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ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINED FINANCIAL STATEMENTS WITH SUPPLEMENTARY INFORMATION YEAR ENDED DECEMBER 31, 2012 AND INDEPENDENT AUDITORS’ REPORT


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE

TABLE OF CONTENTS Page Independent Auditors’ Report

1

Combined Financial Statements Statement of Financial Position

3

Statement of Activities and Changes in Net Assets

4

Statement of Cash Flows

5

Statement of Functional Expenditures

6

Notes to Combined Financial Statements

7

Information Required Under Government Auditing Standards (GAS) Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

18

Schedule of Expenditures of Federal Awards

20

Schedule of Expenditures of State Awards

21

Notes to Schedules of Expenditures of Federal and State Awards

22

Summary of Auditors’ Results and Findings

23

Other Supplementary Information - Combining Statement of Financial Position

24

Statement of Activities and Changes in Unrestricted Net Assets

25

Schedule of Program Services

26

Statement of Cash Flows

27


INDEPENDENT AUDITORS’ REPORT

To the Board of Trustees Atlantic City Rescue Mission, Inc. and Affiliate We have audited the accompanying combined financial statements of Atlantic City Rescue Mission, Inc. and Affiliate, a nonprofit organization, which comprise the statement of financial position as of December 31, 2012, and the related combined statements of activities and changes in net assets, cash flows and functional expenditures for the year then ended, and the related notes to combined financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

(Continued) 1


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Atlantic City Rescue Mission, Inc. and Affiliate as of December 31, 2012, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, schedule of expenditures of state awards and the other combining supplementary information are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 26, 2013 on our consideration of Atlantic City Rescue Mission, Inc. and Affiliate’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Atlantic City Rescue Mission, Inc. and Affiliate’s internal control over financial reporting and compliance.

September 26, 2013

2


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINED STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2012

ASSETS Current assets Cash and cash equivalents Accounts receivable Accounts receivable - related party Prepaid expenses and deposits Total current assets

$

Noncurrent assets Property and equipment - at cost, less accumulated depreciation Construction in progress Investments Total noncurrent assets

LIABILITIES AND NET ASSETS Current liabilities Accounts payable and other liabilities Accrued expenses Deferred revenue Line of credit Total current liabilities

4,106,338 149,391 223,403 4,479,132 $ 5,444,770

$

Noncurrent liabilities Gift annuities payable

696,719 194,566 11,500 62,853 965,638

124,065 89,565 84,541 250,000 548,171

65,911 614,082

Commitments Net assets Unrestricted Net investments in land, buildings and equipment Designated for long-term investment Undesignated Total unrestricted Temporarily restricted Permanently restricted Total net assets

4,106,338 223,403 359,244 4,688,985 137,408 4,295 4,830,688 $ 5,444,770

See notes to financial statements. 3


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, 2012

Unrestricted Revenues and other support Contributions Legacies Donated food, clothing and supplies Donated services Special events Shelter/welfare income Client fees Contract income Investment income (loss) Adjustment of actuarial liability Miscellaneous Net assets released from restriction for use in programs Total revenues and other support Expenditures and loss Program services Men’s Ministry Family Life Center Single Women’s Ministry Barnabas House Community Service Kitchen Street Outreach Mid-Atlantic Resources for the Poor Total program services Supporting services Management and general Development Total supporting services Total expenditures before loss Loss on disposal of equipment Total expenditures and loss Change in net assets Net assets, beginning of year Net assets, end of year

$ 1,806,026 170,827 895,451 6,715 15,488 1,030,506 74,812 549,964 26,544 8,477 17,323

Temporarily Restricted

Permanently Restricted

$

$

343,163 -

Total

(151) -

$ 2,149,189 170,827 895,451 6,715 15,488 1,030,506 74,812 549,964 26,393 8,477 17,323

(151)

