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Home My WebLink AboutUAY FinancialUNITED ACTION FOR YOUTH, INC. IOWA CITY, IOWA FINANCIAL STATEMENTS JUNE 30, 2023 AND 2022 TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT............................................................................................................. 1 FINANCIAL STATEMENTS Statementsof Financial Position............................................................................................................ 3 Statementsof Activities.......................................................................................................................... 4 Statements of Functional Expenses...................................................................................................... 6 Statementsof Cash Flows..................................................................................................................... 8 Notes to Financial Statements............................................................................................................... 9 Is P SWinkel, Parker & Foster, CPA PC C erti(i—I Public Accountants & Consultants Independent Auditor's Report To the Board of Directors United Action for Youth, Inc. Iowa City, Iowa Opinion We have audited the financial statements of United Action for Youth, Inc., which comprise the statements of financial position as of June 30, 2023 and 2022, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of United Action for Youth, Inc. as of June 30, 2023 and 2022, 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. Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of United Action for Youth, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management 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, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about United Action for Youth, Inc.'s ability to continue as a going concern for one year after the date that the financial statements are issued. Auditor's Responsibility 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 auditor's 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. 1301 19th Avenue NW 519 Kirkwood Avenue Clinton, Iowa 52732 Iowa City, Iowa 52240 tel:563.242.3440 tel:319.351.0231 fax:563.242.5555 fax:319.351.7720 www.wpf-epa.com 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 United Action for Youth, Inc.'s internal control. Accordingly, nc 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 United Action for Youth, Inc.'s ability to continue as a goinc concern for a reasonable period of time. 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. W/A o r110' & ! 08tw,, Iowa City, Iowa March 8, 2024 FINANCIAL STATEMENTS UNITED ACTION FOR YOUTH, INC. STATEMENTS OF FINANCIAL POSITION JUNE 30, 2023 AND 2022 2023 2022 ASSETS Current Assets Cash and cash equivalents $ 437,678 $ 483,544 Grants and accounts receivable, net of allowance for credit losses 208,946 206,730 Prepaid expenses 23,404 23,509 Total Current Assets 670,028 713,783 Property and Equipment Land 56,000 56,000 Buildings, net of accumulated depreciation 838,784 935,737 Equipment, furniture, and fixtures, net of accumulated depreciation 32,788 44,777 Vehicles, net of accumulated depreciation 36,917 49,602 Total Property and Equipment 964,489 1,086,116 TOTAL ASSETS $ 1,634,517 $ 1,799,899 LIABILITIES AND NET ASSETS LIABILITIES Current Liabilities Accounts payable $ 8,729 $ 26,591 Accrued and withheld payroll taxes 4,626 5,142 Accrued wages payable 53,753 76,003 Accrued vacations payable 76,001 70,980 Deposits payable 3,306 - Total Current Liabilities 146,414 178,716 Non -Current Liabilities Long-term debt 347,725 347,725 Total Non -Current Liabilities 347,725 347,725 Total Liabilities 494,139 526,441 NET ASSETS Without Donor Restrictions Undesignated 460,073 459,190 Designated to investment in property and equipment 616,764 738,391 Total Without Donor Restrictions 1,076,837 1,197,581 With Donor Restrictions 63,541 76,877 Total Net Assets 1,140,378 1,273,458 TOTAL LIABILITIES AND NET ASSETS $ 1,634,517 $ 1,799,899 The accompanying notes are an integral part of the financial statements. 