Independent Auditor Reports 2009 & 2010
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Audit Report 2009 (2.9 mb)
Herman & Cormany
Certified Public Accountants, A.C.
Accountants & Consultants
Independent Auditors’ Report
To the Board of Directors
West Virginia Bar Foundation, Inc.
We have audited the accompanying statement of assets, liabilities, and net assets – modified cash basis of West Virginia Bar Foundation, Inc. (a nonprofit organization) as of June 30, 2010, and the related statements of support, revenue, and expenses- modified cash basis and cash flows – modified cash basis for the year then ended. These financial statements are the responsibility of the Organization’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from West Virginia Bar Foundation, Inc.’s 2009 financial statements and, in our report dated November 23, 2009, we expressed an unqualified opinion on those financial statements.
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 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 mat our audit provides a reasonable basis for our opinion.
As described in Note A, these financial statements were prepared on the cash basis of accounting, except that the statements include a provision for depreciation of buildings, reports unrealized gains and losses on investments, and records liabilities for accrued payroll taxes and withholdings. This basis is a comprehensive basis of accounting othei than generally accepted accounting principles.
| Charleston, WV October 27, 2010 |
| 1031 Quarrier Street, Suite 511 • Charleston, WV 25301-2397 • (304) 345-2320 • (304) 345-2325 faxwww.herman-cormanycpas.com |
| CPA |
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities and net assets of West Virginia Bar Foundation, Inc. as of June 30, 2010, and its support, revenue, and expenses foi the year then ended, on the basis of accounting described in Note A.
West Virginia Bar Foundation, Inc.
Statement of Assets, Liabilities, and Net Assets – Modified Cash Basis
June 30,2010, with Comparative Totals as of June 30,2009
Assets 2010 2009
Cash and cash equivalents $339,997 $333,563
Investments -0- 3,854
Land and buildings 620,335 639,363
Total Assets $960,332 $976,780
Liabilities and Net Assets
Accrued payroll and other liabilities $ 2,010 $ 1,968
Notes payable 303,724 323,790
Total Liabilities $305,734 $325,758
Net Assets
Unrestricted $561,634 $534,438
Temporarily restricted 92,964 116,584
Total Net Assets $654,598 $651,022
Total Liabilities and Net Assets $960,332 $976,780
See independent auditors’ report and notes to financial statements.
West Virginia Bar Foundation, Inc.
Statement of Support, Revenue and Expenses – Modified Cash Basis
For the Year Ended June 30,2010, with Comparative Totals for the Year Ended June 30,2009
Revenues Collected
Contributions
Fellows dinner and program
Interest and dividends
Unrealized gain (loss) on investments
Rental income
Net assets released from restrictions
Satisfaction of program requirements
Total Revenues Collected
Expenses and Losses
Grants awarded
Salaries and payroll taxes
Deferred compensation
Office supplies and expense
Depreciation
Interest
Fellows dinner and program
Professional services
Insurance
Travel and meetings
Dues and fees
Miscellaneous
Total Expenses and Losses
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
| 2010 | |||
|
Temporarily |
2009 | ||
|
Unrestricted |
Restricted | Total | Total |
|
$ 5,750 |
$ -0- |
$ 5,750 |
$ 12,800 |
|
15,875 |
-0- |
15,875 |
29,988 |
|
39,694 |
-0- |
39,694 |
37,724 |
|
8,384 |
449,370 |
457,754 |
427,120 |
|
632 |
-0- |
632 |
(1,616) |
|
114,063 |
-0- |
114,063 |
114,063 |
|
472.990 |
(472,990) |
-0- |
-0- |
|
657.388 |
(23,620) |
633.768 |
620,079 |
|
456,300 |
-0- |
456,300 |
470,892 |
|
80,833 |
-0- |
80,833 |
80,649 |
|
10,000 |
-0- |
10,000 |
10,000 |
|
9,632 |
-0- |
9,632 |
9,666 |
|
19,028 |
-0- |
19,028 |
19,028 |
|
20,263 |
-0- |
20,263 |
32,017 |
|
16,640 |
-0- |
16,640 |
10,891 |
|
8,661 |
-0- |
8,661 |
8,334 |
|
1,555 |
-0- |
1,555 |
1,520 |
|
6,266 |
-0- |
6,266 |
6,293 |
|
977 |
-0- |
977 |
961 |
|
37 |
-0- |
37 |
-0- |
|
630.192 |
-0- |
630.192 |
650,251 |
|
27,196 |
(23,620) |
3,576 |
(30,172) |
|
534.438 |
116.584 |
651.022 |
681,194 |
|
S561.634 |
s o2.964 |
S654.598 |
$651.022 |
See independent auditors’ report and notes to financial statements.
