WHAT TO LOOK FOR IN A NONPROFIT’S FINANCIAL …

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WHAT TO LOOK FOR IN A NONPROFIT'S

FINANCIAL STATEMENTS

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Presented by:

Regina A. Rodriguez, CPA Senior Manager

Not-for-Profit Services EisnerAmper LLP 212.891.6038 fax: 917.286.2522

regina.rodriguez@

March 22, 2012

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What to Look for in a Nonprofit's Financial Statements Table of Contents

Who Cares? Financial Statement Analysis and Red Flags Sample Financial Statement

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WHO CARES?

EXEMPT ORGANIZATION AUDITED FINANCIAL STATEMENTS

DECEMBER 31, 2011 and 2010

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FINANCIAL STATEMENT ANALYSIS AND RED FLAGS

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FINANCIAL STATEMENT ANALYSIS

Independent Auditors' Report

? Type of opinion

? Last date of fieldwork

? Period of report

? Auditor

INDEPENDENT AUDITORS' REPORT

Board of Directors Exempt Organization New York, New York

? "Boilerplate" language ? "GAAP" ? "GAAS" ? "PCAOB"

We have audited the accompanying statements of financial position of Exempt Organization (the "Organization") as of December 31, 2011 and 2010, and the related statements of activities, functional expenses, and cash flows for the years then ended. These financial statements are the responsibility of the Organization's management. 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. 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 includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all material respects, the financial position of Exempt Organization as of December 31, 2011 and 2010, and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

New York, New York Month XX, 20XX

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FINANCIAL STATEMENT ANALYSIS

STATEMENT OF FINANCIAL POSITION ASSETS

? "Mix" of assets ? "Current" vs. "long

term"

? Investments

? Cost vs fair value

? Pledges and other receivables

? "Contra" assets ? Liquidity ? Prepaid expenses

ASSETS Cash and cash equivalents Investments Pledges receivable, net Grants receivable Prepaid expenses and other current assets Inventory Property and equipment, net Security deposits

December 31,

2011

2010

$ 1,953,000 10,250,000 3,108,000 1,175,000 37,000 34,000 5,729,000 3,000

$ 22,289,000

$ 2,193,000 10,108,000 3,207,000 943,000 55,000 31,000 4,761,000 3,000

$ 21,301,000

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FINANCIAL STATEMENT ANALYSIS

STATEMENT OF FINANCIAL POSITION

Liabilities

? Payables and accruals ? Deferred revenue

? Loans, notes, mortgages

? Commitments and contingencies

Net Assets

? Unrestricted

? Operating ? Board designated, "quasi-

endowment

? Temporarily restricted

? Permanently restricted

? NYPMIFA vs. UPMIFA ? Underwater funds

LIABILITIES AND NET ASSETS Accounts payable and accrued expenses Deferred revenue Accrued vacation Annuities payable Accrued pension liability Bonds payable

Total liabilities

Commitments and contingency (Note M)

Net assets: Unrestricted: Operating fund Board-designated fund

Total unrestricted

Temporarily restricted Permanently restricted

Total net assets

$ 671,000 301,000 231,000 150,000 650,000

3,700,000

5,703,000

$ 569,000 290,000 228,000 125,000 645,000

4,000,000

5,857,000

6,996,000 325,000

7,321,000

2,491,000 6,774,000

16,586,000

$ 22,289,000

6,649,000 301,000

6,950,000

2,494,000 6,000,000

15,444,000

$ 21,301,000

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