3 UNITED ACTION FOR YOUTH, INC. STATEMENTS OF ACTIVITIES YEARS ENDED JUNE 30, 2023 AND 2022 2023 Without Donor With Donor Restrictions Restrictions Total REVENUE AND OTHER SUPPORT Contributions: $ 291,065 $ 131,787 $ 422,872 General support: United Way of Johnson County 80,284 - 80,284 Johnson County 110,000 - 110,000 City of Iowa City 47,537 - 47,537 City of North Liberty 8,500 8,500 City of Coralville 3,798 - 3,798 Purchase of services fees: Juvenile Court Services 2,500 - 2,500 Counseling Services 324,239 - 324,239 Johnson County Empowerment Board 114,251 - 114,251 Grants and awards: Federal 459,606 - 459,606 State 198,110 - 198,110 Other 233,384 - 233,384 Interest income 5,917 - 5,917 Fundraising 78,164 - 78,164 Other revenue 3,622 - 3,622 Net assets released from restrictions: Purpose restrictions accomplished 144,123 (144,123) - Total Revenue and Other Support 2,105,120 (12,336) 2,092,784 EXPENSES Program Services: Counseling/Intervention 1,046,380 - 1,046,380 Prevention 709,297 - 709,297 Support Services: Management and General 364,683 - 364,683 Fundraising 106,604 - 105,504 Total Expenses 2,225,864 - 2,225,864 CHANGE IN NET ASSETS (120,744) (12,336) (133,080) NET ASSETS, BEGINNING OF YEAR 1,197,581 75,877 1,273,458 NET ASSETS, END OF YEAR $ 1,076,837 $ 63,541 $ 1,140,378 4 2022 Without Donor With Donor Restrictions Restrictions Total REVENUE AND OTHER SUPPORT Contributions: $ 246,159 $ 192,153 $ 438,312 General support: United Way of Johnson County _ 79,596 - 79,596 Johnson County 110,000 - 110,000 City of Iowa City 46,088 - 46,088 City of North Liberty 5,000 5,000 City of Coralville 3,798 - 3,798 Purchase of services fees: Juvenile Court Services 2,750 - 2,750 Counseling Services 325,300 - 325,300 Johnson County Empowerment Board 120,988 - 120,988 Grants and awards: Federal 447,381 - 447,381 State 219,970 - 219,970 Other 132,059 - 132,059 Interest income 438 - 438 Fundraising 59,496 - 59,496 Other revenue 50,414 - 50,414 Net assets released from restrictions. Purpose restrictions accomplished 136,332 (136,332) - Total Revenue and Other Support 1,985,769 55,821 2,041,590 EXPENSES Program Services: Counseling/Intervention 874,670 - 874,670 Prevention 730,600 - 730,600 Support Services: Management and General 295,325 - 295,325 Fundraising 93,979 - 93,979 Total Expenses 1,994,574 - 1,994,574 CHANGE IN NET ASSETS (8,805) 55,821 47,016 NET ASSETS, BEGINNING OF YEAR 1,206,386 20,056 1,226,442 NET ASSETS, END OF YEAR $ 1,197,581 $ 75,877 $ 1,273,468 The accompanying notes are an integral part of the financial statements. 5 UNITED ACTION FOR YOUTH, INC. STATEMENTS OF FUNCTIONAL EXPENSES YEARS ENDED JUNE 30, 2023 AND 2022 2023 Program Services Support Services Total Counseling/ Program Management Intervention Prevention Services and General Fundraising Total Personnel costs: Salaries and wages $ 785,735 $ 374,218 $1,159,953 $ 203,887 $ 59,000 $1,422,840 Health insurance 75,379 10,637 86,016 38,483 9,151 133,650 Payrolltaxes 57,735 29,287 87,022 14,847 3,625 105,494 Employee benefits 14,669 14,444 29,113 9,092 1,670 39,875 Total personnel costs 933,518 428,586 1,362,104 266,309 73,446 1,701,869 Contract services - 9,000 9,000 - - 9,000 Professional services and consultants 6,055 7,920 13,975 1,727 - 15,702 Program activities 21 10,358 10,379 - - 10,379 Supplies 18,074 28,459 46,533 4,711 1,019 52,263 Food 164 8,563 8,727 107 23,920 32,754 Telephone and communications 4,498 6,367 10,865 638 - 11,503 Postage and freight 466 676 1,142 55 477 1,674 Utilities - - - 48,416 - 48,416 Repairs and maintenance - 12,408 12,408 16,081 - 28,489 Printing 4,036 3,515 7,551 588 1,127 9,266 Licenses and dues 3,859 1,174 5,033 215 - 5,248 Publicity and advertising 878 2,232 3,110 4,937 - 8,047 Mileage and travel 2,417 8,459 10,876 27 - 10,903 Conferences and staff training 5,246 8,830 14,076 523 - 14,599 Client assistance 854 90,122 90,976 - - 90,976 Miscellaneous expenses 717 321 1,038 766 5,515 7,309 Insurance 16,926 21,158 38,084 7,431 - 45,516 Teen parent incentives - 335 336 - - 335 Depreciation 48,651 60,814 109,465 12,162 - 121,627 TOTAL EXPENSES 11,046,380 $ 709,297 $1,755,677 $ 364,683 $ 105,504 $2,226,864 0 2022 Program Services Suocort Services Total Counseling/ Program Management Intervention Prevention Services and General Fundraising Total Personnel costs: Salaries and wages $ 635,194 $ 387,629 $1,022,823 $ 160,102 $ 46,940 $1,229.866 Health insurance 64,327 9,593 73,920 24,361 6,732 105,013 Payroll taxes 43.684 27,126 70,810 11,966 2,758 85,534 Employee benefits 12,334 15,319 27,653 8,634 1,434 37,721 Total personnel costs 756,539 439,667 1,196,206 206,063 57,864 1,458,133 Contract services - 40,502 40,502 - - 40,502 Professional services and consultants 11,700 14,973 26,673 