HomeMy WebLinkAbout20173998.tiffEnvision
Creative Support for People
with Developmental Disabilities
November 15, 2017
Weld County Commissioners
P. O. Box 758
Greeley, CO 80632
Dear Weld County Commissioners,
RECEIVED
NOV 202017
WELD COUNTY
COMMISSIONERS
Enclosed is a copy of Envision's fiscal year 2017 audit. Please do not hesitate to contact
me if you have any questions.
Sincerely,
Marty Kedy
Finance and Administratibi 'Director
CO mrnr,; ovlg cc.: r= C ow)
I WWI I17
t Lit V7
2017-3998
1050 37th Street / P.O. Box 200069
Evans, Colorado 80620
970.339.5360 / 888.695.5883
Fax 970.330.2261 / www.envisionco.org
Financial Statements and
Independent Auditor's Report
Envision, Creative Support for People with
Developmental Disabilities
June 30, 2017
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
STATEMENT OF ACTIVITIES
STATEMENT OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
Page
3
6
7
8
9
Lo an, Thomas Johnson, LLCM
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Envision, Creative Support for People with Developmental Disabilities
We have audited the accompanying financial statements of Envision, Creative Support for
People with Developmental Disabilities (the Center), which comprise the statement of financial
position as of June 30, 2017, and the related statements of activities and cash flows for the year
then ended, and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America as established by the Auditing Standards Board of the American Institute of
Certified Public Accountants. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Calvin Logan
Phone 303 532 1000
Fax 303 532 1080
5023 W. 120th Ave., #165, Broomfield, CO 80020
Jan Thomas Pauline Davis
Phone 303 569 6030 Phone 719 640-1188
Fax 303 569 6031 Fax 719 937 4271
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of Envision, Creative Support for People with Developmental Disabilities
as of June 30, 2017, and the changes in its net assets and its cash flows for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Report on Summarized Comparative Information
We have previously audited the Center's 2016 financial statements, and our report dated
November 3, 2016, expressed an unmodified opinion on those audited financial statements. In
our opinion, the summarized comparative information presented herein as of and for the year
ended June 30, 2016, is consistent, in all material respects, with the audited financial statements
from which it has been derived.
(40 (::•s• ,Aho r tvt s d-
Broomfield, Colorado
October 30, 2017
Financial Statements
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Envision, Creative Support for People with Developmental Disabilities
STATEMENT OF FINANCIAL POSITION
June 30, 2017
(With summarized financial information as of June 30, 2016)
ASSETS
Current assets
Cash and cash equivalents
Investments
Accounts receivable
Fees and grants from governmental agencies
Other, net of allowance for uncollectible receivables of $10,462
Prepaid expenses and other
Total current assets
Land, buildings and equipment, net
Total assets
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable
Accrued personnel expenses
Deferred revenue
Current portion of capital lease obligation
Total current liabilities
Long-term debt, net of current portion
Capital lease obligation
Total liabilities
Net assets
Unrestricted
Net investment in land, building and equipment
Undesignated
Total unrestricted net assets
Total liabilities and net assets
2017
$ 288,675
1,807,991
1,205,897
56,628
86,593
3,445,784
580,985
$ 4,026,769
2016
$ 431,899
1,646,292
1,216,245
70,494
85,637
3,450,567
637,621
$ 4,088,188
$ 521,597 $
155,121
32,165
57,978
766,861
167,986
934,847
525,274
298,869
4,999
53,534
882,676
225,964
1,108,640
355,021 358,123
2,736,901 2,621,425
3,091,922 2,979,548
$ 4,026,769 $ 4,088,188
The accompanying notes are an integral part of this statement.
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Envision, Creative Support for People with Developmental Disabilities
STATEMENT OF ACTIVITIES
Year ended June 30, 2017
(With summarized financial information for the year ended June 30, 2016)
Total unrestricted
Revenues and support
Fees and grants from governmental agencies
Fees for services
State of Colorado
State General Fund
Medicaid
County and cities
Grants and other
Part C
Other
2017
2016
$ 2,414,050 $ 2,268,210
6,736,332 7,739,162
50,225 45,225
244,229 201,918
17,599 16,594
Total fees and grants from governmental agencies 9,462,435 10,271,109
Public support
Contributions 68,475 32,938
United Way 43,445 43,695
Residential room and board 298,196 312,396
Other revenue 472,820 337,177
Total revenues and support
Expenses
Program services
Medicaid comprehensive
State adult supported living
Medicaid adult supported living
Children's extensive support
Early intervention
Family support
Case management
Total program services
Supporting services
Management and general
Fundraising
Total expenses
CHANGE IN NET ASSETS
Net assets, beginning of year
Net assets, end of year
10,345,371 10,997,315
4,223,986 4,714,449
260,489 411,723
1,097,413 1,498,220
516,066 484,016
1,242,111 1,005,788
307,620 366,351
1,665,951 1,564,786
9,313,636 10,045,333
863,379 825,738
55,982
67,993
10,232,997 10,939,064
112,374
2,979,548
58,251
2,921,297
$ 3,091,922 $ 2,979,548
The accompanying notes are an integral part of this statement.
