TRAIL BLAZER CAMPS FINANCIAL STATEMENTS AND AUDITORSâ€™ REPORT AUGUST 31, 2018
TRAIL BLAZER CAMPS
Page Independent Auditorsâ€™ Report
Statement of financial position as of August 31, 2018
Statement of activities for the year ended August 31, 2018
Statement of expenses for the year ended August 31, 2018
Statement of cash flows for the year ended August 31, 2018
Notes to financial statements
6 â€“ 13
INDEPENDENT AUDITORS' REPORT
The Board of Directors of Trail Blazer Camps
We have audited the accompanying financial statements of Trail Blazer Camps (a nonprofit organization), which comprise the statement of financial position as of August 31, 2018, and the related statements of activities, expenses, and cash flows for the year then ended, and the related notes to the 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. Auditor’s 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. 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 Trail Blazer Camps as of August 31, 2018, 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.
Skody Scot & Company, CPAS, P.C.
New York, NY July 20, 2019 -1-
TRAIL BLAZER CAMPS STATEMENT OF FINANCIAL POSITION AUGUST 31, 2018
ASSETS Cash and cash equivalents: Unrestricted Restricted for endowment Endowment investments Contributions and other receivables Property and equipment, net Security deposits and other assets
728,742 34,399 1,237,330 197,754 343,858 12,475
LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses Loans payable Refundable advances Total liabilities
247,091 2,498 178,664 428,253
Commitments and contingencies (see notes) Net Assets: Without donor restrictions With donor restrictions: Purpose restrictions Endowment Underwater endowment
829,576 25,000 1,967,198 (695,469)
Total net assets
Total liabilities and net assets
See accompanying notes to the financial statements. -2-
TRAIL BLAZER CAMPS STATEMENT OF ACTIVITIES YEAR ENDED AUGUST 31, 2018
Support and Revenues: Program service revenue Contributions Government contracts Special events: Event income Less: related direct costs Net special event income Contributions in-kind Investment income Other income Net assets released from restriction pursuant to endowment spending rate distribution formula Total support and revenues
Without Donor Restrictions
With Donor Restrictions
96,725 (28,394) 68,331 300,000 284 2,823
Expenses: Program services Supporting services: Management and general Fundraising Total expenses Increase/(Decrease) In Net Assets Net assets, beginning of year (restated) Net assets, end of year
1,248,964 733,298 186,043
25,000 62,669 -
$ 1,248,964 758,298 186,043 96,725 (28,394) 68,331 300,000 62,953 2,823
221,994 103,342 2,565,871
221,994 103,342 2,565,871
(2,690) 64,231 832,266 1,232,498 829,576 $ 1,296,729
61,541 2,064,764 $ 2,126,305
See accompanying notes to the financial statements. -3-
TRAIL BLAZER CAMPS STATEMENT OF EXPENSES YEAR ENDED AUGUST 31, 2018
Staff salaries Payroll taxes Employee benefits Bad debt Bank charges & processing fees Camp counselors Consultants and contractors Depreciation Equipment Insurance Occupancy Office supplies & expenses Professional fees Program expenses - other Promotion Repairs and maintenace Telephone and communications Travel and meetings Total expenses
Program Services $ 972,894 96,255 16,313 213,418 73,480 26,277 52,472 410,480 170,086 57,176 10,718 28,057 10,511 102,398
Supporting Services Management and General Fundraising $ 48,964 $ 73,447 4,326 7,571 1,017 3,061 16,331 54,278 30,085 1,466 1,122 15,230 3,562 6,782 4,219 4,658 8,172 31,427 975 487 3,949 533 955 478 1,551 690
Total Expenses $ 1,095,305 108,152 20,391 16,331 54,278 213,418 30,085 73,480 28,865 71,264 421,481 182,916 31,427 57,176 12,180 32,539 11,944 104,639
See accompanying notes to the financial statements. -4-
TRAIL BLAZER CAMPS STATEMENT OF CASH FLOWS YEAR ENDED AUGUST 31, 2018
Cash flows from operating activities: Increase/(decrease) in net assets
Adjustments for non-cash items included in operating activities: Depreciation Bad debt expense Investment (gains)/losses
73,480 16,331 (30,906)
Changes in assets and liabilities: Contributions & other receivables Prepaid expenses Security deposits & other assets Accounts payable and accrued expenses Refundable advances Net cash provided/(used) by operating activities
(50,705) 9,900 (6,750) 82,830 149,245 304,966
Cash flows from investing activities: Sales of investments Investment purchases Purchase of property and equipment Net cash provided/(used) by investing activities
210,056 (209,563) (50,566) (50,073)
Cash flows from financing activities Repayment of loans payable Net cash provided/(used) by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See accompanying notes to the financial statements. -5-
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies The Organization Trail Blazer Camps (Organization), a not-for-profit organization, was incorporated in the State of New York on April 22, 1906. The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for federal, state or local income taxes has been recorded. The Organization does not believe its financial statements contain any uncertain tax positions. The Organization primarily receives its support from contributions from foundations, corporations, individuals and from program service revenue. The Organizationâ€™s mission is to help young people develop the skills and values necessary for living healthy and productive lives, through outdoor adventure, leadership and after school programming. To accomplish this mission, the Organization offers camps and after school programs such as; Overnight Camp, Brooklyn Day Camp, School Break Camps, and Under One Sky after school program. Basis of Accounting The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. Change in Accounting Principle In 2018, the Organization adopted all reporting changes required under FASB ASU 2016-14 Presentation of Financial Statements of Not-for-Profit Entities. Accordingly, all amounts on the 2018 financial statements have been reclassified to conform to the new presentation requirements. All required disclosures have been incorporated and included on the accompanying financial statements and in these notes. Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Cash Equivalents For the purposes of the statement of financial position and the statement of cash flows, the Organization considers as cash equivalents money market funds and all highly liquid resources, such as investments in certificates of deposit, with an original maturity of three months or less.
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies (Continued) Property and Equipment The Organization capitalizes certain property and equipment with estimated lives of three years or more. Purchased property and equipment are stated at cost, less accumulated depreciation. Donated property and equipment are stated at fair value on the date of donation, less accumulated depreciation. Depreciation of equipment and vehicles is computed by the straight-line method over the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred and major renewals and betterments are capitalized. Net Assets Net assets, revenues, gains and losses are classified based on the existence or absence of donor or grantor-imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows: Net Assets Without Donor Restrictions - Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. This classification includes net assets designated by the board or management for a specified purpose. Net Assets With Donor Restrictions - Net assets subject to donor (or certain grantor) imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature (endowment), where the donor stipulates that resources be maintained in perpetuity. Revenue Recognition All contributions are considered available for the Organizationâ€™s general programs unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor are reported as support with donor restrictions and increases in the respective class of net assets. Contributions restricted by donors are reported as increases in net assets without donor restrictions if the restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished) in the reporting period in which the revenue is recognized. All other donor-restricted contributions are reported as increases in net assets with donor restrictions, depending on the nature of the restrictions. When a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statement of activities as net assets released from restrictions. Investment income and gains restricted by donors are reported as increases in net assets without donor restrictions if the restrictions are met (either a stipulated time period ends or a purpose restriction is accomplished) in the reporting period in which the income and gains are recognized. When a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions. Program service revenue relates to fees received in exchange for program services. Revenue is recognized when the program service is provided. Any revenue received which has not been earned is recorded as refundable advances.
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies (Continued) Receivables Contributions are recognized when the donor makes an unconditional promise to give to the Organization. Receivables that are expected to be collected within one year are recorded at their net realizable value. Receivables that are expected to be collected in future years are recorded at the present value of estimated future cash flows. All receivables are expected to be received within one year and as such have been stated at their net realizable value with no allowance for uncollectible receivables. Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities and in the statement of expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Salaries are allocated on the basis of estimated time and other expenses are allocated based on usage. The Organization classifies expenses, which are not directly related to a specific program, as Management and General expenses. Note 2 - Cash and Cash Equivalents Cash and cash equivalents consisted of the following at August 31, 2018: Unrestricted: Money Market Funds Checking and savings Restricted for endowment: Money Market Funds
$ 284,677 444,065 34,399 $ 763,141
Note 3 - Property and Equipment Property and equipment by major class consisted of the following at August 31, 2018: Leasehold improvements Furniture, fixtures & equipment Vehicles Software
$ 977,125 262,023 226,617 35,217 1,500,982 ( 1,157,124) $ 343,858
Less: Accumulated depreciation
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 4 - Commitments and Contingencies The Organization leases office space under two non-cancellable operating leases. The Organization also has a lease agreement for the land used for their summer programs, however they do not pay annual rent for this agreement and instead are responsible for real estate taxes and maintenance and upkeep of the buildings and structures of all the leased premises. As of August 31, 2018, minimum aggregate annual rentals are as follows: Year ended August 31, 2019 2020 2021 2022 2023
$ 71,353 74,459 77,548 63,727 43,074
Total rent and occupancy related expenses charged to operations for the year ended August 31, 2018 was $421,481.