3,169 1,008 30,850 Program activities - 9,311 9,311 - 954 10,265 Supplies 26,572 35,296 61,868 4,928 4,769 71,565 Food 2,056 4,577 6,633 74 13,521 20,228 Telephone and communications 4,769 6,296 11,065 509 - 11,574 Postage and freight 357 390 747 50 403 1,200 Utilities - - - 45,349 - 45,349 Repairs and maintenance - 3.365 3,365 16,311 - 19,676 Printing 3,583 4,738 8,321 462 2,792 11,575 Licenses and dues 2,285 1,219 3,504 203 - 3,707 Publicity and advertising 1,030 2,158 3,188 43 4,009 7,240 Mileage and travel 1,697 4,848 6,545 - 9 6,554 Conferences and staff training 6,135 10,094 16,229 1,100 18 17,347 Client assistance - 79,157 79,157 - - 79,167 Miscellaneous expenses 298 (72) 226 340 8,632 9,198 Insurance 14,322 17,903 32,225 6,643 - 38,868 Teen parent incentives - 770 770 - - 770 Depreciation _ 44,327 55,408 99,735 11,081 - 110,816 TOTAL EXPENSES $ 874,670 $ 730,600 $1,605,270 $ 295,325 $ 93,979 $1,994,574 The accompanying notes are an integral part of the financial statements. 7 UNITED ACTION FOR YOUTH, INC. STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2023 AND 2022 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating (used in) activities: Depreciation Effects of changes in operating assets and liabilities: Grants and accounts receivable Prepaid expenses Accounts payable Accrued and withheld payroll taxes Accrued wages payable Accrued vacations payable Deposits payable Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment Net cash used in investing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR 2023 2022 $ (133,080) $ 47,016 121,627 110,816 (2,216) (45,368) 105 (23,509) (17,862) (7,770) (516) 1,139 (22,260) 44,960 5,021 17,608 3,305 - (45,866) 144,892 (104,183) (104,183) (45,866) 40,709 483,544 442,835 $ 437.678 $ 483,544 The accompanying notes are an integral part of the financial statements. 0 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Organization United Action for Youth, Inc.'s (Organization) primary programs are counseling and intervention services, prevention, and youth development in Johnson County, Iowa. The programs provide counseling, activities, and other services to youth who are runaway and/or homeless, victims of several types of abuse, youth who are in trouble with the law, or to prevent young people from experiencing problems with substance abuse, other types of abuse, and other social problems. The Organization's programs are funded primarily by grants and allocations. The Organization grants credit to private pay clients. Basis of Accountina The accounts of the Organization are maintained on the accrual basis of accounting and the accompanying financial statements have been prepared on that basis. Accountina Estimates The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and those differences could be material. Cash and Cash Eauivalents The Organization considers all cash and highly liquid financial instruments with original maturities of three months or less, which are neither held for nor restricted by donors for long-term purposes, to be cash and cash equivalents. Donated Assets Donated investments and other noncash donations are recorded as contributions at their fair values at the date of donation. Receivables and Credit Policies Grants and accounts receivable consist primarily of noninterest-bearing accounts due for counseling and intervention, prevention, and youth development services. Grant receivables make up the majority of the receivables balance and are due from governmental agencies. Accounts receivables are recorded at the net realizable value at the transaction price based on standard charges for services provided, reduced by contractual adjustments provided to third -party payers and implicit price concessions provided to uninsured or underinsured patients. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to client service revenue in the period of change. Management determines an allowance for credit losses based on estimated net realizable collections of accounts receivable considering historical experience, an assessment of economic conditions, and a review of subsequent collections. Accounts receivable are written off when there is no reasonable chance of collection. Recoveries of accounts receivable previously written off are recorded as income when received. At June 30, 2023 and 2022 the allowance was $9,000. UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Eauipment It is the Organization's policy to capitalize property and equipment over $1,000. Lesser amounts are expensed. Purchased property and equipment are capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organization reclassifies net assets with donor restrictions to net assets without donor restrictions at that time. Depreciation of property and equipment is provided by the straight-line method as follows: Buildings 10-20 years Equipment, furniture, and fixtures 3-7 years Vehicles 5 years Impairment of Lona-Lived Assets The Organization reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of carrying amount or the fair value less costs to sell. Net Assets The Organization reports information regarding its financial position and activities according to two classes of net assets that are based upon the existence or absence of restrictions on use that are placed by its donors or grantors: net assets without donor restrictions and net assets with donor restrictions. Net assets without donor restrictions are resources available to support operations and not subject to donor or grantor restrictions. The only limits on the use of net assets without donor restrictions are the broad limits resulting from the nature of the Organization, the environment in which it operates, the purposes specified in it corporate documents and its application for tax-exempt status. The Board has designated an amount related to investment in property and equipment. Net assets with donor restrictions are subject to donor or grantor imposed restrictions. Some restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor -imposed restrictions are perpetual in nature, such as those that the donor stipulates that resources be maintained in perpetuity. The Organization's unspent contributions are reported in net assets with donor contributions if the donor or grantor limited their use. Contributions of property and equipment or cash restricted to acquisition of property and equipment are reported as net assets with donor restrictions if the donor has restricted the use of the property or equipment to a particular program. These restrictions expire when the assets are placed in service. 10 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) When a donor's or grantor's restriction is satisfied, either by using the resources in the manner specified by the donor or grantor or by the passage of time, the expiration of the restriction is reported in the financial statements by reclassifying the net assets from net assets with donor restrictions to net assets without donor restrictions. Revenue and Revenue Recoanition The Organization recognizes contributions when cash, securities or other assets, an unconditional promise to give, or notification of 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 substantially met. Purchase of service fees, which are primarily derived from services rendered to clients for counseling and intervention services, is reported at the amount that reflects the consideration to which the Organization expects to be entitled to in exchange for provided services to clients. These amounts are due from third - parry payers (including health insurers and government programs) and clients. Generally, the Organization bills the third -party payers and clients several days after the services are performed and/or the client is discharged from the program. Revenue is recognized as performance obligations are satisfied. Performance obligations are determined based on the nature of the services provided by the Organization. The performance obligations are satisfied at a point in time when the client receives and consumes the benefits of the services. The Organization determines the transaction price based on industry rates for services provided, reduced by contractual adjustments provided to third -party payers and discounts provided to clients in accordance with the Organization's policy. Generally, clients who are covered by third -party payers are responsible for related deductibles and coinsurance, which vary in amount. The Organization also provides services to uninsured clients, and generally offers those uninsured clients a discount from standard charges. Subsequent changes to the Organization's transaction price are recorded as adjustment to purchase of services fees in the period of the change. A portion of the Organization's revenue is derived from cost -reimbursable federal and state contracts and grants, which are conditioned upon certain performance requirements and/or the incurrence of allowable qualifying expenses. 