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FINANCIAL STATEMENTS MAY 31, 2009

GENESIS WORLD MISSION, INC.

GENESIS WORLD MISSION, INC. Table of Contents

Page INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS Statement of Financial Position Statement of Activities Statement of Functional Expenses Statement of Cash Flows Notes to Financial Statements 1

2 4 5 7 8

Morris W. Grigg, CPA Thomas J. Ritter, MS, CPA Duane Brash, CPA John J. Mahler, CPA

Members American Institute of Certified Public Accountants Idaho Society of Certified Public Accountants

INDEPENDENT AUDITORS REPORT

To the Board of Directors Genesis World Mission, Inc. Garden City, Idaho We have audited the accompanying statement of financial position of Genesis World Mission, Inc. (an Idaho nonprofit organization) as of May 31, 2009 and the related statements of activities, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of the Organizations management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organizations internal control over financial reporting. Accordingly, we do not express such an opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Genesis World Mission, Inc. as of May 31, 2009, and the changes in its net assets and its cash flows for the years then ended are in conformity with accounting principles generally accepted in the United States of America.

December 4, 2009 Boise, Idaho

GENESIS WORLD MISSION, INC.


STATEMENT OF FINANCIAL POSITION MAY 31, 2009

ASSETS CURRENT ASSETS Cash and cash equivalents Prepaid expenses Contractual receivables Pledges receivable Grants receivable Pharmacy and supply inventory Total current assets PROPERTY AND EQUIPMENT, at cost Land Building and improvements Equipment and software Less accumulated depreciation

115,545 187 1,966 33,783 20,977 45,270 217,728

85,000 482,687 57,541 (68,454) 556,774 $ 774,502

See accompanying notes to financial statements

GENESIS WORLD MISSION, INC.


STATEMENT OF FINANCIAL POSITION MAY 31, 2009

LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable Accrued liabilities Note payable, current portion Total current liabilities LONG-TERM LIABILITIES Note payable, less current portion

5,286 17,268 16,010 38,564

212,609 251,173

NET ASSETS Unrestricted Temporarily restricted Permanently restricted

452,287 71,042 523,329 $ 774,502

See accompanying notes to financial statements

GENESIS WORLD MISSION, INC.


STATEMENT OF ACTIVITIES YEAR ENDED MAY 31, 2009

Unrestricted REVENUES, GAINS AND OTHER SUPPORT Foundation and corporate grants State grants Contributions and support Fundraising events Interest income Contracted revenue Other In-kind labor In-kind materials and supplies Net assets released from restrictions Temporarily restricted Total revenues, gains and other support EXPENSES Garden City Community Clinic Medical program Dental program Total Garden City Community Clinic Volunteer Physicians Network International programs Administration Fundraising Total expenses CHANGE IN NET ASSETS NET ASSETS, BEGINNING OF YEAR, as restated NET ASSETS, END OF YEAR $

Temporarily Restricted

Total

235,350 87,762 50,247 356 28,051 85 336,964 127,938 168,593 1,035,346

56,000 13,472 112,966 17,362 (168,593) 31,207

291,350 13,472 200,728 67,609 356 28,051 85 336,964 127,938 1,066,553

562,481 59,845 622,326 59,929 114,113 75,689 73,357 945,414 89,932 362,355 452,287 $

31,207 39,835 71,042 $

562,481 59,845 622,326 59,929 114,113 75,689 73,357 945,414 121,139 402,190 523,329

See accompanying notes to financial statements

GENESIS WORLD MISSION, INC.


STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED MAY 31, 2009

Garden Garden Total City City Garden Community Community City Volunteer International Clinic Clinic Community Physicians Medical (Medical) (Dental) Clinic Network Missions Personnel $ 315,803 Contractual services 83,676 Utilities and building maintenance 14,274 Interest expense Professional fees 3,160 Direct international Medications and supplies 126,599 Fundraising events Depreciation and amortization 8,587 Insurance 2,046 Postage and delivery 834 Printing and reproduction 2,226 Advertising 635 Travel and entertainment 2,694 Repairs, maintenance and minor equipment 1,119 Other 828 $ 562,481 $ 31,912 397 4,321 295 12,788 7,444 455 117 369 277 172 1,286 12 $ 59,845 $ 347,715 84,073 18,595 3,455 139,387 16,031 2,501 951 2,595 912 2,866 2,405 840 $ 622,326 $ 45,413 3,540 2,353 3,649 340 1,387 263 637 657 750 601 226 113 $ 59,929 $ 17,074 2,248 1,357 77,343 2,254 1,398 567 517 626 10 7,858 393 2,468 $ 114,113

See accompanying notes to financial statements

GENESIS WORLD MISSION, INC.


STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED MAY 31, 2009

Administration Personnel $ 48,348 Contractual services 864 Utilities and building maintenance 2,390 Interest expense 16,898 Professional fees 636 Direct international Medications and supplies 1,380 Fundraising events Depreciation and amortization 1,680 Insurance 296 Postage and delivery 258 Printing and reproduction 699 Advertising 495 Travel and entertainment 792 Repairs, maintenance and minor equipment 861 Other 92 $ 75,689

Fundraising $ 25,716 514 531 317 35,896 386 192 1,723 4,768 615 972 399 1,328 $ 73,357

Total $ 484,266 88,477 26,100 16,898 9,628 77,343 143,678 35,896 20,882 3,819 4,086 9,345 2,782 13,089 4,284 4,841 $ 945,414

See accompanying notes to financial statements

GENESIS WORLD MISSION, INC.


STATEMENT OF CASH FLOWS YEAR ENDED MAY 31, 2009

CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Donated capital assets Depreciation and amortization Increase (decrease) in: Prepaid expenses Accounts receivable Grants receivable Inventory Accounts payable Accrued expenses Net cash used by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets Net cash used by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Payments on long-term debt Net cash used by financing activities INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Interest paid Non-cash financing and investing activities Donated capital assets

121,139

(1,950) 20,882 (187) (35,749) 3,546 16,487 5,172 4,566 133,906

(10,328) (10,328)

(63,018) (63,018) 60,560 54,985 $ 115,545

$ $

16,898 1,950

See accompanying notes to financial statements

GENESIS WORLD MISSION, INC.


NOTES TO FINANCIAL STATEMENTS MAY 31, 2009

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities Genesis World Mission, Inc ("Organization") is a non-profit, faith based organization providing medical, physical and spiritual care for the underserved. The organization operates a medical and dental clinic in Garden City, Idaho and manages a county-wide Volunteer Physicians Network. It also works to provide sustainable humanitarian medical aid internationally and operates a warehouse to supply both the clinic and international projects. In 2008, the organization helped establish and continues to help operate a medical clinic in Ndumberi, Kenya in partnership with a separate in-country organization. Cash and Cash Equivalents Cash and cash equivalents include cash on hand as well as checking and savings accounts with financial institutions. The Organization considers all short-term investments purchased with a maturity of three months or less to be cash equivalents. Cash is maintained in a Boise area financial institution. Pledges and Grants Receivable Pledges and grants receivable are stated at unpaid balances, less an allowance for uncollectible amounts. Balances are non-interest bearing. The allowance is based on experience. It is the Organizations policy to charge off uncollectible receivables when management determines the receivable will not be collected. There was no allowance at May 31, 2009 as all amounts are deemed collectible. Inventories Pharmaceutical and medical supplies are either donated or purchased. As of May 31, 2009, the value of purchased and donated pharmaceutical and medical supplies has been capitalized as supplied inventory at the lower of cost or market. Property and Equipment Purchased property, equipment and software is recorded at cost. Donated property, equipment and software are valued in the financial statements when used on Organization projects. Other donated property and equipment which is passed through the warehouse to other organizations are not valued in the financial statements. Purchased property and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets. Federal and State Income Taxes Under Section 501(c)(3) of the Internal Revenue Code, as well as under Idaho state law, the Organization is considered to be a nonprofit organization and is therefore exempt from federal and state income taxes. It has been classified as an organization that is not a private foundation under Section 509(a)(2) of the Internal Revenue Code.

