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Home My WebLink AboutCommUnity FinancialCOMMUNITY CRISIS SERVICES AND FOOD BANK FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2023 AND 2022 COMMUNITY CRISIS SERVICES AND FOOD BANK TABLE OF CONTENTS YEARS ENDED JUNE 30, 2023 AND 2022 INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION 4 STATEMENTS OF ACTIVITIES 6 STATEMENTS OF FUNCTIONAL EXPENSES 8 STATEMENTS OF CASH FLOWS 10 NOTES TO FINANCIAL STATEMENTS 11 CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer. CliftonLarsonAllen LLP CLAconnect.com % )*+,- +. -/) 012- +3 -/) 2.4.5246 -4-)7).-8 Opinion ! " # $ % # & " $ " '! () *)*( *)** $ ! $ +" $ $ $ , ! " $ - " $ $$ $ " $ " % # & '! () *)*( *)** # $ !# " "$ # $$ " . , Basis for Opinion ! ! ! !# # $$ " . /.., %! "-$ ! ! - .! 0 1"-$ .! $ ! " , 2! - " % # & ! $ "-$ $ $ 2! $ # ! !, -$ ! - ! "" " " - ! ! ", Responsibilities of Management for the Financial Statements 3 # "-$ " " " $ !# " "$ # $$ " . # "$ $ $ $ " " " $ $ ! ! , " " # $ # 2! $! ## # !- $ !- -! % # & ; -$ ! ## $ $ -$ - !, Board of Directors CommUnity Crisis Services and Food Bank (2) Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 Organization’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization’s ability to continue as a going concern for a reasonable period of time. Board of Directors CommUnity Crisis Services and Food Bank (3) We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. CliftonLarsonAllen LLP Cedar Rapids, Iowa January 25, 2024 COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENTS OF FINANCIAL POSITION JUNE 30, 2023 AND 2022 See accompanying Notes to Financial Statements. (4) 2023 2022 ASSETS CURRENT ASSETS Cash and Cash Equivalents 573,000$ 1,980,705$ Accounts Receivable 3,679 7,568 Grants and Contracts Receivable 2,154,863 650,426 Unconditional Promises to Give 250,915 249,218 Prepaid Expenses 49,809 26,736 Total Current Assets 3,032,266 2,914,653 INVESTMENTS 1,057,605 964,766 PROPERTY AND EQUIPMENT Land 325,000 325,000 Buildings and Improvements 2,546,243 2,646,127 Furniture and Equipment 1,259,139 760,709 Total Property and Equipment 4,130,382 3,731,836 Less: Accumulated Depreciation (1,734,121) (1,477,968) Property and Equipment, Net 2,396,261 2,253,868 OTHER ASSETS Beneficial Interest in Assets Held by Community Foundation 15,387 14,753 ROU Assets - Operating, Net 12,658 - ROU Assets - Financing, Net 19,836 - Total Other Assets 47,881 14,753 Total Assets 6,534,013$ 6,148,040$ COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENTS OF FINANCIAL POSITION (CONTINUED) JUNE 30, 2023 AND 2022 See accompanying Notes to Financial Statements. (5) 2023 2022 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts Payable 54,243$ 103,505$ Accrued Expenses and Other Liabilities 471,805 189,668 Deferred Revenue 14,500 450,000 Lease Liability - Operating 6,979 - Lease Liability - Financing 6,547 - Line of Credit 550,000 - Current Portion Capital Lease (ASC 840)- 4,441 Total Current Liabilities 1,104,074 747,614 LONG-TERM LIABILITIES Lease Liability - Operating 5,679 - Lease Liability - Financing 13,289 - Long-Term Portion of Capital Lease (ASC 840)- 9,993 Total Long-Term Liabilities 18,968 9,993 Total Liabilities 1,123,042 757,607 NET ASSETS Without Donor Restrictions: Undesignated 3,995,569 4,111,347 Board-Designated Endowment 432,087 389,283 Board-Designated Reserve 266,515 245,855 Board-Designated Strategic Fund 359,003 329,628 Total W ithout Donor Restrictions 5,053,174 5,076,113 With Donor Restrictions 357,797 314,320 Total Net Assets 5,410,971 5,390,433 Total Liabilities and Net Assets 6,534,013$ 6,148,040$ COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023 See accompanying Notes to Financial Statements. (6) Without Donor With Donor Restrictions Restrictions Total SUPPORT AND REVENUE Support: Contributions 1,487,859$ 93,817$ 1,581,676$ In-Kind Contributions 2,299,331 - 2,299,331 United Way 6,193 108,130 114,323 Johnson County - 127,785 127,785 City of Iowa City 74,037 - 74,037 City of Coralville - 5,000 5,000 Total Support 3,867,420 334,732 4,202,152 Revenue: Grants and Contracts 10,162,673 - 10,162,673 Investment Income, Net 96,254 - 96,254 Change in Beneficial Interest in Assets Held by Community Foundation 634 - 634 Rental Income 48,519 - 48,519 Loss on Disposal of Property and Equipment (1,054) - (1,054) Total Revenue 10,307,026 - 10,307,026 Total Support and Revenue 14,174,446 334,732 14,509,178 NET ASSETS RELEASED FROM RESTRICTIONS Restrictions Satisfied by Passage of Time and Payments 291,255 (291,255) - Total Support and Revenue, Net Assets Released from Restrictions 14,465,701 43,477 14,509,178 EXPENSES Program Services: Crisis Intervention 9,223,439 - 9,223,439 Food Bank 3,379,516 - 3,379,516 Emergency Assistance 876,115 - 876,115 1105 Project 106,697 - 106,697 Total Program Services 13,585,767 - 13,585,767 Supporting Services: Management and General 601,761 - 601,761 Fundraising 