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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM FINANCIAL STATEMENTS WITH INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2017


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM TABLE OF CONTENTS INDEX

Page INDEPENDENT AUDITORS’ REPORT

2-3

FINANCIAL STATEMENTS Statement of Financial Position With comparative information for 2016

4

Statement of Activities With comparative information for 2016

5

Statement of Functional Activities, With comparative information for 2016

6

Statement of Cash Flows With comparative information for 2016

7

NOTES TO FINANCIAL STATEMENTS

8-18

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL

19-20

Schedule of Findings and Responses

21


Reply to: 16 Village Court 112 West 34th Street Hazlet, NJ 07730 New York, NY 10120 Tel 732.761.1120 Tel 212.223.3230 Fax 732.907.1827 Fax 646.292.5172 www.skecpa.com

SKE GROUP, LLC Certified Public Accountants and Business Consultants

Independent Auditors' Report

To the Vestry and Management Church of the Holy Apostles Church of the Holy Apostles Soup Kitchen Program We have audited the accompanying financial statements of the Church of the Holy ApostlesHoly Apostles Soup Kitchen Program, which comprise the statement of financial position as of December 31, 2017, and the related statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements. The prior year summarized comparative information has been derived from the Organization's 2016 financial statements and, in our report dated April 24, 2017 we expressed an unqualified opinion on those 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 audits. We conducted our audits in accordance with 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting


"'' policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

In our opinion, the fmancial statements referred to above present fairly, in all material respects, the financial position of the Church of the Holy Apostles - Holy Apostles Soup Kitchen Pro gram as of December 31, 201 7, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other reporting required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated April 16, 2018, on our consideration of Church of the Holy Apostles-Holy Apostles Soup Kitchen's internal control over fmancial 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 fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Church of the Holy ApostlesHoly Apostles Soup Kitchen's internal control over financial reporting and compliance.

Hazlet, New Jersey

April16, 2018


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2017 (With comparative amounts at December 31, 2016)

ASSETS Cash and cash equivalents Due from the Church Contributions receivable Grants receivable Prepaid expenses Investments Property and equipment, net Intangible asset TOTAL ASSETS

2017

2016

$ 1,274,197 302,392 239,593 38,172 67,729 1,160,582 49,776 4,000

$ 1,547,162 224,585 139,400 57,518 42,135 1,016,052 63,142 6,000

$ 3,136,441

$ 3,095,993

$

$

LIABILITIES AND NET ASSETS

LIABILITIES Accounts payable and accrued expenses

168,279

181,808

NET ASSETS Unrestricted Temporarily restricted

2,930,521 37,641

2,876,544 37,641

Total Net Assets

2,968,162

2,914,185

$ 3,136,441

$ 3,095,993

TOTAL LIABILITIES AND NET ASSETS

See notes to financial statements. -4-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2017 (With summarized totals for the year ended December 31, 2016)

Unrestricted

REVENUE Individuals Bequests Corporations Foundations Churches Government grants Donated food Special events Net assets released from restrictions

$

-

2,939,630

Temporarily Restricted

$ 1,197,799 31,337 78,764 570,734 39,847 289,777 397,520 333,852 (2,939,630)

Total 2017

2016

$ 1,197,799 31,337 78,764 570,734 39,847 289,777 397,520 333,852

$

-

1,034,911 57,613 102,425 526,850 43,985 364,542 409,554 267,010 -

Total Public Support and Revenue

2,939,630

-

2,939,630

2,806,891

EXPENSES Salaries and related expenses Space utilization fee and building expenses Food and supplies Maintenance and repairs Professional fees Communications Publication and Memberships Utilities Program promotion Advocacy and counseling Laundry and uniforms Insurance Equipment rental Miscellaneous

1,333,929 260,000 752,547 40,497 420,131 10,112 266 53,809 19,201 50,994 10,269 2,066 5,874 63,980

-

1,333,929 260,000 752,547 40,497 420,131 10,112 266 53,809 19,201 50,994 10,269 2,066 5,874 63,980

1,200,427 260,000 768,659 41,353 251,076 12,176 56,779 65,759 38,228 8,780 5,823 41,933

3,023,675

-

3,023,675

2,750,993

15,365

-

15,365

18,257

3,039,040

-

3,039,040

2,769,250

Depreciation and amortization Total Operating Expenses Change in Net Assets from Operations Investment income CHANGE IN NET ASSETS NET ASSETS Beginning of year End of year