4,945,145

277,064 4,879,197

(277,064) 66,099

1,061,206 452,012 436,324 159,155 339,631 1,144,395 209,870 19,219 3,821,812

-

- . -

1,061,206 452,012 436,324 159,155 339,631 1,144,395 209,870 19,219 3,821,812

509,132 831,426 1,340,558 5,162,370

-

-

509,132 831,426 1,340,558 5,162,370

1,168 5,163,538

-

-

1,168 5,163,538

(284,341) 4,973,326 $ 4,688,985

See notes to financial statements. 4

66,099 $

71,309 137,408

(151) $

4,446 4,295

(218,393) 5,049,081 $ 4,830,688


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2012

Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash used in operating activities Realized gain on investments Unrealized gain on investments Loss on disposal of equipment Depreciation Changes in assets and liabilities Accounts receivable Prepaid expenses and deposits Accounts payable and other liabilities Accrued expenses Deferred revenue Net cash used in operating activities

$ (218,393)

(7,692) (17,892) 1,168 221,786 952 524 (101,987) 32,571 84,541 (4,422)

Cash flows from investing activities Purchase of property and equipment Investment in construction in progress Proceeds from sale of investments Gift annuities payable Net cash provided by investing activities

(2,700) (63,488) 282,936 (4,044) 212,704

Cash flows from financing activities Proceeds from short-term borrowings (line of credit)

250,000

Net increase in cash and cash equivalents

458,282

Cash and cash equivalents, beginning of year

238,437

Cash and cash equivalents, end of year Supplemental cash flow disclosures Interest paid

$ 696,719 $

Noncash investing activities Utilization of deposit on property and equipment acquisition See notes to financial statements. 5

6,448 15,432


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINED STATEMENT OF FUNCTIONAL EXPENDITURES YEAR ENDED DECEMBER 31, 2012

Supporting Services Program Services Salaries and wages Employee benefits Payroll taxes Books and literature Community relations Continuing education Depreciation Donor acquisition Dues/subscriptions Donor appeals Food service - GIK Food service - Other Emergency Assistance and HPRP Health and program services - GIK Health and program services - Other Insurance Interest expense and bank fees Office supplies Mailings and postage Printing Professional fees Donated services Property and equipment maintenance Property taxes Utilities Refuse removal Rentals Telephone Travel Software and services Special events and public relations Miscellaneous Total expenditures

Management and General

Development

Total Supporting Services

Total Expenditures

$ 1,376,937 325,667 107,265 405 101 411 170,664 4,152 863,731 50,312 151,708 31,720 33,666 78,719 246 7,802 1,599 87,331 5,167 107,104 211,391 24,974 112,478 25,834 37,948 3,407 1,073

$

254,234 64,047 19,452 12 564 28,766 597 1,798 838 10,788 17,347 1,798 1,604 1,028 21,373 871 10,548 4,430 32,508 4,209 14,901 4,213 3,413 9,653 140

$ 192,985 46,173 15,121 158,289 21 22,356 79,278 3,590 158,442 1,397 1,446 8,386 2,127 1,774 48,913 7,189 5,181 677 9,377 25,265 3,272 11,581 3,193 4,595 20,640 48 110

$

447,219 110,220 34,573 158,301 585 51,122 79,278 4,187 158,442 3,195 2,284 19,174 19,474 3,572 50,517 8,217 26,554 1,548 19,925 4,430 57,773 7,481 26,482 7,406 8,008 30,293 48 250

$ 1,824,156 435,887 141,838 405 158,402 996 221,786 79,278 8,339 158,442 863,731 53,507 151,708 31,720 35,950 97,893 19,720 11,374 52,116 8,217 113,885 6,715 127,029 4,430 269,164 32,455 138,960 33,240 45,956 33,700 48 1,323

