the american institute for contemporary german studies at ... · located in washington, d.c., the...

The American Institute for ContemporaryGerman Studies at The

Johns Hopkins University, Inc.

Financial Statements andIndependent Auditor's Report

June 30, 2012 and 2011



Table of Contents

Page

Independent Auditor's Report 1

Statement of Financial Position 2

Statement of Activities 3

Statement of Cash Flows 4

Statement of Functional Expenditures 5

Notes to Financial Statements 6-12

Independent Auditor's Report on Supplemental Information 14

Statement of Expenditures by Program 15

William A. Russ, CPA

Independent Auditor's Report

To the Board of DirectorsThe American Institute for Contemporary German Studies

at The Johns Hopkins University, Inc.Washington, DC

I have audited the accompanying Statements of Financial Position of The AmericanInstitute for Contemporary German Studies at The Johns Hopkins University, Inc., (anon-profit organization) as of June 30, 2012, and the related Statements of Activities andCash Flows for the year then ended. These financial statements are the responsibility ofthe Institute's management. My responsibility is to express an opinion on these financialstatements based on my audit. The prior year summarized comparative information hasbeen derived from the Institute's 2011 financial statements and, in my report datedSeptember 27, 2011,1 expressed an unqualified opinion on those financial statements.

I conducted my audit in accordance with generally accepted auditing standards in theUnited States of America. Those standards require that I plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe my audit provides areasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of The American Institute for Contemporary GermanStudies at The Johns Hopkins University, Inc. as of June 30, 2012, and the changes in itsnet assets and its cash flows for the year then ended in conformity with generallyaccepted accounting principles.

September 28, 2012

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2316 Tucker Lane, Baltimore, Maryland 21207, (410) 448-9100, [email protected]

The American Institute for Contemporary German Studiesat The Johns Hopkins University

Washington, D.C.

Statements of Financial PositionJune 30,2012 and 2011

2012 2011Assets

CurrentCash and cash equivalentsPledge receivablesGrants receivableOther receivablesPrepaid expenses and other assets

Total current assetsNon-current

Furniture, equipment and leasehold improvements, less accumulateddepreciation of $ 177,205 in 2012 and $ 170,319 in 2011

Investments, at fair value

Total assets

Liabilities and Net AssetsCurrent Liabilities

Johns Hopkins University overdraftAccounts payable

Net AssetsUnrestricted - undesignatedUnrestricted - board designated endowmentsTotal unrestricted

Temporarily restricted

Total net assets

Total liabilities and net assets

$ 206,538105,179184,9575,04664,966

$ 253,144255,470411,1942,82026,016

566,686

9,0892,836,361

2,845,450

3,412,136

76,30050,733

127,033

205,9952,836,3613,042,357

242,744

3,285,103

3,412,136

948,644

15,9752,786,382

2,802,357

3,751,001

25,20427,942

53,146

332,7122,786,3823,119,094

578,761

3,697,855

$3,751,001

The accompanying notes are an integral part of these financial statements.- 2 -


Washington, D.C.

Statements of ActivitiesFor The Years Ended June 30,2012 and 2011 (summarized)

RevenueContributions and grantsInterest, dividends and realized gainsOther revenues

Total revenues

Net assets released from restrictions:Satisfaction of program restrictions

Net revenues

ExpendituresProgram expendituresManagement and generalFund raising

Total expenditures

Change in net assets from operations

Unrealized gain (loss) on investments

Change in net assets

Net assets at beginning of year

Net assets at end of year

2012

Unrestricted

$ 987,84360,72417,937

1,066,504

606,420

1,672,924

1,069,948282,863316,828

1,669,639

3,285

(80,021)

(76,736)

3,119,094

$ 3,042,357

TemporarilyRestricted

$ 224,95945,444

270,403

(606,420)

(336,017)

-

(336,017)

-

(336,017)

578,761

$ 242,744

Total

$ 1,212,802106,16817,937

1,336,907

-

1,336,907

1,069,948282,863316,828

1,669,639

(332,732)

(80,021)

(412,753)

3,697,855

$ 3,285,103

2011Total

$ 1,305,940108,02915,680

1,429,649

1,429,649

987,238264,861271,304

1,523,403

(93,754)

261,114

167,360

3,530,495

$ 3,697,855'



Washington, D.C.