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GENESIS WORLD MISSION, INC.


NOTES TO FINANCIAL STATEMENTS MAY 31, 2009

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) Concentration of Credit Risk For the fiscal year ended May 31, 2009, the Organization has maintained various bank accounts with Idaho financial institutions. The bank balances were fully insured by federal depository insurance coverage. In-Kind Contributions The Organization records donated services for volunteers who perform work similar to salaried personnel and are a significant and integral part of the efforts of the Organization. Contributions of donated non-cash assets are recognized at fair value in the financial statements. Use of Estimates The Organization uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. It is at least reasonably possible that the estimates will change within the next year. Promises to Give Contributions and grants are recognized when the donor or grantor makes an unconditional promise to give to the Organization. All donor-restricted contributions and grants are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Restricted Funds The Organization reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Grant Revenues All grants, except for expenditure reimbursement grants, are recognized as income when the grantor agency agrees to provide the funds to the Organization. Expenditure reimbursement grants are recognized as income when the related expenditures are made. NOTE 2 - PATIENT GOODS AND SERVICES REVENUE The Organization operates the Garden City Community Clinic and has a policy of providing free medical care to patients who do not have third-party coverage. Therefore, no revenue from medical services is recorded. Eligibility is based on household size and income based on 200% of the Federal Poverty Guidelines.

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GENESIS WORLD MISSION, INC.


NOTES TO FINANCIAL STATEMENTS MAY 31, 2009

NOTE 3 - NOTE PAYABLE During 2006, the Organization acquired the building and associated land they were previously leasing for a purchase price of $425,000 resulting in a long-term note payable of $415,000. Unscheduled principal payments were made on the note from funds provided by a grant from the Laura Moore Cunningham Foundation. Terms of the note are as follows: Note payable to the Ashley's, interest at 7.0% amortized over 30 years, with monthly payments of principal and interest of $2,761 through April 1, 2016 with a balloon payment due April 1, 2016, collateralized by land and building. $ Less current portion $ At May 31, 2008, maturities of long-term debt are as follows: 2010 2011 2012 2013 2014 Thereafter $ 16,010 18,900 20,231 21,728 23,299 128,451 228,619 228,619 16,010 212,609

$ NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS St. Lukes Medical Director Funds John F Nagel GAPMed Funds Laura Moore Cunningham Building Funds Harry Morrison Foundation (Fire Equipment) Funds Rotary Transportation Funds Rotary Hygiene Funds Kiwanis Clinic Equipment Funds Kenya Clinic Funds Kenya General Funds $

1,139 93 1,222 6,583 393 89 54 15,829 45,640 71,042

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GENESIS WORLD MISSION, INC.


NOTES TO FINANCIAL STATEMENTS MAY 31, 2009

NOTE 5 RELATED PARTY TRANSACTIONS The Organization has valued the in-kind services of four of its board members for professional services provided during the year (outside of board responsibilities.) The value of said services, as determined by management, is $75,958 and is reflected in the financial statements. The Organization also accepts cash and in-kind donations (such as tangible goods and fundraising auction items) from board members and employees. The value of cash donations by board members and employees is $35,469; the value of in-kind donations by the same is $36,028. In-kind amounts are determined by management and are reflected in the financial statements. NOTE 5 CORRECTION OF AN ERROR The financial statements for the year ended May 31, 2008 contained an error in the calculation of purchased and donated pharmaceutical inventory. Accordingly, the Organization restated its financial statements for the year ended May 31, 2008. The effect of the correction was to decrease pharmacy and supply inventory and decrease the change in net assets for 2008 by $35,518. Unrestricted net assets at the beginning of 2009 have been adjusted for the effects of this restatement.

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