301,112 - 301,112 Total Supporting Services 902,873 - 902,873 Total Expenses 14,488,640 - 14,488,640 CHANGE IN NET ASSETS (22,939) 43,477 20,538 Net Assets - Beginning of Year 5,076,113 314,320 5,390,433 NET ASSETS - END OF YEAR 5,053,174$ 357,797$ 5,410,971$ COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2022 See accompanying Notes to Financial Statements. (7) Without Donor With Donor Restrictions Restrictions Total SUPPORT AND REVENUE Support: Contributions 1,205,295$ 41,973$ 1,247,268$ In-Kind Contributions 2,965,306 - 2,965,306 United Way 11,758 110,068 121,826 Johnson County - 127,785 127,785 City of Iowa City 72,402 - 72,402 City of Coralville - 11,365 11,365 Total Support 4,254,761 291,191 4,545,952 Revenue: Grants and Contracts 4,255,536 - 4,255,536 Investment Income, Net (121,605) - (121,605) Change in Beneficial Interest in Assets Held by Community Foundation (3,236) - (3,236) Rental Income 52,209 - 52,209 Loss on Disposal of Property and Equipment (16,727) - (16,727) Total Revenue 4,166,177 - 4,166,177 Total Support and Revenue 8,420,938 291,191 8,712,129 NET ASSETS RELEASED FROM RESTRICTIONS Restrictions Satisfied by Passage of Time and Payments 258,286 (258,286) - Total Support and Revenue, Net Assets Released from Restrictions 8,679,224 32,905 8,712,129 EXPENSES Program Services: Crisis Intervention 2,788,985 - 2,788,985 Food Bank 3,374,991 - 3,374,991 Emergency Assistance 800,861 - 800,861 1105 Project 93,359 - 93,359 Total Program Services 7,058,196 - 7,058,196 Supporting Services: Management and General 464,672 - 464,672 Fundraising 286,201 - 286,201 Total Supporting Services 750,873 - 750,873 Total Expenses 7,809,069 - 7,809,069 CHANGE IN NET ASSETS 870,155 32,905 903,060 Net Assets - Beginning of Year 4,205,958 281,415 4,487,373 NET ASSETS - END OF YEAR 5,076,113$ 314,320$ 5,390,433$ COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2023 See accompanying Notes to Financial Statements. (8) Total Total Total Crisis Food Emergency 1105 Program Management Supporting Functional Intervention Bank Assistance Project Services and General Fundraising Services Expenses Salaries 7,461,802$ 427,816$ 253,449$ 30,640$ 8,173,707$ 258,414$ 175,482$ 433,896$ 8,607,603$ Other Employee Benefits 386,381 33,897 21,682 5,585 447,545 12,634 17,480 30,114 477,659 Payroll Taxes 549,557 31,570 18,935 2,170 602,232 19,197 13,435 32,632 634,864 Pension Contributions 56,651 2,419 3,845 551 63,466 1,046 4,980 6,026 69,492 Professional Fees 47,127 1,725 1,725 - 50,577 66,280 - 66,280 116,857 Advertising 47,543 1,072 - - 48,615 35,223 10,457 45,680 94,295 Office Expenses 10,719 6,002 4,529 186 21,436 28,548 24,338 52,886 74,322 Telephone 63,851 5,091 618 5,434 74,994 1,502 1,293 2,795 77,789 Information Technology 123,548 41,416 20,443 331 185,738 83,441 32,551 115,992 301,730 Occupancy 3,880 14,069 1,979 9,438 29,366 3,605 1,665 5,270 34,636 Meeting and Conferences 39,291 3,039 150 - 42,480 1,185 2,171 3,356 45,836 Insurance 62,700 24,954 5,452 14,811 107,917 13,423 4,888 18,311 126,228 Special Events 295 - - - 295 246 34 280 575 Client Assistance 35,621 2,578,589 528,315 - 3,142,525 498 - 498 3,143,023 Travel 72,302 235 349 - 72,886 6,042 2,151 8,193 81,079 Maintenance 50,424 147,489 5,008 21,461 224,382 27,854 5,612 33,466 257,848 Interest Expense - - - - - 2,005 - 2,005 2,005 Miscellaneous 28,027 11,504 164 - 39,695 19,262 106 19,368 59,063 Total Expenses by Function 9,039,719 3,330,887 866,643 90,607 13,327,856 580,405 296,643 877,048 14,204,904 Depreciation and Amortization 183,720 48,629 9,472 16,090 257,911 21,356 4,469 25,825 283,736 Total Expenses 9,223,439$ 3,379,516$ 876,115$ 106,697$ 13,585,767$ 601,761$ 301,112$ 902,873$ 14,488,640$ Program Services Supporting Services COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2022 See accompanying Notes to Financial Statements. (9) Total Total Total Crisis Food Emergency 1105 Program Management Supporting Functional Intervention Bank Assistance Project Services and General Fundraising Services Expenses Salaries 2,193,490$ 303,159$ 185,509$ 32,279$ 2,714,437$ 231,959$ 168,869$ 400,828$ 3,115,265$ Other Employee Benefits 110,087 30,741 15,626 3,817 160,271 24,063 13,981 38,044 198,315 Payroll Taxes 157,008 22,067 13,904 2,429 195,408 17,368 12,432 29,800 225,208 Pension Contributions 21,168 2,492 1,926 462 26,048 4,165 5,676 9,841 35,889 Professional Fees - - - - - 22,961 - 22,961 22,961 Advertising 33,722 5,218 904 804 40,648 40,683 2,382 43,065 83,713 Office Expenses 14,924 7,437 3,223 5,265 30,849 17,364 21,455 38,819 69,668 Telephone 21,662 4,541 566 167 26,936 7,408 1,011 8,419 35,355 Information Technology 37,961 14,523 4,185 9,859 66,528 15,718 16,776 32,494 99,022 Occupancy 4,115 16,141 1,916 121 22,293 13,258 1,537 14,795 37,088 Meeting and Conferences 35,761 1,440 217 7,975 45,393 (4,967) 3,789 (1,178) 44,215 Insurance 30,452 6,682 3,002 - 40,136 17,858 1,809 19,667 59,803 Special Events - - - - - - 