$ 3,821,812

$

509,132

$ 831,426

$ 1,340,558

$ 5,162,370

See notes to financial statements. 6


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Atlantic City Rescue Mission, Inc. (the “Mission”) is the unifying corporate body for two organizations, the Atlantic City Rescue Mission, Inc. and its affiliate, Mid-Atlantic Resources for the Poor. The combined financial statements present the combined assets, liabilities, net assets and activities for the two organizations. All material intercompany balances and transactions have been eliminated in the combination. Atlantic City Rescue Mission, Inc. is a non-denominational organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The purpose of the Mission is to provide the ministry of rehabilitation for those who are addicted to gambling, alcohol, and drugs. Meals and shelter are also provided for needy transients, which include single men, single women, mothers and their children. Mid-Atlantic Resources for the Poor is an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The purpose of Mid-Atlantic Resources for the Poor is to provide benevolent and charitable relief to needy persons by providing rental housing, bill-paying assistance, and vocational training to enhance employment opportunities. Reference to the Mission in these notes refers to both organizations unless otherwise indicated. Basis of Presentation The accompanying financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Net assets, support and revenues, expenses, gains and losses are classified based on the existence or absence of donorimposed restrictions. To ensure the observance of limitations and restrictions placed on the use of resources available to the Mission, resources for various purposes are classified for accounting purposes into classes established according to their nature and purpose. Net assets of the Mission are divided into three classes: unrestricted, temporarily restricted, and permanently restricted. Unrestricted net assets are net assets that are neither permanently restricted nor temporarily restricted by donor-imposed stipulations and include board-designated funds, or funds that have been segregated by the board to be spent only on specified purposes. Temporarily restricted net assets result from contributions whose use is limited by donorimposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the Mission pursuant to these stipulations. Net assets may be temporarily restricted for various purposes, such as use in future periods or use for specified purposes.

7


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued) Permanently restricted net assets are those that are subject to donor-imposed restrictions which will never lapse, thus requiring that the funds be permanently retained. Generally, the donors of these funds permit the organization to use all or parts of the income earned on the related investments, and the net capital appreciation thereon, for general or specific purposes. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statement of cash flows, the Mission considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents, with the exception of money market funds which are included with investments. Accounts Receivable Accounts receivable are stated at the amounts management expects to collect. Management evaluates its accounts receivable and records an allowance for doubtful accounts, when deemed necessary, based on a combination of historical experience, aging analysis, and information on specific accounts. Based on the Mission’s review of accounts receivable, no allowance for doubtful accounts was considered necessary at December 31, 2012. Promises to Give/Pledges Unconditional promises to give represent pledges which have been made by donors but have not yet been received by the Mission. They are recognized as revenues or gains in the period received and as assets, decreases of liabilities or expenses, depending on the form of the benefits received. Conditional promises to give are recognized when the conditions on which they depend are substantially met.

8


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investment Valuation GAAP defines fair value, provides guidance for measuring fair value, and requires certain disclosures, based on a fair value hierarchy. This fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that reflect the Mission’s own assumptions. Investments in equity securities with readily determinable fair values and all investments in debt securities are reported at fair value based on quoted prices in active markets (national security exchanges) for identical assets, with gains and losses included in the statement of activities and changes in net assets. Donated investments are reflected as contributions at their fair values at date of receipt. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include U.S. Government obligations, mutual funds and money market funds. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Intermission Gift Annuity Investments The Mission has established a gift annuity plan whereby donors may contribute assets to the organization, in exchange for the right to receive a fixed dollar annual return during their lifetimes. This transaction provides for a portion of the transfer to be considered a charitable contribution for income tax purposes. The difference between the amount of the annuity and the liability for future payments, determined on an actuarial basis, is recognized as income at the date of the gift. Upon the death of the annuitant (or the last joint annuitant), income distributions cease. The actuarial liability for annuities payable is evaluated annually (giving effect to the investment income and payments to annuitants) and any surplus or deficiency is recognized in the statement of activities and changes in net assets.

9


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Intermission Gift Annuity Investments (Continued) Fair value is estimated at the present value of the future distributions expected to be received over the term of the agreements. Due to the nature of the valuation inputs, the investment is classified within Level 2 of the hierarchy. Property and Equipment Property and equipment are stated at cost, or, if donated, at the estimated fair market value at the date of donation. Depreciation is recorded using the straight-line method at various rates calculated to allocate the cost of the respective items over their estimated useful lives. Estimated useful lives are: Land improvements Buildings Building improvements Furniture, fixtures and equipment Automobiles and trucks

40 years 40 years 15 - 20 years 5 - 10 years 3 - 5 years

The Mission capitalizes purchases and donations with a value over $5,000 and a usable life of at least 5 years. Planned major maintenance activities and their estimated cost are presented to the board for approval when a necessity is recognized. Restricted and Unrestricted Revenue and Support Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. All donor restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities and changes in net assets as net assets released from restrictions. Depending on the terms of the grant, certain restricted grants received are recorded as refundable advances until they are expended for the purposes of the grant, at which time they are recognized as revenue. If, at the end of the grant term, the funding agency requests a return of unexpended monies, such funds are then reclassified as due to grantor. Bequests are recorded as revenue based on valid wills with measurable proceeds.