st Virginia Bar Foundation, Inc. Statement of Cash Flows – Modified Cash Basis
For the Year Ended June 30,2010, with Comparative Totals for the Year Ended June 30, 2009
2010 2009
|
6,434 333.563 $339.997 |
Cash Flows from Operating Activities
ange in Net Assets
Adjustments to Reconcile Change in Net Assets To Net Cash Provided By (Used In) Operating Activities: Depreciation
Unrealized (gain) loss on investments Increase (decrease) in accrued payroll and other liabilities Net Cash Provided By (Used In) Operating Activities
Cash Flows From Investing Activities
Proceeds from sale of investments Net Cash Provided By Investing Activities
Cash Flows From Financing Activities
Principal payments on long-term debt Net Cash Used in Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year
| $ 3,576 |
$ (30,172)
|
19,028 |
19,028 |
| (632) |
1,616 |
|
42 |
(754) |
|
22,014 |
(10,2821 |
4,486
4,486
-J)-
| (20.066) (20.066) |
(157.6661 (157.6661
(167,948) 501.511
$ 333.563
Supplemental disclosures of cash flow information:
Cash paid during the year for: Interest $20, 263 $32,017
See Independent auditor’s report and notes to financial statements.
West Virginia Bar Foundation, Inc. Notes to Financial Statements
June 30,2010, with Comparative Totals as of June 30, 2009
Note A – Summary of Significant Accounting Policies
Organization – The West Virginia Bar Foundation, Inc. was formed in 1988 to promote the administration -slice, the continuing education of the practicing lawyer, and the introduction of the law school jpaduate to the practice of law. Additionally, it supports organizations established to provide legal services through staff attorneys or unpaid volunteers to persons who find it difficult to obtain such services through normal channels. The Organization’s primary revenue sources are through contributions, memberships, and interest earned on the lawyers’ trust accounts.
Basis of Accounting – The financial statements of the Organization have been prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Modifications to the cash basis of accounting include the recording of depreciation and the recognition of unrealized gains and losses on investments held.
Revenue Recognition – All contributions and grants are considered available for the Organization’s general programs unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor or grantor are reported as temporarily or permanently restricted support and increase the respective class of net assets. Contributions received with temporary restrictions that are met in the same reporting as unrestricted support and increase unrestricted net assets. Investment income that is limited to specific uses by donor restrictions is reported as increases in unrestricted net assets if the restrictions are met in the same reporting period as the income is recognized.
Cash and cash equivalents – For purposes of the Statement of Cash Flows, the Organization considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.
Estimates – Management 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. Actual results could differ from those estimates.
Income Tax Status – The Organization is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. In addition, the Organization qualifies for the charitable contribution deduction under Section 170(b)(l )(A) and has been classified as an organization other than a private foundation under Section 509(a)(2).
Investments – Investments in marketable equity securities with readily determinable fair values are stated al fair market value. Unrealized gains and losses are included in the change in net assets in the accompanying Statement of Support, Revenue and Expenses.
West Virginia Bar Foundation, Inc. Notes to Financial Statements
June 30,2010, with Comparative Totals as of June 30, 2009
Note A – Summary of Significant Accounting Policies (Continued)
Comparative Totals – The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended June 30, 2009, from which the summarized information was derived.
