ALTERNATIVES Circular A-133 Audit, 12-31-00.do
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ALTERNATIVES FEDERAL CREDIT UNION Ithaca, New York Standard Report on Financial Statements and on the Supplementary Schedule of Expenditures of Federal Awards Issued in a Single Audit- Nonprofit Organization December 31, 2000 ALTERNATIVES FEDERAL CREDIT UNION DECEMBER 31, 1999, 2000 Independent Auditors’ Report………………………………………… 1 Schedule of Expenditures of Federal Awards………………………… 3 Statement of Financial Condition…..…………………………………. 4 Statement of Income…………………………………………………... 5 Statement of Members’ Equity………………………………………... 6 Statements of Cash Flows……………………………………………... 7 Notes to Financial Statements…………………………………………. 8-18 Independent Auditors’ Report on Additional Information…………….. 19 Key Ratios…………………………………………………………….... 20 INDEPENDENT AUDITORS’ REPORT To the Board of Directors of the Alternatives Federal Credit Union Ithaca, New York We have audited the accompanying statements of financial condition of the Alternatives Federal Credit Union as of December 31, 1999, and 2000, and the related statements of income, members’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Credit Union’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our ...
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ALTERNATIVES FEDERAL CREDIT UNION Ithaca, New York Standard Report on Financial Statements and on the Supplementary Schedule of Expenditures of Federal Awards Issued in a Single Audit- Nonprofit Organization
December 31, 2000
ALTERNATIVES FEDERAL CREDIT UNION
DECEMBER 31, 1999, 2000
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1
3
4
5
6
7
Independent Auditors’ Report
Schedule of Expenditures of Federal Awards
Statement of Financial Condition
..
. Statement of Income
... Statement of Members’ Equity
... Statements of Cash Flows
... Notes to Financial Statements
. 8 -18 Independent Auditors’ Report on Additional Information
.. 19 Key Ratios
INDEPENDENT AUDITORS’ REPORT To the Board of Directors of the Alternatives Federal Credit Union Ithaca, New York We have audited the accompanying statements of financial condition of the Alternatives Federal Credit Union as of December 31, 1999, and 2000, and the related statements of income, members’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Credit Union’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Alternatives Federal Credit Union as of December 31, 1999, and 2000, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated March 22, 2001, on our consideration of Alternatives Federal Credit Union’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants.
Our audit was performed for the purpose of forming an opinion on the basic financial statements of Alternatives Federal Credit Union taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. April 5, 2001 Rochester, New York
ALTERNATIVES FEDERAL CREDIT UNION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2000 Federal CFDA Federal Grantor Number U.S. Treasury Department CDFI Fund 21.020 Total Expenditures of federal funds
Federal Expenditures $1,150,000
$1,150,000
ALTERNATIVES FEDERAL CREDIT UNION STATEMENTS OF FINANCIAL CONDITION December 31, ASSETS 1999 2000 Cash and cash equivalents $ 2,057,394 $ 4,166,844 Investment Securities held to Maturit Certificates of deposit 5,251,025 2,776,025 U.S. Government and Federal A 0 0 Investment Securities held for Sale U.S. Government and Federal A 1,378,960 3,608,898 Investment in Alternatives CUSO 1,117 1,117 Loans to members, net of allowance for loan lo 19,579,681 21,755,565 Grants and other receivables receivable 553,841 346,289 Accrued interest receivable 106,949 118,648 Accrued Income on investments 38,397 79,616 Propert 1,361,432 1,271,864 depreciation of $685,382 NCUSIF deposit 251,841 272,860 Other assets 89,135 73,004 Total Assets $ 30,669,772 $ 34,470,730 LIABILITIES AND MEMBERS' EQUITY Current Liabilities: Members' shares and savin Accrued expenses and other liabilities Deferred revenue Total Current Liabilities Lon Secondar Members' Equit Re Undivided Earnin Unrealized Total Members' Equit Total Liabilites and Members' Equit
$ 27,437,302 $ 30,250,176 96,963 411,608 222,548 150,000 27,756,813 30,811,784
850,000 1,400,000
631,973 495,096 1,452,026 1,754,952 8,898 2,062,959 2,258,946 $ 30,669,772 $ 34,470,730
See Independent Auditors' Report and Notes to Financial Statements -4-
ALTERNATIVES FEDERAL CREDIT UNION STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1999 2000 1,489,285 $ 1,738,305 465,609 329,407 82,040 152,698 2,036,934 2,220,410
Interest Income Loans Receivable Cash and cash equivalents deposits Investments securities Total Interest Income Interest Expense Members' share and savings accounts Borrowed funds Total Interest Expense Net Interest Income Provision for loan losses Net Interest Income After Provision for Loan Losses Non-Interest Income Fees and charges Grants Total Non-Interest Income Non-Interest Expense Compensation and benefits Occupancy Other Total Non-Interest Expense Extraordinary Item Fair market write down of land Net Income
$
$
857,281 15,393 872,674 1,164,260 86,737 1,077,523
417,306 183,243 600,549
982,278 115,757 573,888 1,671,923
917,974 46,092 964,066 1,256,344 307,747 948,597
454,332 1,011,121 1,465,453
1,077,190 108,017 749,163 1,934,370
0 308,999 6,149 $ 170,681
See Independent Auditors' Report and Notes to Financial Statements -5-
ALTERNATIVES FEDERAL CREDIT UNION STATEMENTS OF MEMBERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999 AND 2000
Balance at December 31, 1999 $
Net income
Transfers, net
Balance at December 31, 2000 $
Regular Reserve 631,973 $
(136,877)
495,096 $
Undivided Earnings 1,452,026 $