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 refundable advances in the statement of financial position. Fundraising revenue is recognized at a point in time either as received, or upon completion of the specified fundraising event when the amount can be reasonably estimated, whichever is more appropriate. Donated Services No amounts have been reflected in the financial statements for donated services. The Organization generally pays for services requiring specific expertise. However, Board members volunteer their time and perform a variety of tasks that assist the Organization. The financial statements do not reflect the value of these donated services since volunteer hours are not tracked and the volunteer time does not meet the criteria for recognition in the financial statements. 11 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Functional Allocation of Expenses The costs of program and supporting activities have been summarized on a functional basis in the statements of functional expenses. The statements of functional expenses present the natural classification detail of the expenses by function. The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, expenses require allocation on a reasonable basis that is consistently applied. The functional expenses are allocated to the program bases on actual expenses incurred, or estimated amounts where actual amounts cannot be determined. Salaries and wages, health insurance, payroll taxes, and employee benefits are allocated on the basis of estimates of time and effort. Other allocated expenses are done so in proportion to the percentage reflected in the Organization's budgeted for program and supporting services. Advertisina Costs Advertising costs are expensed as incurred and were $8,047 and $7,240 for the years ended June 30, 2023 and 2022, respectively. Income Tax The Organization is a nonprofit corporation as described in Section 501(c)(3) of the Internal Revenue Code (the Code) and is exempt from income tax. Accordingly, no provision for income tax has been made in the financial statements. Generally accepted accounting principles prescribe rules for the recognition, measurement, classification, and disclosure in the financial statements of uncertain tax positions taken or expected to be taken in the Organization's income tax returns. Management is not aware of any tax positions that would have a material effect on the financial statements that are more likely than not to change in the next twelve months, or that would not sustain an examination by applicable taxing authorities with full knowledge of the position and all relevant facts. Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Organization's income tax returns will not be challenged by the taxing authorities and that the Organization will not be subject to additional tax, penalties, and interest as a result of such challenge. The Organizations' Forms 990, Return of Organization Exempt from Income Tax, for the years ending 2022, 2021, and 2020 are subject to exemption by the IRS, generally for three years after they were filed. The Organization recognizes penalties and interest arising from uncertain tax positions as incurred in expenses. No such penalties or interest were recognized during the years ended June 30, 2023 and 2022. Subseauent Events Management has evaluated subsequent events through March 8, 2024, the date which the financial statements were available to be issued. 12 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 2. LIQUIDITY AND AVAILABILITY Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the date of the statement of financial position comprise the following: 2023 2022 Cash and cash equivalents $ 437,678 $ 483,544 Grants and accounts receivable, net of allowance for uncollectible accounts 208,946 206,730 Total fincancial assets available 646,624 690,274 Less donor imposed restrictions 63,541 75,877 Financial assets available within one year $ 583,083 $ 614,397 As part of the Organization's liquidity management plan, the Organization invests cash in excess of daily requirements in money markets and high -yield accounts. To help manage unanticipated liquidity needs, the Organization has established a line of credit in the amount of $50,000 (Note 8). NOTE 3. CONCENTRATION OF CREDIT RISK The Organization