KIRKWOOD COMMUNITY COLLEGE FOUNDATION
FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2015 AND 2014
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
TABLE OF CONTENTS
YEARS ENDED JUNE 30, 2015 AND 2014
INDEPENDENT AUDITORS' REPORT
1
FINANCIAL STATEMENTS
STATEMENTS OF FINANCIAL POSITION
3
STATEMENTS OF ACTIVITIES
4
STATEMENTS OF CASH FLOWS
5
NOTES TO FINANCIAL STATEMENTS
6
CliftonLarsonAllen LLP
CLAconnect.com
INDEPENDENT AUDITORS' REPORT
Audit Committee
Kirkwood Community College Foundation
Cedar Rapids, Iowa
We have audited the accompanying financial statements of Kirkwood Community College Foundation
(Foundation), a component unit of Kirkwood Community College, which comprise the statement of
financial position as of June 30, 2015, 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.
Auditors’ 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. 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 auditors’ 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.
An independent member of Nexia International
(1)
Audit Committee
Kirkwood Community College Foundation
Opinion
In our opinion, the 2015 financial statements referred to above present fairly, in all material respects, the
financial position of the Foundation as of June 30, 2015, and the results of its operations and its cash
flows for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
The financial statements of Kirkwood Community College Foundation as of June 30, 2014, were audited
by other auditors whose report dated October 28, 2014, expressed an unmodified opinion on those
statements. As discussed in Note 10 to the financial statements, the Foundation has adjusted its 2014
financial statements to retrospectively apply the change in accounting for a beneficial interest in a trust
agreement and reclassification of pledges receivable as temporarily restricted net assets. The other
auditors reported on the financial statements before the retrospective adjustment.
As part of our audit of the 2015 financial statements, we also audited the adjustments to the 2014
financial statements to retrospectively apply the change in accounting as described in Note 10. In our
opinion, such adjustments are appropriate and have been properly applied. We were not engaged to
audit, review, or apply any procedures to Kirkwood Community College Foundation’s 2014 financial
statements other than with respect to the adjustments and, accordingly, we do not express an opinion or
any other form of assurance on the 2014 financial statements as a whole.
a
CliftonLarsonAllen LLP
Cedar Rapids, Iowa
October 19, 2015
(2)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2015 AND 2014
2015
2014
ASSETS
CURRENT ASSETS
Cash
Pledges, at Net Present Value, Less Allowance
for Doubtful Pledges
Total Current Assets
$
$
511,013
406,205
1,074,202
382,064
893,077
311,523
29,047,084
254,029
405,087
30,017,723
624,891
29,125,720
238,188
416,014
30,404,813
$ 31,091,925
$ 31,297,890
$
$
INVESTMENTS AND LONG-TERM ASSETS
Pledges, at Net Present Value, Less Allowance
for Doubtful Pledges
Investments
Cash Value of Life Insurance
Beneficial Interests
Total Investment and Long-Term Assets
Total Assets
667,997
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts Payable
Due to Kirkwood Community College
Due to Kirkwood Facilities Foundation
Due to KCCK-Radio
Current Portion of Annuities Payable
Total Current Liabilities
ANNUITIES PAYABLE, LESS CURRENT PORTION ABOVE
Total Liabilities
16,616
160,822
640,406
555,942
32,700
1,406,486
20,617
109,606
634,761
515,478
32,700
1,313,162
112,700
1,519,186
121,200
1,434,362
1,848,159
1,822,152
24,807,765
28,478,076
1,887,313
1,611,424
24,971,301
28,470,038
Temporarily Restricted
1,094,663
1,393,490
Total Net Assets
29,572,739
29,863,528
$ 31,091,925
$ 31,297,890
NET ASSETS
Unrestricted
Unrestricted, Board Designated for Endowment
Unrestricted, Donor Advised for Endowment
Total Unrestricted
Total Liabilities and Net Assets
See accompanying Notes to Financial Statements.
