audit

Doris Wilson

Description

AMERICAN PHILATELIC SOCIETY AND AMERICAN PHILATELIC RESEARCH LIBRARYTABLE OF CONTENTSIndependent Auditor’s Report on the Consolidated Financial Statements 2Consolidated Financial StatementsConsolidated Statements of Financial Position 3Consolidated Statements of Activities 4-5Consolidatts of Cash Flows 6Notes to Consolidated Financial Statements 7-11Supplemental InformationIndependent Auditor’s Report on Supplemental Information 12Consolidating Statement of Financial Position 13Consolidating Statement of Activities 14-15Consolidating Statement of Changes in Net Assets 16Statement of Functional Expenses - American Philatelic Society 17Statement of Functional Expenses - American Philatelic Research Library 18RITCHEY, COX, HOLLIS, MOCK & KLEIN, PCCERTIFIED PUBLIC ACCOUNTANTS315 SOUTH ALLEN STREETSUITE 117STATE COLLEGE, PA 16801Independent Auditor’s Reporton the Consolidated Financial StatementsMay 31, 2003To the Board of DirectorsAmerican Philatelic Society and American Philatelic Research LibraryState College, PennsylvaniaWe have audited the accompanying consolidated statements of financial position of American Philatelic Society andAmerican Philatelic Research Library (the Organization) as of December 31, 2002 and 2001, and the related consolidatedstatements of activities and cash flows for the years then ended. These financial statements are the responsibility of theOrganization’s management. Our responsibility is to express an opinion on ...

Informations

• Publié par: Uproi
• Nombre de lectures: 108
• Langue: English

Extrait

A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY TABLE OF CO NTENTS

Inde pen den t Aud itor’s Re por t on the C onso lidated Finan cial State men ts Co nsolid ated F inancia l Statem ents Consolidated Statements of Financial Position Consolidated Statements of Activities Consolidated Statements of Cash Flows No tes to C onso lidated Finan cial State men ts Supplemental Information Independent Auditor’s Report on Supplemental Information Consolidating Statement of Financial Position Consolidating Statement of Activities Co nsolid ating Sta teme nt of Ch ange s in Ne t Assets Statem ent of F unctio nal E xpe nses - A meric an P hilatelic S ociety Statement of Functional Expenses - American Philatelic Research Library

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3 4-5 6 7-11

12 13 14-15 16 17 18

May 31, 2003

RITCHEY, COX, HOLLIS, MOCK & KLEIN, PC CERTIFIED PUBLIC ACCOUNTANTS 315 SOUTH ALLEN STREET SUITE 117 STATE COLLEGE, PA 16801

Independent Auditor’s Report on the Co nsolid ated F inancia l Statem ents

To the B oard of Directors American Philatelic Society and American Philatelic Research Library State C ollege , Pen nsylvan ia

W e have aud ited the a cco mpa nying co nsolid ated sta teme nts of finan cial po sition of A meric an P hilatelic S ociety and American Philatelic Research Library (the Organization) as of December 31, 2002 and 2001, and the related consolidated statem ents of activities and cash flows for the years then en ded. T hese financial statements are the responsibility of the Org aniza tion’s management. Our respo nsibility is to express an opinion on these financial statements based on our audits. W e conducted our aud its in accordance with auditing standards generally accepted in the United States of America. Tho se standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statem ents are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amo unts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimate s mad e by m anag eme nt, as well as eva luating the over all financia l stateme nt pres entatio n. W e believe that our audit provides a reasonable bases for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects the financial position of American Philatelic Society and American Philatelic Research Library as of December 31, 2002 and 2001, 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.

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY C O N SO L ID A TE D ST A TE M E N TS O F F IN A N CIA L PO S IT IO N AT DEC EM BER 31, 2002 2001 A S SE T S C U R RE N T AS SE T S Cash and c ash eq uivalen ts $ 451,336 $ 347,165 Sho rt-term inv estme nts 2,017,066 3,795,324 Acc ounts r eceiv able 96,371 109,574 Uncond itional promises to give 95,604 - Inventory 84,560 126,605 Pre paid expe nses an d oth er cur rent asse ts 78,582 53,141 To tal curre nt assets 2,823,519  4,431,809 P R OPERT Y AND E Q U IP M ENT Land 521,322 201,322 Bu ilding an d imp rove men ts 2,090,882 2,045,882 Construc tion in progress 311,753 208,153 Furniture and equipment 1,738,669 1,546,269  4,662,626 4,001,626 Less accumulated depreciation (2,281,250) (2,083,181) Total property and equipment 2,381,376 1,918,445 O T H E R A S SE T S Lon g-term in vestm ents 2,108,564 1,050,813 To tal assets $ 7,313,459 $ 7,401,067 L IA B IL IT I ES A ND N E T AS SE T S CURRENT LIABILITIES Accounts payable and accrued expenses Stamp sales on consignment Deferred dues and other liabilities Total current liabilities LONG-TERM LIABILITIES Deferred dues and other liabilities Total liabilities N E T AS SE T S Unrestricted: Undesignated Board designated Temporarily restricted Permanently restricted To tal net asse ts To tal liabilities an d net a ssets

See no tes to consolida ted financial statements.