(99,410)

-

(99,410)

37,641

153,387

-

153,387

70,643

53,977

-

53,977

108,284

37,641

2,914,185

2,805,901

37,641

$ 2,968,162

2,876,544 $ 2,930,521 See notes to financial statements. -5-

$

$

2,914,185


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2017 (With summarized totals for the year ended December 31, 2016)

Program and Supporting Services Total

Supporting Services Program Services

General and Administration

Development

Total

2017

2016

SALARIES AND RELATED EXPENSES Salaries Payroll taxes and employee benefits Total Salaries and Related Expenses

$

645,498 249,704

$

200,860 39,688

$

148,659 49,520

$ 349,519 89,208

$

995,017 338,912

$

905,792 294,635

895,202

240,548

198,179

438,727

1,333,929

1,200,427

752,547 40,497 156,437 7,584 266 53,809 19,201 50,994 10,269 2,066 5,874 63,980

2,528 -

263,694 -

263,694 2,528 -

752,547 40,497 420,131 10,112 266 53,809 19,201 50,994 10,269 2,066 5,874 63,980

768,659 41,353 251,076 12,176 56,779 65,759 38,228 8,780 5,823 41,933

2,058,726

243,076

461,873

704,949

2,763,675

2,490,993

260,000 15,365

260,000 18,257

$ 3,039,040

$ 2,769,250

EXPENSES Food and supplies Maintenance and repairs Professional fees Communications Publication and Memberships Utilities Program promotion Advocacy and counseling Laundry and uniforms Insurance Equipment rental Miscellaneous

Allocation of space utilization fee and building expenses Depreciation and amortization Total Expenses

260,000 15,365 $ 2,334,091

$

243,076

$

461,873

See notes to financial statements -6-

$ 704,949


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2017 (With comparative amounts at December 31, 2016)

2017

CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets ADJUSTMENTS TO RECONCILE INCREASE IN NET ASSETS TO NET CASH USED IN OPERATING ACTIVITIES Contributed securities Depreciation Realized and unrealized loss (gain) on investments Changes in assets and liabilities Due from the Church Contributions receivable Grants receivable Prepaid expenses Accounts payable and accrued expenses

$

Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments Sale of investments Purchases of property and equipment

2016

53,977

$

(92,167) 15,365 (124,861)

(43,987) 18,257 (45,228)

(77,807) (100,193) 19,346 (25,594) (13,529)

(70,388) 264,276 24,170 7,106 (87,891)

(345,463)

174,599

(26,257) 98,755

44,980 (2,775)

-

Net cash provided by investing activities

NET DECREASE IN CASH AND CASH EQUIVALENTS

108,284

72,498

42,205

(272,965)

216,804

CASH AND CASH EQUIVALENTS Beginning of year End of year

1,547,162

1,330,358

$ 1,274,197

$ 1,547,162

$ $

$ $

Supplemental Cash Flow Information: Interest paid Income taxes See notes to financial statements. -7-

-

-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

NOTE 1 – ORGANIZATION AND TAX STATUS The Holy Apostles Soup Kitchen Program (the "Soup Kitchen)" has no separate legal status or existence. The program is operated by The Church of the Holy Apostles of the Episcopal Church, a not-for-profit organization. The Church of the Holy Apostles (the "Church"), a parish of the Diocese of New York of the Episcopal Church, was established in 1844. As a religious body, the parish has a rich liturgical life and a historic commitment to ministries of compassion and social justice. The Church serves a wide community through various outreach programs. The most well-known one began in 1982 when the parish opened the Soup Kitchen to provide meals and social service counseling to the homeless persons of New York. The Soup Kitchen's primary sources of support are individual contributions and government and foundation grants. The Church of the Holy Apostles is a not-for-profit organization as described in Section 509(a) (1) of the Internal Revenue Code and is exempt from federal income tax under Section 501(c) (3) of the Internal Revenue Code. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates.