10


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Donated Food, Clothing, Supplies and Services Donations of property and equipment are recorded as support at their estimated fair value at the date of donation. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use are reported as restricted support. If there are no donor stipulations regarding how long those donated assets must be maintained, the Mission reports expirations of donor restrictions when the donated or acquired assets are placed in service. The Mission reclassifies temporarily restricted net assets to unrestricted net assets at that time. Included in unrestricted contributions and program services expense is the estimated value of donated food, clothing and supplies received and utilized by the Mission in the amount of $895,451. The Mission also received donated services totaling $6,715 toward the cost of professional, various ministry related services, such as chiropractic care and technical support, and repair and maintenance of the building. These donated services are reflected as contributions and expenditures in the accompanying financial statements and are valued based on the estimated cost of services that otherwise would have had to be purchased. In addition, the Mission receives a significant amount of donated services from unpaid volunteers who assist in program services and fund raising projects. No amounts have been recognized in the statement of activities and changes in net assets for these unpaid volunteers because the criteria for recognition under GAAP have not been satisfied. During 2012, approximately 26,000 volunteer hours were donated. Income Tax Status The Mission qualifies as a tax-exempt organization under Section 501 (c)(3) of the Internal Revenue Code, and has been classified as an organization that is not a private foundation under Section 509(a)(2), and therefore qualifies for the charitable contribution deduction under Section 170(b)(1)(a). Federal and state information returns for years prior to 2009 are no longer subject to examination by tax authorities. Subsequent Events These financial statements were approved by management and available for issuance on September 26, 2013. Management has evaluated subsequent events through this date.

11


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

2 - PROGRAM AND SUPPORTING SERVICES Expenses are allocated to programs and supporting services on the basis of time and expense analysis. The following program and supporting services are included in the accompanying financial statements: Men’s Ministry / Single Women’s Ministry This is a long-term program that is offered to men and an emergency shelter service to single women. It is a multi-faceted program for those seeking release from alcohol, drug and gambling addiction. The program consists of in-depth personal counseling, class sessions, discussion groups, basic Bible studies, in-house work therapy and work readiness training. Family Life Center The Family Life Center is a haven for homeless mothers and children. Up to 11 families can stay as long as they need to until they can move back into permanent housing. Safe shelter, meals, counseling, parenting classes for mothers, and homework help for the children are all available. Barnabas House Barnabas House is a transitional housing facility in Wildwood, New Jersey, for male graduates of addiction recovery programs. All graduates must find outside employment and contribute a portion of their pay towards the program (client fees). In addition, graduates must attend regular meetings as well as individual counseling sessions. Community Service Community service consists of housing location and placement, transportation assistance, information and referral services, and community outreach. Kitchen Breakfast, lunch and dinner are prepared 7 days a week; in addition food baskets are given to the local needy. Over 400,000 meals a year are provided. Street Outreach Seven days a week, in conjunction with local police and government agencies, attempts are made to bring the homeless into the shelter of the Mission, and to save lives during freezing weather.

12


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

2 - PROGRAM AND SUPPORTING SERVICES (Continued) Mid-Atlantic Resources for the Poor (MARP) Benevolent and charitable relief is extended to needy persons by providing emergency shelter and affordable rental housing. Educational and vocational training is also provided to enhance employment opportunities. Other Meals, shelter and clothing are a homeless person’s immediate needs, but they also need services to help them get back on their feet again. Some of the other programs offered include the Goshen Farm where the Mission runs a 3-1/2 acre farm. Clients along with volunteers harvest over 30,000 pounds of low-cost, healthy produce for the shelter. Liaisons with rehabilitative and therapeutic agencies include the onsite AtlantiCare Behavioral Health clinic and AtlantiCare Mission Healthcare, also onsite. General and Administrative General and administrative services include those functions necessary to obtain and manage the Mission’s financial and other resources, ensure an adequate working environment, develop and administer Mission programs and services and, in conjunction with the Board, oversee the articulation of Mission policies and procedures, as well as long-term Mission strategies. Development Development includes those functions necessary to encourage and secure private financial support from individuals, foundations and corporations.

