiththetypesofrequirementsthatcouldhavea direct and material effect on a major federal program to determine the auditing procedures that areappropriateinthecircumstancesforthepurposeofexpressinganopiniononcomplianceforthemajorfederalprogramandtotestandreportoninternalcontrolovercomplianceinaccordancewithOMBCircularA‐133,but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance.Accordingly,wedonotexpressanopinionontheeffectivenessofUWBA’sinternalcontrolovercompliance.

A deficiency in internal control over compliance exists when the design or operation of a control overcompliance does not allowmanagement or employees, in the normal course of performing their assignedfunctions,toprevent,ordetectandcorrect,noncompliancewithatypeofcompliancerequirementofafederalprogram on a timely basis. A material weakness in internal control over compliance is a deficiency, orcombinationofdeficiencies,ininternalcontrolovercompliance,suchthatthereisareasonablepossibilitythatmaterialnoncompliancewithatypeofcompliancerequirementofafederalprogramwillnotbeprevented,ordetected and corrected, on a timely basis. A significant deficiency in internal control over compliance is adeficiency, or a combination of deficiencies, in internal control over compliancewith a type of compliancerequirement of a federal program that is less severe than a material weakness in internal control overcompliance,yetimportantenoughtomeritattentionbythosechargedwithgovernance.

Our consideration of internal control over compliance was for the limited purpose described in the firstparagraphofthissectionandwasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbematerialweaknessesorsignificantdeficiencies.Wedidnotidentifyanydeficienciesininternalcontrolovercompliancethatweconsidertobematerialweaknesses.However,materialweaknessesmayexistthathavenotbeenidentified.

Thepurposeofthisreportoninternalcontrolovercomplianceissolelytodescribethescopeofourtestingofinternalcontrolovercomplianceand theresultsof that testingbasedon therequirementsofOMBCircularA‐133.Accordingly,thisreportisnotsuitableforanyotherpurpose.SanFrancisco,CaliforniaNovember7,2013

UNITEDWAYOFTHEBAYAREASCHEDULEOFFINDINGSANDQUESTIONEDCOSTS

YearEndedJune30,2013

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SECTIONI–SUMMARYOFAUDITOR’SRESULTSFinancialStatementsTypeofauditor’sreportissued: UnmodifiedInternalcontroloverfinancialreporting: Materialweaknessesidentified? Yes X No Significantdeficiencyidentified? Yes X Nonereported Noncompliancematerialtofinancial

statementsnoted? Yes X NoFederalAwardsInternalcontrolovermajorprograms: Materialweaknessesidentified? Yes X No Significantdeficiencyidentified? Yes X NonereportedTypeofauditor’sreportissuedoncomplianceformajorprograms: UnmodifedAnyauditfindingsdisclosedthatarerequiredtobereportedinaccordancewith: Section510(a)ofOMBCircularA‐133? Yes X NoIdentificationofmajorprograms: CFDANumber(s) NameofFederalProgramorCluster

21.009 VolunteerIncomeTaxAssistance DollarthresholdusedtodistinguishbetweenTypeAandTypeBprograms: $300,000 Auditeequalifiedaslow‐riskauditee? X Yes _ No

PARTII–FINANCIALSTATEMENTFINDINGS

Nonenoted.

PARTIII–FEDERALAWARDFINDINGSANDQUESTIONEDCOSTS

Nonenoted.

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