(3)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
STATEMENTS OF ACTIVITIES
YEARS ENDED JUNE 30, 2015 AND 2014
2015
SUPPORT AND REVENUES
Contributions, Pledges and Cash, Net
Contributions, In-Kind
Contributions from Kirkwood Community College
Contributions to Donor Advised for Endowment
Investment Income, Net
Actuarial Adjustment to Annuities Payable
Other, Primarily Special Event Fundraisers
Release from Temporarily Restricted
Total Unrestricted Support and Revenues
$
EXPENSES
Program Expenses:
Distributions to Kirkwood Community College for:
Scholarships
Capital Projects
Other, Primarily Instructional Department Support
Other Scholarships
Total Program Expenses
2014
859,007
115,877
1,841,466
517,640
213,328
(23,764)
8,394
406,857
3,938,805
$
738,820
135,812
1,722,640
758,000
3,853,156
(25,108)
6,023
453,120
7,642,463
2,532,899
107,521
326,876
32,067
2,999,363
2,413,993
66,573
527,917
31,296
3,039,779
Fundraising Expenses:
Annual Campaign Expenses
Planned Giving Expenses
Total Fundraising Expenses
58,823
47,363
106,186
95,890
47,314
143,204
Management and General Expenses:
Payroll
Professional Contract Services
Memberships
Meetings
Other, Primarily Operating Expenses
Total Management and General Expenses
479,911
159,641
6,621
1,938
177,107
825,218
459,394
115,173
7,114
1,881
189,033
772,595
3,930,767
3,955,578
8,038
3,686,885
Total Expenses
CHANGE IN UNRESTRICTED NET ASSETS
SUPPORT AND REVENUES - TEMPORARILY RESTRICTED
Contributions, Pledges and Cash, Net
Release from Restriction
Total Temporarily Restricted Support and Revenues
108,030
(406,857)
(298,827)
CHANGE IN NET ASSETS
(290,789)
24,599
(453,120)
(428,521)
3,258,364
Net Assets - Beginning as Previously Reported
-
26,208,765
Prior Period Adjustment (See Note 10)
-
396,399
29,863,528
26,605,164
Net Assets - Beginning as Restated
NET ASSETS - ENDING
$
See accompanying Notes to Financial Statements.
(4)
29,572,739
$
29,863,528
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2015 AND 2014
2015
CASH FLOWS FROM OPERATING ACTIVITIES
Change in Net Assets
Adjustments to Reconcile Change in Net Assets
to Net Cash Provided by Operating Activities:
Net (Appreciation) Depreciation in Fair Value of Investments
Addition (Reduction) of Allowance for Uncollectible Pledges
Actuarial Adjustment to Annuities Payable
Change in Beneficial Interests
Contributed Stock
Changes in Assets and Liabilities:
Pledge Receivable
Accounts Payable
Due to Related Entities
Net Cash Provided by Operating Activities
$
(290,789)
2014
$
3,258,364
248,575
1,000
23,764
817
(21,262)
(3,475,524)
(3,000)
25,108
(3,361)
-
309,489
(4,001)
97,325
364,918
421,657
(2,178)
439,611
660,677
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Sales of Investments
Purchases of Investments
Distributions from Beneficial Interests
Cash Value of Life Insurance
Net Cash Used in Investing Activities
14,818,571
(14,988,510)
10,110
(15,841)
(175,670)
10,236,633
(10,930,679)
10,357
(22,216)
(705,905)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on Annuities
(32,264)
(32,708)
INCREASE (DECREASE) IN CASH
156,984
(77,936)
Cash - Beginning
511,013
588,949
CASH - ENDING
$
See accompanying Notes to Financial Statements.
(5)
667,997
$
511,013
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 1
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities
Kirkwood Community College Foundation (Foundation) is a not-for-profit organization formed
in 1969 for the purpose of maintaining, developing and extending its facilities and services
for the benefit of Kirkwood Community College (College), a separate entity. The Foundation
is organized and operates exclusively for charitable, scientific and educational purposes to
provide broader educational service opportunities to the College's students, staff, faculty and
residents of the geographic area it serves. The Foundation is considered a discretely
presented component unit of the College, and therefore, included in the College's
government-wide financial statements.
Significant Accounting Policies
Basis of Presentation: The Foundation classifies its net assets for accounting and reporting
purposes into three net asset categories according to externally (donor) imposed restrictions.
