2017 Audited Financial Statements
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SQUASHBUSTERS, INC. FINANCIAL STATEMENTS TEN MONTHS ENDED JUNE 30, 2017 SQUASHBUSTERS, INC. TABLE OF CONTENTS TEN MONTHS ENDED JUNE 30, 2017 Page Independent Auditor’s Report 1 Financial Statements Statement of Financial Position 2 Statement of Activities and Changes in Net Assets 3 Statement of Functional Expenses 4 Statement of Cash Flows 5 Notes to Financial Statements 6 - 14 Supplementary Information Statements of Activities for the Twelve Months Ended June 30, 2017 and 2016 15 Board of Directors Squashbusters, Inc. 795 Columbus Avenue Roxbury Crossing, MA 02120-2108 Re: Independent Auditor’s Report Ladies and Gentlemen: Report on Financial Statements We have audited the accompanying financial statements of Squashbusters, Inc. (a Massachusetts nonprofit organization), which comprise the statement of financial position as of June 30, 2017, and the related statement of activities and changes in net assets, cash flow, and functional expenses for the period 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 of America; 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial 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 entity’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 entity’s internal control. Accordingly, we express 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 presentation of the financial statements. We believe 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 position of Squashbusters, Inc. as of June 30, 2017, and the changes in its net assets and cash flow for the period then ended in accordance with accounting principles generally accepted in the United States of America. Supplementary Information The supplementary information contained on page 15 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The information is the representation of management. We have not audited the supplementary information and, accordingly, do not express an opinion, a conclusion, nor provide any form of assurance on such supplementary information, Respectfully submitted, Di Pesa & Company DI PESA AND COMPANY Certified Public Accountants Quincy, Massachusetts September 25, 2017 - 1 - SQUASHBUSTERS, INC. STATEMENT OF FINANCIAL POSITION JUNE 30, 2017 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 1,420,024 Contributions Receivable 358,333 Prepaid Expenses 9,212 TOTAL CURRENT ASSETS 1,787,569 INVESTMENTS Endowment Investments: Board Designated 8,637,967 Temporarily Restricted 1,591,171 Permanently Restricted 637,318 10,866,456 Deferred Compensation Plan 458,716 TOTAL INVESTMENTS 11,325,172 OTHER ASSETS Property and Equipment, net 4,963,590 Long-Term Contributions Receivable 737,438 TOTAL OTHER ASSETS 5,701,028 TOTAL ASSETS $ 18,813,769 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accrued Expenses $ 80,701 OTHER LIABILITIES Deferred Compensation Liability 177,144 TOTAL LIABILITIES 257,845 NET ASSETS Unrestricted: Operating 6,570,961 Board Designated 8,637,967 Total Unrestricted 15,208,928 Temporarily Restricted 2,709,678 Permanently Restricted 637,318 TOTAL NET ASSETS 18,555,924 TOTAL LIABILITIES AND NET ASSETS $ 18,813,769 See accompanying notes to financial statements - 2 - SQUASHBUSTERS, INC. STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE TEN MONTHS ENDED JUNE 30, 2017 Temporarily Permanently Unrestricted Restricted Restricted Total Net Assets Net Assets Net Assets Net Assets SUPPORT AND REVENUE Contributions, Gifts and Grants 1,521,411 $ 489,753 $ - $ 2,011,164 Capital Campaign Contributions - 315,000 - 315,000 Reimbursed Program Expenses 5,551 - - 5,551 Special Events - Income 1,356,323 - - 1,356,323 - Expenses (173,321) - - (173,321) Investment Income Interest Income 35,052 2,184 - 37,236 Dividend Income 75,154 4,682 - 79,836 Realized Gains 100,787 6,279 - 107,066 Unrealized Gains 352,180 21,942 - 374,122 Investment Expenses (33,625) (2,095) - (35,720) Net Assets Released from Restrictions: Satisfaction