2013 Financial Statements and Report of Independent Accountants
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GaryMcGee & Co. LLP CERTIFIED PUBLIC ACCOUNTANTS Portland Art Museum Financial Statements and Other Information as of and for the Years Ended June 30, 2013 and 2012 and Report of Independent Accountants P O R T L A N D A R T M U S E U M TABLE OF CONTENTS Page Report of the Treasurer 3 Report of Independent Accountants 4 Financial Statements: Statements of Financial Position 6 Statements of Activities 8 Statements of Cash Flows 10 Notes to Financial Statements 11 Supplementary Financial Information: Schedule of Operating Revenues and Expenses of the Northwest Film Center 30 Notes to Schedule of Operating Revenues and Expenses of the Northwest Film Center 31 Other Information: Governing Board and Management 32 Inquiries and Other Information 34 Report of the Treasurer The financial statements and other information con- The financial statements have been examined by the tained in this report have been prepared by manage- Museum’s independent accountants, GARY MCGEE & ment, which is responsible for the information’s integ- CO. LLP, whose report follows. Their examinations rity and objectivity. The financial statements have were made in accordance with generally accepted au- been prepared in accordance with generally accepted diting standards. The Audit Committee of the Board accounting principles applied on a consistent basis and of Trustees meets periodically with management and are deemed to present fairly the financial position of the independent accountants to review accounting, the PORTLAND ART MUSEUM and the changes in its net auditing, internal accounting controls, and financial assets and cash flows. Where necessary, management reporting matters, and to ensure that all responsibili- has made informed judgments and estimates of the ties are fulfilled with regard to the objectivity and in- outcome of events and transactions, with due consid- tegrity of the Museum’s financial statements. The eration given to materiality. Audit Committee of the Board of Trustees also re- views the scope and results of the Museum’s audit, As a means of fulfilling its responsibility for the integ- and current and emerging accounting and financial rity of financial information included in this report, requirements and practices affecting the Museum. management relies on a system of internal controls established to ensure, within reasonable limits, that assets are safeguarded against loss or unauthorized William Whitsell use, that transactions are properly recorded and exe- Treasurer cuted in accordance with management’s authoriza- Board of Trustees tion, and that the accounting records can be relied Portland Art Museum upon to prepare financial statements in accordance with generally accepted accounting principles. This system is augmented by careful selection and training of qualified personnel and the dissemination of writ- ten policies and procedures. 3 GaryMcGee & Co. LLP CERTIFIED PUBLIC ACCOUNTANTS REPORT OF INDEPENDENT ACCOUNTANTS The Board of Trustees Portland Art Museum: We have audited the accompanying financial statements of the Portland Art Museum, which comprise the state- ments of financial position as of June 30, 2013 and 2012, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi- nancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Museum’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Museum’s internal control. Accordingly, we ex- press no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presen- tation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial posi- tion of the Portland Art Museum as of June 30, 2013 and 2012, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States. 808 SW Third Avenue, Suite 700 Portland, Oregon 97204 p: 503 222 2515 f: 503 222 6401 www.garymcgee.com 4 Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The sup- plementary information included on page 30 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. October 24, 2013 5 P O R T L A N D A R T M U S E U M STATEMENTS OF FINANCIAL POSITION J U N E 3 0 , 2 0 1 3 A N D 2 0 1 2 2013 Temporarily Permanently Unrestricted restricted restricted Total Assets: Cash and cash equivalents (note 5) $ 2,838,935 819,890 1,409,280 5,068,105 Short-term investments (note 5) − 2,176,335 − 2,176,335 Accounts receivable 264,520 − − 264,520 Pledges receivable (note 3) 463,749 123,578 1,702,666 2,289,993 Inventories and prepayments (note 4) 854,232 − − 854,232 Other assets 497,034 45,744 − 542,778 Investments (notes 5 and 10) 9,149,467 3,668,339 33,216,173 46,033,979 Beneficial interest in perpetual trusts (note 6) − − 1,102,213 1,102,213 Real estate investments, at cost (note 16) 4,837,854 − − 4,837,854 Property and equipment (note 7) 56,434,854 − − 56,434,854 Total assets $ 75,340,645 6,833,886 37,430,332 119,604,863 Liabilities: Accounts payable and accrued expenses 680,546 − − 680,546 Accrued payroll and related expenses 670,853 − − 670,853 Deferred revenues (note 9) 527,473 − − 527,473 Other liabilities (note 10) 26,995 − − 26,995 Note payable (note 10) 3,729,733 − − 3,729,733 Due to (from) other funds (462,408) 492,246 (29,838) − Total liabilities 5,173,192 492,246 (29,838) 5,635,600 Net assets: Unrestricted: Available for programs and general operations 2,268,872 − − 2,268,872 Designated by the Board of Trustees (note 11) 11,321,643 − − 11,321,643 Cumulative endowment losses (note 11) (966,037) − − (966,037) Net investment in capital assets and real estate investments 57,542,975 − − 57,542,975 Total unrestricted 70,167,453 − − 70,167,453 Temporarily restricted (note 11) − 6,341,640 − 6,341,640 Permanently restricted for endowment (note 11) − − 37,460,170 37,460,170 Total net assets 70,167,453 6,341,640 37,460,170 113,969,263 Commitments and contingencies (notes 5, 10, 15, 16, 17, and 18) Total liabilities and net assets $ 75,340,645 6,833,886 37,430,332 119,604,863 See accompanying notes to financial statements. 6 2012 Temporarily Permanently Unrestricted restricted restricted Total 3,354,664 791,233 − 4,145,897 − 2,681,949 − 2,681,949 133,147 − − 133,147 1,187,023 526,248 2,809,194 4,522,465 730,595 − − 730,595 532,794 42,865 − 575,659 7,721,602 2,082,684 32,204,061 42,008,347 − − 1,077,943 1,077,943 4,837,854 − − 4,837,854 57,650,417 − − 57,650,417 76,148,096 6,124,979 36,091,198 118,364,273 573,194 − − 573,194 621,649 − − 621,649 466,144 − − 466,144 225,994 − − 225,994 4,721,878 − − 4,721,878 (612,038) 612,038 − − 5,996,821 612,038 − 6,608,859 3,206,892 − − 3,206,892 10,974,904 − − 10,974,904 (1,796,914) − − (1,796,914) 57,766,393 − − 57,766,393 70,151,275 − − 70,151,275 − 5,512,941 − 5,512,941 − − 36,091,198 36,091,198 70,151,275 5,512,941 36,091,198 111,755,414 76,148,096 6,124,979 36,091,198 118,364,273 7 P O R T L A N D A R T M U S E U M STATEMENTS OF ACTIVITIES Y E A R S E N D E D