AUDIT REPORT - 2007 STANDARD
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HEALTHCARE FOR THE HOMELESS - HOUSTON FINANCIAL STATEMENTS December 31, 2007 and 2006 HEALTHCARE FOR THE HOMELESS - HOUSTON TABLE OF CONTENTS December 31, 2007 and 2006 PAGE INDEPENDENT AUDITORS’ REPORT 3 FINANCIAL STATEMENTS: STATEMENTS OF FINANCIAL POSITION 4 STATEMENTS OF ACTIVITIES 5 STATEMENT OF FUNCTIONAL EXPENSES 6 STATEMENTS OF CASH FLOWS 7 NOTES TO FINANCIAL STATEMENTS 8 HEALTHCARE FOR THE HOMELESS - HOUSTON STATEMENTS OF FINANCIAL POSITION December 31, 2007 and 2006 ASSETS 2007 2006 Cash and cash equivalents $ 283,923 $ 485,185 Certificate of deposit 31,387 - Accounts receivable 129,002 21,509 Government grants receivable 307,027 159,702 Pledges receivable 684,730 450,000 Prepaid expenses 3,140 3,028 Furniture, fixtures and equipment, net 25,737 18,576 TOTAL ASSETS $ 1,464,946 $ 1,138,000 LIABILITIES AND NET ASSETS LIABILITIES: Accounts payable $ 438,356 $ 204,147 NET ASSETS: Unrestricted 406,860 633,853 Temporarily restricted 619,730 300,000 Total net assets 1,026,590 933,853 TOTAL LIABILITIES AND NET ASSETS $ 1,464,946 $ 1,138,000 See accompanying notes to ...
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HEALTHCARE FOR THE HOMELESS - HOUSTON
FINANCIAL STATEMENTS
December 31, 2007 and 2006
HEALTHCARE FOR THE HOMELESS - HOUSTON
TABLE OF CONTENTS
December 31, 2007 and 2006
PAGE
INDEPENDENT AUDITORS’ REPORT
3
FINANCIAL STATEMENTS:
STATEMENTS OF FINANCIAL POSITION
4
STATEMENTS OF ACTIVITIES
5
STATEMENT OF FUNCTIONAL EXPENSES
6
STATEMENTS OF CASH FLOWS
7
NOTES TO FINANCIAL STATEMENTS
8
See accompanying notes to financial statements.
4
HEALTHCARE FOR THE HOMELESS - HOUSTON
STATEMENTS OF FINANCIAL POSITION
December 31, 2007 and 2006
ASSETS
2007
2006
Cash and cash equivalents
$
283,923
$
485,185
Certificate of deposit
31,387
-
Accounts receivable
129,002
21,509
Government grants receivable
307,027
159,702
Pledges receivable
684,730
450,000
Prepaid expenses
3,140
3,028
Furniture, fixtures and equipment, net
25,737
18,576
TOTAL ASSETS
$
1,464,946
$
1,138,000
LIABILITIES AND NET ASSETS
LIABILITIES:
Accounts payable
$
438,356
$
204,147
NET ASSETS:
Unrestricted
406,860
633,853
Temporarily restricted
619,730
300,000
Total net assets
1,026,590
933,853
TOTAL LIABILITIES AND NET ASSETS
$
1,464,946
$
1,138,000
See accompanying notes to financial statements.
5
HEALTHCARE FOR THE HOMELESS - HOUSTON
STATEMENTS OF ACTIVITIES
For the years ended December 31, 2007 and 2006
CHANGES IN UNRESTRICTED NET ASSETS:
2007
2006
Support and revenues:
Programs
$
166,729
$
107,880
Individuals
83,587
107,842
Corporations
67,913
132,743
Federal and state grants and contracts
710,665
580,871
Private grants
611,060
1,048,600
In-kind contributions
392,602
392,831
Other
64,760
20,842
Total support and revenues
2,097,316
2,391,609
Expenses:
Healthcare services
1,884,496
1,553,904
Management and general
316,524
393,317
Fundraising
123,289
59,873
Total expenses
2,324,309
2,007,094
Support and revenues over (under) expenses
(226,993)
384,515
Net assets released – restrictions satisfied
-
33,000
Increase (decrease) in unrestricted net assets
(226,993)
417,515
CHANGES IN TEMPORARILY RESTRICTED NET ASSETS:
Contributions
319,730
-
Net assets released – restrictions satisfied
-
(33,000)
Increase (decrease) in temporarily restricted net assets
319,730
(33,000)
INCREASE IN NET ASSETS
92,737
384,515
NET ASSETS, beginning of year
933,853
549,338
NET ASSETS, end of year
$
1,026,590
$
933,853
See accompanying notes to financial statements.