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$ 112,883  1,544,863  1,134,993  2,792,739  253,134  3,045,873

 1,898,389  1,356,525  178,922  833,750  4,267,586 $ 7,313,459

$ 115,628  1,514,862  963,908  2,594,398  240,959  2,835,357

 2,142,427  1,605,645  121,022  696,616  4,565,710 $ 7,401,067

A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY CONSO LIDATED STATEM ENTS OF ACTIVITIES YEAR S ENDED DECEM BER 31, 2002 2001 C H A NG E IN U N R ES T R IC T E D NE T A SS E T S REVENUE AND SUPPORT Dues and subscriptions $ 1,161,184 $ 1,077,560 Sales division 653,326 669,088 Internet sales division 256,342 124,814 Investment income (196,787) (363,013) Ame rican Philatelist 441,622 439,453 Comm unications 456,261 380,728 Publications 56,428 49,466 Special activities 171,427 171,573 Administrative offices 101,257 132,046 Royalties 33,084 31,252 Education 45,591 40,915 Library services 16,832 14,260 Developm ent 83,676 326,866 Public relations 18,934 7,683 Rent 30,675 1,474 Miscellaneous 16,812 11,681 Total revenue and support 3,346,664 3,115,846 Net assets released from restrictions 206,946 350,398 Total revenue and support and reclassifications 3,553,610 3,466,244 EXPENSES PROGRAM SERVICES Ame rican Philatelist Sales division Internet sales division Comm unications Specialty sales Library services Education Public relations Special activities Publications Information services Yo uth Founders and patrons Total program services SUPPORTING SERVICES Administration and managem ent Officers and committees Developm ent Building relocation Building operations Phoenix Avenue rental Total supporting services

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 825,641  729,141  299,805  470,978  14,881  261,510  135,962  139,468  155,572  65,482  94,191  22,205  5,567  3,220,403  479,177  55,737  55,345  100,682  128,240  7,184  826,365

 937,979  767,005  280,018  348,397  10,819  230,195  125,684  125,368  149,504  68,557  88,826  25,586  4,825  3,162,763  478,531  57,450  55,342  130,971  132,224 -   854,518

A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY C O NSOL ID A TED ST A TEME N T S O F ACT IV I TI ES (C O NTIN U ED ) YEAR S ENDED DECEM BER 31, 2002 2001 $ 4,046,768 $ 4,017,281  (493,158) (551,037)  290,683 189,879  (25,837) -  (206,946) (350,398)  57,900 (160,519)  138,303 7,858  (1,169) -   137,134 7,858  (298,124) (703,698)  4,565,710 5,269,408 $ 4,267,586 $ 4,565,710

Total expenses Cha nge in u nrestricte d net a ssets C H A NG E IN T E M P O RA R IL Y RE S T RI CT E D N ET A SS E T S Contributions Investment income Net assets released from restrictions Cha nge in te mpo rarily restric ted ne t assets C H A NG E IN P E RM A N E N T LY R E ST R IC T E D NE T A SS E T S Contributions Investment income Cha nge in p erma nently res tricted n et assets C H A NG E IN N E T AS SE T S NET ASSETS, BEGINNING OF YEAR NET ASSETS, END OF YEAR

See no tes to consolida ted financial statements.

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY C O NS OL ID AT ED ST AT EM E N TS OF CA SH FL OW S YEAR S ENDED DECEM BER 31, 2002 2001 $ (298,124) $ (703,698)  198,069 193,210  296,170 205,303  13,203 (69,043)  (95,604) -   42,045 16,385  (25,441) (17,382)  (2,745) (6,040)  30,001 21,236  183,260 228,201  340,834 (131,828)  424,337 400,222  (661,000) (292,181)  (236,663) 108,041  104,171 (23,787)  347,165 370,952 $ 451,336 $ 347,165

CASH FLOWS FROM OPERATING ACTIVITIES Cha nge in n et assets Adjustm ents to reconc ile change in net assets  to net cash used in o perating activities: Depreciation and amortization Un realize d loss o n investm ents Chang es in assets and liabilities: Acc ounts r eceiv able Uncond itional promises to give Inventory Pre paid expe nses an d oth er cur rent asse ts Accounts payable and accrued expenses Stamp sales on consignment Deferred dues and other liabilities Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES (Purchases) sales of investments, net Purchases of property and equipment Net cash (used in) provided by investing activities N E T IN C R EA S E ( DE C RE A SE ) I N C A SH A N D CA S H E Q U IV A LE N T S CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR

See no tes to consolida ted financial statements.