13


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

3 - INVESTMENTS The following table presents the fair value measurements of assets recognized in the accompanying statement of financial position measured at fair value on a recurring basis and the level within the fair value hierarchy in which the value measurement falls at December 31, 2012.

Fair Value Money market funds Equities Mutual funds Intermission gift annuity investments Total investments

$ 33,210 7,099 51,929 131,165 $ 223,403

Fair Value Measurement Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) $ 33,210 7,099 51,929 $ 92,238

$

131,165 $ 131,165

$

-0-

$

Investment income and adjustment of actuarial liability was earned and recorded as follows:

Interest and dividend income Realized gain on investments Unrealized gain on investments Payment to annuitants Adjustment of actuarial calculation Total

14

Net Investment Income

Adjustment of Actuarial Liability

Total

$ 7,427 6,218 12,748 $ 26,393

$ 5,459 1,474 5,144 (7,692) 4,092 $ 8,477

$ 12,886 7,692 17,892 (7,692) 4,092 $ 34,870


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

4 - PROPERTY AND EQUIPMENT Property and equipment at December 31, 2012 consisted of the following: Land Land improvements Building and improvements Furniture, fixtures and equipment Automobiles and trucks Less - Accumulated depreciation and amortization Total

$ 1,174,402 409,936 5,164,266 611,353 150,361 7,510,318 3,403,980 $ 4,106,338

5 - LINE OF CREDIT The Mission has a line of credit secured by a first lien mortgage on property located in Wildwood, New Jersey. The amount of commitment available is $250,000, bearing interest at a variable rate (4.5% at December 31, 2012). As of December 31, 2012, the balance outstanding was $250,000.

6 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of funds restricted by donors to be used for the following specific purposes: Client assistance and services Hurricane Sandy relief

$

11,350 126,058 $ 137,408

7 - PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets consist of donated stock that is to be invested in perpetuity, the income from which is available for unrestricted program services.

15


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

8 - OPERATING LEASE COMMITMENTS The Mission entered into a lease agreement to rent a single-family home to provide temporary housing to individuals and families that are in need of housing assistance. The lease was for one year and expired on December 31, 2012. The monthly rent (including sewer) was $1,032. Total rent expense for 2012 for this unit was $11,334. The Mission’s second lease agreement is for space located near the Mission, with a lease term of three years commencing February 1, 2011 and ending January 31, 2014. The monthly rent for this location is $6,500. Total rent expense for 2012 was $78,000. Future minimum lease payments for the space located near the Mission is as follows: Year Ending December 31, 2013 2014 Total

$ 78,000 6,500 $ 84,500

The Mission also paid rental expense for other locations and on equipment leases that are month to month and do not have specific end dates. The rent expense incurred for these leases in 2012 was $36,886.

9 - CONCENTRATION OF CREDIT RISK FOR CASH Financial instruments which potentially subject the Mission to concentration of credit risk consist principally of cash balances in financial institutions which are insured by the Federal Deposit Insurance Corporation or Securities Investor Protection Corporation, subject to certain limitations.

10 - ECONOMIC DEPENDENCY The Mission receives support from federal and state government agencies in the form of aid and specific grants and contracts. A significant reduction in the level of this support could have an effect on the Mission’s programs and activities. See Note 12.

16


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO COMBINED FINANCIAL STATEMENTS

11 - RELATED PARTIES During 2012, an officer purchased an automobile from the Mission for $11,500. The terms of the sale require sixty monthly installments, commencing January 2013, of $192, with no interest. As a result, there is a related party receivable of $11,500 on the statement of financial position as of December 31, 2012. Included in Construction in Progress at December 31, 2012 is $75,000 for the Barnabas House Renovation project, which was paid in late 2010 to the same officer’s construction company. During 2012, the Mission also recognized payments of $15,432, previously made in 2010 to the same officer’s construction company, for work on the Interior Mezzanine 2nd Floor Food Warehouse, which was completed and placed in service in 2012. During 2012, $2,700 was paid to another officer for rent of their condominium, while a client who was displaced from their home stayed there.