170,681
132,245
1,754,952 $
Unrealized Gain (loss) (21,040) $
29,938
8,898 $
See Independent Auditors' Report and Notes to Financial Statements -6-
Total 2,062,959
170,681
25,306
2,258,946
ALTERNATIVES FEDERAL CREDIT UNION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999 2000 Cash Flows From Operating Activities: Interest received on loans $ 1,489,285 $ 1,738,305 Interest received on investments 547,649 482,105 Miscellaneous income 3,026 1,011,121 Fees and charges 417,306 454,332 Interest paid (863,644) (917,974) Interest paid on borrowed funds (15,393) (46,092) Cash paid to employees and suppliers (1,665,560) (1,934,370) Net Cash Provided by Operating Activities 92,886 787,427 Cash Flows From Investing Activities: Proceeds from maturities and sales of investment securities 700,000 2,566,066 Purchase of investment securities (725,638) (2,229,938) Net loans received from (made to) members (2,649,553) (2,186,982) (Increase) in NCUSIF deposit 45,847 (21,019) Changes in investment in Alternatives CUSO 0 0 Expenditures for property and equipment (846,804) (411,075) Net Cash Provided (Used) by Investing Activities (3,476,148) (2,282,948) Cash Flow From Financing Activities: Net (decrease) increase in members' share and savings activities 2,017,748 3,054,971 New borrowings 600,000 550,000 Repayment of borrowed funds 0 0 Net Cash (Used) Provided by Financing Activities 2,617,748 3,604,971 NET INCREASE (DECREASE) IN CASH (765,514) 2,109,450 Cash and cash equivalents at January 1, 2,822,908 2,057,394 Cash and cash equivalents at December 31, 2,057,394 4,166,844 Reconciliation of Net Income to Net Cash Provided by Operating Activities: Net Income 6,149 170,681 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 80,550 79,806 Fair market write down 0 308,999 Provision for loan and OREO losses 86,737 307,747 (Decrease) of investment discounts (116,616) (234,323) Decrease in accrued interest receivable (22,878) (11,699) (Increase) decrease in other assets 902 16,131 (Decrease) increase in accrued expenses and other liabilities (23,001) 314,645 (Decrease) in deferred revenue 200,067 72,548 Increase of Investment premiums (119,024) (237,108) Net Cash Provided by Operating Activities $ 92,886 $ 787,427 See Independent Auditor' Report and Notes to Financial Statements -7-
ALTERNATIVES FEDERAL CREDIT UNION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 and 2000 Note 1- Summary of Significant Accounting Policies Nature of Business Alternatives Federal Credit Union, located in Tompkins County, New York, has operations principally related to holding deposits for and making loans to members of Alternatives Federal Credit Union and their families. Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents Cash equivalents of $2,057,394 and $4,166,844 at December 31, 1999, and 2000, consists of federal funds sold, certificates of deposit, and funds due from banks. For purposes of the statement of cash flows, the Credit Union considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Investment Securities Investment securities are stated at cost, adjusted for amortization of premiums and accretion of discounts computed using the interest method. Management intends to hold such investments to maturity. Cost of securities sold for purposes of computing gains or losses is determined by the specific identification method. Loans Held For Sale Mortgage loans originated and intended for sale on the secondary market are carried at the lower of aggregate cost or estimated market value in the aggregate. Net unrealized losses are recognized in a valuation allowance by charges to income.
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ALTERNATIVES FEDERAL CREDIT UNION NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999 and 2000 Mortgage Backed Securities Mortgage backed and related securities are stated at cost, adjusted for amortization of premiums and accretion of fees and discounts computed by the interest method. It is generally management’s intention to hold such assets to maturity. Should any be sold, cost of securities for purposes of computing gains and losses is determined by the specific identification method. Loans to Members and Allowance for Loan Losses Loans are stated at the amount of unpaid principal, reduced by an allowance for loan losses. Interest on loans is recognized over the term of the loan and is calculated using the simple-interest method on principal amounts outstanding. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that the collectibility of the principal is unlikely. The allowance is an amount that management believes will be adequate to absorb losses on existing loans that may become uncollectible, based on evaluations of the collectibility of loans and prior loan loss experience. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, and current economic conditions and trends that may affect the borrower’s ability to repay the loan. Accrual of interest is discontinued on a loan when management believes, after considering economics, business conditions, and collection efforts, that the borrowers' financial condition is such that collection of interest is doubtful. NCUSIF Deposit The deposit in the National Credit Union Share Insurance Fund (NCUSIF) is in accordance with NCUA regulations, which require the maintenance of a deposit by each insured credit union in an amount equal to one percent of its insured shares. The deposit would be refunded to the Credit Union if its insurance coverage is terminated, it converts to insurance coverage from another source, or the operations of the fund are transferred from the NCUA Board.
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