maintains cash balances at a financial institution which are insured by the Federal Deposit Insurance Corporation up to $250,000, as of June 30, 2023 and 2022, At times during the year, the balances exceeded FDIC insurance limits. Management believes the credit risk related to deposits in excess of FDIC limits is minimal. NOTE 4. GRANTS AND ACCOUNTS RECEIVABLE Grants and accounts receivable consists of the following at June 30, 2023 and 2022: Grants receivable Accounts receivable Less allowance for doubtful accounts 2023 2022 2021 $ 175,848 $ 180,380 $ 133,888 42,098 35,350 36,474 217,946 215,730 170,362 9,000 9,000 9,000 $ 208,946 $ 206,730 $ 161,362 13 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 5. PROPERTY AND EQUIPMENT Property and equipment at June 30, 2023 and 2022 consists of the following: Assets at Cost Balance June 30. 2022 Additions Land $ 56,000 $ - Buildings 1,939,061 - Equipment, furniture, and fixtures 111,550 - Vehicles 110,455 - Total $ 2,217,066 $ - Accumulated Depreciation Balance June 30. 2022 Additions Disposals Land $ - $ - $ Buildings 1,003,324 96,953 Equipment, furniture, and fixtures 66,773 11,989 Vehicles 60,853 12,685 Total $ 1,130,950 $ 121,627 $ Balance Disposals June 30. 2023 $ $ 56,000 1,939,061 111,550 110,455 $ $ 2,2177,066 Depreciated Balance Balance June 30. 2023 June 30, 2023 $ - $ 66,000 1.100,277 838,784 78,762 32,788 73,538 36,917 $ 1,252,577 $ 964,489 Depreciation expense for the years ended June 30, 2023 and 2022 was $121,627 and $110,816, respectively. NOTE 6. COMPENSATED ABSENCES Employees accumulate vacation hours for subsequent time off or for payment upon termination, retirement, or death. The liability for accrued employee vacation hours was $76,001 and $70,980 at June 30, 2023 and 2022, respectively. NOTE 7. LONG-TERM DEBT Long-term debt at June 30, 2023 and 2022 consists of the following: 2023 Mortaaaes Davable Real estate mortgage payable to the City of Iowa City, Iowa, dated September 28, 2012, due January 1, 2028, secured by real property at 1221-1231 Bloomington Street, Iowa City, Iowa, (historical cost of $354,498 as of June 30, 2023 and 2022 and carrying amount of $194,570 and $209,495 as of June 30, 2023 and 2022, respectively) forgivable on January 1, 2028 if the Organization complies with the provisions of the Home Investment Partnership Program grant, including interest at a rate of 0% per annum. $ 34712-5 14 2022 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 7. LONG-TERM DEBT (CONTINUED) The maturities of long-term debt are as follows: Year ending June 30, 2024 $ 2025 2026 2027 2028 347,725 Later Total $ 347,725 NOTE 8. LINE OF CREDIT The Organization has a line of credit with an available balance of $50,000 with MidWestOne Bank, Iowa City Iowa. The line of credit was originally dated May 1, 2018, and has been renewed regularly with a current maturity date of July 8, 2023. Accrued interest is payable monthly with the final principal and interest balance due on maturity. The line of credit is secured by all of the Organization's assets under the terms of a commercial security agreement dated July 8, 2022. Interest on the line of credit accrues at a rate of 1.50% above the Wall Street Journal prime rate and will not be less than 5.00%. Interest rates on the line of credit at June 30, 2023 and 2022 were 9.50% and 6.50%, respectively. During the years ended June 30, 2023 and 2022, the Organization borrowed no money and had no balance on the line of credit. NOTE 9. RESTRICTIONS/LIMITATIONS OF NET ASSETS Net Assets Without Donor Restrictions The Organization's net assets without donor restrictions are as follows for the years ending June 30, 2023 and 2022: 2023 2022 Undesignated $ 460,073 $ 459,190 Board designated for investment in property and equipment 616,764 738,391 Total $ 1,076,837 $ 1,197,581 Net Assets With Donor Restrictions Net assets with donor restrictions are available for the following purposes at June 30, 2023 and 2022: Direct Assistance Funds Youth Awards Youth Development SPARK Total 15 2023 2022 5,725 $ 6,250 900 2,400 5,424 6,192 51,492 61,035 63,541 $ 75,877 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 9. RESTRICTIONS/LIMITATIONS OF NET ASSETS (CONTINUED) Purpose restrictions accomplished during the years ended June 30, 2023 and 2022 were as follows: Youth Development Other youth activities Total NOTE 10. DONATED SERVICES 2023 $ 15,343 128,780 2022 $ 5,864 130,468 $ 144,123 $ 