scc inc. financial statement fy 2006 - 2007

7/30/2019 SCC Inc. Financial Statement FY 2006 - 2007

1/15

SUNSET CULTURAL CENTER, INC.FINANCIAL STATEMENTS

FOR THE YEAR ENDEDJUNE 30, 2007AND INDEPENDENT AUDITORS' REPORT


2/15

SUNSET CULTURAL CENTER, INC.

Independent Auditors' Report

Financial Statements:Statement of Financial PositionStatement ofActivitiesStatement ofCash FlowsNotes to Financial Statements

Supplemental Schedule:

Table ofContents

Exhibit B Summary Financial Information and Grant RequirementsNotes to Supplemental Schedule

I

Page

2

345

6-10

1112


3/15

INDEPENDENT AUDITORS' REPORT

To the Board ofDirectorsSunset Cultural Center, Inc.

We have audited the accompanying statement of financial position of Sunset Cultural Center,Inc. (a nonprofit organization) as of June 30, 2007, and the related statement of activities andcash flows for the year then ended. These financial statements are the responsibility of themanagement of Sunset Cultural Center, Inc. Our responsibility is to express an opinion onthese financial statements based on our auditWe conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatementAn audit includes examining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinionIn our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of Sunset Cultural Center, Inc. as of June 30, 2007 and the results of itsactivities and its cash flows for the year then ended, in conformity with accounting principlesgenerally accepted in the United States ofAmerica.,Our audit was made for the purpose of forming an opinion on the basic financial statements ofSunset Cultural Center, Inc. taken as a whole. The supplementary information listed in thetable of contents is presented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as a whole .September 14,2007

2


4/15

ASSETSCashMarketable securitiesAccounts receivable- netInterest receivablePrepaid expensesTreasury Bills

SUNSET CULTURAL CENTER, INC.STATEMENT OF FINANCIAL POSITIONJUNE 30, 2007

Property and equipment -netTOTAL ASSETS

LIABILITIES AND NET ASSETSLiabilities:Accounts payableAccrued expensesDeferred revenueLease payable

I otalliabilitiesNet Assets:Umestricted

Temporarily restrictedTotal net assetsTOTAL LIABILITIES AND NET ASSETS

See Notes to Financial Statements3

$

$

$

$

31,15120,09822,2614,18210,376521,03450 084652,186

97,00778,68914,0805 240195 016234,230229 940464 170652,186


5/15

SUNSET CULTURAL CENTER, INC.STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2007

UnrestrictedREVENUE AND PUBLIC SUPPORT:Revenue:Ticket sales $ 864,155Theater rental 175,685Facility use and other fee income 166,429Reimbursed expenses 151,031Sponsorship income 50,000Investment income 20,801Rental and other income 99 570

Total revenue 1,527,671Public support:Enabling grant 713,000Perfmmance Carmel Venture FundProducers GuildOther grants and donations 1,000In-kind donation 11,250Net assets released from restrictions 91 763Total public support 817 013

Total revenue and public support 2,344,684EXPENSES:Theater services 1,713,448Community services 235,391Management and general 316,149

I otal expenses 2,264,988CHANGES IN NET ASSETS 79,696NET ASSETS, BEGINNING 154 534NET ASSETS, ENDING $ 234,23Q

See Notes to Financial Statement4

TemporarilyRestricted

$

3,255

3 255

1,231129,62658,838__{91,763)

97 932101 187

101,187128,753

$ 222,24Q

Total

$ 864,155175,685166,429151,03150,00024,05699 5701,530,926

713,0001,231129,62659,83811,250914 945

2,445,8711,713,448235,391316 1492,264,988

180,883283,287

$ 464,17Q


6/15

SUNSET CULTURAL CENTER, INC.STATEMENT OF CASH FLOWSFOR THE YEAR ENDED JUNE 30, 2007

CASH FLOWS FROM OPERATING ACTIVITIES:Changes in net assetsAqjustments to reconcile increase in net assetsto net cash provided by operating activities:DepreciationGain on sale of equipmentDonated marketable securities(Increase) decrease in:Accounts receivablePledges I eceivableInterest receivablePrepaid expensesIncrease (decrease) in:Accounts payableAccrued expensesDeferred revenue