7
HEALTHCARE FOR THE HOMELESS - HOUSTON
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2007and 2006
2007
2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Increase in net assets
$
92,737
$
384,515
Adjustments to reconcile increase in net assets
to net cash provided (used) by operating activities:
Depreciation
10,595
7,357
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable
(107,493)
(1,361)
Government grants receivable
(147,325)
(8,926)
Pledges receivable
(234,730)
(39,500)
Prepaid expenses
(112)
1,720
Increase in:
Accounts payable
234,209
34,211
Net cash provided (used) by operating activities
(152,119)
378,016
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of certificate of deposit
(31,387)
-
Purchase of equipment
(17,756)
(9,698)
Net cash used by investing activities
(49,143)
(9,698)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(201,262)
368,318
CASH AND CASH EQUIVALENTS, beginning of year
485,185
116,867
CASH AND CASH EQUIVALENTS, end of year
$
283,923
$
485,185
8
HEALTHCARE FOR THE HOMELESS - HOUSTON
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
(1)
Summary of significant accounting policies
Background
Healthcare for the Homeless – Houston (the “Organization”) is a nonprofit corporation organized by a
consortium of healthcare and community-based service organizations.
The mission of the
Organization is to promote health, hope and dignity for Houston’s homeless through accessible and
comprehensive care. Support for the Organization is provided primarily through donor contributions,
grants and volunteer services.
Originally, the Organization operated as a sponsored project of the Greater Houston Community
Foundation (“GHCF”), which provided fiduciary oversight and assistance with organizational
development.
On April 1, 2001, the Organization separated from GHCF and began functioning as an
independent 501(c)(3) tax-exempt corporation under the governance of its own board of directors,
which includes formerly homeless individuals.
Contributions
Contributions are recognized when the donor makes a promise to give to the Organization that is, in
substance, unconditional.
Contributions that are restricted by the donor are reported as increases in
unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are
recognized.
All other donor-restricted contributions are reported as increases in temporarily or
permanently restricted net assets depending on the nature of the restrictions.
When a restriction
expires, temporarily restricted net assets are reclassified to unrestricted net assets.
Functional expense allocation
Directly identifiable expenses are charged to programs and supporting services.
Expenses related to
more than one function are charged to programs and supporting services on the basis of periodic time
and expense studies or on the basis of square footage.
Management and general expenses include
those expenses that are not directly identifiable with any other specific function but provide for the
overall support and direction of the Organization.
The Organization has a staffing agreement with an entity that provides licensed medical and
administrative professionals.
These and other contract service expenses are presented as salaries
and employee benefits in the statement of functional expenses.
Donated materials and services
The value of donated materials is reflected in the accompanying financial statements to the extent that
an objective basis is available to measure the value of such items.
Donated services are recognized as contributions in accordance with SFAS No. 116, Accounting for
Contributions Received and Contributions Made, if the services (a) create or enhance nonfinancial
assets or (b) require specialized skills, are performed by people with those skills, and would otherwise
have to be contracted and paid for by the Organization.
Other volunteers donate significant amounts of
their time in fulfillment of the functions of the Organization that were not recognized as contributions in
the financial statements since the recognition criteria under SFAS No. 116 were not met.
9
HEALTHCARE FOR THE HOMELESS – HOUSTON
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
(1)
Summary of significant accounting policies (cont’d)
Cash and cash equivalents
For the purposes of the statement of cash flows, the Organization considers all highly liquid
investments purchased with an original maturity of three months or less to be cash equivalents.
Receivables
Government grants, pledges and other receivables are considered by management to be fully
collectible and accordingly no allowance for doubtful accounts is considered necessary.