Note 5 - Endowment The Organizationâ€™s endowment is comprised of one donor-restricted fund (Fund) which was established to provide investment income to the operating budget of the Organization and to provide revenue from corpus liquidation, as permitted, to fund identified needs deemed fundamental to the growth and sustainability of the Organization and its mission as determined by the Board of Trustees. The fund currently consists of various types of investments and money market funds. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. The Board of Directors of the Organization has interpreted the New York Prudent Management of Institutional Funds Act (NYPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as net assets with donor restrictions (a) the original value of gifts donated to the donor-restricted endowment, (b) the original value of subsequent gifts to the donor-restricted endowment, and (c) accumulations to the donor-restricted endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. When amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by NYPMIFA, the Organization reclassifies net assets with donor restrictions to net assets without donor restrictions. In accordance with NYPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: (1) the duration and preservation of the various funds, (2) the purposes of the donor-restricted endowment funds, (3) general economic conditions, (4) the possible effect of inflation and deflation, (5) the expected total return from income and the appreciation of the investments, (6) other resources of the Organization, and (7) the Organizationâ€™s investment policies.
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 5 - Endowment (continued) Investment Return Objectives, Risk Parameters and Strategies. The Organization has adopted investment and spending policies, approved by the Board of Directors, for endowment assets that emphasize total return; that is, the aggregate return from capital appreciation and dividend and interest income in a conservative portfolio that avoids inappropriate risk to endowment principal. Endowment assets are invested in money market funds, equity securities, fixed income and real asset funds. This asset mix is intended to accomplish the investment goal of conservative principle protection with long term growth while achieving income results that provide revenue useful to furthering the Organizationâ€™s mission. Investment risk is measured in terms of the total endowment fund; investment assets and allocation between asset classes and strategies are managed in order to not expose the Fund to unacceptable levels of risk. Spending Policy. The donor restriction states that investment income can be used to help fund the operating costs of the Organization. The Organization may also use a portion of the investment corpus, limited to an amount not to exceed 4% of the calculated historic rolling average of such corpus over the previous three years, to help cover certain costs that are deemed fundamental to the growth and sustainability of the Organization as determined and approved by the Board of Trustees. Changes and composition in endowment net assets are as follows: Underwater portion of donor-restricted Endowment (restated), August 31, 2017
Investment return and activity, year ended August 31, 2018: Investment income 31,763 Net gains/(losses) 30,906 Total investment return 62,669 Amounts appropriated for expenditure: ( 23,438) Net investment activity 39,231 Underwater portion of donor-restricted Endowment, August 31, 2018 ($ 695,469) Donor-restricted endowment at August 31, 2018: Original donor-restricted gift amount required to be maintained in perpetuity by donor Underwater portion of donor-restricted Endowment Net value, donor-restricted endowments
- 10 -
$ 1,967,198 ( 695,469) $ 1,271,729
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 6 - Underwater Endowment From time to time, certain donor-restricted endowment funds may have fair values less than the amount required to be maintained by donors or by law (underwater endowments). The Organization has interpreted The New York Prudent Management of Institutional Funds Act (NYPMIFA) to permit spending from underwater endowments in accordance with prudent measures required by law. As of August 31, 2018, the Organization has a donor restricted endowment fund with an accumulated gift value of $1,967,198, a current fair value of $1,271,729 and a deficiency of $695,469. This deficiency resulted from unfavorable market conditions and was reported in net assets with donor restrictions.
Note 7 - Concentrations The Organization maintains its checking, savings and money market accounts with financial institutions. The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000 per financial institution. The Securities Investor Protection Corporation (SIPC) insures cash and securities, including money market funds, up to $500,000 per financial institution. At times, the balances of the accounts have exceeded the limits during the year ended August 31, 2018.