12 - SUBSEQUENT EVENTS During March 2013, the line of credit was converted into a $250,000 loan. Beginning April 1, 2013, monthly installments of $2,660 are due, based on a fixed interest rate of 5% and a five-year amortization. A final payment of all principal plus interest is due at that time. On March 1, 2018, the interest rate will adjust to 300 basis points in excess of the weekly average rate for fiveyear U.S. Treasury securities (adjusted for constant maturities) prevailing 30 days prior to the said anniversary. The maturity date is March 1, 2023. During April 2013, the relationship with MARP was dissolved and the Mission no longer provides any oversight of MARP funds. As of September 2013, no funding has been received from Comprehensive Emergency Assistance Services (“CEAS”) and Emergency Assistance (“EA”) contracts. The Mission is uncertain whether they will receive any funding from these contracts in 2013. Management plans to increase revenue by increasing contributions through fundraising efforts in an attempt to avoid decreasing related program services.

17


INFORMATION REQUIRED UNDER GOVERNMENT AUDITING STANDARDS


INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Trustees Atlantic City Rescue Mission, Inc. and Affiliate

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Atlantic City Rescue Mission, Inc. and Affiliate (the “Mission”) (a nonprofit organization), which compromise the statement of financial position as of December 31, 2012, and the related combined statements of activities and changes in net assets, cash flows and functional expenditures for the year then ended, and the related notes to combined financial statements, and have issued our report thereon dated September 26, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Mission’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing an opinion on the effectiveness of the Mission’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Mission’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Mission’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

(Continued) 18


Compliance and Other Matters As part of obtaining reasonable assurance about whether the Mission’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of the financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Mission’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Mission’s internal control and compliance. Accordingly, this communication is not suitable for any other purposes.

September 26, 2013

19


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED DECEMBER 31, 2012

Federal Grantor/Pass-through Grantor/ Program Title

Federal CFDA Number

Federal Contract Number

Grant Period

Program or Award Amount

3/18/093/18/2012

$ 539,602

$ 59,866

3/18/093/18/2012

518,596

28,171

28,171

97,332

63,488

63,488

Revenue Expenditures Recognized Recognized

Federal Assistance U.S. Department of Housing and Urban Development Passed through City of Atlantic City Homeless Prevention and Rapid Re-housing Program (HPRP)

14.239

Passed through Atlantic County Homeless Prevention and Rapid Re-housing Program (HPRP)

14.239

SO9UY340024

14.231

2012-100-022-5020

Passed through New Jersey Department of Community Affairs Emergency Solutions Grant Program (ESG)

See notes to schedules of expenditures of federal and state awards and Independent Auditors’ Report.

20

10/1/11 7/31/2013

$

59,866


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE SCHEDULE OF EXPENDITURES OF STATE AWARDS YEAR ENDED DECEMBER 31, 2012

State Grantor/Pass-through Grantor/ Program Title

State Contract Number

Grant Period

Program or Award Amount

Revenue Recognized

Accounts Receivable or Expenditures (Refundable Recognized Advances)

State Assistance State of New Jersey Department of Human Services: Renewal Contract for Homeless Services

K.12.93

1/1/1212/31/2012 $

271,306 $

See notes to schedules of expenditures of federal and state awards and Independent Auditors’ Report. 21

271,293

$

271,293

$

6,567


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AND STATE AWARDS

1 - GENERAL INFORMATION The accompanying Schedules of Expenditures of Federal and State Awards presents the activities for all of the federal and state award programs of Atlantic City Rescue Mission, Inc. and Affiliate. All financial awards received directly from federal and state agencies, as well as financial awards passed through other governmental agencies or not-for-profit organizations, are included on the schedules.

2 - BASIS OF ACCOUNTING The accompanying Schedules of Expenditures of Federal and State Awards are presented using the accrual basis of accounting. The amounts reported on the schedules as expenditures may differ from certain financial reports submitted to federal and state funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting.

3 - RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Federal and state award expenditures are reported on the Schedule of Functional Expenditures as program services and supporting services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the Schedules of Expenditures of Federal and State Awards due to program expenditures exceeding grant or contract budget limitations, matching, in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America.

22


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE SUMMARY OF AUDITORS’ RESULTS AND FINDINGS

Section I - Summary of Auditors’ Results Financial Statements Type of auditors’ report issued:

Unqualified

Internal control over financial reporting: 1) Material weakness(es) identified?

yes

X

no

2) Significant deficiency(ies) identified?

yes

X

none reported

Noncompliance material to general-purpose financial statements noted?

yes

X

no

Section II - Financial Statement Findings {This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance related to the financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 of Government Auditing Standards.} None noted.

