CALIFORNIA CPA EDUCATION FOUNDATION.CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge & INDEPENDENT AUDITOR'S REPORT Auditor's Report Recorded in the annual report, the auditor's report tests to see that a corporation's financial statements comply with GAAP. This is sometimes referred to as the clean opinion. Notes: Most auditor's reports consist of three paragraphs. 1999 to 2000 CALCPA TREASURER'S REPORT It is my pleasure to report on CalCPA's financial results for the fiscal year ended April 30, 2000. We recognized an excess of revenue over expenses in the amount of $1,247,000. Our ending fund balance increased to $2,507,000 with cash and cash equivalents of $4,156,000. The results of operations are significantly better than the prior year when CalCPA recognized losses Recognized Loss The amount of loss reported for income tax purposes. Notes: You can defer recognizing some losses and then deduct the losses for the following year(s). of $1,121,000. There were many reasons for this dramatic turnaround including: * Joint efforts and sacrifices by members and staff. Meeting expenses were substantially under budget at the chapter, board and committee levels. * Member dues revenue exceeded budget. Billing and monitoring of membership renewals has improved our cash flow, allowed us to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. our cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. , and eliminated the need to borrow funds. * Staff reductions resulted in the restructuring of staff responsibilities to increase efficiency. * Publications revenue exceeded budget. Publication expenses were substantially under budget due to changes made in the communications division. * CalCPA operated in a maintenance mode this year while conducting an executive search and hiring a new executive director. The Finance Committee worked diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in its oversight capacity to monitor compliance with the budget guidelines approved by the board of directors. The fund balance has been increased to a level in excess of the guidelines for the year ended April 30, 2000. The Finance Committee monitored the performance of our investments quarterly and worked closely with our investment consultant to diversify our investment portfolio and establish a line of credit secured by our investments. CalCPA has returned to a fiscally sound position with a positive outlook for the future. It has been an honor to serve as CalCPA treasurer this past year. I have enjoyed the experiences and challenges we faced this year. I wish to thank all of our members, management team and staff for making this a successful year for CalCPA. Michael Pimentel FOUNDATION TREASURER'S REPORT The accompanying financial statements of the California CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. Education Foundation, for the fiscal year ended April 30, 2000, reflect its continued successful delivery of quality programs, while controlling the costs necessary to produce and provide them. Total revenues were steady, primarily as a result of the Foundation's decision to continue pricing its programs to members at very low margins. Additionally, through the creative work of its management team and program leaders, substantial cost savings were achieved in delivering those programs. The Foundation did suffer a significant disappointment during the year when it was determined that its new database software was not going to be completed by the vendor, and that the database program would be unable to meet the Foundation's requirements. This has caused both the Foundation and the vendor to pursue legal and other remedies. The impact of this dispute on the financial statements was material. The capitalized cost of this abandoned software, $531,000, was written off by the Foundation in its entirely. This cost has been reflected within the Foundation's "Management and General" expenses in the accompanying Consolidating Statements of Activities. It is also discussed in Note 6 to the financial statements. The Foundation is continuing to explore new and innovative CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment products and alliances. Through its innovative programs and delivery styles, its management and program leadership will continue to deliver effective programs, within an affordable pricing structure. We look forward to its continued success in its new facilities in Redwood City Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. . D. Paul Regan GILBERT ACCOUNTANCY CORPORATION CERTIFIED PUBLIC ACCOUNTANTS Certified Public Accountant (CPA) An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state. INDEPENDENT AUDITORS' REPORT Board of Directors The California Society of Certified Public Accountants Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. California Certified Public Accountants Education Foundation Redwood City, California Redwood City is a suburb located on the San Francisco Peninsula in the San Francisco Bay Area of California. Redwood City is the county seat of San Mateo County. As of the 2005 census, the city had a total population of 76,000. We have audited the accompanying consolidating statement of financial position of The California Society of Certified Public Accountants (CalCPA) and California Certified Public Accountants Education Foundation (Foundation) as of April 30, 2000, and the related consolidating statements of activities, functional expenses, and cash flows for the year then ended. These consolidating financial statements are the responsibility of the management of CalCPA and the Foundation. Our responsibility is to express an opinion on these consolidating financial statements based on our audit. The consolidating financial statements of CalCPA and the Foundation as of April 30, 1999, were audited by other auditors whose report dated July 23, 1999, expressed an unqualified opinion Unqualified opinion An independent auditor's opinion that a company's financial statements comply with accepted accounting procedures. Antithesis of qualified opinion. unqualified opinion See clean opinion. on those statements. We conducted our audit in accordance with generally accepted auditing standards Generally Accepted Auditing Standards, or GAAS, are ten auditing standards, developed by the AICPA, consisting of general standards, standards of field work, and standards of reporting, along with interpretations. . Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement mis·state tr.v. mis·stat·ed, mis·stat·ing, mis·states To state wrongly or falsely. mis·state  ment n. . An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the consolidating financial statements referred to above present fairly, in all material respects, the individual and consolidated financial positions of The California Society of Certified Public Accountants and California Certified Public Accountants Education Foundation as of April 30, 2000, and the changes in their net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and their cash flows for the year then ended, in conformity with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Gilbert Accountancy Corporation Certified Public Accountants June 16, 2000 NOTES TO CONSOLIDATING FINANCIAL STATEMENTS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The California Society of Certified Public Accountants (Ca1CPA) is a nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. incorporated membership organization whose purpose is to advance the profession of accountancy in the State of California. Ca1CPA provides its members with general and technical resources through its chapters and committees. California Certified Public Accountants Education Foundation (Foundation) is a nonprofit public benefit corporation organized to provide continuing professional education to Certified Public Accountants (CPAs) and other interested parties. Revenues for both Ca1CPA and the Foundation are derived primarily from CPAs in California. CalCPA and the Foundation share some administrative functions. Such costs are incurred by Ca1CPA, who charges the Foundation for its estimated share. PRINCIPLES OF CONSOLIDATION The Board of Trustees of the Foundation consists of members of CalCPA who are elected by the governing Board Noun 1. governing board - a board that manages the affairs of an institution board - a committee having supervisory powers; "the board has seven members" of Directors of CalCPA. Because of common control, the accompanying financial statements reflect the consolidation of CalCPA and the Foundation. Material transactions between the entities have been eliminated in consolidation. BASIS OF PRESENTATION The financial statements are presented in conformity with Statement of Financial Accounting Standard (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 117, Financial Statements of Not-For-Profit Organizations. Under SEAS No. 117, CalCPA and the Foundation report information regarding their financial position and activities according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. Information on net asset classifications is disclosed in Note 12. REVENUE RECOGNITION Membership dues are recognized as revenue in the membership period. Dues collected in advance of the membership period are recorded as deferred revenue until earned. Peer review registration fees are recognized over the calendar year. Peer review processing and review fees are recognized as review engagements are completed. Revenue from professional education programs is recognized in the periods the programs are held. CASH AND EQUIVALENTS For financial statement purposes, CalCPA and the Foundation consider all investments with a maturity at purchase of three months or less to be cash equivalents. ADVERTISING COSTS Direct response advertising costs are capitalized in other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. and charged to expense in the period the associated events occur. Other advertising costs are expensed as incurred. INVESTMENTS Are stated at market value. PROPERTY AND EQUIPMENT Are stated at cost and depreciated Depreciated may refer to:
straight-line method of depreciation over estimated useful lives of 3 to 10 years. DEFERRED LEASE COSTS Rent expense is recognized on a straight-line basis over the life of the lease. Deferred lease costs represent rent expense recognized in excess of rental payments made. DONATED SERVICES Members of CalCPA donate their time to various activities of CalCPA and the Foundation, including the leadership of the organizations, committees, chapters, and member events. No revenue has been recognized for these services. INCOME TAXES CalCPA and the Foundation are exempt from income taxes under Internal Revenue Code The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. (IRC (Internet Relay Chat) Computer conferencing on the Internet. There are hundreds of IRC channels on numerous subjects that are hosted on IRC servers around the world. After joining a channel, your messages are broadcast to everyone listening to that channel. ) Sections 501(c)(6) and 501(c)(3), respectively, and related California code sections. However, the organizations are subject to income taxes from activities unrelated to their tax-exempt purposes. The Foundation is considered a publicly supported organization. FUNCTIONAL EXPENSES The costs of providing the program services and supporting services have been summarized on a functional basis in the statements of activities and of functional expenses. Accordingly, certain costs have been allocated among the program services and supporting services based on estimates of employees' time incurred and on usage of resources. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. RECLASSIFICATIONS Certain 1999 amounts have been reclassified to conform with the 2000 financial statement presentation. 2. RELATED PARTY TRANSACTIONS CalCPA shares certain administrative functions with CAMICO Mutual Insurance Company (CAMICO) and Group insurance Trust (GIT). CalCPA charges CAMICO and GIT for their estimated shares of related expenses. In addition, CAMICO and GIT purchase services from CalCPA. CAMICO provides professional liability insurance for Ca1CPA members and is endorsed by CalCPA. Since CAMICO is not under common control with CalCPA and the Foundation, the financial statements do not reflect consolidation of CAMICO. Balances of $126,000 and $95,000 due from CAMICO as of April 30, 2000 and 1999, respectively, are included in CalCPA's accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . Services purchased and expenses allocated for CAMICO totaled $353,000 for 2000 and $357,000 for 1999. GIT is a multiple employer welfare arrangement formed to provide health and welfare insurance plans to CalCPA members at favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. group rates. The CalCPA Board of Directors exerts control over the nomination process for the Board of Trustees of GIT. However, since regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. limit CalCPA's control of GIT's activities, the financial statements do not reflect consolidation of GIT. A balance of $136,000 due to GIT as of April 30,2000, is included in CalCPA's accrued expenses Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. . A balance of $191,000 due from GIT as of April 30, 1999, is included in CalCPA's other accounts receivable. Services purchased and expenses allocated for GIT totaled $256,000 for 2000 and $283,000 for 1999. 