NET CASH PROVIDED BY OPERATINGACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of equipmentPurchase of Treasury Bills

NET CASH USED BYINVESTING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES:Lease paymentsRepayment ofworking capital advance

NET CASH USED BY FINANCINGACTIVITIESNET DECREASE IN CASHCASH AT BEGINNING OF YEARCASH AT END OF YEAR

See Notes to Financial Statement5

$ 180,88349,661(166)(20,098)(2,905)7,686(4,182)56,78437,39710,40459,527)

255 937827283,762)

282,935)(2,614)120,000)

122,614)(149,612)180 763

$ 31,151


7/15

SUNSET CULTURAL CENTER, INC .NOTES TO FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30, 2007

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESNature of Operations - Sunset Cultural Center, Inc . ("SCC") is a California nonprofitpublic benefit corporation that was formed to operate and manage the Sunset Communityand Cultural Center ("the Center"), owned by the City ofCarmel-by-the-Sea, ("the City"),for the benefit of the City, its residents and visitors, and the users of the Center.The Center includes a 718 seat theater with stage, rehearsal rooms, dressing rooms andrelated facilities.. The theater is rented to third party presenters and is used for eventsproduced by SCC. In addition, there are meeting rooms and office space unrelated to thetheater that are used by SCC, tenants and many other outside community groups .Basis of Presentation - The accompanying financial statements are presented using theaccrual basis of accounting in accordance with generally accepted accounting principles .The net assets, revenues, gains and losses, and other support, expenses and other charges inthe accompanying financial statements are classified based on the existence or absence ofdonor-imposed restrictions.. Accordingly, for reporting purposes, net assets of SCC andchanges therein are classified as follows:

Unrestricted Net Assets - Net assets that are not subject to d o n o r ~ i m p o s e dstipulations.. This includes any amounts designated by the Board for certain purposes. Temporarily Restricted Net Assets - Net assets subject to d o n o r ~ i m p o s e dstipulations that may or will be met either by actions of SCC and/or the passage oftime . Permanently Restricted Net Assets - Net assets subject to d o n o r ~ i m p o s e drestrictions that they be maintained permanently by SCC As ofJune 30, 2007, therewere no permanently restricted net assets.

Recognition of Donor Restrictions - Support that is restricted by the donor is reported asan increase in temporarily or permanently restricted net assets, depending on the nature ofthe restriction. When a restriction expires (that is, when a stipulated time restriction endsor purpose restriction is accomplished), temporarily restricted net assets are reclassified tounrestricted net assets and reported in the Statement of Activities as "net assets releasedfrom restrictions "Marketable Securities - Marketable securities represent donated common stock receivedin June 2007 and sold on July 3, 2007.. It is the policy ofSCC to sell donated securities andconvert the gift to cash.Accounts Receivable - Accounts receivable are recorded using the allowance method andare presented net of the allowance for uncollectibility. At June 30, 2007 the allowance isestimated to be zero..Treasury Bills- Treasury Bills are recorded at cost and range in maturity from three to sixmonths at the time ofpurchase . Interest is recognized as it is earned

6


8/15

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Property and Equipment - The City owns the Center and the related property, plant andequipment SCC purchases certain tangible assets to support managing the facility. TheCity has reversionary rights to any assets purchased by SCC. Property and equipment witha useful life ofmore than one year and an acquisition cost of$1 ,000 or more are recognizedat cost. Donated property is recorded at fair market value on the date received.. Suchdonations are reported as umestricted support unless the donor has restricted the donatedasset to a specific purpose.. Assets donated with explicit restrictions regarding their use andcontributions of cash that must be used to acquire property and equipment are reported asrestricted support. Absent donor stipulations regarding how long those donated assets mustbe maintained, SCC reports expirations of donor restrictions when the donated or acquiredassets are placed in service. Depreciation is computed using the straight-line method overthe estimated useful lives ofthe assets ranging from three to seven years.Income Taxes- SCC is exempt from federal income tax under Section 50l(c)(3) of theInternal Revenue Code and from state franchise tax under California Revenue and TaxationCode 2370l(d) but is subject to taxes on umelated business income when earnedDefened Revenue - Reservation fees are recognized as revenue in the fiscal year whichincludes the related performance.. Amounts received in advance are repmted as deferredrevenue . At June 30,2007, deferred revenue was $14,080Contributed Services and Facilities - Volunteers contribute services that have not beenrecorded in the accompanying financial statements because the criteria for recognitionunder SFAS No . 116 have not been met. SCC receives the use of office space at no cost,the in-kind donation is recognized at the fair value of rent for similar nonprofitorganizations in the area. The amount recorded for the year ending June 30, 2007 was$11 ,250, which is reflected in the financial statements as in-kind donation with anoffsetting charge to rentFunctional Allocation of Expenses - The costs of providing program services and otheractivities have been presented on a functional basis in the Statement of ActivitiesAccordingly, certain costs have been allocated among the programs and supportingservices benefitedUse of Estimates - The preparation of financial statements in accordance with generallyaccepted accounting principles requires management to make estimates and assumptionsthat affect the amounts reported. Actual results are not expected to differ from thoseestimates

