Report of Independent Auditors and Financial Statements with … · 06-08-2017 · Report of...
Transcript of Report of Independent Auditors and Financial Statements with … · 06-08-2017 · Report of...
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
Page1
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.
Page2
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
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$
UNITEDWAYOFTHEBAYAREA
Seeaccompanyingnotes.Page4
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$
UNITEDWAYOFTHEBAYAREA
Seeaccompanyingnotes.Page5
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$
‐
UNITEDWAYOFTHEBAYAREA
Seeaccompanyingnotes.Page6
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
UNITEDWAYOFTHEBAYAREA
Seeaccompanyingnotes.Page7
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
UNITEDWAYOFTHEBAYAREA
Seeaccompanyingnotes.Page8
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
Page9
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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UNITEDWAYOFTHEBAYAREANOTESTOFINANCIALSTATEMENTS
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.
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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
FairValueMeasurementInputs Level1 Level2 Total
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:
FairValueMeasurementInputs Level1 Level2 Total
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:
FairValueMeasurementInputs Level1 Level2 Total
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$96,679, respectively,and is included inaccruedpensioncosts. InApril2012, theBoardofDirectorsunanimouslypassedaresolutiontofreezethe403(b)planandacceptnonewcontributions.InOctober2013,theBoardofDirectorsvotedtounanimouslyterminatetheplan.
UWBA also has a defined contribution retirement plan under Section 403(b) of the Internal Revenue Code, available to thoseemployeeswhoarenoteligibletoparticipateinthe401(k).UWBAdoesnotprovideanymatchingcontributionstothisplan.
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NOTE9–TEMPORARILYRESTRICTEDNETASSETS
TemporarilyrestrictednetassetswereavailableforthefollowingpurposesasofJune30:2013 2012
UWBAcommunityprogramsSparkPoint 38,047 481,642Othercommunityprograms 1,324,922 613,326Endowmentactivity 728,655 195,175
Total 2,091,624$ 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.
UNITEDWAYOFTHEBAYAREANOTESTOFINANCIALSTATEMENTS
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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$3,500,000withinterestchargedataratedeterminedbythelenderonaperiodicbasis.
NOTE13–LABORUNIONCONTRACT
UBWA'snon‐managementemployeesaresubjecttoacollectivebargainingagreement.Thecontractisathree‐yearagreementthatexpiredonMarch31,2012,andwasmutuallyextendedtoMarch31,2013.CurrentlyanewcontractisbeingnegotiatedbetweenUWBAandOfficeandProfessionalEmployeesInternationalUnionLocal#3.
UNITEDWAYOFTHEBAYAREASCHEDULEOFEXPENDITURESOFFEDERALAWARDSYearEndedJune30,2013
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FederalCFDANumber FundingAgent
FederalContract/GrantNumber
2013Amount
DepartmentoftheTreasury21.009 DepartmentofTreasury V12012 359,500$
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
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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.
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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.
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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
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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.
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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.