23


OTHER SUPPLEMENTARY INFORMATION - COMBINING


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINING STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2012 Atlantic City Mid-Atlantic Rescue Resources Mission for the Poor Eliminations ASSETS Current assets Cash and cash equivalents Accounts receivable Accounts receivable - related party Prepaid expenses and deposits Advance to Mid-Atlantic Resources for the Poor Total current assets

$ 693,441 194,566 11,500 62,853 100,179 1,062,539

Noncurrent assets Property and equipment - at cost, less accumulated depreciation Construction in progress Investments Total noncurrent assets Total assets

4,101,160 149,391 223,403 4,473,954 $ 5,536,493

LIABILITIES AND NET ASSETS Current liabilities Accounts payable and other liabilities Accrued expenses Advance from Atlantic City Rescue Mission Deferred revenue Line of credit Total current liabilities Noncurrent liabilities Gift annuities payable Total liabilities

$ 124,038 89,565 84,541 250,000 548,144 65,911 614,055

$

$

$

3,278 3,278

5,178 5,178 8,456

27 100,179 100,206 100,206

$

- $ (100,179) (100,179)

Total

696,719 194,566 11,500 62,853 965,638

4,106,338 149,391 223,403 4,479,132 $ (100,179) $ 5,444,770

$

- $ (100,179) (100,179)

124,065 89,565 84,541 250,000 548,171

(100,179)

65,911 614,082

Commitments Net assets Unrestricted Net investments in land, buildings and equipment Designated for long-term investment Undesignated Total unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets

4,101,160 223,403 456,172 4,780,735 137,408 4,295 4,922,438 $ 5,536,493

See Independent Auditors’ Report. 24

5,178 (96,928) (91,750) (91,750) $ 8,456 $ (100,179) $

4,106,338 223,403 359,244 4,688,985 137,408 4,295 4,830,688 5,444,770


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINING STATEMENT OF ACTIVITIES AND CHANGES IN UNRESTRICTED NET ASSETS YEAR ENDED DECEMBER 31, 2012

Atlantic City Rescue Mission Revenues and other support Contributions Legacies Donated food, clothing and supplies Donated services Special events Shelter/welfare income Client fees Contract income Investment income Adjustment of actuarial liability Miscellaneous Net assets released from restrictions for use in programs Total revenues and other support

$

Expenditures and loss Program services Men’s Ministry Family Life Center Single Women’s Ministry Barnabas House Community Service Kitchen Street Outreach Mid-Atlantic Resources for the Poor Total program services Supporting services Management and general Development Total supporting services Total expenditures before loss Loss on disposal of equipment Total expenditures and loss Change in net assets Net assets, beginning of year Net assets, end of year

1,803,146 170,827 895,451 6,715 15,488 1,030,506 66,186 549,964 26,525 8,477 17,323

Mid-Atlantic Resources for the Poor $

See Independent Auditors’ Report. 25

$

Total

-

$ 1,806,026 170,827 895,451 6,715 15,488 1,030,506 74,812 549,964 26,544 8,477 17,323

277,064 4,867,672

11,525

-

277,064 4,879,197

1,061,206 452,012 436,324 159,155 339,631 1,144,395 209,870 3,802,593

19,219 19,219

-

1,061,206 452,012 436,324 159,155 339,631 1,144,395 209,870 19,219 3,821,812

509,132 831,426 1,340,558 5,143,151

19,219

-

509,132 831,426 1,340,558 5,162,370

1,168

-

-

1,168

5,144,319

19,219

-

5,163,538

(7,694)

-

(276,647) $

2,880 8,626 19 -

Eliminations

5,057,382 4,780,735

$

(84,056) (91,750)

$

-0-

(284,341) 4,973,326 $ 4,688,985


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINING SCHEDULE OF PROGRAM SERVICES YEAR ENDED DECEMBER 31, 2012

Salaries and wages Employee benefits Payroll taxes Total Books and literature Community relations Continuing education Depreciation Dues/subscriptions Food service - GIK Food service - Other Emergency assistance and HPRP Health and program services - GIK Health and program services - Other Insurance Interest expense and bank fees Office supplies Mailings and postage Professional fees Donated services Property and equipment maintenance Utilities Refuse removal Rentals Telephone Travel Software and services Miscellaneous