22,717 22,717 22,717 Client Assistance 17,334 2,753,538 563,740 - 3,334,612 16,411 - 16,411 3,351,023 Travel 26,084 613 183 - 26,880 1,087 3,566 4,653 31,533 Maintenance 52,708 106,754 3,948 13,361 176,771 7,833 2,996 10,829 187,600 Volunteer Recognition 2,833 1,812 210 - 4,855 2,405 416 2,821 7,676 Interest Expense - - - - - 1,308 - 1,308 1,308 Miscellaneous 2,300 2,296 - - 4,596 12,506 - 12,506 17,102 Total Expenses by Function 2,761,609 3,279,454 799,059 76,539 6,916,661 449,388 279,412 728,800 7,645,461 Depreciation 27,376 95,537 1,802 16,820 141,535 15,284 6,789 22,073 163,608 Total Expenses 2,788,985$ 3,374,991$ 800,861$ 93,359$ 7,058,196$ 464,672$ 286,201$ 750,873$ 7,809,069$ Program Services Supporting Services COMMUNITY CRISIS SERVICES AND FOOD BANK STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2023 AND 2022 See accompanying Notes to Financial Statements. (10) 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Change in Net Assets 20,538$ 903,060$ Adjustments to Reconcile Change in Net Assets to Net Cash Provided (Used) by Operating Activities: Reinvested Interest/Dividends (24,766) (26,676) Realized and Unrealized Loss (Gain) on Investments (72,605) 155,464 Depreciation 277,749 163,608 ROU - Amortization 5,987 - Loss on Disposal of Property and Equipment 1,054 16,727 Change in Beneficial Interests in Assets Held by Community Foundation (1,372) 3,236 Changes in Operating Assets and Liabilities: Receivables (1,502,245) (379,132) Prepaid Expenses (23,073) (9,469) Accounts Payable (49,263) 41,736 Accrued Expenses and Other Liabilities 282,137 46,357 Deferred Revenue (435,500) 450,000 Net Cash Provided (Used) by Operating Activities (1,521,359) 1,364,911 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Investments (218,837) (1,589,788) Proceeds from Sales of Investments 223,369 1,220,904 Distributions from Community Foundation 738 - Purchases of Property and Equipment (434,598) (638,370) Net Cash Used by Investing Activities (429,328) (1,007,254) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Line of Credit 550,000 - Payments on Financing Leases (7,018) - Payments on Obligations under Capital Leases - (4,107) Net Cash Provided (Used) by Financing Activities 542,982 (4,107) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,407,705) 353,550 Cash and Cash Equivalents - Beginning of Year 1,980,705 1,627,155 CASH AND CASH EQUIVALENTS - END OF YEAR 573,000$ 1,980,705$ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Noncash ROU Additions 34,891$ -$ COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (11) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization CommUnity Crisis Services and Food Bank formerly known as The Crisis Center of Johnson County (herein referred to as the Organization) was incorporated in June 1970 in the state of Iowa. The mission of the Organization is to provide immediate and non-judgmental support for individuals facing emotional, food, or financial crisis. Significant accounting policies followed by the Organization are presented below. Use of Estimates in Preparing Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates. Cash and Cash Equivalents The Organization considers all liquid investments with a maturity of three months or less when purchased to be cash equivalents. Accounts Receivable Accounts receivable are unsecured and are reported at their outstanding balances. Management periodically evaluates the Organization’s past receivables loss experience, known and inherent risks in receivables populations, adverse situations that may affect an obligor’s ability to pay, and current economic conditions. The Organization maintained an allowance for doubtful accounts of $-0-for the years ended June 30, 2023 and 2022. Grants and Contracts Receivable Grants and contract receivables are unsecured and are reported at their outstanding balances. Management periodically evaluates the Organization’s past receivables loss experience, known and inherent risks in receivables populations, adverse situations that may affect an obligor’s ability to pay, and current economic conditions. The Organization maintained an allowance for doubtful accounts of $-0-for the years ended June 30, 2023 and 2022. Unconditional Promises to Give Unconditional promises to give are recognized in the period the promises are made. Conditional promises to give are recognized when the conditions on which thy depend are substantially met, that is, when the conditional promise becomes unconditional. The Organization has not recorded any conditional promises to give. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (12) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investments Investments are carried at fair value with unrealized and realized gains and losses on investments reported as an increase or decrease in net assets without donor restrictions. Investment income is recognized when earned. Property and Equipment Property and equipment which were purchased are stated at their original cost. All fixed assets are depreciated over their estimated useful lives of 5 to 20 years, using the straight- line method of depreciation. The Organization follows the practice of capitalizing at cost all expenditures for property and equipment in excess of $1,000 and a useful life greater than one year. Leases The Organization determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (ROU) assets –operating and lease liability –operating, and finance leases are included in ROU assets –financing and lease liability –financing in the statements of financial position. ROU assets represent the Organization’s right to use an underlying asset for the lease term and lease liabilities represent the Organization’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Organization will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Organization has elected to recognize payments for short-term leases with a lease term of 12 months or less as expense as incurred and these leases are not included as lease liabilities or ROU assets on the statements of financial position. The individual lease contracts do not provide information about the discount rate implicit in the lease. Therefore, the Organization has elected to use a risk-free discount rate determined using a period comparable with that of the lease term for computing the present value of lease liabilities. Beneficial Interest in Assets Held by Community Foundation Certain funds are held by the Community Foundation of Johnson County (the Foundation), in permanent designated agency endowment funds, for the benefit of the Organization. The transactions with the Foundation are deemed to be reciprocal and, therefore, the value of the funds held by the Foundation is recognized as an asset (beneficial interest in assets held by community foundation) by the Organization. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (13) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Beneficial Interest in Assets Held by Community Foundation (Continued) Certain other funds held by the Foundation for the benefit of the Organization have been established (see Note 5) by donors who explicitly granted variance power to the Foundation in a nonreciprocal transfer. As such, these funds are not recognized as an asset by the Organization. The distributions received from the Foundation from these funds are recognized as contribution revenue by the Organization. Net Assets Net assets are classified based on the existence or absence of donor-imposed restrictions. The following is a description of each class: Net Assets Without Donor Restrictions –Resources over which the board of directors has discretionary control. Designated amounts represent amounts which the board has set aside for a particular purpose. Net Assets With Donor Restrictions –Those resources subject to donor-imposed restrictions which will be satisfied by actions of the Organization or passage of time. Recognition of Support and Revenue The Organization recognizes support when cash, securities or other assets; unconditional promises to give; or a notification of a beneficial interest is received. Conditional promises to give, that is, those with a measurable performance or other barrier and a right of return are not recognized until the conditions on which they depend have been met. Revenue from programs is reported in the amount that reflects the consideration to which the Organization expects to be entitled in exchange for providing services to their program participants. Amounts received are recognized as revenue when the Organization has incurred expenditures in compliance with specific contract or grant provisions. Amounts received prior to incurring qualifying expenditures are reported as deferred revenue in the statement of financial position. As of June 30, 2023, over $17 million of cost reimbursable grants over a span of multiple years have not been recognized as revenue because qualifying expenditures have not yet been incurred. No amounts have been received in advance under federal, state, city, and county contracts and grants. The Organization’s accounts receivable and deferred revenue are as follows as of June 30: 2023 2022 2021 Accounts Receivable 3,679$ 7,568$ 1,888$ Deferred Revenue 14,500 450,000 - COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (14) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Advertising The Organization expenses advertising costs as incurred. Tax-Exempt Status The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and a similar section of the Iowa income tax law, which provides income tax exemption for corporations organized and operated exclusively for religious, charitable, or educational purposes.The Internal Revenue Service has not determined that the Organization is a private foundation. The Organization files information returns in the U.S. federal