Statements of Cash FlowsFor the Years Ended June 30, 2012 and 2011

Cash flows from operating activities:Increase (decrease) in net assets

Adjustments to reconcile change in netassets to net cash used by operating activities:

DepreciationDecrease (increase) in pledges receivableDecrease (increase) in grants receivableDecrease (increase) in other receivablesDecrease (increase) in prepaid expenseIncrease (decrease) in JHU overdraftIncrease (decrease) in accounts payable

Net cash provided by operating activities

Cash flows from investing activities:Realized gains & other income from JHU endowmentInterest earned on board designated endowment paid by bankContributions designated to endowmentsUnrealized loss (gain) on investmentsDistributions from JHU board designated endowments

Net cash used in investing activities

Net increase (decrease) in cash

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

2012

$ (412,753)

3,371

(104,942)(489)

(129,500)80,021

104,934

2011

$ 167,358

6,885150,291226,237(2,226)(38,950)51,09622,791

8,2843,52832,827(1,106)18,40722,819(4,620)

247,497

(107,075)(468)

(47,000)(261,114)107,074

(49,977) (308,583)

(46,606) (61,086)

253,144 314,230

$ 206,538 $ 253,144



Washington, B.C.

Statement of Functional ExpendituresFor The Years Ended June 30, 2012 and 2011 (summarized)

Salaries

Personnel benefits

Books, subscriptions, reference

Equipment rental and maintenance

General office

Occupancy

Printing & copying

Telephone

Travel

Seminars/conferences/workshops

Award dinner/project development

Admin overhead

Miscellaneous fees and staff development

Depreciation

General contractual services

Consultants/professional fees

Honoraria

Stipends

Program

Services

$ 376,969

133,187

814

325

21,027

178,871

21,691

2,792

87,477

45,301

859

14,480

251

2,118

58,586

32,000

93,200

1,069,948

2012

Management

& General

$ 56,996

21,468

4,820

8,693

75,944

1,957

20,030

41,555

3,287

6,589

4,768

36,756

282,863

Fundraising

$ 70,543

27,720

1,011

4,691

104

3,891

125,303

83,565

316,828

Total

$ 504,508

182,375

814

5,145

30,731

254,815

28,339

22,926

132,923

45,301

129,449

14,480

6,840

6,885

58,586

120,321

32,000

93,200

1,669,639

Total

2011

S 469,565

165,047

1,241

11,062

23,643

242,586

27,313

20,550

126,879

72,630

87,845

13,697

4,158

8,284

109,148

17,280

43,874

78,600

1,523,402


The American Institute for Contemporary German Studiesat The Johns Hopkins University, Inc.

Washington, D.C.

Notes to Financial StatementsJune 30, 2012 and 2011

Note 1 Organization and Summary of Significant Accounting Policies

Organization

Located in Washington, D.C., the American Institute for Contemporary German Studiesat The Johns Hopkins University, Inc. (Institute) is an independent, non-profit public policyorganization, which works in Germany and the United States to address current and emergingpolicy challenges. Founded in 1983, the Institute is affiliated with The Johns Hopkins University(University). The Institute is governed by its own Board of Trustees, which includes prominentGerman and American leaders from the business, policy, and academic communities. Throughoriginal analyses, dialogue, conferences, and other activities, AICGS is helping to sustainGerman-American and transatlantic cooperation in a new century. In 2007 an independentassociation called AICGS e. V. was established under the laws of the Federal Republic of Germany.This eingetragener Verein was established to allow German residents to make tax deductibledonations to support the mission of the Institute.

Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits with financial institutions and withthe University. The University holds and disburses the Institute's funds in support of its normaloperations. Net cash (overdraft) on deposit with the University on June 30, 2012 and 2011amounted to $(76,300) and $(25,204) respectively.

Fund Accounting

To insure the observance of limitations and restrictions placed on the use of resourcesavailable to the Institute, the accounts of the Institute are maintained in accordance with theprinciples of fund accounting. This is the procedure by which resources for various purposes areclassified for accounting and recording purposes into funds established according to their natureand purposes. Separate accounts are maintained for each fund; however, in the accompanyingfinancial statements, funds that have similar characteristics have been combined into fund groups.All the Institute's financial transactions have been recorded as operating funds and classified aseither unrestricted or temporarily restricted.

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

Unrestricted Funds

Operating funds that are not restricted by the donor are reported as revenue in the periodreceived. Pledges, less an allowance for un-collectible amounts, are recorded as receivables in theperiod pledged.