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY NOTES TO CO NSOLIDATED FINANCIAL STATEM ENTS DECEM BER 31, 2002 AND 2001 NOTE 1: ORGAN IZATION AND SUM M ARY OF SIGNIFICANT ACCO UNTING POLICIES A. Organization The American Philatelic Society (APS) was organized to promote awareness of stamp collecting in the United States and abroad. APS publishes the American Philatelist and provides a range of educational and philatelic services and facilitates for the benefit of collectors. The Am erican Philate lic Res earch Libra ry (APRL) maintains a comprehensive philatelic library to support and encourage resea rch re lated to philately. B . Basis of Presentation Financial statement presen tation follows the recom mend ations of the Financia l Acco unting S tanda rds B oard s on its Statem ents of Financial Accounting Standards (SFAS) No. 117, Fina ncial Statem ents of No t-for-Profit Org anization s. Under SFAS No. 117, APS and APRL are required to report information regarding their financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. C. Basis of Accounting APS and APRL prep are the ir financia l stateme nts on the accru al basis of accounting. Revenue is recognized when earned and expenses are recorded when the obligation is incurred. D . Principles of Consolidation The consolidated financial statements include the accounts of APS and AP RL. Significant intercompany accounts and transactions have been eliminated in consolidation. E. Use of Estimates The preparation of financia l statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accord ingly, actual re sults could d iffer from these estimates. F. Income Taxes APS and APRL are exempt from the payment of income taxes on their exempt activities under Internal Revenue Code Sections 501 (c)(3 ). Both AP S and APRL qualify for the charitable deduction under Section 170(b)(1)(A) and have been classified as org aniza tions tha t are no t private found ations u nde r Sec tion 50 9(a) (2). G . Cash and c ash eq uivalen ts Cash and cash equivalents include readily available funds held by local banking institutions. Other highly liquid investments including m oney ma rket funds are classified as investme nts. H . Inventory Inventory consists of publications and souvenir items and is stated at the lower of cost (first-in, first-out method) or market value. I. Property and Equipm ent AP S and AP RL c apitaliz e all pro perty a nd eq uipm ent pu rchas es of $ 1,00 0 or greate r. Acquisitions of property, plant and equipment are recorded at cost and depreciated using the straight-line method over estimated useful lives of 40 years for the b uilding a nd im pro vem ents, and 5 to 1 0 year s for furnitu re and equip men t.

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY NOTES TO CO NSOLIDATED FINANCIAL STATEM ENTS DECEM BER 31, 2002 AND 2001  NOTE 1: ORG ANIZATION A ND SUM M ARY O F SIGNIFICANT AC COU NTING PO LICIES (continued) J. Collections APRL has a collection of philatelic reference and research material used by philatelists and researchers interested in studying issues rela ted to philately. APRL ensures that the collection is protected and preserved and that proceeds from the sale of c ollectio n items a re used to pur chase add itional co llection ite ms. No value for the collec tion is reflec ted in the accompanying financial statements as APRL does not capitalize collections. APS has a reference stamp collection that is used for expertising and research b y APS and its memb ers. K . Deferred Dues Deferred dues repre sent am ounts p aid to AP S and AP RL in adva nce fo r annu al and life memb ership dues. T hese amounts are reported as liabilities in the accompanying consolidated statement of financial position. L. Stamp Sales on Consignment Stamp sales on consignm ent represents fund s received for sales, less co mmissions, from member stamp books held by APS on consignment. These funds are remitted to members when the related stamp books are retired. M . Ne t Assets Te mpo rarily restricted net assets represent amounts limited by donor-imposed stipulations. Permanently restricted net assets represent amounts limited by donor-imposed stipulations requiring that the principal be invested in perp etuity. Earnings on permanently restricted net assets may be used by the Organization and are either restricted or tem por arily restricted in nature. N . Restricted and Unrestricted Revenues and C ontributions APS and A PR L hav e ado pted SFA S N o. 11 6, Acco unting for Con tributions Received and Contributions Made. Contributions are recognized when the donor makes an uncond itional promise to give to the Organization. Contributions are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any do nor restrictions. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the reporting perio d in which the contributions are recognized. All other donor restricted contributions are reported as increa ses in tem por arily or p erma nently res tricted n et assets , depending on the nature of the restrictions. When a restriction expires (that is, when a stipulated restriction end s or purp ose restriction is ac com plished ), temp orar ily restricted net asse ts are rec lassified to unrestr icted net a ssets and repo rted in th e statem ent of ac tivities as net a ssets released from restriction. The Organization uses the allowance method to determine uncollectible amount of unconditional promises receivable. The allowance is based on prior years’ experience and management’s analysis of specific promises made. The Organization believes that no allowance for uncollectible promises is necessary at December 31, 2002. O . Functional Allocation of Expenses The costs of providing various programs and adm inistrative activities have been summarized on a function basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefitted. P. Reclassifications Cer tain reclassifications have been made to the 2001 financial statements to make them conform with the 2002 financial statements.

