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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM FINANCIAL STATEMENTS WITH INDEPENDENT AUDITORS' REPORT DECEMBER 31, 2016


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

INDEPENDENT AUDITORS' REPORT

2-3

FINANCIAL STATEMENTS Statement of Financial Position

4

Statement of Activities

5

Statement of Cash Flows

6

NOTES TO FINANCIAL STATEMENTS

7-18

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

The Vestry Church of the Holy Apostles

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 , 2016, and the related statements of activities 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 2015 financial statements and, in our report dated May 24, 2016 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 financial statements referred to above present fairly, in all material respects, the financial position of the Church of the Holy Apostles - Holy Apostles Soup Kitchen Program as of December 31 , 2016, 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 24,2017, on our consideration of Church of the Holy Apostles-Holy Apostles Soup Kitchen'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 Church of the Holy ApostlesHoly Apostles Soup Kitchen 's internal control over financial reporting and compliance.

Hazlet, New Jersey

April 24, 2017


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM STATEMENT OF FINANCIAL POSITION DECEMBER 31 , 2016 (With comparative amounts at December 31 , 20 15)

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

2016

2015

$ 1,547,162 224,585 139,400 57,518 42,135 1,016,051 63 ,142 6,000

$ 1,330,358 154,197 403 ,676 81 ,688 49,241 971,814 76,626 8,000

$ 3,095,993

$ 3,075,600

LIABILITIES AND NET ASSETS

LIABILITIES Accounts payable and accrued expenses

$

181 ,808

$

269,699

Total Liabilities

181 ,808

269,699

NET ASSETS Unrestricted Temporarily restricted

2,876,544 37,641

2,805,895

Total Net Assets

2,914,185

2,805,901

$ 3,095,993

$ 3,075,600

TOTAL LIABILITIES AND NET ASSETS

See notes to financial statements.

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM

STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31 , 2016 (With summarized totals for the year ended December 3 1, 20 15)

Unrestricted

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

Total Public Support and Revenue EXPENSES Salaries and related expenses Space utilization fee and building expenses Food and supplies Maintenance and repairs Professional fees Communications Utilities Program promotion Advocacy and counseling Laundry and uniforms Equipment rental Miscellaneous

$

2,769,250

$ 1,034,911 57,613 102,425 526,850 43,985 364,543 409,554 267,010 {2, 769,250}

2,769,250

37,641

$

1,090,834 399,752 112,2 18 511,870 9,622 256,901 241,533 210,267

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

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

1,291 ,678 260,000 472,728 6,662 276,656 12, 169 54,869 61 ,434 39,580 9,382 6,205 33,019

2,750,993

2,750,993

2,524,382

18,257

18,257

17,200

2,769,250

2,769,250

2,541,582

37,641

291,415

70,643

3,316

108,284

294,731

2,805,901

2,511,170

37,641 70,643

Investment income

70,643

CHANGE IN NET ASSETS

End ofyear

$ 1,034,911 57,613 102,425 526,850 43,985 364,543 409,554 267,010

2015

2,832,997

Change in Net Assets from Operations

NET ASSETS Beginning of year

Total 2016

2,806,891

Depreciation Total Operating Expenses

Temporarily Restricted

37,641

2,805,901

$ 2,876,544

$

See notes to financial statements. -5-

37,641

$ 2,914,185

$

2,805,901


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM

STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2016 (With comparative amounts at December 31, 20 15)

2016

CASH FLOWS FROM OPERATING ACTIVITIES Increase in net assets ADillSTMENTS TO RECONCILE INCREASE IN NET ASSETS TO NET CASH PROVIDED BY 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 Due to the Church

$

Net cash provided (used) by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Investments Sale of Investments Purchases of property and equipment

Net cash provided (used) in investing activities

NET INCREASE IN CASH AND CASH EQUIVALENTS

108,284

2015

$

294,731

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

(85,864) 17,200 21,744

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

(154,197) (240,302) (52,542) (5,052) 140,815 (227,565)

174,599

(291,032)

44,980 (2,775)

(86,299) 30,318 (38,993)

42,205

(94,974)

216,804

(386,006)

CASH AND CASH EQUIVALENTS

1,330,358

1,716,364

$ 1,547,162

$ 1,330,358

$

$

$

$

Beginning of year End ofyear Supplemental Cash Flow Information: Interest paid Income taxes See notes to financial statements. - 6-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2016

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 ofNew York. The Church was one of the first properties to be designated a New York City landmark and is listed in the National Registry of Historic Places. It completed a restoration of the building following a devastating fire in 1990. The Soup Kitchen's primary sources of support are individual contributions and government and foundation grants. The Church ofthe 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.

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2016

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, 2016 and 2015 , 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 (1 00%) of the outstanding contribution balances, accordingly there is no provision for an allowance at December 31 , 2016 and 2015 , respectively.

Investments The Church follows Financial Accounting Standards Board (F ASB) 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:

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2016 NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Investments (continued)

Level I -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 ("NA V") as reported by the management of the respective alternative investment fund . F ASB guidance provides for the use of NA V 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. -9-


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2016

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. Net Assets Unrestricted net assets include funds having no restrictions as to use or purpose imposed by donors. 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.

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM

NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2016 NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Net Assets (continued)

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. 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.

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER31, 2016

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) Contributed Services A substantial number of volunteers have donated significant amounts of time, approximately 51,260 hours , and services. However, such contributed services do not meet the criteria for recognition of contributed services contained in accounting principles generally accepted in the United States of America and, accordingly, are not reflected in the accompanying financial statements. Donated food is recorded as contributions at its estimated value at the date of receipt.

Allocation of Expenses Expenses have been charged to program and supporting services based on direct expenses and other specific allocation methods.

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 April24, 2017.