Washington, D.C.


Note 1 Organization and Summary of Significant Accounting Policies (Continued)

Temporarily Restricted Funds

Gifts of cash or other long-lived assets with explicit restrictions that specify how theassets are to be used are reported as temporarily restricted support. Absent explicit donorstipulations about how those long-lived assets must be maintained, the Institute reports expirationsof donor restrictions when the donated or acquired long-lived assets are placed in service.

Board Designated Endowment

Unrestricted contributions have been designated by the Institute's Board of Directors asendowment funds. Donors have stipulated certain contributions be invested in this otherwiseunrestricted endowment funds. Accordingly, additional contributions from donors have beeninvested into one of two board designated endowment funds. As of June 30, 2012, the Institutehas not received any permanently restricted contributions.

A portion of the Institute's endowment funds have been invested in The Johns Hopkins Universityendowment pool with the remaining funds invested in a money market bank account. A portion ofthe endowment fund income and gains (realized and unrealized) have been designated to benefitthe Institute's Harry & Helen Gray Culture & Politics Program with the remaining fundssupporting general operations. The fair market value of the endowment funds invested at June 30,2012 and 2011 are as follows:

2012 2011Humanities program $1,034,471 $ 1,068,562General operations 1,801,890 1,717,820

Total endowment funds $2,836,361 $ 2,786,382

An additional $129,500 and $47,000 was designated by the Institute's Board of Directors asendowment funds during the years ending June 30, 2012 and 2011, respectively.

Equipment

Equipment has been stated at cost. Depreciation is provided on the straight-line methodover the estimated useful lives of the assets. Repairs and maintenance are charged to earnings asincurred. Leasehold improvements are capitalized. When assets are sold, retired, or otherwisedisposed of, the applicable costs and allowances are removed from the accounts and the resultinggain or loss is recognized. Depreciation expense was $6,885 and $8,284 for the years ending June30, 2012 and 2011, respectively.

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Washington, D.C.


Note 1 Organization and Summary of Significant Accounting Policies (Continued)

Use of Estimates

The preparation of the financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclose of contingent assets and liabilities at thedate of the financial statements and reported amounts of revenue and expenses during thereporting period. Actual results could differ from those estimates.

Direct and Shared Costs

Direct costs consist of costs incurred that are readily identifiable to a programobjective. Shared costs include costs that are not readily identifiable to a specific programobjective but consist of elements attributable to achieving more than one program objective or tothe overall programmatic mission of the Institute. Significant shared costs include expendituresassociated with occupancy and salaries. Shared occupancy costs are allocated to the Institute'sprograms proportionally by square footage of space utilized. Shared salary costs are allocated tothe Institute's programs based on estimates of time and effort reported by employees.

Comparative Amounts

The amounts shown for 2011 in the accompanying statement of activities are included toprovide a basis for comparison with 2012. They do not include all of the information necessaryfor a fair presentation of the 2011 activities in conformity with generally accepted accountingprinciples.

Fair Value Measurements

The Institute categorizes its assets measured at fair value into a three-level hierarchybased on the priority of inputs to the valuation technique used to determine fair value. The fairvalue hierarchy gives the highest priority to quoted prices in active markets for identical assets(Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in thedetermination of the fair value measurement fall within different levels of the hierarchy, thecategorization is based on the lowest level input that is significant to the fair value measurement.Assets valued at fair value are categorized based on the inputs to the valuation techniques asfollows:

Level 1 - Valuations based on unadjusted quoted prices for identical assets or liabilities inactive markets;

Level 2 - Valuations based on quoted prices for similar assets or liabilities or identicalassets or liabilities in less active markets, such as dealer or broker markets; and

Level 3 - Valuations derived from valuation techniques in which one or more significantinputs or significant value drivers are unobservable. such as pricing models, discountedcash flow models and similar techniques not based on market, exchange, dealer or brokertraded transactions. The only assets or liabilities which are valued at fair value on arecurring basis consist of investments in equity securities and mutual funds.

- 8 -


Washington, D.C.