NOTE 2. CONCENTRATION OF CREDIT RISKSCC holds cash balances in one financial institution in amounts exceeding the federalinsurance limits.. However, management believes that SCC does not face a significant riskofloss on these assets.

7


9/15

NOTE 3. TREASURY BILLSTreasury Bills held at June 30, 2007, have various maturities between August 9 andDecember 6, 2007 and amounted to $521,034The following schedule summarizes the investment return and its classification in thestatement of activities for the year ended June 30, 2007:

UmestrictedInterest/dividends $ 20.801 $

NOTE 4. PROPERTY AND EQUIPMENT

TemporarilyRestricted Total3 255 !lk$ ~ 2 ~ 4 . " " ' 0 5 ~ 6

At June 30, 2007, property and equipment consisted of the following:Office equipment and softwareBuilding improvementsTheater equipment

TotalLess accumulated depreciation and amortizationNet property and equipment

NOTE 5. LEASING ARRANGEMENTS

$

$

129,49419,46718 534

167,49511741150.084

SCC leases office equipment under a capital lease.. The economic substance of the lease isthat sec is financing the acquisition of the equipment through the lease and accordingly,the equipment is recorded as an asset and the lease is recorded as a liability.Future minimum lease payments under the capital lease as of June 30, 2007 for each of theremaining years and in the aggregate are as follows:Year EndedJune 30,

20082009TotalLess: amount representing interestPresent value ofminimum lease payments

8

$

Amount3,3562 2375,5933535.240


10/15

NOTE 5. LEASING ARRANGEMENTS (Continued)In addition, SCC as lessor, leased office space to eight tenants under operating leases.. Theterm of the leases range from two years to two and one half years beginning January 1,2006 and expiring June 30, 2008.. The monthly rental payments range from $70 to $1,761.One tenant has an armual rent of $1 for use of library book receipt and storage.. Rentalincome for these leases as of June 30, 2007 was $66,670Minimum future rentals to be received on the operating leases are $59,965 for the yearending June 30, 2008 .

NOTE 6. TEMPORARILY RESTRICTED NET ASSETSAs of June 30, 2007, temporarily restricted net assets are composed of cash and cashequivalents which are restricted for the following purposes:Performance CarmelProducers GuildFacility

Total$$

50,071159,77120 098229.940

The City produced a performance series, Performance Carmel, and under the terms of theAgreement, SCC is to continue producing this series.. The City transferred all funds heldfor Performance Crume! to SCC.. The Producers Guild is a fund established to supportevents produced by Sunset Center Presents.During the year ended June 30, 2007 net assets were released from donor restrictions whenexpenses satisfying the restricted purpose were incurred, or by occurrence of other eventsspecified by donors, These assets are shown in the Statement of Activities as "Itemsreleased from restriction"Purpose restriction accomplished:Performance Crume!Producers GuildFacilitySunset Center Presents

Total

$

$

9

29,74523,27823,14515 59591.763


11/15

NOTE 7. RETIREMENT PLANDuring 2005, the Board of Trustees approved the creation of the Sunset Cultural Center,Inc . 403(b) Plan (the Plan), a defined contribution plan. Employees voluntarily makecontributions to the Plan in amounts based upon the limits established by Sections 402(g)and 414(v) of the Internal Revenue Code . The Plan's assets are invested in certain selfdirected income, money market and mutual funds.The Board of Trustees may approve a discretionary employer contribution to be allocatedin proportion to the participants' total armual compensation. The Board of Trustees has notapproved a contribution for the period ended June 30, 2007.

