KWGS and KWTU – The University of Tulsa Independent Auditor’s Report and Financial Statements June 30, 2020 and 2019 KWGS and KWTU – The University of Tulsa June 30, 2020 and 2019 Contents Independent Auditor’s Report ......................................................................................................... 1 Financial Statements Statements of Financial Position ........................................................................................................ 3 Statements of Activities ...................................................................................................................... 4 Statements of Functional Expenses .................................................................................................... 5 Statements of Cash Flows .................................................................................................................. 6 Notes to Financial Statements ............................................................................................................ 7 Independent Auditor’s Report Board of Trustees The University of Tulsa Tulsa, Oklahoma We have audited the accompanying financial statements of KWGS and KWTU – The University of Tulsa (the Stations), which comprise the statements of financial position as of June 30, 2020 and 2019, and the related statements of activities, functional expenses, 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 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 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 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 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 Stations as of June 30, 2020 and 2019, 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 of America. Board of Trustees The University of Tulsa Page 2 Emphasis of Matter As described in Note 1, the accompanying financial statements of the Stations are intended to present the financial position and changes in net assets and cash flows of only that portion of activities that is attributable to the transactions of the Stations. They do not purport to, and do not, present fairly the financial position of The University of Tulsa as of June 30, 2020 and 2019, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Tulsa, Oklahoma November 23, 2020 KWGS and KWTU – The University of Tulsa Statements of Financial Position June 30, 2020 and 2019 Assets 2020 2019 Equity in pooled cash $ 777,249 $ 550,111 Contribution receivable 4,880 9,527 Prepaid programming expenses 89,585 66,778 Property and equipment, net 98,338 126,734 Other assets 37,892 33,124 Total assets$ 1,007,944 $ 786,274 Liabilities and Net Assets Liabilities Accounts payable and accrued liabilities $ 110,290 $ 81,086 Net Assets Without donor restrictions 855,487 642,491 With donor restrictions 42,167 62,697 Total net assets 897,654 705,188 Total liabilities and net assets$ 1,007,944 $ 786,274 See Notes to Financial Statements 3 KWGS and KWTU – The University of Tulsa Statements of Activities Years Ended June 30, 2020 and 2019 2020 Without Donor With Donor Restrictions Restrictions Total Revenues, Gains, and Other Support University support General appropriation$ 318,239 $ - $ 318,239 Indirect administrative services 409,267 - 409,267 Subscriptions and contributions 1,138,167 - 1,138,167 Community service and other grants 176,144 36,787 212,931 In-kind contributions 100,336 - 100,336 Other 1,619 193 1,812 Total revenue 2,143,772 36,980 2,180,752 Net assets released from restrictions 62,278 (62,278) - Total revenues, gains, and other support 2,206,050 (25,298) 2,180,752 Expenses Program services Programming and production 1,054,484 - 1,054,484 Broadcasting 233,907 - 233,907 Program information 36,951 - 36,951 Total program services 1,325,342 - 1,325,342 Support services Fundraising 136,912 - 136,912 Management and general 530,800 - 530,800 Total expenses 1,993,054 - 1,993,054 Change in Net Assets from Operating Activities 212,996 (25,298) 187,698 Nonoperating Activities Net endowment loss in excess of income designated for operations - (1,782) (1,782) Gifts for endowments - 6,550 6,550 Total nonoperating activities - 4,768 4,768 Increase (Decrease) in Net Assets 212,996 (20,530) 192,466 Net Assets, Beginning of Year 642,491 62,697 705,188 Net Assets, End of Year $ 855,487 $ 42,167 $ 897,654 See Notes to Financial Statements 2019 Without Donor With Donor Restrictions Restrictions Total Revenues, Gains, and Other Support University support General appropriation$ 306,854 $ - $ 306,854 Indirect administrative services 127,863 - 127,863 Subscriptions and contributions 1,004,152 20,000 1,024,152 Community service and other grants 106,593 38,491 145,084 In-kind contributions 106,237 - 106,237 Other 1,273 361 1,634 Total revenue 1,652,972 58,852 1,711,824 Net assets released from restrictions 32,949 (32,949) - Total revenues, gains, and other support 1,685,921 25,903 1,711,824 Expenses Program services Programming and production 1,166,591 - 1,166,591 Broadcasting 243,365 - 243,365 Program information 37,465 - 37,465 Total program services 1,447,421 - 1,447,421 Support services Fundraising 138,525 - 138,525 Management and general 246,558 - 246,558 Total expenses 1,832,504 - 1,832,504 Change in Net Assets from Operating Activities (146,583) 25,903 (120,680) Nonoperating Activities Net endowment gains in excess of income designated for operations - 835 835 Gifts for endowments - 5,695 5,695 Total nonoperating activities - 6,530 6,530 Increase (Decrease) in Net Assets (146,583) 32,433 (114,150) Net Assets, Beginning of Year 789,074 30,264 819,338 Net Assets, End of Year $ 642,491 $ 62,697 $ 705,188 4 KWGS and KWTU – The University of Tulsa Statements of Functional Expenses Years Ended June 30, 2020 and 2019 Program Services Support Services Programming Management and Program and Production Broadcasting Information Fundraising General Total 2020 Salaries$ 263,105 $ 70,474 $ 23,491 $ 42,285 $ 70,475 $ 469,830 Fringe benefits 89,153 23,881 7,960 14,327 23,880 159,201 Supplies and general expenses 702,226 16,499 5,500 80,300 21,499 826,024 Depreciation - 22,717 - - 5,679 28,396 Tower rental - 100,336 - - - 100,336 Indirect administrative expenses - - - 409,267 409,267 Total $ 1,054,484 $ 233,907 $ 36,951 $ 136,912 $ 530,800 $ 1,993,054 2019 Salaries$ 264,069 $ 70,733 $ 23,578 $ 42,440 $ 70,734 $ 471,554 Fringe benefits 93,345 25,003 8,334 15,002 25,003 166,687 Supplies and general expenses 809,177 16,658 5,553 81,083 16,658 929,129 Depreciation - 24,734 - - 6,183 30,917 Tower rental - 100,336 - - - 100,336 Indirect administrative expenses - - - - 127,863 127,863 Other - 5,901 - - 117 6,018 Total $ 1,166,591 $ 243,365 $ 37,465 $ 138,525 $ 246,558 $ 1,832,504 See Notes to Financial Statements 5 KWGS and KWTU – The University of Tulsa Statements of Cash Flows Years Ended June 30, 2020 and 2019 2020 2019 Operating Activities Subscriptions and contributions received $ 1,142,814 $ 1,028,577 Community service and other grants received 212,931 145,084 University support received 318,239 306,854 Other income received 1,812 1,634 Cash paid to suppliers and employees (1,450,440) (1,552,743) Net cash provided by (used in) operating activities 225,356 (70,594) Investing Activities Investment income (loss) (1,782) 835 Purchase of investments (2,986) (7,365) Net cash used in investing activities (4,768) (6,530) Financing Activities Purchase