If amounts
become uncollectible, operations will be charged when the determination is made.
Furniture, fixtures and equipment
Furniture, fixtures and equipment are shown at cost or, in the case of donated assets, fair market value
at the date of the gift.
Donated assets are reported as unrestricted support unless the donor has
restricted the donated asset to a specific purpose.
Assets donated with explicit restrictions regarding
their use and contributions of cash that must be used to acquire property and equipment are reported
as restricted support.
Absent donor stipulations regarding how long those donated assets must be
maintained, the Organization reports expirations of donor restrictions when the donated or acquired
assets are placed in service as instructed by the donor and reclassifies temporarily restricted net
assets to unrestricted net assets at that time.
Depreciation of furniture, fixtures and equipment is
provided on a straight-line basis over the following estimated useful lives of the assets:
Furniture and fixtures
5 years
Computer software
3 years
Equipment
3 to 5 years
Maintenance and repairs are charged to expense as incurred.
Costs of betterments and renewals are
capitalized.
Gains or losses upon disposal of assets are recognized in the period during which the
transaction occurs.
Tax status
The Organization has been granted tax-exempt status pursuant to Section 501(c)(3) of the Internal
Revenue Code and is not a private foundation.
Gifts to the Organization are tax deductible.
Concentration of credit risk
The Organization occasionally maintains deposits in excess of federally insured limits.
Statement of
Financial Accounting Standards No. 105 identifies these items as a concentration of credit risk
requiring disclosure, regardless of the degree of risk.
The risk is managed by maintaining all deposits
in high quality financial institutions.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America 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 support, revenues and expenses during the
reporting period.
Actual results could differ from those estimates.
10
HEALTHCARE FOR THE HOMELESS - HOUSTON
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
(2)
Restrictions on assets
At December 31, 2007, temporarily restricted net assets consisted of a $619,730 pledge receivable,
net of discount, that is to be used to fund direct patient care service costs through the year 2009.
At December 31, 2006, temporarily restricted net assets consisted of a $300,000 pledge receivable
that were used to fund direct patient care service costs through the year 2007.
(3)
Pledges receivable
At December 31, 2007 and 2006, unconditional promises to give were discounted to present value at a
discount rate of 5% and are due to be collected as follows:
2007
2006
Gross amounts due in
One year
$
385,865
$
450,000
One year to three years
320,865
-
706,730
450,000
Less discount to present value
(22,000)
-
$
684,730
$
450,000
(4)
Furniture, fixtures and equipment
Furniture, fixtures and equipment, less accumulated depreciation, at December 31, 2007 and 2006
included the following:
2007
2006
Furniture and fixtures
$
2,301
$
2,301
Computer software
6,465
6,465
Office and medical equipment
46,046
56,248
Construction in progress
12,362
-
67,174
65,014
Less accumulated depreciation
(41,437)
(46,438)
$
25,737
$
18,576
(5)
Major donors
During 2007, one Federal grant and one donor accounted for approximately $973,000 or 48% of the
Organization’s total unrestricted and restricted support and revenues. During 2006, one Federal grant
and two foundation donors accounted for approximately $855,000 or 36% of the Organization’s total
unrestricted and restricted support and revenues.
11
HEALTHCARE FOR THE HOMELESS - HOUSTON
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
(6)
Related party transactions
During 2007, the Organization engaged a company that employs a relative of a member of the
Organization's Board of Directors to provide consulting services for a fee of $13,200. The Board of
Directors unanimously voted to approve the terms of the consulting engagement. The related party
board member abstained from the vote.
(7)
Commitments and contingencies
The Organization receives significant financial assistance from Federal, state and local government
agencies in the form of grants.
The disbursement of funds received under these programs generally
requires compliance with terms and conditions specified in the grant agreement and are subject to
audit by the grantor agencies.
Any disallowed claims resulting from such audits would become a
liability of the Organization.
However, in the opinion of management, any potential disallowed claims,
if any, would not have a material effect on the financial statements.
At December 31, 2007 and 2006, the Organization had an unsecured business line of credit with a
bank that provides for maximum borrowings of $50,000.
Interest at 8% is payable monthly.
At
December 31, 2007 and 2006, there were no borrowings outstanding on the line of credit.