Notes to Financial StatementsJune 30,2012 and 2011

Note 2 Temporarily Restricted Net Assets

Temporarily restricted net assets available for the Institute's programs after June 30 areas follows:

Bosch Health Care Reform ProjectBusiness & Economics ProgramSociety, Culture & Politics ProgramDAAD FellowshipDaimler Energy Policy ProgramDeutsche Bank FellowshipDraeger Foundation Lecture SeriesStifterverband fur due Deutsche Wissenschaft FellowshipERP Responses to Economic CrisisF.H. Langhammer Luncheon SeriesGMF Work Study GroupsHarry and Helen Gray Culture & Politics ProgramNRW FellowshipOther ProgramsForeign & Domestic Policies Program

2012 2011$ 46,443

23,1078,551

65,62456,122

-(10,594)

6,41019,525

7,0209,3265,2265,984

$ 242,744

$ 130,83523,9729,864

192,676-

3,8973,9669,562

76,90517,34746,87018,03319,2686,161

19,405

$ 578,761

Note 3 Contributions and Grants

Contributions and grants consist of the following as of June 30, for the following years:

Unrestricted trustee contributionsUnrestricted membership donationsGlobal Leadership Award Dinner revenuesOther contributions

Unrestricted contributions and support

Restricted trustee donationsRestricted membership donationsOther restricted grants

Restricted contributions and support

Total contributions and support

2012 2011$ 1 14,979

52,621820,243

987,843

113,82340,04771,089

224,959

$ 185,97946,932586,8462,500

822,257

25,00085,567373,116

483,683

$ 1,212,802 $ 1,305,940

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Washington, D.C.


Note 4 Investments

The Institute has invested its endowment funds into the University's Endowment Pooland in a money market fund at a bank. The Institute considers its investment in the JHUEndowment Fund as an investment available for sale. Contributions into the endowment pool,reinvested earnings and realized gains for the years ending on June 30 are as follows:

Board Designated Investments2012

Cost Market

Investment in JHU Endowment Fund

Humanities endowment $ 640,200

Board endowment 1,787,922

Accumulated

Unrealized

Gain (Loss)

$ 394,271

13,968

2,428,122 $ 2,836,361 $ 408,239

1,034,471

1,801,890

Investment in JHU Endowment Fund

Humanities endowment $ 640,200

Board endowment 1,658,422

2011

Cost Market

Accumulated

Unrealized

Gain (Loss)

$ 1,068,562 $ 428,362

1,717,820 59,398

1 2,298,622 ~$ 2,786,382 $ 487,760'

Note 5 Fair Value Measurement

The Institute uses fair value measurement to record fair value adjustments to certain assets and todetermine fair value disclosures. For additional information on how the Institute measures fairvalue refer to Note 1 - Organization and Summary of Significant Accounting Policies.

Investment in JHU Endowment Fund and Commercial Money Market Account - Shares inthe JHU Endowment Pool are valued at the Institute's proportional share of the pool's investmentin debt and equity securities. Such investments are classified within Level 1 of the valuationhierarchy.

-10-


Washington, D.C.


Note 5 Fair Value Measurement (continued)

The following table presents assets measured at fair value by classification within the fair valuehierarchy as of June 30, 2012:

Fair Value Measurements Using

Shares in JHUEndowment Pool

Deposits atcommercial banks

Total

The following table presents assetshierarchy as of June 30, 201 1 :

Quoted Prices inActive Markets for

Identical Assets(Level 1)

$ 2,428,110

408,251

$ 2,836,361i _

measured at fair value

SignificantOther Significant

Observable UnobservableInputs Inputs

(Level 2) (Level 3)

$ $ -

-

$ - $ -

by classification within the

Total

$ 2,428,110

408,251

$ 2,836,361

fair value

Fair Value Measurements Using

Shares in JHUEndowment Pool

Deposits atcommercial banks

Total

Quoted Prices in

Active Markets forIdentical Assets

(Level 1)

$ 2,508,127

278,255

$ 2,786,382

SignificantOther Significant

Observable UnobservableInputs Inputs

(Level 2) (Level 3)

$ $ -

-

$ - $ -

Total

$ 2,508,127

278,255

$ 2,786,382


Washington, D.C.


Note 6 Lease Obligation

The University has entered into a lease of the office space used by the Institute at 1755Massachusetts Avenue, NW, in Washington, D.C. The Institute reimburses the University for itsuse of this space. The lease period extends to 31 March 2014 and is classified as an operatinglease. Rent expense was $254,815 and $242,586 for the years ended June 30, 2012 and 2011,respectively. The Institute's minimum lease obligation for years ending on June 30 are as follows:

Year Amount

2013 257,3482014 198,744

Note 7 Tax Status

The financial statements do not include a provision for income taxes because theInstitute is a tax-exempt organization. Should that status be challenged in the future, theInstitute's 2009, 2010 and 2011 tax years are open for examination by the IRS. The IRShas not classified the Institute as a private foundation.