3. PEER REVIEW PROGRAM The financial statements of CalCPA include the operations of the Peer Review Program, which administers the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. peer review program in California, Arizona, and Alaska. Peer review expenses are included in Other Activities" in the statements of activities and of functional expenses, Revenues, expenses, and net assets for the division are summarized as follows: 4. ADVERTSISNG COSTS The Foundation's direct response advertising consists primarily of catalogs and brochures for events. Other current assets include capitalized advertising costs of $177,000 and $230,000 as of April 30, 2000 and 1999, respectively. Advertising costs charged to expense are as follows: In the year ended April 30, 1999, CalCPA and the Foundation acquired a membership database software package from a vendor. During the year ended April 30, 2000, the software was determined to be unable to meet the Foundation's requirements and the costs incurred totaling $531,000 were recorded as an expense. The Foundation is seeking legal and other remedies to recover its software investment. The amount of any possible future recovery cannot be estimated and, accordingly, none has been recorded in the financial statements. 8. LINE OF CREDIT Ca1CPA has established a line of credit with an investment firm. The line bears interest at the firm's average base rate plus 0.125%. As of April 30, 2000, the credit limit is $3,000,000 and there is no outstanding balance due. 9. OPERATING LEASE Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. OBLIGATIONS CalCPA and CAMICO have signed agreements to lease new office space for their corporate headquarters under non-cancelable operating leases expiring in July 2010. GIT and the Foundation have signed sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. agreements with Ca1CPA and CAMICO, respectively, also expiring in July 2010, to use a portion of the office space for their corporate headquarters. Sublease payments are based on square footage occupied. CalCPA also leases office space in several major California cities, mostly under year-to-year operating leases. The Glendale office lease is a non-cancelable operating lease expiring in November 2003. Future minimum lease payments Rental payments over the lease term including the amount of any bargain purchase option, premium and any guaranteed residual value and excluding any rental relating to costs to be met by the lessor and any contingent rentals. under these agreements, net of minimum sublease receipts from GIT, as well as the remaining rent on the existing lease, are as follows: Under the existing operating lease for the corporate headquarters, CalCPA and the Foundation earn income, included in other income on the statements of activities, on space subleased to unrelated tenants. CalCPA has not subleased any of its space under the new lease to unrelated tenants, but has the option to do so. Rent expense under the existing lease is presented net of the portion of the lease paid by CAMICO. Rent expense and sublease income under the existing lease are as follows: 10. RETIREMENT PLANS CalCPA sponsors a defined benefit pension plan for substantially all full-time employees of CalCPA and the Foundation. Each employee's benefits are based on years of service and the employee's compensation during the last five years of employment. CalCPA's funding policy is to contribute annually an amount not less than the ERISA See Employee Retirement Income Security Act. ERISA See Employee Retirement Income Security Act (ERISA). minimum funding requirement The Minimum Funding Requirement (MFR) was a part of United Kingdom legislation in the Pensions Act 1995, and was introduced on 6 April 1997. The Pensions Act 2004 abolishes the MFR replaces it with new "scheme funding objective"; this came into force on 30 December, 2005 for all and not more than the amount that would be deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). for federal income taxes. Due to investment performance, no employer contributions were required for 2000 or 1999. Contributions are intended to provide not only for benefits earned to date but also for benefits expected to be earned in the future. The following information is based on computations by the plan actuary actuary One who calculates insurance risks and premiums. Actuaries compute the probability of the occurrence of such events as birth, marriage, illness, accidents, and death. : CalCPA and the Foundation each sponsor defined contribution plans Defined contribution plan A pension plan whose sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: Defined benefit plan under IRC Section 401(k). All employees at least 21 years old who have completed one year of service are eligible to participate. Participants may contribute up to 15% of eligible gross compensation. Employer contributions are at the discretion of the respective governing boards. There were no employer contributions in 2000 or 1999. CalCPA maintains a deferred compensation plan under Internal Revenue Code Section 457. The plan is closed to further contributions or new participants, and only a few participants remain. Deferred compensation assets consist of investments reserved for future payment of deferred compensation liabilities. 11. OTHER OBLIGATIONS CalCPA is obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. under a contract, expiring during the year ending April 30, 2001, to maintain and host a website. The current portion of the contract payable is included in accrued expenses in the statements of financial position. In May 2000, the Foundation signed an agreement to develop and purchase software for an amount not to exceed $389,000. 12. NET ASSETS As of April 30, 2000 and 1999, the net assets of the Foundation include approximately $280,000 that is temporarily restricted for scholarships by CalCPA member donors. Except for this balance, the net assets of CalCPA and the Foundation are unrestricted. The changes in temporarily restricted net assets for the years ended April 30, 2000 and 1999, are not significant. 13. CONCENTRATION OF CREDIT RISK Ca1CPA and the Foundation maintain a majority of their cash in money market accounts that are not federally insured and in bank deposit accounts which, at times, may exceed federally insured limits. The organizations have not experienced any losses in such accounts. Management believes the organizations are not exposed to any significant credit risk related to cash. |
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