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY NOTES TO CO NSOLIDATED FINANCIAL STATEM ENTS DECEM BER 31, 2002 AND 2001 NOTE 2: CON CENTR ATION O F CRED IT RISK The two entities maintain cash accounts at various financial institutions. The accounts are FDIC insured for am ounts up to $1 00,00 0. At De cemb er 31, 20 02, the entities had carrying b alances and bank b alances as follows: Carrying Bank Balance Balance APS Citizens Bank $ 3,070 $ 22,484 PNC Bank 193,667 302,232 A P RL Omega B ank 1,747 1,986 PNC Bank 252,069 22,838

NOTE 3: U N COND I TI O NAL PR O MISE S TO GIVE Unco nditional prom ises to give at Dece mber 3 1, 200 2 are as follows: Receivable in less than one year $ 60,536 Receivable in one to five years 35,068 Total unconditional promises to give $ 95,604 Unconditional pro mises to give are res tricted to supp ort the A meric an P hilatelic C enter d evelo pme nt pro ject. (S ee N ote 9)

NOTE 4: INVESTMENTS Investm ents are p resen ted in the conso lidated statements of financial position at fair market value and consist of the follow ing as o f Dec emb er 31 , 2002 2001 Sho rt-term inv estme nts Money market funds $ 1,243,683 $ 467,071 U.S. Treasury and agency notes 102,781 100,187 Cer tificates of d epo sit - 99,000 Corporate bonds 50,352 97,000 Equity securities 547,784 2,638,872 Mutual funds 72,466 - To tal short-ter m inve stmen ts 2,017,066 3,402,130 Lon g-term in vestm ents Cer tificates of d epo sit - 585,931 Government agency notes 1,387,360 771,675 Corporate bonds 636,204 621,926 Rare stamps 85,000 70,000 To tal long-te rm inve stmen ts 2,108,564 2,049,532 To tal investm ents $ 4,125,630 $ 5,451,662

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY NOTES TO CO NSOLIDATED FINANCIAL STATEM ENTS DECEM BER 31, 2002 AND 2001 NOTE 4: INVESTM ENTS (continued) Investm ent inco me c onsists o f the follow ing for the years en ded De cem ber 3 1, 2002 Tem por arily Per man ently Unrestricted Restricted Restricted Total Interest and dividends $ 111,780 $ 7,006 $ - $ 118,786 Realized losses (40,330) (6,079) - (46,409) Unrealized losses (268,237) (26,764) (1,169) (296,170) Total investment income $ (196,787) $ (25,837) $ (1,169) $ (223,793)

2001

Interest and dividends $ 149,560 $ - $ - $ 149,560 Realized losses (294,120) (11,212) - (305,332) Unrealized losses (205,303) (1,237) - (206,540) Total investment income $ (349,863) $ (12,449) $ $ (362,312) - For the year ended December 31, 2001, interest, dividends and realized losses were not recorded separately. As a result, the amo unt of $ 11,2 12 r epo rted a s realize d losse s repr esents the total am ount o f interest, dividends and realized losses. The investment income is reported net of investment fees of $22,610 and $25,725 for the years ended December 31, 2002 and 200 1, resp ectively.

NOTE 5: E M PLOY E E B E N E FI T P L A NS APS has a 403(b) voluntary savings plan (the Plan) available for all emp loyees mee ting certa in minim um re quire men ts as to age and le ngth of service. APS m akes contributions to the Plan equal to 4% of the eligible payroll plus matching contributions up to 3% of the eligible payroll. Pension expense related to this plan for the years ended December 31, 200 2 and 200 1 wa s $74 ,439 and $ 75,2 96, re spec tively.