NOTE 8. MANAGEMENT AGREEMENTA management agreement ("the Agreement") was signed by SCC and the City andaccepted by the City Council on June 8, 2004.. Responsibility for management of theCenter was transferred to SCC on July I, 2004 for a term of3 years ending June 30, 2007.SCC has the option to extend the term for two additional three-year terms. The renewaloption has been exercised for the period July 1, 2007 through June 30, 2010. TheAgreement sets performance criteria and provides remedies in the event SCC fails to meetsuch criteria, including early termination of the Agreement The City is committed toproviding an Enabling Grant of $750,000 for the fiscal year ending June 30, 2008.. SCC iseconomically dependent on the Enabling Grant received from the City

NOTE 9. COMMITMENTS AND CONTINGENCIESSCC has entered into various contracts for services.. The contracts range from a period ofthree years to five years and total $284,568. At June 30, 2007, the remaining commitmentswere $90, 170 .

10


12/15

SUPPLEMENTAL SCHEDULE


13/15

SUNSET CULTURAL CENTER, INC.SUPPLEMENTAL SCHEDULEEXHIBIT B SUMMARY FINANCIAL INFORMATION AND GRANT REQUIREMENTSFOR THE YEAR ENDED JUNE 30, 2007

REVENUE:Rentals:TheaterRoomsOfficesOtherFacility feesGrants/sponsorshipsTotal revenue

Performance Carmel - netSunset Center Presents -ne tBox Office - net

Adjusted revenueCOSTS:Direct costs:All personnelAll other

Total direct costsIndirect costs

Total costsSHORTFALLENABLING GRANTEXCESS OF REVENUE AND GRANTS OVER COSTS

11

$ 163,09127,71866,67053,76993,72374145

479,11613,68021,65437,542)

476 908

594,778218 317813,095275 994

1,089,089(612,181)713 000

$ 1QQ,812


14/15

SUNSET CULTURAL CENTER, INC.NOTES TO SUPPLEMENTAL SCHEDULEEXHIBIT B - SUMMARY FINANCIAL INFORMATION AND GRANT REQUIREMENTSFOR THE YEAR ENDED JUNE 30, 2007

NOTE 1. The supplemental schedule presents the results of operations as defined in the Agreementin Article 4 Expenses, Section 4.2, for the year ended June 30, 2007. The financial resultsshown in Exhibit B Summary Financial Information and Grant Requirements differ fromthe preceding financial statements as follows:

1) The supplemental schedule does not reflect the in-kind donation and expenserelated to Sunset Cultural Center 's use of administrative offices owned by the City2) The supplemental schedule shows as expenditures the costs of acquired assets withuseful lives in excess of one year.. In the accompanying financial statements theseassets have been capitalized and depreciation and amortization expense has beenrecorded for the period3) The supplemental schedule shows as expenditures certain lease payments related toa capital lease. In the accompanying financial statements this asset has beencapitalized and future lease payments have been recorded as a liability, anddepreciation expense has been recorded for the period4) The supplemental schedule does not include donations of temporarily restricted netassets for Producers Guild and facilities which remain restricted as of June 30,2007..

12


15/15

INDEPENDENT AUDITORS' REPO RT

To the Board of DirectorsSunset Cultural Center, Inc.

We have audited the accompanying statement of financial position of Sunset Cultural Center,Inc. (a nonprofit organization) as of June 30, 2007, and the related statement of activities andcash flows for the year then ended These financial statements are the responsibility of themanagement of Sunset Cultural Center, Inc. Our responsibility is to express an opinion onthese financial statements based on our auditWe conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatementAn audit includes examining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of Sunset Cultural Center, Inc. as of Tune 30, 2007 and the results of itsactivities and its cash flows for the year then ended, in conformity with accounting principlesgenerally accepted in the United States of America .Our audit was made for the purpose of forming an opinion on the basic financial statements ofSunset Cultural Center, Inc. taken as a whole. The supplementary information listed in thetable of contents is presented for purposes of additional analysis and is not a required part of thebasic financial statements Such information has been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as a whole.September 14, 2007

2

scc inc. financial statement fy 2006 - 2007

Documents