Land and Buildings – Land and buildings are recorded at cost. The Organization capitalizes expenditures for property and equipment based upon the cost and life expectancy of the asset. Depreciation is calculated utilizing the straight-line method over the estimated useful life of the asset. The land and equipment value at June 30, 2010 and 2009 is as follows:
2010 2009
Buildings $761,088 $761,088
Less: accumulated depreciation 242,253 223,225
518,835 537,863
Land 101,500 101.500
$620,335 $639,363
Classification of Support — The Organization reports contributions and other revenues as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor or earnings 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 on the Statement of Support, Revenue and Expense as net assets released from restrictions.
Note B – Net Assets Released From Restrictions
Net assets were released from donor and earnings restrictions by incurring expenses satisfying the restricted purposes or by occurrence of other events specified by donors for the years ended June 30,2010 and 2009 as follows:
2010 2009
IOLTA program disbursements and fund transfers $469,264 $483,771
We the People Program 3.726 0
$472,990 $483,771
West Virginia Bar Foundation, Inc. Notes to Financial Statements
June 30, 2010, with Comparative Totals as of June 30,2009
C – Certificates of Deposit
Certificates of deposit totaling $ 108,722 and $ 101,630 at June 30,2010 and 2009, respectively are included in cash and cash equivalents in the accompanying financial statements. The certificate bears interest at 3.68% at June 30,2010. The certificate of deposit matures on December 16,2010, with penalties for early withdrawal. Any penalties for early withdrawal would not have a material effect on the financial
statements.
Note D – Concentration of Credit Risk
The Organization receives a significant portion of its revenues from interest earned on lawyers’ trust accounts and rental income. A material reduction in the level of earned interest or rents received would have a significant impact on the Organization’s activities, and its ability to continue as a going concern.
Note E – Restrictions of Net Assets
Temporarily restricted net assets are available for the following purposes at June 30, 2010 and 2009:
2010 2009
Grants – We the People Program $ -0- $ 3,726
IOLTA Program 92.964 112.858
92,964 $116,584
Note F – Notes Payable
Notes payable at June 30,2010 and 2009 are as follows: 2010 2009
Note payable to a bank, bearing interest at 6.35% and payable
in monthly installments of $3,361 through October, 2020.
Secured by the related land and building. $303,724 $323,790
Following is a summary of the schedule of maturities of long-term debt for the next five years:
Years Ended
June 30, Amount
2011 $ 18,606
2012 20,050
2013 21,607
2014 23,284
2015 25,092
Thereafter 195.085
$303,724
West Virginia Bar Foundation, Inc.
Notes to Financial Statements
June 30,2010, with Comparative Totals as of June 30,2009
Note G – Investments
The Organization’s investments at June 30, 2009 consist of common stocks and options held with an investment company. The cost basis of these investments was $6,144 and the market value was $3,854. The market value is reported on the basis of quoted market prices and are unrestricted net assets at year end. During the year ended June 30, 2010 all stocks and options were sold and converted into cash.
Note H – Leases
The Organization leases a portion of its buildings owned to the WV State Bar. During each of the years ended June 30,2010 and 2009, the Organization recognized rental income of $114,063 for the leasing of these facilities. As of October 1, 2010 the WV Bar Foundation and the WV State Bar have agreed to an option for the WV State Bar to purchase these buildings. Future rental income is dependent upon whether the option is exercised. While the option is being negotiated, the lease has been extended on a month to month basis at a reduced rent as agreed upon by both parties.
Note I – IOLTA Program
The Organization, as mandated by the Supreme Court of Appeals, is required to remit all earnings received from lawyers’ trust accounts to various organizations based upon a prescribed formula. Grants were awarded in the amounts of $429,874 and $440,653 under this formula during the years ended June 30,2010 and 2009, respectively.
Additionally, the Organization is permitted to retain an amount not to exceed $50,000 for administration of the fund. During the year ended June 30, 2010, this amount was retained by the Organization and transferred into its unrestricted cash account to cover these costs.
Note J – Subsequent Events
By an order of the West Virginia Supreme Court of Appeals on June 22,2010, the West Virginia State Bar was empowered to be the administrative agency of the interest earned on the IOLTA trust accounts, effective July 1, 2010. The Organization is currently working with the banks holding the IOLTA funds about the changes, etc. prior to the transfer of all funds to the WV State Bar. The net effect of the transfer will decrease the net assets of the Organization by $92,964.
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