As such, the financial statements are presented on the basis of unrestricted, temporarily
restricted and permanently restricted net assets. The Foundation may designate portions of
its unrestricted net assets as board-designated for various purposes. The three classes are
based on the presence or absence of donor-imposed restrictions. Temporarily restricted net
assets include net assets restricted by donors to a specific time period or purpose.
Permanently restricted net assets are restricted by donors to be maintained in perpetuity.
The donor agreements used by the Foundation and the Foundation's bylaws contain a
variance power provision, which results in the Foundation having the unilateral power to
override a donor's instruction without approval of the donor. Therefore, all contributions
received and net assets are reported as unrestricted.
Accounting 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 revenues and expenses, gains, losses and other changes in net assets
during the reporting period. Actual results could differ from those estimates.
Cash: The Foundation excludes money market accounts held for long-term investment in its
definition of cash and cash equivalents.
Recognition of Contributions: Contributions, including unconditional promises to give, are
recognized as revenues in the period received. Conditional promises to give are not
recognized until they become unconditional, that is when the conditions on which they
depend are substantially met. Contributions to be received after one year are discounted at
an appropriate discount rate commensurate with the risks involved. Amortization of discount
is recorded as additional contribution revenue. An allowance for uncollectible contributions
receivable is provided based upon management's judgment including such factors as prior
collection history, type of contribution and nature of fund raising activity. Pledges written off
totaled $14,287 and $16,098 for the years ended June 30, 2015 and 2014, respectively.
(6)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 1
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Significant Accounting Policies (Continued)
Investments: Investments are recorded at fair value, the price that would be received to sell
the investment in an orderly transaction at the statement of financial position date, except for
money markets which are recorded at cost.
Realized and unrealized gains and losses on investment transactions, which are determined
by the specific-identification method, are included in investment income. Interest and
dividends are recognized as revenue when earned.
Endowed investment assets are pooled on a market value basis, with each individual fund
receiving a share of the total pool's investment activity for the month based on the balance of
the endowment on the first day of that month.
Beneficial Interests: Board designated endowment funds are held by a local community
foundation. The transactions are deemed reciprocal and, therefore, the values of the funds
are recognized as assets. The Foundation is also a 40% beneficiary of a charitable
education trust holding land primarily.
Contributed Services and In-Kind Contributions: Non-monetary assets, art objects,
equipment and various services contributed to the College through the Foundation for the
direct benefit of a College department are recorded at fair value at the date of the
contribution and recorded as in-kind revenue and other program expenses. Fair value is
primarily determined based on appraised values from third-party appraisers or comparable
items. The donors receive recognition from the Foundation for such contributions. These
items are transferred to the College upon receipt. The in-kind contributions for the years
ended June 30, 2015 and 2014 include several small donations with individual market values
no greater than $30,000, respectively. Contributed services that enhance nonfinancial
assets and that require specialized skills and are provided by individuals with those
specialized skills are included in the contributions from the College and a corresponding
expense (see Note 5).
Annuities Payable: The Foundation has received gifts from various individuals under annuity
agreements (life income agreements). Annuities payable to beneficiaries are reportable as a
liability at the present value of the estimated future payments to be distributed over the
beneficiaries' lives. The Foundation recalculates the present value of these payments
through the use of discount rates and Internal Revenue Service (IRS) life expectancy tables.
The present value of these payments is included in the financial statements using discount
rates ranging from 6.6% to 11.1%. The annuities payable will be paid from investment
earnings.
Functional Expenses: The costs of providing contributions and other activities have been
summarized on a functional basis in the statement of activities. Directly identifiable expenses
are charged to programs and supporting services. Management and general expenses
include those expenses that are not directly identifiable with any other specific function, but
provide overall support and direction of the Foundation. Fundraising expenses include those
expenses that are directly identifiable to the solicitation of contributions.
(7)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 1
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Significant Accounting Policies (Continued)
Income Tax Status: The IRS has recognized the Foundation as exempt from federal income
tax under Section 501(c)(3) of the Internal Revenue Code. The Foundation follows the
accounting guidance for accounting for uncertainty in income taxes. The Foundation is
subject to federal and state income taxes to the extent it has unrelated business income. In
accordance with the guidance for uncertainty in income taxes, management has evaluated
their material tax positions and determined that there are no income tax effects with respect
to its financial statements.
