THE CATHOLIC FOUNDATION of UTAH Financial Statements and Supplementary Information June 30, 2019 and 2018 (With Independent Auditors’ Report Thereon)
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THE CATHOLIC FOUNDATION OF UTAH Financial Statements and Supplementary Information June 30, 2019 and 2018 (With Independent Auditors’ Report Thereon) THE CATHOLIC FOUNDATION OF UTAH Table of Contents Page Independent Auditors’ Report 1 Financial Statements: Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Notes to Financial Statements 6 Supplementary Information Endowment and Gift Information with Donor Restrictions 17 KPMG LLP Suite 1500 15 W. South Temple Salt Lake City, UT 84101 Independent Auditors’ Report The Most Reverend Oscar A. Solis: We have audited the accompanying financial statements of The Catholic Foundation of Utah (the Foundation), which comprise the statements of financial position as of June 30, 2019 and 2018, 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 U.S. generally accepted accounting principles; 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. Auditors’ 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 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 financial statements. The procedures selected depend on the auditors’ 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 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 position of The Catholic Foundation of Utah as of June 30, 2019 and 2018, and the results of its activities and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles. Emphasis of Matter As discussed in Note 1(k) to the financial statements, on July 1, 2018, the Foundation adopted Accounting Standards Update (ASU) No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, requiring a change in the presentation of net assets and enhanced financial statement disclosures. Our opinion is not modified with respect to this matter. KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Other Matter Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information relating to Endowment and Gift Information with Donor Restrictions 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 of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Salt Lake City, Utah November 6, 2019 2 THE CATHOLIC FOUNDATION OF UTAH Statements of Financial Position June 30, 2019 and 2018 Assets 2019 2018 Cash and cash equivalents $ 1,401,923 1,550,489 Interest receivable 67,669 63,751 Investments 43,489,171 39,768,254 Other assets 528,351 523,905 Total assets $ 45,487,114 41,906,399 Liabilities and Net Assets Liabilities: Accrued liabilities $ 21,389 113,593 Annuity and charitable remainder unitrust liabilities 289,974 297,465 Related-entity endowment liabilities 13,047,141 11,734,960 Total liabilities 13,358,504 12,146,018 Net assets: Without donor restrictions — — With donor restrictions Purpose restricted 5,084,202 4,857,792 Donor-restricted endowments 27,044,408 24,902,589 Total net assets with donor restrictions 32,128,610 29,760,381 Total net assets 32,128,610 29,760,381 Total liabilities and net assets $ 45,487,114 41,906,399 See accompanying notes to financial statements. 3 THE CATHOLIC FOUNDATION OF UTAH Statements of Activities Years ended June 30, 2019 and 2018 2019 2018 Changes in net assets without donor restrictions: Beneficiaries services $ (1,487,227) (2,009,907) Management and general (159,386) (156,536) Fundraising (152,920) (146,256) Other income 2,597 567 Net assets released from restrictions 1,796,936 2,312,303 Increase in net assets without donor restrictions — 171 Changes in net assets with donor restrictions: Purpose restricted: Contributions 57,363 180,732 Interest and dividends on investments 396,905 391,319 Net realized gains on investments 522,215 720,271 Net unrealized gains on investments 395,624 81 Net change in related-entity endowment liabilities (1,312,181) (1,238,109) Net assets released from restrictions (778,155) (815,634) Total changes in purpose restricted net assets (718,229) (761,340) Transfer from other Catholic entities 944,639 1,105,584 Increase in purpose restricted net assets 226,410 344,244 Donor-restricted endowments: Contributions restricted for long-term investment 1,190,027 187,585 Interest and dividends on investments 595,632 565,582 Net realized gains on investments 747,639 1,039,962 Net unrealized gains on investments 605,055 16,315 Related-entity deposits 11,569 529,025 Change in value on charitable remainder unitrusts 6,255 7,574 Change in cash surrender value on insurance policies 4,423 9,469 Net assets released from restrictions (1,018,781) (1,496,669) Increase in donor-restricted endowments 2,141,819 858,843 Increase in net assets with donor restrictions 2,368,229 1,203,087 Increase in net assets 2,368,229 1,203,258 Net assets at beginning of year 29,760,381 28,557,123 Net assets at end of year $ 32,128,610 29,760,381 See accompanying notes to financial statements. 4 THE CATHOLIC FOUNDATION OF UTAH Statements of Cash Flows Years ended June 30, 2019 and 2018 2019 2018 Cash flows from operating activities: Increase in net assets $ 2,368,229 1,203,258 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Net realized gains on investments (1,269,854) (1,760,233) Net unrealized gains on investments (1,000,679) (16,396) Contributions restricted for long-term investment (1,190,027) (187,585) Changes in operating assets and liabilities: Interest receivable (3,918) (210) Other assets (4,446) (8,817) Accrued liabilities (92,204) 93,259 Annuity and charitable remainder unitrust liabilities (7,491) (144,046) Related-entity endowment liabilities 1,312,181 1,238,109 Net cash provided by operating activities 111,791 417,339 Cash flows from investing activities: Purchase of investments (16,498,899) (10,527,689) Proceeds from sale of investments 15,048,515 9,603,719 Net cash used in investing activities (1,450,384) (923,970) Cash flows from financing activity: Proceeds from contributions restricted for long-term investment 1,190,027 187,585 Net cash provided by financing activity 1,190,027 187,585 Net decrease in cash and cash equivalents (148,566) (319,046) Cash and cash equivalents at beginning of year 1,550,489 1,869,535 Cash and cash equivalents at end of year $ 1,401,923 1,550,489 See accompanying notes to financial statements. 5 THE CATHOLIC FOUNDATION OF UTAH Notes to Financial Statements June 30, 2019 and 2018 (1) Organization and Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying financial statements include the accounts of The Catholic Foundation of Utah (the Foundation) only, and present no accounts of any other components of the Roman Catholic Bishop of Salt Lake City (the Bishop), a Corporation Sole. The Foundation is incorporated under the Utah Nonprofit Corporation and Cooperative Association Act. (b) Donated Assets Assets donated to the Foundation are recorded at fair value at the date of donation. (c) Net Assets Contributions are generally recognized as revenue at their fair value in the period received or made. The financial statements report net assets and changes in net assets in two classes that are based upon the existence or absence of restrictions on use that are placed by its donors, as follows: (i) Without Donor Restrictions Net assets without donor restrictions represent resources which are not subject to donor restrictions and over which the Foundation retains control to use the funds in order to achieve the Foundation’s purpose.