HINTON RURAL LIFE CENTER, INC.
Report to Board Finance Committee
August 18, 2016
Attachments
Audited Financial Statements for the Years Ended December 31, 2015 and 2014
Independent Auditors’ Report to the Board of Directors – June 22, 2016
Management Response to Independent Auditors’ Report to the Board of Directors – June 22, 2016
Statement of Financial Position – June 30, 2016 – Unaudited
Statement of Activities – For Six Months Ended June 30, 2016 - Unaudited
Cash Position Chart – June 30, 2016
Notes Payable Chart – June 30, 2016
2016 Financial Update
Through June, the Center is running a year to date loss from operations of ($21,338). This is not unexpected. It was reported to the Board in April that based on management’s initial cash flow projection, the anticipated cash flow shortfall from operations will be approximately ($60,000).
However, much of the 2015 grant monies that has been set aside in restricted accounts (see Cash Position Chart) is available to pay certain budgeted salaries and other expenses and should offset the expected cash flow shortfalls. Additionally, at Board direction, management has set aside $100,000 in a working capital reserve bank account. That money may be used to cover cash flow shortfalls when short term funding needs arise.
The outside audit with Dixon Hughes Goodman has been completed and the audited financial statements issued. This package includes the audited financial statements for the years ended December 31, 2015 and 2014. In addition to the financial statements a separate Auditors’ Report to the Board of Directors and Management’s response is included in this package. The audit proceeded smoothly. Management will work closely with the audit firm to speed up the audit process in 2017. Finally, it should be noted that the audit fees were covered by the Southeastern Jurisdiction of the United Methodist Church and SEJ has indicated that it will pay audit fees for the next four years. We appreciate the generosity of SEJ.
As reported to the Board in April, North Carolina Department of Revenue Sales Tax regulations will require Hinton Center to charge sales tax on accommodations for overnight guests in certain situations. The Center has received a tax assessment from the NC DOR for three years unpaid back taxes on accommodations of $11,053 plus interest of $965. The NC DOR did not assess any penalties. The tax assessment and interest has been paid. Management is working with sales tax auditors to pay additional county occupancy taxes going back three years. The occupancy taxes approximate $5,000, including interest.
Management has begun to develop a preliminary budget for 2017. It is expected that we will have a draft of the 2017 budget available for the Finance Committee at the October Board meeting.
Report to Board Finance Committee 081816