Presentation of Prior-Year Information The fmancial 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 fmancial statements for the year ended December 31,2015, from which the summarized information was derived .

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM

NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2016 NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncement

The FASB issued an Accounting Standards Update ASU 2012-05 , Not-for-Profit Entities Classification of the sale of Proceeds of Donated Financial Assets in the Statement of Cash Flows ("ASU 2012-05"). ASU 2012-05 requires entities to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without any imposed limitations for sale and were converted nearly immediately into cash. Accordingly, the cash receipts from the sale of those financial assets should be classified as cash inflows from operating activities, unless the donor restricted the use of the contributed resources to long-term purposes, in which case those cash receipts should be classified as cash flows from financing activities. Otherwise, cash receipts from the sale of donated financial assets should be classified as cash flows from investing activities. This update is effective prospectively for years beginning after June 15, 2014. 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,

Unrestricted: Operations 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.

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2016

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: 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 Soup Kitchen investments

Fair Value

$

17

Unrealized Gains (Losses)

Cost

$

17

$

5,212 3,767

5,183 3,777

29 (10)

1,007,055

995,412

11,643

$1.016.051

$ 1.004.389

$

~

2015

Description Temporary cash investments, at cost, plus accrued interest Equity securities: Electronic Equipment Major Integrated Oil & Gas Internet Information Providers Business Software & Services Beverages - Soft Drinks Specialty Eateries Entertainment- Diversified Banking Other Mutual funds: Balance Life Cycle Total Soup Kitchen investments

Fair Value

$

468

Unrealized Gains (Losses)

Cost

$

468

$

3,158 2,239 7,567 3,717 149 6,003 3,993 3,262 1,252

3,158 2,239 7,567 3,717 149 6,003 3,993 3,262 1,252

940,006

973,049

(33,043)

$ 971.814

$ 1.004.857

$ (33.043)

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER31, 2016

NOTE 4- INVESTMENTS (continued) Net realized and unrealized gains (losses) from investments for the years ended December 31, 2016 and 2015 totaled ($45,228) and $21 ,744, respectively.

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 F ASB ASC fair value hierarchy as of December 31 is summarized as follows: 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 (Levell)

$

17

Significant Unobservable Inputs (Level3)

$

$

5,212 3,767 1,007,055 $1.016.051

-15-

Total

17 5,212 3,767

$

-Q-

1,007,055 $ l,Ql6,Q51


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2015

NOTE 5-FAIR VALUE MEASUREMENT (continued) 2015

Description

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

Temporary cash investments, at cost, plus accrued interest Equity securities: Electronic Equipment Major Integrated Oil & Gas Internet Information Providers Business Software & Services Beverages - Soft Drinks Specialty Eateries Entertainment- Diversified Banking Other Mutual funds: Balance Life Cycle Total Soup Kitchen investments

$

468

Significant Unobservable Inputs (Level3)

$

Total

$

468

3,158 2,239 7,567 3,717 149 6,003 3,993 3,262 1,252

2,239 7,567 3,717 149 6,003 3,993 3,262 1,252

940,006 $971.814

940,006 $971.814

$ ==

Investment income consisted of the following for the years ended December 31: 2016 Interest and dividends $ 25,415 $ Realized and unrealized gain (loss) on investments (45,228) $ 09.813) $

2015 36,738 (33,422) 3.316

NOTE 6- PROPERTY AND EQUIPMENT Property and equipment at December 31, 2014 consisted of the following:

$

Kitchen equipment Less accumulated depreciation

$

-16-

2016 120,407 (57,265) 63.142

2015 $ 202,832 (126,206) $ 76.626


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2016 NOTE 6- PROPERTY AND EQUIPMENT (continued) During 2016, the Church retired $85,196 of fully depreciated assets related to the soup kitchen program. Depreciation and amortization was $18,257 and $15,001 for 2016 and 2015, 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. Accumulated amortization as of December 31, 2016 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 2016 the Church charged a space utilization fee of $260,000. At December 31, 2016, the amount due from the Church was $224,585. NOTE 9- CONTINGENCIES In July 2011, the Church was named a party to a lawsuit in connection with alleged employment discrimination. This matter was later amended to include an additional cause of action under New York Labor Law for unpaid overtime wages. In accordance with F ASB ASC 450- Contingencies, management evaluates these matters on an ongoing basis. In the opinion of management, although the outcome of these proceedings are uncertain, they should not have a material adverse effect on the Church's financial position, results of operations or cash flows. NOTE 10- NET ASSETS During 2016, net assets were released from donor restrictions by incurring expenses satisfying the restricted purpose of funding soup kitchen operating expenses. NOTEll-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.

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CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM NOTES TO FINANCIAL STATEMENTS DECEMBER31, 2016

NOTE 11- CONCENTRATIONS (continued) The maximum loss would be the carrying amount in the fmancial 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, 2016, 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 fmancial institution as of December 31 , 2016 and 2015. 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.

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SKE GROUP, LLC Certified Public Accountants and Business Consultants

Reply to: 16 Village Court Hazlet, NJ 07730 Tel 732.761 .1120 Fax 732 .907.1827

112 West 34th Street New York, NY 10120 Tel 212.223.3230 Fax 646.292 .5172 www.skecpa.com

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 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 fmancial position as of December 31 , 2016, and the related statements of activities and cash flows for the year then ended have issued our report thereon dated April 24, 2017. 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 fmancial 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 ofthe 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 that have 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 financial 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 fmancial 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

April24, 2017


CHURCH OF THE HOLY APOSTLES HOLY APOSTLES SOUP KITCHEN PROGRAM Schedule ofFindings and Responses

I.

Current Year Findings None

II.

Status of Prior Year Findings None

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Hask final financial statements 12 31 16  
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