Note 8 - Fair Value Measurement of Investments The Financial Accounting Standards Board (FASB) requires enhanced disclosures about investments that are measured and reported at fair value. FASB establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1: Investments falling within Level 1 of the fair value hierarchy are valued using inputs based upon quoted prices in active markets for identical investments. Investments that are typically included in Level 1 are listed equity securities, publicly traded mutual funds, and exchange traded funds. Level 2: Investments falling within Level 2 of the fair value hierarchy are valued using significant observable inputs other than prices quoted in active markets. Examples of Level 2 inputs are model-driven prices, quoted prices for similar investments in active markets, and quoted prices for identical or similar investments in inactive markets. Investments that are typically included in Level 2 are municipal bonds, corporate bonds, and government debt securities.
- 11 -
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 8 - Fair Value Measurement of Investments (continued) Level 3: Investments falling within Level 3 of the fair value hierarchy are valued using methodology that is unobservable and significant to the fair value measurement. Level 3 inputs require significant management judgment or estimation. Investments that are typically included in this category are investments in limited partnerships, and investments in private companies or unregistered securities. The investmentâ€™s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following summarizes the valuation of the Organizationâ€™s investments by the above fair value hierarchy levels as of August 31, 2018: Level 1 Level 2 Level 3
$ 1,237,330 $ 1,237,330
Note 9 - Investments Investments consisted of the following at August 31, 2018:
Mutual funds Equity securities
Cost 666,745 428,934 $ 1,095,679 $
Fair Value $ 663,529 573,801 $ 1,237,330
Unrealized Gain/(Loss) $( 3,216) 144,867 $ 141,651
Note 10 - Loans Payable In 2013, the Organization took out a loan to purchase a vehicle. Payments of $387 are due on a monthly basis, which includes interest of 4%. The loan is due to be paid back in November 2018. As of August 31, 2018, the balance of the loan is $2,498.
Note 11 - Contributions in-kind The Organization signed a lease agreement for the use of land and the lessor agreed not to charge the Organization rent, provided that the Organization maintain the property and pay for upkeep and real estate taxes. This agreement meets the criteria for being recognized as a contribution in accordance with GAAP. The value of the in-kind rent was calculated based on the estimated fair market value of the property. Total contributions in-kind reported in the accompanying statement of activities for the year ended August 31, 2018 amounted to $300,000.
- 12 -
TRAIL BLAZER CAMPS NOTES TO FINANCIAL STATEMENTS Note 12 - Liquidity and Availability of Financial Assets The Organization regularly monitors liquidity required to meet its operating needs and other obligations as they come due. For purposes of analyzing resources available to meet general expenditures over a 12-month period, the Organization considers all expenditures related to its ongoing activities to be general expenditures. Amounts available for general expenditures over a 12-month period include donor-restricted amounts that are available for ongoing programmatic and support expenditures. The following reflects the Organizationâ€™s financial assets, as of August 31, 2018, reduced by amounts not available for general use within one year because of contractual, donorimposed, or internal restrictions and designations: Financial assets: Cash and cash equivalents: Investments Contributions and other receivables Total financial assets
$ 763,141 1,237,330 197,754 2,198,225
Less those unavailable for general expenditures within one year: Cash restricted for endowment ( 34,399) Investments restricted for endowment ( 1,237,330) Financial assets available to meet cash needs for general expenditures within one year
Note 13 - Prior Period Adjustment Net assets at the beginning of fiscal year 2018 have been adjusted to account for losses sustained in the investment account related to endowment donations in prior years. This adjustment had no impact on the results of fiscal year 2018â€™s activities; however, the cumulative impact decreased the ending balance of net assets with donor restrictions for fiscal year 2017 by $734,700 and increased the ending balance of net assets without donor restrictions for fiscal year 2017 by $734,700.
Note 14 - Government Contracts The Organization was awarded various government grants to support its programs. Total expenses expended under the grants amounted to $186,043 during the year ended August 31, 2018.
Note 15 - Subsequent Events Subsequent events were evaluated for potential additional disclosures through July 20, 2019, which is the date the financial statements were available to be issued.
- 13 -
Trail Blazers Audited Statements FY 2018