jurisdiction. The Organization follows the accounting standard for evaluating uncertain tax positions and has determined that it was not required to record a liability related to uncertain tax positions for the years ended June 30, 2023 and 2022. Functional Expenses The Organization allocates its expenses on a functional basis among its program and supporting activities. Expenses that can be identified with a specific program are allocated directly according to their natural expenditure classification. Other expenses that are common to several functions are allocated by time spent and effort. Adoption of New Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, Leases (Topic 842). This new standard increases transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the statement of financial position. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statement to assess the amount, timing, and uncertainty of cash flows arising from leases. The Organization adopted the requirements of the guidance effective July 1, 2022, and has elected to apply the provisions of this standard to the beginning of the period of adoption. The Organization has elected to adopt the package of practical expedients available in the year of adoption. The Organization has elected to adopt the available practical expedient to use hindsight in determining the lease term and in assessing impairment of the Organization’s ROU assets. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (15) NOTE 2 LIQUIDITY AND AVAILABILITY The Organization regularly monitors liquidity to meet its operating needs and other commitments, while also striving to maximize the investment of its available funds. The Organization receives contributions, grants, and program fees on an ongoing basis. For purposes of analyzing resources available to meet general expenditures over a 12-month period, the Organization considers all expenditures related to its ongoing activities as well as the conduct of services undertaken to support those activities to be general expenditures. In addition to the financial assets available to meet general expenditures over the next 12 months, the Organization anticipates collecting sufficient support and revenue to cover general expenditures. The Organization considers contributions restricted for programs which are ongoing, major, and central to their operations to be available to meet cash needs for general expenditures. The following table shows the financial assets available for general expenditures and future needs of the Organization as of June 30: 2023 2022 Cash 573,000$ 1,980,705$ Receivables 2,409,457 907,212 Investments 266,515 245,855 Total 3,248,972$ 3,133,772$ NOTE 3 INVESTMENTS Investments consist of the following as of June 30: 2023 2022 Mutual Funds 998,750$ 920,996$ Fixed Income 21,740 21,262 Money Market Funds 37,115 22,508 Total 1,057,605$ 964,766$ Investment income consists of the following for the years ended June 30: 2023 2022 Interest and Dividend Income 27,128$ 37,712$ Net Realized and Unrealized Gain 72,605 (155,339) Investment Expense (3,479) (3,978) Total 96,254$ (121,605)$ COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (16) NOTE 4 FAIR VALUE MEASUREMENTS Certain assets of the Organization are reported at fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1 –Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Organization has the ability to access. Level 2 –Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 –Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodologies used for assets measured at fair value. Mutual Funds –Securities listed on a national market or exchange and valued at the last sale price, or if there is no sale and the market is still considered active, at the last transaction price before year-end. Fixed Income –Valued at the most recent price of the equivalent quoted yield for such securities, or those of comparable maturity, quality, and type. Beneficial Interest in Assets Held by a Community Foundation –The unobservable inputs are the underlying assets at the Foundation and follow their investment pool. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (17) NOTE 4 FAIR VALUE MEASUREMENTS (CONTINUED) The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There are no unfunded commitments or redemptions associated with these assets. The following tables set forth by level, within the fair value hierarchy, the Organization’s assets at fair value as of June 30: Level 1 Level 2 Level 3 Total Mutual Funds 998,750$ -$ -$ 998,750$ Fixed Income - 21,740 - 21,740 Total Investments 998,750 21,740 - 1,020,490 Beneficial Interest in Assets Held by Community Foundation - - 15,387 15,387 Total Assets at Fair Value 998,750$ 21,740$ 15,387$ 1,035,877$ 2023 Level 1 Level 2 Level 3 Total Mutual Funds 920,996$ -$ -$ 920,996$ Fixed Income - 21,262 - 21,262 Total Investments 920,996 21,262 - 942,258 Beneficial Interest in Assets Held by Community