Reclassifications: Certain amounts included in prior year financial statements have been
reclassified with no effect on change in net assets or net assets to conform to the current
presentation.
Subsequent Events: Management has evaluated subsequent events through October 19,
2015, the date the financial statements were available for issuance. Through this date, there
were no subsequent events requiring disclosure.
NOTE 2
PLEDGES
Pledges as of June 30 consist of the following:
Endowed Pledges
Nonendowed Pledges
Other Pledges
Gross Pledges
Less: Discount to Present Value*
Less: Allowance for Uncollectible Pledges
Net Pledges
$
$
Amounts Due in:
Less than One Year
One to Five Years
Thereafter
$
$
2015
77,500
618,953
45,275
741,728
(18,000)
(6,000)
717,728
406,205
295,452
40,071
741,728
$
$
$
$
2014
134,200
895,229
9,526
1,038,955
(27,000)
(5,000)
1,006,955
382,106
596,795
60,054
1,038,955
* Discount to adjust to present value of future cash flows using a discount rate ranging from
1.2% to 2.2%.
(8)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 3
FAIR VALUE MEASUREMENTS AND INVESTMENTS
Investments as of June 30 are as follows:
2015
$
252,927
7,981,554
20,812,603
$ 29,047,084
Money Market
Fixed Income, Mutual Funds
Equity, Mutual Funds
2014
$
222,967
9,735,579
19,167,174
$ 29,125,720
The Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards
Codification defines fair value, establishes a framework for measuring fair value and requires
disclosure of fair value measurements. The fair value hierarchy set forth in the Topic is as
follows:
Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets
that the Foundation has the ability to access as of the measurement date.
Level 2 – Significant other 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.
Level 3 – Significant unobservable inputs that reflect a reporting entity's own
assumptions about the assumptions that market participants would use in pricing an
asset or liability.
A description of the valuation methodologies used for assets and liabilities measured at fair
value, as well as the general classification of such instruments pursuant to the valuation
hierarchy, is set forth below:
Investments: Investments that have a fair value based on quoted market prices in an
active market for identical securities are classified as Level 1.
Beneficial Interest in Assets Held by Community Foundation: Valued at the Foundation’s
pro-rata share of the community foundation’s investment pool. The unobservable inputs
are the underlying assets at the community foundation and follow their investment policy.
Beneficial Interest in Assets Held by Educational Trust: Valued at the Foundation’s prorata share of the trust’s assets. The unobservable inputs are the value of the land.
(9)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 3
FAIR VALUE MEASUREMENTS AND INVESTMENTS (CONTINUED)
There have been no changes in valuation methodologies during the years ended June 30,
2015 and 2014.
The following tables summarize assets measured at fair value on a recurring basis, by level
classification, as of June 30:
2015
Investments:
Equities:
Large Cap Value
Large Cap Global
Mid Cap Value
International
Real Assets
Fixed Income:
Intermediate Term
Short Term
Fair Value
Level 1
$ 7,878,632
3,145,332
1,438,399
5,301,879
1,389,874
$ 7,878,632
3,145,332
1,438,399
5,301,879
1,389,874
7,341,013
640,541
27,135,670
7,341,013
640,541
27,135,670
-
-
28,152
-
-
28,152
376,935
-
-
376,935
$ 27,540,757
$ 27,135,670
Fair Value
Level 1
$ 8,158,817
2,678,174
1,478,327
5,398,776
1,472,385
$ 8,158,817
2,678,174
1,478,327
5,398,776
1,472,385
7,786,476
476,718
27,449,673
7,786,476
476,718
27,449,673
-
-
29,479
-
-
29,479
386,535
-
-
386,535
$ 27,865,687
$ 27,449,673
Beneficial Interest in Assets
Held by Community Foundation
Beneficial Interest in Assets
Held by Educational Trust
Total Assets
Level 2
$
$
Level 3
-
-
$
-
$ 405,087
2014
Investments:
Equities:
Large Cap Value
Large Cap Global
Mid Cap Value
International
Real Assets
Fixed Income:
Intermediate Term
Short Term
Beneficial Interest in Assets
Held by Community Foundation
Beneficial Interest in Assets
Held by Educational Trust
Total Assets
(10)
Level 2
$
$
Level 3
-
-
$
-
$ 416,014
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 3
FAIR VALUE MEASUREMENTS AND INVESTMENTS (CONTINUED)
The tables above do not include money market investments of $252,927 and $222,967 as of
June 30, 2015 and 2014, respectively, which are valued at cost.