-8-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and Cash Equivalents The Church considers all highly liquid investments with an initial maturity of three months or less when purchased to be cash equivalents. Money market funds that are intended for investment purposes are classified separately under investments. As of December 31, 2017, and 2016, no cash is held as permanently restricted cash and cash equivalents designated by donors. Promises to Give and Grants Receivable Unconditional promises to give are recorded at fair value and recognized as revenues in the period such promises are made by the donor. Unconditional promises to give that are expected to be collected in future years are reported at present value of their net realizable value using an interest rate of 4.50%. Amortization of the resulting discount is recognized as additional contributions revenue. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional. Grants receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on its assessment of the current status of individual accounts. Balances, that are still outstanding after management has used reasonable collection efforts, are written off through a charge to the valuation allowance and a credit to contribution receivable. Based upon historical collection statistics, management expects to collect one hundred percent (100%) of the outstanding contribution balances, accordingly there is no provision for an allowance at December 31, 2017 and 2016, respectively. Investments The Church follows Financial Accounting Standards Board (FASB) guidance on Fair Value Measurements and Disclosures which defines fair value and establishes a fair value hierarchy organized into three levels based upon the input assumptions used in pricing assets. FASB ASC Fair Value Measurements and Disclosures requires investments measured and reported at fair value to be classified and disclosed in one of the following categories: .

-9-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Investments (continued)

Level 1 – Quoted prices are available in active markets for identical investments as of the reporting date. The Church does not adjust the quoted price for these investments even in situations where the Church holds a large position and a sale could reasonably impact the quoted price Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies Level 3 – Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. Investments are carried at fair value. The fair value of alternative investments has been estimated using the Net Asset Value ("NAV") as reported by the management of the respective alternative investment fund. FASB guidance provides for the use of NAV as a "Practical Expedient" for estimating fair value of alternative investments. Alternative investments classification within Level 2 or 3 is based on the Church's ability to redeem its interest in the near term. Investment Income Recognition Realized gains and losses on investments represent the difference between the original cost of the securities on a specific identified cost basis and the related fair market value on the date of sale or distribution. They include the original cost written-off, if any. When the investments are sold, gains and losses are classified as realized. The deemed gains or losses from any in-kind distribution of securities represent the difference between the fair value of the securities distributed as of the date of distribution and the original cost. The difference between the original cost and the fair value of investments held at the end of the year represents unrealized appreciation or depreciation. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis and dividends are recorded on the ex-dividend date. Realized and unrealized gains and losses are included in the determination of the change in net assets. Investment Risk The Church invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. -10-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Investment Risk (continued) Due to the level of risk associated with investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term, based upon the markets’ fluctuations, and that such changes could materially affect the Church’s statement of financial position. Property and Equipment Property and equipment are capitalized at cost. Property and equipment in excess of $5,000 with a useful life of five years or more are capitalized. Depreciation is recorded on the straight-line method over the estimated useful lives of the assets as follows: Kitchen, fixtures and equipment

5-7 years

Intangible Asset Intangible asset is costs associated with the development of the Soup Kitchen website. The website costs are amortized over six years. Accrued Vacation and Sick Time As a component of compensation, Church employees are entitled to vacation and sick time. Accordingly, at each year end, the Church must recognize a liability for the amount that represents unused vacation or sick time. At December 31, 2017 and 2016 the accrual for vacation and sick time related to the Soup Kitchen was $71,125 and $74,062, respectively, and was reported in the accompanying statements of financial position as a component of accrued expenses. Net Assets Unrestricted net assets include funds having no restrictions as to use or purpose imposed by donors.

-11-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Net Assets (continued) Temporarily restricted net assets (including investment income) contain donor-imposed restrictions that permit the Church to use or expend the assets as specified. When a donor 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 as net assets released from restrictions. Permanently restricted net assets represent resources, the uses of which have been permanently restricted by donors. Income from all permanently restricted net assets is available for unrestricted and temporarily restricted purposes. The Church's change in net assets from operations includes revenue from contributions, government grants, community program fees, other operating revenue, and net assets released from restrictions. All investment income including gains and losses on investment transactions is considered non-operating. Dividends, interest and net appreciation (depreciation) on investments are reported as follows: (1) as increases (decreases) in permanently restricted net assets if the terms of the gift require that they be added to or subtracted from the principal of permanently restricted net assets; (2) as increases in temporarily restricted net assets if the terms of the gift impose restrictions on the current use of the income or net gains; and (3) as increases (decreases) in unrestricted net assets in all other cases. Revenue Recognition Contributions Contributions are reported as either temporarily or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