NOTE 6: S T AMP S A L ES O N C O N S IG N MENT Stamp sales on consignment represent m oney receive d from the sales o f stamps from m embe rs less commission, not yet remitted to the stam p bo ok o wner. The amount due was $1,544,863 and $1,514,862 at December 31, 2002 and 2001, respe ctively. The total value of unsold members’ stamp books held on consignment was $14,022,224 and $12,663,304 at De cem ber 3 1, 20 02 a nd 2 001 , respe ctively.

NOTE 7: TEMP ORAR ILY RESTRICTED NET ASSETS Te mpo rarily restric ted ne t assets we re ava ilable fo r the follo wing p urpo ses as o f Dec emb er 31 , 2002 2001 Building $ 146,922 $ 93,713 Other 17,190 19,147 Cryer Philatelic Research Award (Cryer) 776 3,929 APE X equipme nt 4,233 4,233 Total $ 169,121 $ 121,022

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A M ERIC A N P H IL A TELI C SO C IETY AND A M E R I C A N P H IL A TELI C R ES E ARCH L IB R ARY NOTES TO CO NSOLIDATED FINANCIAL STATEM ENTS DECEM BER 31, 2002 AND 2001 NOTE 8: PERM ANENTLY RESTRICTED NET A SSETS Permanently restricted net assets were available for the following purposes as of December 31, 2002 2001 John K. Tiffany Program $ 245,236 $ 242,742 Endowm ent 255,507 255,316 Found ers’ and patro ns’ 171,209 171,159 Cryer Philatelic Research Award (Cryer) 16,590 16,590 Daniel W . Vooys Acquisitions and Binding (Vooys) 145,208 10,809 Total $ 833,750 $ 696,616

NOTE 9: AM ERICAN PHILATELIC CENTER O n March 1, 2002, APRL purchased the Match Factory complex in Bellefonte, Pennsylvania for $366,223. The complex will become the American Philatelic Center and will house the American Philatelic Society National Headquarters, the American Philate lic Res earch Libra ry and other c omm ercial ten ants. Developm ent of the comp lex is estimated to cost $7.5 million and will occur in three phases. Ph ase 1 be gan Janua ry 2003 and is estimated to b e com plete by Aug ust 2003. This phase focuses on development of 22,000 square feet that will provide 17,000 square feet for tenant space and 5,000 square feet for A PS and A PR L. Ph ase 2 will focus o n dev elop ing a sec tion of the main c omp lex that w ill be used by APS and APRL. Phase 2 construction will begin after completion of Phase 1 and the sale of the existing building and is estimate d to tak e app roxim ately 10 mon ths to co mple te. Pha se 3 w ill focus o n dev elop men t of approximately 30,000 square feet of tenant space in the main structure and an additional 25,000 square feet for APS and APRL. As part of the purchase of the complex, APRL borrowed $365,000 from APS. Th e mo rtgage requ ires ann ual pa ymen ts of $43,667 including interest at a rate of 3.4% beginning March 1, 2003 until March 1, 2012. The mortgage is secured by land and buildings. The note receivable and related mortgage payable amounts are eliminated in the consolidating statem ent of fina ncial p osition .

NOTE 10: COM M ITMENTS AND CONTINGENCIES APS is a defe nda nt in a laws uit filed in C ourt o f Com mon Plea s of Ce ntre C ounty. T he pla intiff seeks to be restored as a mem ber o f AP S. Th e cou rt ruled in favor of AP S. T he pla intiff filed an a ppe al with the P ennsylv ania S upre me C ourt. APS’s legal counsel expects a favorable outcome.

NOTE 11: SUBSEQUENT EVENTS O n January 9, 20 03, A PR L ob tained financing for the A meric an P hilatelic C enter d evelo pme nt pro ject re ferred to in No te 9 from a local financial institution. The financing is in the form of a two-year construction loan of $1.2 million whereby APRL pro mises to pay inte rest on the ou tstandin g bala nce a t a rate eq ual to p rime ra te less on e po int. APR L has the option to pay off the outstanding balance with the proceeds from the sale of the existing building. As of May 31, 2003, the outstanding balance was $218,078. O n June 3, 2003, APRL entered into a sales agreement to sell the existing building for a price of $2.4 million. The agree men t include s an ad den dum that gran ts the buyer a due diligence period until July 3, 2003 during which time the buye r has the optio n to term inate the agree men t and re ceive all mon ey paid on d epo sit.

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