136,332 The Organization does not report the value of contributed time by volunteers for financial reporting purposes. For income tax reporting purposes and grant match purposes, the Organization discloses the estimated value of contributed time by volunteers. Estimated amounts of contributed time by volunteers during the years ended June 30, 2023 and 2022 amounted to approximately $46,000 each year. Volunteers contributed their time for a substantial number of the Organization's programs and activities as well as general and administrative purposes. NOTE 11. GRANTS AND AWARDS The Organization's revenue from grants and awards for the years ended June 30, 2023 and 2022 consists of the following: 2023 2022 Federal: Crime Victim Assistance $ 164,192 $ 161,108 Iowa City Community School District - 15,300 Transitional Living Program 268,414 239,078 Pregnancy Prevention and Services - 4,895 Prevent Child Abuse 27,000 27,000 459,606 447,381 State: Juvenile Crime Prevention 115,000 87,450 Iowa Department of Human Services 23,245 72,155 Teen Parent Program 59,865 60,365 198,110 219,970 Other: Johnson County Social Services grants 68,464 29,309 Johnson County Health and Human Services grant 20,000 20,000 Iowa City Community School District 126,100 77,750 Community Development Block Grant 8,820 - Community Foundation of Johnson County 10,000 5,000 233,384 132,059 $ 891,100 $ 799,410 16 UNITED ACTION FOR YOUTH, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2023 and 2022 NOTE 12. GRANT CONTINGENCIES During the year ended June 30, 2003, the City of Iowa City provided United Action for Youth, Inc. (UAY) with $225,000 of Community Development Block Grant funds to be used to purchase real property at 355 Iowa Avenue, Unit 1C, Iowa City, Iowa. The purchase price of the property was $500,000, and was financed by the CDBG grant and a real estate contract with the City of Iowa City. Under the terms of the CDBG grant, UAY is prohibited from selling, assigning or transferring its interest in the property prior to June 30, 2101 without written concurrence of the City. In the event that UAY should sell the property prior to June 30, 2101, UAY must pay to the City the outstanding balance of the loan. In the event UAY discontinues its programs prior to June 30, 2101, UAY must pay to the City the outstanding balance of the loan plus any value of the prorated portion of real and personal property (tangible and intangible) secured with the CDBG grant. The City will be reimbursed for the fair market value of the property less any portion of the fair market value attributable to non-CDBG funds. If UAY fully complies with the obligations of the grant and the loan through and including June 30, 2101, then the lien against the property will be released by the City. During the year ended June 30, 2013, the City of Iowa City provided United Action for Youth, Inc. (UAY) with $360,280 of Home Investment Partnership Program grant funds, of which $347,726 was used to purchase real property at 1221-1231 Bloomington Street, Iowa City, Iowa, and $12,555 was used to provide relocation assistance to eligible tenants. The purchase price of the property was $347,992. Under the terms of the grant, UAY is prohibited from selling, assigning or transferring its interest in the property, except as specifically provided herein to an eligible tenant, prior to January 1, 202B without written concurrence of the City. In the event that UAY should sell the property, except as specifically provided herein to an eligible tenant, prior to January 1, 2028, UAY must pay to the City the outstanding balance of the loan. If UAY fully complies with the obligations of the grant and the loan through and including January 1, 2028, then the lien against the property will be released by the City. NOTE 13. RETIREMENT PLAN Effective September 1, 1995, the Organization adopted a simplified employee retirement plan (SEP) which covers employees who meet certain eligibility requirements. The Board of Directors determines the annual contribution to the plan. The contributions to the plan for the years ended June 30, 2023 and 2022 were based on 3% of compensation to eligible employees and were $26,484 and $21.437, respectively. NOTE 14. SUBSEQUENT EVENT On July 6, 2023 the maturity date of the line Of credit with MidWestOne Bank, Iowa City, Iowa was extended to July 8, 2025. The information is an integral part of the accompanying financial statements. 17