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Envision, Creative Support for People with Developmental Disabilities
STATEMENT OF CASH FLOWS
Year ended June 30, 2017
(With summarized financial information for the year ended June 30, 2016)
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net cash
provided by operating activities
Depreciation and amortization
Realized/unrealized (gain) loss on investments
Gain on disposal of fixed assets
Gain on disposal of capital lease obligations
Change in assets and liabilities
(Increase) decrease in accounts receivable
Increase in prepaid expenses and other
Increase (decrease) in accounts payable and
accrued personnel expenses
Increase (decrease) in deferred revenue
Net cash provided by operating activities
Cash flows from investing activities
Purchase of land, buildings and equipment
Proceeds from sale of land, building & equipment
Purchase of investments
Proceeds from sale of investments
Net cash used in investing activities
Cash flows used in financing activities
Capital lease payments
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental data
Cash paid for interest
Noncash investing and financing activities
Fixed asset additions acquired through capital lease arrangements
Release of capital lease liability
2017
2016
$ 112,374
101,725
(137,454)
(452)
24,214
(956)
(147,425)
27,166
$ 58,251
112,982
14,293
(6,576)
(34,547)
(54,177)
143,845
(46,216)
(20,808)
187,855
(45,089) (10,000)
452
(2,177,722)
2,153,477
(2,262,793)
2,195,003
(68,882)
(53,534)
(77,790)
(64,366)
(143,224)
431,899
45,699
386,200
$ 288,675 $ 431,899
$ 20,301 $ 13,507
305,619
39,914
J
The accompanying notes are an integral part of this statement.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
This description of Envision, Creative Support for People with Developmental Disabilities'
(the Center) nature of activities and summary of significant accounting policies is presented
to assist in understanding the Center's financial statements.
1. Summary of Business Activities
The Center was incorporated under the laws of the State of Colorado in 1964 for the
purpose of providing a community center board to coordinate programs through
interagency cooperation and local agencies to provide services to persons with
developmental disabilities in Weld County. The Center was incorporated as Weld
County Community Center Foundation and in April 1986, began doing business as
Envision, Creative Support for People with Developmental Disabilities, a Colorado
nonprofit corporation. The Center's revenue comes primarily from the State of Colorado
for services provided.
2. Description of Services Provided
The major program services or supports and functional activities directly provided or
purchased by the Center are:
Program Services or Supports
Comprehensive (Medicaid) refers to residential services, adult day services or supports
and transportation activities as specified in the eligible person's Individualized Plan (IP).
Included are a number of different types of residential settings, which provide an array
of training, learning, experiential and support activities provided in residential living
alternatives designed to meet individual needs. Additionally, adult day services
provide opportunities for individuals to experience and actively participate in valued
roles in the community. These services and supports enable individuals to access and
participate in typical community activities such as work, recreation, and senior citizen
activities. Finally, transportation activities refer to "Home to Day Program
transportation" services relevant to an individual's work schedule as specified in the IP.
For these purposes, "work schedule" is defined broadly to include adult and retirement
activities such as education, training, community integration, and employment.
Adult Supported Living (State and Medicaid) provides individualized living services for
persons who are responsible for their own living arrangements in the community.
Children's Extensive Support is a deeming waiver (only the child's income is considered
in determining eligibility) intended to provide needed services and supports to eligible
children under the age of eighteen years in order for the children to remain in or return
to the family home. Waiver services are targeted to children having extensive support
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
2. Description of Services Provided (Continued)
Program Services or Supports (Continued)
needs, which require constant line -of -sight supervision due to significantly challenging
behaviors and/or coexisting medical conditions. Available services include personal
assistance, household modification, specialized medical equipment and supplies,
professional services and community connection services.
Early Intervention is for children from birth through age two which offer infants and
toddlers and their families services and supports to enhance child development in the
areas of cognition, speech, communication, physical, motor, vision, hearing, social -
emotional development, and self help skills; parent -child or family interaction; and early
identification, screening and assessment services.