of Donor Restrictions 1,020,246 (1,020,246) - - TOTAL SUPPORT AND REVENUE 4,259,757 (182,500) - 4,077,257 FUNCTIONAL EXPENSES Program Services 1,442,163 - - 1,442,163 Fundraising 285,329 - - 285,329 Management and General 258,192 - - 258,192 TOTAL FUNCTIONAL EXPENSES 1,985,684 - - 1,985,684 CHANGE IN NET ASSETS 2,274,073 (182,500) - 2,091,573 NET ASSETS - BEGINNING OF PERIOD 12,934,855 2,892,178 637,318 16,464,351 NET ASSETS - END OF PERIOD $ 15,208,928 $ 2,709,678 $ 637,318 $ 18,555,924 See accompanying notes to financial statements - 3 - SQUASHBUSTERS, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR THE TEN MONTHS ENDED JUNE 30, 2017 Program Management Services Fundraising and General Total EXPENSES Payroll $ 849,151 $ 234,518 $ 81,292 $ 1,164,960 Program Expenses - Other 208,959 - - 208,959 Depreciation Expense 120,362 - 69,610 189,972 Payroll Taxes 79,496 16,092 7,866 103,454 Employee Benefits 48,921 14,848 3,645 67,414 Deferred Compensation Expense - - 59,048 59,048 Insurance Expense 57,547 - 1,371 58,918 Financial Fees - - 5,398 5,398 Professional Fees 13,100 - 19,992 33,092 Staff Expenses 11,337 1,613 675 13,625 Occupancy Expense 13,302 - - 13,302 Postage and Printing 5,298 4,858 954 11,110 Transportation 9,662 - - 9,662 Software Licensing 4,123 900 4,247 9,271 Development Expense - 8,577 - 8,577 Supplies 5,617 379 741 6,737 Recognition & Appreciation 203 3,191 135 3,529 Meetings and Conferences 1,255 354 1,406 3,015 Advertising and Recruiting 1,140 - 82 1,223 Telephone and Internet Services 12,689 - 1,730 14,419 TOTAL EXPENSES $ 1,442,163 $ 285,329 $ 258,192 $ 1,985,684 See accompanying notes to financial statements - 4 - SQUASHBUSTERS. INC. STATEMENTS OF CASH FLOWS FOR THE TEN MONTHS ENDED JUNE 30, 2017 CASH FLOWS PROVIDED BY OPERATING ACTIVITIES Change in Net Assets $ 2,091,573 Adjustments to Reconcile Changes in Net Assets to Net Cash Provided (Used) By Operating Activities Depreciation 189,972 Gain on Sale of Investments (107,066) Investment Income Reinvested (117,072) Unrealized Gain on Investments (374,122) (Increase) Decrease in Assets: Contributions Receivable 168,856 Prepaid Expenses 11,687 Increase (Decrease) in Liabilities: Accrued Expenses 33,661 Deferred Compensation Plan 59,048 NET CASH PROVIDED BY OPERATING ACTIVITIES 1,956,537 CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES Purchase of Investments (5,867,900) Sale of Investments, Net of Dividend Reinvestments 5,389,093 Purchase of Property and Equipment (624,763) NET CASH USED BY INVESTING ACTIVITIES (1,103,570) NET INCREASE IN CASH AND CASH EQUIVALENTS 852,967 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 567,057 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,420,024 See accompanying notes to financial statements - 5 - SQUASHBUSTERS, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 1. NATURE OF OPERATION Squashbusters, Inc. (the Organization), a Massachusetts nonprofit organization, is an intensive urban youth program serving approximately 300 middle school, high school and college students per year in Boston and Lawrence, Massachusetts. The Organization also has plans for an additional location in Providence, Rhode Island with an anticipated opening in early 2018. The Organization uses the sport of squash in combination with academic tutoring and enrichment, community service, summer opportunities and hands-on college counseling, to achieve three specific outcomes: (1) improvement in long-term health and wellness; (2) college access and success – matriculation, perseverance and graduation and; (3) positive character development. The Organization serves its students continuously from the start of middle school until they graduate high school and enroll in college. The Organization then supports every student’s journey through college to graduation. Students will spend approximately 100 days each school year, from grades 6 and 7 through grade 12 in direct engagement with the program. Effective September 1, 2016, the Organization