Men's Ministry

Family Life Center

Single Women's Ministry

548,761 136,091 43,223 728,075 293 41 224 68,022 1,620 4,251 17,173 16,742 25,515 1,517 366 15,758 2,060 35,132 76,872 9,954 35,236 8,178 12,483 1,358 336 $ 1,061,206

$ 229,725 67,789 17,974 315,488 17 53 28,344 609 1,771 7,156 4,394 10,632 1,125 242 6,567 858 14,616 32,031 4,148 14,682 3,830 4,741 566 142 $ 452,012

$ 235,234 39,846 17,990 293,070 112 17 51 29,276 628 1,830 7,391 7,445 10,982 1,079 241 6,783 886 14,567 33,083 4,284 15,165 3,863 4,766 584 221 $ 436,324

$

See Independent Auditors’ Report. 26

Barnabas House $

56,547 21,534 4,431 82,512 4 13 7,008 297 988 610 17,330 1,130 172 1,624 212 12,083 26,445 1,026 3,630 589 3,159 140 183 $ 159,155

Community Service $ 101,468 17,328 7,903 126,699 7 23 12,575 262 786 151,708 1,798 4,717 949 190 3,734 381 6,344 14,212 1,840 6,514 3,321 3,257 251 63 $ 339,631

Kitchen

Street Outreach

95,715 20,939 7,156 123,810 7 22 11,866 383 863,731 39,838 1,034 4,451 899 194 49,671 359 11,821 13,409 1,736 16,886 2,016 1,965 237 60 $ 1,144,395

$ 109,487 22,140 8,588 140,215 8 25 13,573 353 848 1,593 5,092 1,103 194 3,145 411 7,001 15,339 1,986 7,031 4,037 7,577 271 68 $ 209,870

$

Mid-Atlantic Resources for the Poor $

$

50 246 49 5,540 13,334 19,219

Total Program Services $ 1,376,937 325,667 107,265 1,809,869 405 101 411 170,664 4,152 863,731 50,312 151,708 31,720 33,666 78,719 246 7,802 1,599 87,331 5,167 107,104 211,391 24,974 112,478 25,834 37,948 3,407 1,073 $ 3,821,812


ATLANTIC CITY RESCUE MISSION, INC. AND AFFILIATE COMBINING STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2012

Mid-Atlantic Atlantic City Resources Rescue Mission for the Poor Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Realized gain on investments Unrealized gain on investments Loss on disposal of equipment Depreciation Changes in assets and liabilities Accounts receivable Prepaid expenses and deposits Accounts payable and other liabilities Accrued expenses Advances to Mid-Atlantic Resources for the Poor Advances from Atlantic City Rescue Mission Deferred revenue Net cash provided by (used in) operating activities

$

(210,699)

$

(7,694)

Total $

(218,393)

(7,692) (17,892) 1,168 221,786

-

(7,692) (17,892) 1,168 221,786

952 (3,476) (96,214) 32,571 (1,464) 84,541 3,581

4,000 (5,773) 1,464 (8,003)

952 524 (101,987) 32,571 (1,464) 1,464 84,541 (4,422)

Cash flows from investing activities Purchase of property and equipment Investment in construction in progress Proceeds from sale of investments Gift annuities payable Net cash provided by investing activities

(2,700) (63,488) 282,936 (4,044) 212,704

-

(2,700) (63,488) 282,936 (4,044) 212,704

Cash flows from financing activities Proceeds from short-term borrowings (line of credit)

250,000

-

250,000

466,285

(8,003)

458,282

227,156

11,281

238,437

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental cash flow disclosures Interest paid Noncash investing activities Utilization of deposit on property and equipment acquisition

See Independent Auditors’ Report. 27

$

693,441

$

3,278

$

696,719

$

6,448

$

-

$

6,448

15,432

-

15,432

Profile for ACRescueMission

ACRM Audited Financial Statements 2012  

2012 Audited Financial Statements for Atlantic City Rescue Mission This audit was conducted by the outside independent Accounting office of...

ACRM Audited Financial Statements 2012  

2012 Audited Financial Statements for Atlantic City Rescue Mission This audit was conducted by the outside independent Accounting office of...

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