Family Support provides an array of supportive services to the person with a
developmental disability and his/her family when the person remains within the family
home, thereby preventing or delaying the need for out -of -home placement, which is
unwanted by the person or the family.
Case Management is the determination of eligibility for services and supports, service
and support coordination, and the monitoring of all services and supports delivered
pursuant to the IP, and the evaluation of results identified in the IP.
Supporting Services
Management and General includes those activities necessary for planning, coordination,
and overall direction of the Center, financial administration, general board activities and
other related activities indispensable to the Center's corporate existence.
Fundraising represents the Center's costs to develop and maintain a fundraising effort
that generates awareness and increases support for persons with disabilities.
3. Basis of Accounting
Financial statements of the Center have been prepared on the accrual basis, whereby
revenues are recorded when services are provided and expenses are recognized when
incurred.
4. Use of Estimates
In preparing financial statements in conformity with accounting principles generally
accepted in the United States of America, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities at the date of the financial statements, and the
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
4. Use of Estimates (Continued)
reported amounts of revenues, support and expenses during the reporting period.
Actual results could differ from those estimates.
5. Subsequent Events
The Center has evaluated events and transactions occurring subsequent to the end of the
fiscal year for potential recognition or disclosure through October 30, 2017, the date on
which the financial statements were issued. The Center did not identify any events or
transactions that would have a material impact on the financial statements.
6. Cash and Cash Equivalents
For purposes of the statement of cash flows, the Center considers cash to be cash on
hand and cash on deposit, subject to immediate withdrawal, and cash equivalents to be
short-term investments with an original maturity of three months or less.
The Center maintains its cash balances in one financial institution located in Colorado
which at times, may exceed federally insured limits. The Center has not experienced
any losses in such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.
7. Investments
The Center records investments in equity and debt securities at fair value in the
statement of financial position. Investment securities are exposed to various risks such
as interest rate, market, and credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially
affect the amounts reported in the statement of financial position.
8. Accounts Receivable
The majority of the Center's accounts receivable are due from the State of Colorado.
Accounts receivable are due according to contractual terms and are stated at the
amounts management expects to collect from outstanding balances. The Center
determines its allowance for uncollectible receivables by considering a number of
factors, including the length of time accounts receivable are past due and the Center's
previous collection history. The Center writes off accounts receivable to bad debt
expense after reasonable collection efforts have been made. Payments subsequently
received on such receivables, if any, are recorded as other revenue.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
9. Accounting for Contributions
All contributions are considered to be available for unrestricted use unless specifically
restricted by the donor. Amounts received that are designated for future periods, or are
restricted by the donor for specific purposes are reported as temporarily restricted or
permanently restricted support that increase those net asset classes. Unconditional
promises to give, which do not state a due date, are presumed to be time -restricted by
the donor until received and are reported as temporarily restricted net assets.
A donor restriction expires when a stipulated time restriction ends, when an
unconditional promise with an implied time restriction is collected, or when a purpose
restriction is accomplished. Upon expiration, temporarily restricted net assets are
reclassified to unrestricted net assets and are reported in the statement of activities as net
assets released from restrictions. Restricted contributions received in the same year in
which the restrictions are met are recorded as unrestricted revenue, rather than
temporarily restricted revenue. The Center has no donor restricted contributions whose
restrictions were not currently met.
10. Land, Buildings and Equipment
Land, buildings and equipment are reported at cost for purchased assets and estimated
fair value, at date of receipt, for donated property. Items are capitalized if the cost or
estimated value exceeds $5,000. Depreciation and amortization is provided on the
straight-line method over the following estimated useful lives:
Years
Buildings and improvements 5-30
Administrative and program equipment 5
Transportation equipment 5
11. Income Taxes
The Center is operated as a nonprofit organization exempt from federal income tax
under Section 501(c)(3) of the Internal Revenue Code. The Center recognizes tax
liabilities when, despite the Center's belief that its tax return positions are supportable,
the Center believes that certain positions may not be fully sustained upon review by tax
authorities. Benefits from tax positions are measured at the largest amount of benefit
that is greater than fifty percent likely of being realized upon settlement. The Center has
concluded there is no tax liability or benefit required to be recorded as of June 30, 2017.