-12-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. The discounts on those amounts are computed using interest rates applicable to the years in which the promises are received. Amortization of the discounts is included in contribution revenue. Conditional promises to give are not included as support until the conditions are substantially met. Government Grants Revenue and receivables from government contracts are recognized when reimbursable expenses are incurred under the terms of the contracts. Contract payments in excess of or less than qualified expenses are accounted for as contract advances payable or government contracts receivable, respectively. In-Kind Contributions Donated food Donated food is recorded as both a contribution and program expense at its estimated cost to purchase value at the date of receipt. Contributed Services A substantial number of volunteers have donated significant amounts of time and services, to the Church, approximately 51,585 hours, and services. No amounts have been reflected in the financial statements for those services since they do not meet the criteria for recognition under FASB ASC 958-605-50-1. Under FASB ASC 958605-50-1, contributions of services are recognized if the services (a) create or enhance nonfinancial assets or (b) require specialized skills and are provided by individuals possessing those skills, and (c) would typically be purchased if not provided by donation. Allocation of Expenses Expenses have been charged to program and supporting services based on direct expenses and other specific allocation methods.

-13-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Accounting for Uncertainty in Income Taxes The Church is not required to file income tax returns. The Church recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Management has determined that the Church had no uncertain tax positions that would require financial statement recognition. Subsequent Events Evaluation by Management Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were available to be issued, which date is April 16, 2018. Presentation of Prior-Year Information The financial statements include certain prior-year comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the organization's financial statements for the year ended December 31, 2016, from which the summarized information was derived. NOTE 3 – PROMISES TO GIVE, NET Unconditional promises to give, net of discount and allowance, due within one year consist of the following at December 31,

2017 Unrestricted: Operations

$ -0-

2016 $ -0-

Contributions that are made with terms which provide for payment to be made beyond the subsequent fiscal year are discounted to their present value using an interest rate of 4.50% and are deemed to be fully collectible by management.

-14-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

NOTE 4 - INVESTMENTS The Church’s investments are recorded at fair value on a recurring basis. The following table represents investments at fair value as of December 31: 2017

Description Temporary cash investments, at cost, plus accrued interest Equity securities: Energy Services Mutual funds: Life Strategy Moderate Growth Total Investments

Fair Value

$

-

Unrealized Gains (Losses)

Cost

$

-

$

-

2,023

1,021

1,002

1,158,559

953,933

204,626

954,954

$ 205,628

$1,160,582

$

2016

Description Temporary cash investments, at cost, plus accrued interest Equity securities: Electronic Equipment Major Integrated Oil & Gas Mutual funds: Life Strategy Moderate Growth Total Investments

Fair Value

$

17

Unrealized Gains (Losses)

Cost

$

17

5,212 3,767 8,979

5,183 3,777 8,960

1,007,056

995,412

$1,016,052

$ 1,004,389

$

29 (10) 19 11,644

$

11,663

Net realized and unrealized gains (losses) from investments for the years ended December 31, 2017 and 2016 totaled $124,861 and ($45,228), respectively.

-15-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 NOTE 5 – FAIR VALUE MEASUREMENT The Church has determined the fair value of the recurring assets and liabilities through application of the FASB ASC Fair Value Measurements and Disclosures. The valuation of investments and beneficial interest in perpetual trust using the FASB ASC fair value hierarchy as of December 31 is summarized as follows: 2017

Description Temporary cash investments, at cost, plus accrued interest Equity securities: Energy Services Mutual funds: Balance Life Cycle Total Investments

Quoted Prices in Active Markets for Identical Assets (Level 1)

$

-

Significant Unobservable Inputs (Level 3)

$

2,023 1,158,559 $1,016,582

$

-

Total

$

-

-

2,023

-

1,158,559 $ 1,016,582

2016

Description Temporary cash investments, at cost, plus accrued interest Equity securities: Electronic Equipment Major Integrated Oil & Gas Mutual funds: Balance Life Cycle Total Soup Kitchen investments

Quoted Prices in Active Markets for Identical Assets (Level 1)

$

17

Significant Unobservable Inputs (Level 3)

$

5,212 3,767 1,007,056 $1,016,052 -16-

$

-

Total

$

17

-

5,212 3,767

-

1,007,056 $1,016,052


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

Investment income consisted of the following for the years ended December 31: 2017 $ 28,526 124,861 $ 153,387

Interest and dividends Realized and unrealized gain (loss) on investments

2016 $ 25,415 (45,228) $ (19,813)

NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment at December 31, 2017 and 2016 consisted of the following: 2017 $ 120,407 (70,631) $ 49,776

Kitchen equipment Less accumulated depreciation

2016 $ 120,407 (57,265) $ 63,142

Depreciation expense for the year ended December 31, 2017 and 2016 was $13,366 and $16,267, respectively.