Foundation - - 14,753 14,753 Total Assets at Fair Value 920,996$ 21,262$ 14,753$ 957,011$ 2022 The following is a summary of changes in the fair value of the Organization’s Level 3 assets for the years ended June 30: 2023 2022 Balance - Beginning of Year 14,753$ 17,989$ Change in Beneficial Interest 1,372 (3,236) Distribution (738) - Balance - End of Year 15,387$ 14,753$ The following table details Level 3 holdings as of June 30: Principal Valuation Unobservable Instrument 2023 2022 Technique Inputs Beneficial Interest in Assets Held 15,387$ 14,753$ Net Value of by Community Foundation Asset Underlying Value Assets Fair Value COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (18) NOTE 5 BENEFICIAL INTEREST IN ASSETS HELD BY COMMUNITY FOUNDATION AND DESIGNATED FUNDS The Organization has established a fund at the Foundation. The fund is administered by the Foundation for the benefit of the Organization. Control over the investment or reinvestment of these funds is exercised exclusively by the Foundation.The transactions with the Foundation are deemed to be reciprocal and, therefore, the value of the fund held by the Foundation is recognized as an asset (beneficial interest in assets held by community foundation) by the Organization. Distributions from the fund are at the discretion of the Organization’s board. The following is the fund balance and purpose at June 30: 2023 2022 Emergency Assistance 15,387$ 14,753$ In addition, designated funds for the benefit of the Organization, have been established by donors with the Foundation. In establishing a designated fund, the donor selects a specific nonprofit institution as a recipient, and grants are made to it annually as long as the named institution remains in existence and continues to fulfill its intended purpose. Only the distributions received by the Organization from these designated funds are included in the accompanying financial statements. The Organization received $21,525 and $-0-from these funds for the years ended June 30, 2023 and 2022, respectively. The amount of investments held on the Organization’s behalf as of June 30, 2023 and 2022 was $434,290 and $455,788, respectively. NOTE 6 NOTE PAYABLE The Organization has a $750,000 line of credit of which $550,000 was used as of June 30, 2023. Amounts drawn against the line of credit are payable on demand and bears interest at 8.25%. The line of credit expires May 21, 2024. The line of credit is collateralized by substantially all of the Organization’s assets. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (19) NOTE 7 LEASES The Organization is leasing office equipment and a vehicle for various terms under long- term noncancelable leases. The leases expire at various dates through 2028. In the normal course of business, it is expected that these leases will be renewed or replaced by similar leases. The following table provides quantitative information concerning the Organization’s leases as of and for the year ended June 30, 2023: Lease Cost: Amortization of ROU Assets 5,987$ Interest on Lease Liabilities 1,031 Operating Lease Cost 9,813 Total Lease Cost 16,831$ Other Lease Information: Operating Cash Flows from Finance Leases 1,031$ Operating Cash Flows from Operating Leases 10,490$ Financing Cash Flows from Finance Leases 6,087$ Cash Paid for Amounts in Lease Liabilities: ROU Assets Obtained in Exchange for New Finance Lease Liabilities 11,700$ ROU Assets Obtained in Exchange for New Operating Lease Liabilities 22,471$ Weighted-Average Remaining Lease Term - Finance Leases 3.6 Years Weighted-Average Remaining Lease Term - Operating Leases 2.6 Years Weighted-Average Discount Rate - Finance Leases 3.43% Weighted-Average Discount Rate - Operating Leases 2.88% COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (20) NOTE 7 LEASES (CONTINUED) The future minimum lease payments expected for these leases as of June 30, 2023 are as follows: Operating Finance Years Ending June 30, Leases Leases 2024 7,227$ 7,999$ 2025 2,151 7,999 2026 2,151 2,584 2027 1,611 2,584 2028 - 1,506 Undiscounted Cash Flows 13,140 22,672 Less: Imputed Interest (482) (2,836) Total Present Value 12,658$ 19,836$ Short-Term Lease Liabilities 6,979$ 6,547$ Long-Term Lease Liabilities 5,679 13,289 Total Lease Liabilities 12,658$ 19,836$ NOTE 8 ENDOWMENTS The Organization’s endowment consists of various funds to support their general operating needs. Its endowments consist of funds designated by the board of directors (the board) to function as endowment. As required by U.S. GAAP, net assets associated with endowment funds, including funds designated by the board to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. The Organization has adopted investment and spending policies for endowment assets that attempt to provide current income to fund the operations of the Organization as well as to enhance the future resources available to the Organization through long-term appreciation of assets. The endowment assets are invested in a manner that is intended to provide growth of principal and income. Currently, endowment assets are being held and managed by a local bank and community foundation. Distributions are approved by the board. Strategies Employed for Achieving Objectives The Organization primarily follows the investment strategy to have a target balance of $400,000 to $500,000 with an allowable variation of $350,000 to $550,000. Fixed income will be approximately $100,000, the remainder of the funds to be invested in longer term, higher risk investments, such as equity-based mutual funds and real estate investments trusts. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (21) NOTE 8 ENDOWMENTS (CONTINUED) Strategies Employed for Achieving Objectives (Continued) Endowment net asset composition by type of fund as of June 30, 2023: Without Donor With Donor Restrictions Restrictions Total Board-Designated Endowment Funds 432,087$ -$ 432,087$ Changes in endowment net assets for the year ended June 30, 2023: Without Donor With Donor Restrictions Restrictions Total Net Assets - Beginning of Year 389,283$ -$ 389,283$ Investment Income 11,453 - 11,453 Investment Fees (1,621) - (1,621) Net Appreciation 32,972 - 32,972 Net Assets - End of Year 432,087$ -$ 432,087$ Endowment net asset composition by type of fund as of June 30, 2022: With Donor Unrestricted Restrictions Total Board-Designated Endowment Funds 389,283$ -$ 389,283$ Changes in net asset composition by type of fund as of June 30, 2022: With Donor Unrestricted Restrictions Total Net Assets - Beginning of Year 663,341$ -$ 663,341$ Investment Income 12,515 - 12,515 Investment Fees (2,000) - (2,000) Transfer to Reserve (224,490) - (224,490) Net Depreciation (60,083) - (60,083) Net Assets - End of Year 389,283$ -$ 389,283$ COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (22) NOTE 9 RESTRICTIONS ON NET ASSETS Net assets with donor restrictions are available for the following purposes as of June 30: 2023 2022 Crisis Intervention 5,901$ 6,089$ Food Bank 182,309 118,502 Future Operations 169,587 189,729 Total 357,797$ 314,320$ Net assets were released from donor restrictions by incurring expenses, satisfying the restricted purpose or by occurrence of the passage of time or other events specified by donors as following for the years ended June 30: 2023 2022 Satisfaction of Purpose Restrictions 42,037$ 14,184$ Expiration of Time Restrictions 249,218 244,102 Total 291,255$ 258,286$ NOTE 10 COMMUNITY DEVELOPMENT BLOCK GRANT CONTINGENCIES The Organization received CDBG funds for the renovation and architectural services for the 1105 Building Project during the year ended June 30, 2013. The grant amount was $187,400. Funds were awarded on a reimbursement basis, and revenue was recorded when cash was received at the time of project performance. No liability has been recorded on the books for the conditional loan. The City recorded a mortgage on the property in the amount of $187,400. The loan on the property requires no payments as long as the Organization owns the property and uses it in its operations through June 30, 2030. In the event the Organization sells, assigns, or transfers its interest in the property, or discontinues its programs, prior to June 30, 2030 without written concurrence from the City, the Organization is required to pay back to the City. If the Organization fully complies with the obligation of the grant and the loan through and including June 30, 2030, then there will be no loan payments due and the lien against the property will be released by the City. The Organization was awarded CDBG funds for the removal of existing parking lot and installation of new parking lot including related work at 1105 Gilbert Court. The grant amount was $100,000. Funds were awarded on a reimbursement basis, and revenue was recorded when cash was received at the time of project performance. No liability has been recorded on the books for the conditional loan. The City recorded a mortgage on the property in the amount of $100,000. The loan on the property requires no payments as long as the Organization owns the property and uses it in its operations through December 31, 2024. In the event the Organization sells, assigns, or transfers its interest in the property, or discontinues its programs, prior to December 31, 2024, without written concurrence from the City, the Organization is required to pay back to the City. If the Organization fully complies with the obligation of the grant and the loan through and including December 31, 2024, then there will be no loan payments due and the lien against the property will be released by the City. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (23) NOTE 10 COMMUNITY DEVELOPMENT BLOCK GRANT CONTINGENCIES (CONTINUED) The Organization was awarded CDBG funds to increase the size of the warehouse, remodel client services, and expand the waiting area at 1105 Gilbert Court. The grant amount was $95,000, the Organization received $38,586 for the year ending June 30, 2019. The City recorded a mortgage on the property in the amount of $95,000. The loan on the property requires no payments as long as the Organization owns the property and uses it in its operations through June 30, 2025. In the event the Organization sells, assigns, or transfers its interest in the property, or discontinues its programs, prior to June 30, 2025, without written concurrence from the City, the Organization is required to pay back to the City. If the Organization fully complies with the obligation of the grant and the loan through and including June 30, 2025, then there will be no loan payments due and the lien against the property will be released by the City. NOTE 11 EMPLOYEE BENEFIT PLAN Effective January 1, 2017, the Organization adopted a 401(k) plan which covers employees who meet certain eligibility requirements. Previously the Organization had a simplified employee retirement (SEP) plan which covered employees who met certain eligibility requirements. The board of directors determines the annual contribution to the plan. For the years ended June 30, 2023 and 2022, the contribution to the plans was based on 5%of compensation paid to eligible employees, and amounted to $69,492 and $35,889, respectively. NOTE 12 DISCLOSURE ABOUT CERTAIN CONCENTRATIONS Cash Concentration The Organization maintains cash balances that exceed the maximum amount insured by the Federal Deposit Insurance Corporation. At June 30, 2023, the Organization had $595,983 of cash deposited in one bank. Management believes the credit risk related to the uninsured balance is minimal. Revenue Concentration The Organization has certain concentrations of support and revenue. For the years ended June 30, 2023 and 2022, the Organization received funding from the following major funding sources, defined as greater than 10% of total support and revenue. The approximate percentage of support and revenue and the amount of receivables from these sources is as follows: Receivable Percentage Receivable Percentage Funding Source A 179,831$ 7 %118,928$ 11 % Funding Source B 1,242,792 39 - 22 Funding Source C 540,458 11 - - Funding Source D - 11 - 19 2023 2022 COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (24) NOTE 13 RISKS AND UNCERTAINTIES The Organization invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the financial statements. NOTE 14 CONTRIBUTED NONFINANCIAL ASSETS The Organization received the following in-kind contributions that are reported in the statements of activities as follows for the years ended June 30: Program Management Services and General Fundraising Total Food and Grocery 2,195,441$ -$ -$ 2,195,441$ Basic Needs 16,198 - - 16,198 Advertising 17,747 - 17,747 Labor 69,945 - - 69,945 Total 2,281,584$ 17,747$ -$ 2,299,331$ 2023 Program Management Services and General Fundraising Total Food and Grocery 2,751,384$ -$ -$ 2,751,384$ Basic Needs 61,724 - - 61,724 Advertising - 29,694 - 29,694 Labor 115,182 - - 115,182 Miscellaneous - 7,322 - 7,322 Total 2,928,290$ 37,016$ -$ 2,965,306$ 2022 The Organization estimates the fair value of food and grocery items by applying an average value per pound to the amount of donated product. For the years ended June 30, 2023 and 2022, the Organization received 1,262,198 and 1,581,257 pounds, respectively, of donated product. The Organization estimates the fair value of basic needs on the basis of purchasing similar supplies in the Organization’s markets. Advertising and labor services are valued and reported at the estimated fair value based on current rates for similar services. The Organization records the fair value of donated services that create or enhance nonfinancial assets or that require specialized skills that would typically need to be purchased if not provided by donation, are recorded at their fair values in the statement of activities. COMMUNITY CRISIS SERVICES AND FOOD BANK NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 (25) NOTE 15 SUBSEQUENT EVENTS Subsequent to year end the Organization entered into an agreement to purchase property totaling $1,200,000, paid off the line of credit totaling $550,000, obtained and paid off promissory note in the amount of $1,000,000. Management evaluated subsequent events through January 25, 2024, the date the financial statements were available to be issued. Events or transactions occurring after June 30, 2023, but prior to January 25, 2024, that provided additional evidence about conditions that existed at June 30, 2023, have been recognized in the financial statements for the year ended June 30, 2023. Events or transactions that provided evidence about conditions that did not exist at June 30, 2023, but arose before the financial statements were available to be issued, have not been recognized in the financial statements for the year ended June 30, 2023.