The Center is subject to routine audits by taxing jurisdictions; however, there are
currently no audits in progress for any tax periods. The Center believes it is no longer
subject to income tax examinations for the years prior to the year ended June 30, 2014.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
12. Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to
transfer a liability (an exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market participants on the
measurement date. A fair value hierarchy has been established under generally accepted
accounting principles, which requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value:
Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 1
assets and liabilities include debt and equity securities, mutual funds, and exchange
traded funds that are traded in an active exchange market.
Level 2 — Observable inputs other than Level 1 prices such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities. This category generally includes
certain U.S. Government agency debt securities and corporate debt securities. The
Center's Level 2 securities are primarily valued using quoted market prices for
similar instruments and nonbinding market prices that are corroborated by
observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the asset or liabilities. Level 3 assets and
liabilities include financial instruments whose value is determined using pricing
models, discounted cash flow methodologies, or similar techniques, as well as
instruments for which the determination of fair value requires significant
management judgment or estimation.
Fair value estimates are made at a specific point in time, based on available market
information and judgments about the financial asset, including estimates of timing,
amount of expected future cash flows, and the credit standing of the issuer. In some
cases, the fair value estimates cannot be substantiated by comparison to independent
markets. In addition, the disclosed fair value may not be realized in the immediate
settlement of the financial asset. The disclosed fair values do not reflect any premium or
discount that could result from offering for sale at one time an entire holding of a
particular financial asset. Potential taxes and other expenses that would be incurred in
an actual sale or settlement are not reflected in amounts disclosed.
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NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
13. Prior Year Summarized Information and Reclassifications
The financial statements include certain prior year summarized comparative
information in total but not by net asset class. Such information does not include
sufficient detail to constitute a presentation in conformity with accounting principles
generally accepted in the United States of America. Accordingly, such information
should be read in conjunction with the Center's financial statements as of and for the
year ended June 30, 2016, from which the summarized information was derived.
Certain financial information as of and for the year ended June 30, 2016 has been
reclassified to conform with the presentation for the current year.
14. Recent Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue
from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of
revenue to which it expects to be entitled for the transfer of promised goods or services
to customers. The updated standard will replace most existing revenue recognition
guidance in generally accepted accounting principles in the United States of America
(US GAAP) when it becomes effective and permits the use of either a full retrospective
or retrospective with cumulative effect transition method. In August 2015, the FASB
issued ASU 2015-14, which defers the effective date of ASU 2014-09 one year, making it
effective for annual reporting periods beginning after December 15, 2018. The Center has
not yet selected a transition method and is currently evaluating the effect that the
standard will have on the financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the
principles for the recognition, measurement, presentation and disclosure of leases for
both parties to a contract (i.e. lessees and lessors). The most significant change for lessees
is the requirement under the new guidance to recognize right -of -use assets and lease
liabilities for all leases not considered short-term leases. Changes to the lessor
accounting model include: (a) synchronizing key aspects of the model with the new
revenue recognition guidance, such as basing whether a lease is similar to a sale or
whether control of the underlying asset has transferred to the lessee and (b)
prospectively eliminating the specialized accounting for leveraged leases. The new
standard requires lessors to account for leases using an approach that is substantially
equivalent to existing guidance for sales -type leases, direct financing leases and
operating leases. The ASU will be effective for fiscal years beginning after December 15,
2019, with early adoption permitted. The Center is in the process of evaluating the
impact of this new guidance.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
14. Recent Accounting Pronouncements (Continued)
In August 2016, the FASB issued ASU No. 2016-14, Not -for Profit Entities (Topic 958):
Presentation of Financial Statements of Not -for -Profit Entities. The amendments in this
ASU make improvements to the information provided in financial statements and
accompanying notes of not -for-profit entities. The amendments set forth the FASB's
improvements to net asset classification requirements and the information presented
about a not -for-profit organization's liquidity, financial performance and cash flows. The
ASU will be effective for fiscal years beginning after December 15, 2017. Earlier adoption
is permitted. The changes in this ASU should generally be applied on a retrospective
basis in the year that the ASU is first applied. The Center is in the process of evaluating
the impact of this new guidance.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230):
Classification of Certain Cash Receipts and Cash Payments. The amendments in this update
clarify the guidance regarding the classification of operating, investing and financing
activities for certain types of cash receipts and payments. The amendments in this
update are effective for the annual periods, and the interim periods within those years,
beginning after December 15, 2018, and should be applied using a retrospective
transition method to each period presented. Early adoption is permitted. The Center is
evaluating the impact of adoption, if any, to the financial statements.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230):
Restricted Cash. The amendments in this ASU require that a statement of cash flows
explain the change during the period in the total of cash, cash equivalents, and amounts
generally described as restricted cash or restricted cash equivalents. Therefore, amounts
generally described as restricted cash and restricted cash equivalents should be included
with cash and cash equivalents when reconciling the beginning -of -period and end -of -
period total amounts shown on the statement of cash flows. The ASU will be effective
for fiscal years beginning after December 15, 2018. Earlier adoption is permitted. The
changes in this ASU should generally be applied on a retrospective basis in the year that
the ASU is first applied. The Center is in the process of evaluating the impact of this
new guidance.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE B - INVESTMENTS
Investments at June 30, 2017 are classified as current. The following table presents the
Center's investments and the fair value hierarchy for those investments as of June 30, 2017.