NOTE 7 – INTANGIBLE ASSET Intangible asset consists of web design and development costs of $12,000. The cost is being amortized over 72 months commencing January 2014. Amortization expense for the year ended December 31, 2017 and 2016 was $2,000 and $2,000, respectively. Accumulated amortization as of December 31, 2017 is $6,000.

NOTE 8 – DUE FROM (TO) THE CHURCH Periodically, in order to meet temporary cash shortfalls, the Church and/or the Soup Kitchen may pay bills on behalf of each other. The Church also allocates to the Soup Kitchen other costs it incurs on its behalf. In 2017 the Church charged a space utilization fee of $260,000. At December 31, 2017, the amount due from the Church was $302,392.

-17-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017

NOTE 9 – CONTINGENCIES Government supported projects are subject to audit by the applicable government granting agencies. At December 31, 2017 there were no audited projects, and management believes that unaudited projects will not result in any material obligations. NOTE 10 – NET ASSETS During 2017, net assets were released from donor restrictions by incurring expenses satisfying the restricted purpose of funding soup kitchen operating expenses. NOTE 11 - CONCENTRATIONS Financial instruments that potentially subject the Church to significant concentrations of credit risk consist primarily of cash and cash equivalents, contributions receivable and the investment portfolio. These instruments are also subject to other market risk conditions such as interest rate risk, equity market risks, and their implied volatilities and market liquidity and funding risks. The Church’s credit risk is inherent principally in its investments. Adverse economic conditions either nationwide or internationally may result in the reduction of the investment’s carrying amount. The maximum loss would be the carrying amount in the financial statements, less amounts insured by the Securities Investor Protection Corporation which is generally up to $500,000 for all brokerage accounts, including up to $250,000 for cash. As of December 31, 2017, the Church had cash balances in excess of the insured limits. The investment portfolio is diversified by type of investments and industry concentrations so that no individual investment or group of investments represents a significant concentration of market risk. Cash and cash equivalents on deposit are guaranteed by the Federal Deposit Insurance Corporation up to $250,000 for all cash accounts with each financial institution as of December 31, 2017 and 2016. At times cash balances held at financial institutions may be in excess of federally insured limits. The Church has not experienced any losses on its cash deposits.

-18-


Reply to: 16 Village Court 112 West 34th Street Hazlet, NJ 07730 New York, NY 10120 Tel 732.761.1120 Tel 212.223.3230 Fax 732.907.1827 Fax 646.292.5172 www.skecpa.com

SKE GROUP, LLC Certified Public Accountants and Business Consultants

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

The Vestry and Management Church of the Holy Apostles We have audited the financial statements of the Church of the Holy Apostles - Holy Apostles Soup Kitchen Program, which comprise the statement of financial position as of December 31, 20 17, and the related statements of activities and cash flows for the year then ended have issued our report thereon dated April 16, 2018. We conducted our audit in accordance with 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Church of the Holy Apostles - Holy Apostles Soup Kitchen Program's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing our opinion on the effectiveness of the Church of the Holy Apostles - Holy Apostles Soup Kitchen's internal control. Accordingly, we do not express an opinion on the effectiveness of the Church of the Holy Apostles- Holy Apostles Soup Kitchen'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 entity'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 over financial reporting 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 thathave not been identified.


Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Church of the Holy Apostles- Holy Apostles Soup Kitchen Program's fmancial statements are free of 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 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 on internal control and the results of that testing, and not to provide an opinion on the effectiveness of the Church of the Holy Apostles - Holy Apostles Soup Kitchen Program internal control or on compliance. This report is an integral part of an audit preformed in accordance with Government Auditing Standards in considering the Church of the Holy Apostles - Holy Apostles Soup Kitchen Program internal control and compliance. Accordingly, this report is not suitable for any other purpose.

Hazlet, New Jersey

April16,2018


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM Schedule of Findings and Responses

I.

Current Year Findings None

II.

Status of Prior Year Findings None

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Church of the holy apostles hask financial statement 12 31 17  
Church of the holy apostles hask financial statement 12 31 17  
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