Note 8 Pension and Post-Retirement Benefit Plans

The Institute participates in a multi-employer defined contributions pension plan of theUniversity. The plan is available to substantially all employees. The Institute pays its portion ofthe cost of this plan through the fringe benefits charge it is assessed by the University. During theyears ended June 30, 2012 and 2011, the Institute contributed $182,375 and $165,047 into theUniversity's fringe benefits pool, respectively. The retirement plan portion of the benefit plancontribution was $53,039 and $38,050, respectively.

Note 9 Subsequent Events

Management evaluated subsequent events through September 28, 2012, the date thefinancial statements were available to be issued. Events or transactions occurring after June 30,2012, but prior to September 28, 2012, that provided additional evidence about conditions thatexisted at June 30, 2012, have been recognized in the financial statements for the year ended June30, 2012. Events or transactions that provided evidence about conditions that did not exist at June30, 2012 but arose before the financial statements were available to be issued have not beenrecognized in the financial statements for the year ended June 30, 2012.

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Supplementary Information

June 30,2012 and 2011

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William A. Russ,CPA

Independent Auditor's Report on Supplementary Information

To the Board of DirectorsThe American Institute for Contemporary German Studiesat The Johns Hopkins University, Inc.

Washington, DC

I have audited the financial statements of The American Institute for ContemporaryGerman Studies at the Johns Hopkins University, Inc., as of and for the year ended 30June 2012, and have issued my report thereon dated 28 September 2012 which containedan unqualified opinion on those financial statements. My audit was performed for thepurpose of forming an opinion on the financial statements as a whole. The accompanyingStatement of Expenditures by Program is presented for the purposes of additionalanalysis and is not a required part of the financial statements. Such information is theresponsibility of management and was derived from and relates directly to the underlyingaccounting and other records used to prepare the financial statements. The informationhas been subjected to the auditing procedures applied in the audit of the financialstatements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare thefinancial statements or to the financial statements themselves, and other additionalprocedures in accordance with auditing standards generally accepted in the United Statesof America. In my opinion, the information is fairly stated in all material respects inrelation to the financial statements as a whole.

September 28, 2012

- 14-

2316 Tucker Lane, Baltimore, Maryland 21207, (410) 448-9100, [email protected]


Washington, D.C.

Statement of Expenditures by ProgramFor The Years Ended June 30,2012 and 2011 (summarized)

Bosch Health Care Reform

Business & Economics Program

DAAD Fellowships 2010-2012

Daimler Energy Policy Program

DaimlerFonds Transatlantic Climate & Energy

Deutsche Bank Economic Roundtable/Fellowhip Series

DGroup Security Project

Draeger Muslim Immigration Conference

ERP Risk Project

F.H. Langhammer Luncheon Series

GMF - A New Generation's Transatlantic Dialogue for the Future

German Marshall Fund New Generation Project

Harry and Helen Gray Culture & Politics Program

NRW Fellowship

Foreign & Domestic Policy Studies Program

Society, Culture & Politics Program

Steven MullerNew Initiatives Fund

Thyssen Terrorism Project

ERP German & American Responses to the Economic Crisis

Stifterverband fur due Deutsche Wissenschaft Fellowship

Shared program costs (net)

Direct Costs

$ 84,392

15,373

140,851

-

15,428

750

-

26,479

-

22,822

46,870

-

55,719

9,943

14,246

2,912

81,705

-

77,060

9,562

2,309

606,421

2012

Shared Costs

$ 39,542

42,782

51,098

-

23,125

15,049

-

24,098

26,792

25,790

27,751

-

29,683

26,316

26,473

23,386

25,771

-

33,509

22,362

2

463,529

2011

Total Charged to Programs

$ 123,934

58,155

191,949

-

38,553

15,799

-

50,577

26,792

48,612

74,621

-

85,402

36,259

40,719

26,298

107,476

-

110,569

31,924

2,309

1,069,948

$ 32,195

42,873

175,247

63,412

25,778

18,617

67,685

21,387

-

32,453

58,974

46,631

86,045

32,238

52,182

43,622

38,554

12,244

88,142

47,796

1,163

987,238

The accompanying notes are an integral part of these financial statements.See independent auditor's report on supplementary information.

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