Fair Value Level 1 Level 2 Level 3
Equity income securities - domestic $ 421,501 $ 421,501 $
Mutual funds 872,837 872,837
Exchange traded funds 513,653 513,653
Total investments
$ 1,807,991 $ 1,807,991 $
Investment return for the year ended June 30, 2017, consists of the following:
Investment income
Unrealized gain on investments
Realized gain on investments
NOTE C - LAND, BUILDINGS AND EQUIPMENT
$ 54,270
103,562
33,892
$ 191,724
Land, buildings and equipment consists of the following at June 30, 2017:
Buildings and improvements
Administrative and program equipment
Transportation equipment
Less accumulated depreciation and amortization
Land
$ 1,292,470
239,755
663,034
2,195,259
1,788,274
406,985
174,000
$ 580,985
Depreciation and amortization expense was $101,725 for the year ended June 30, 2017.
NOTE D - DEFERRED REVENUE
Deferred revenue of $32,165 consists of unearned revenue from the State of Colorado. The
revenue is recognized when services are performed.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE E - PORTFOLIO LOAN ACCOUNT FACILITY
Envision entered into a secured variable rate portfolio loan account facility with a bank in an
initial available amount of $862,000. The facility was subsequently increased due to
increases in the balance of the pledged collateral to $1,207,386 as of June 30, 2017. Drawings
on the facility are available on a revolving line of credit basis and bear interest at a variable
rate equal to 30 day maturity LIBOR, which was 1.22% at June 30, 2017, plus 3.50%.
Amounts drawn under the facility may be repaid and re -borrowed by Envision from time to
time. The facility has an indefinite term. The facility is secured by the investment portfolio.
There was no outstanding balance at June 30, 2017 and interest expense for the year ended
June 30, 2017 was $0.
NOTE F - LEASES
Operating
The Center conducts a portion of its comprehensive residential program operations from
leased facilities. In addition, the Center leases various pieces of equipment under operating
leases, which expire at various dates through 2019. Rental expense under the operating
leases for the year ended June 30, 2017 was $105,717.
Future minimum rental payments for these leases at June 30, 2017 are as follows:
Year ending June 30,
2018
2019
Capital
$ 18,312
1.536
$ 19,848
The Center leases vehicles under a capital lease arrangement, and for financial reporting
purposes, minimum lease rentals relating to the vehicles have been capitalized. The related
assets and obligation have been recorded using the Center's incremental borrowing rate at
the inception of the lease. The leases, which are non -cancelable, expire in fiscal year 2021.
Interest expense for the year ended June 30, 2017 was $20,301.
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Envision, Creative Support for People with Developmental Disabilities
NOTES TO FINANCIAL STATEMENTS
June 30, 2017
NOTE F - LEASES (CONTINUED)
A schedule of future minimum lease payments under this capital lease together with the
present value of the net minimum lease payments as of June 30, 2017 is as follows:
Year ending June 30,
2018
2019
2020
2021
Less amount representing interest
Total minimum lease payments
Less current portion
$ 73,959
73,959
73,959
38,112
259,989
34,025
225,964
57,978
Long-term capital lease obligations $ 167,986
Property recorded under the capital lease includes the following amounts at June 30, 2017:
Transportation equipment
Less accumulated amortization
$ 315,619
93,830
$ 221,789
Amortization expense related to property recorded under the capital lease is combined with
depreciation expense.
NOTE G - RELATED PARTY TRANSACTIONS
The Center receives a substantial amount of revenue from the State of Colorado. The
amount of receivables and deferred revenue the Center has from the State of Colorado are
$1,202,397 and $32,165, respectively, at June 30, 2017. Envision has a payable to the State of
Colorado of $110,994 as of June 30, 2017. These transactions are considered to be
transactions with a related party by virtue of the significant management influence
exercised by the State of Colorado through contract provisions.
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