There were no transfers between Levels 1 and 2 of the fair value hierarchy during the years
ended June 30, 2015 and 2014.
The following table presents additional information about assets as of June 30 measured at
fair value on a recurring basis for which the Foundation has utilized Level 3 inputs to
determine fair value:
Balance, Beginning
Distributions
Change in Beneficial Interests
Balance, Ending
$
$
2015
416,014
(10,110)
(817)
405,087
$
$
2014
423,010
(10,357)
3,361
416,014
The following table sets forth additional disclosure of the Foundation's investments whose
fair value is estimated using NAV per share (or its equivalent) as of June 30, 2015 and 2014:
Fair Value
Private Equity Fund, U.S.
Small Cap Equity Fund (a)
2015
2014
$ 1,658,487
$ 1,453,080
Unfunded
Commitment
$
-
Redemption
Frequency
Redemption
Notice Period
Daily
Same Day
(a) This fund invests in marketable equity securities that are all exchange traded in the
United States of America (USA). These funds can be redeemed at NAV per share based on
the fair value of the fund's securities and other assets, less liabilities at the close of business
on any day the New York Stock Exchange is open. The fair value of this investment has
been estimated using the NAV per share on the investments provided by the fund manager.
The investments of the Foundation are exposed to various risk such as interest rate, market
and credit due to the level of risk associated with such investments and the level of
uncertainty related to changes in the value of such investments, it is at least reasonable
possible that changes in risks in the near term could materially affect investment balances
and the amounts reported in the financial statements.
Investment income for the years ended June 30 is summarized as follows:
Interest and Dividends, Net of Fees
Net Realized Gains
Net Unrealized Gains
Change in Cash Surrender Value of Life Insurance, Net
$
$
(11)
2015
461,426
333,422
(581,996)
476
213,328
$
$
2014
371,065
1,134,489
2,341,035
6,567
3,853,156
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 4
NATURE AND AMOUNT OF TEMPORARY RESTRICTED NET ASSETS
Temporarily restricted net assets are available for the following purposes as of June 30:
Scholarships
Other Programs
$
$
NOTE 5
2015
1,051,388
43,275
1,094,663
$
$
2014
1,383,964
9,526
1,393,490
RELATED PARTY TRANSACTIONS
The Foundation provides services for the benefit of the College. In return, the College has
provided the Foundation with certain staff, facilities and insurance coverage for its operations
without charge. The Foundation has recorded revenue included in contributions from the
College and expenses included in payroll and fundraising expenses totaling $939,065 and
$917,719 for the years ended June 30, 2015 and 2014, respectively. In addition, the College
has provided payroll and benefits of $93,286 and $92,152 for certain employees that do not
meet the criteria for recognition as contributed services because their position does not
require specialized skills. Also, during the years ended June 30, 2015 and 2014, the
Foundation contributed to the College for facilities additions and equipment, scholarships
and various amounts for programs conducted by the College totaling $3,215,039 and
$3,173,016, including scholarships of $2,532,899 and $2,413,993 and in-kind contributions
of $115,877 and $135,812, respectively.
The Foundation received contributions of $902,401 and $800,903 from the College during
the years ended June 30, 2015 and 2014, respectively.
The Foundation acts as an agent for Kirkwood Facilities Foundation by providing pooled
investments, which had a balance of $640,406 and $634,761 as of June 30, 2015 and 2014,
and for KCCK-FM Radio, a department of the College, by providing tracking of contributions
raised by KCCK-Radio and pooled investments, which had a balance of $555,942 and
$515,478 as of June 30, 2015 and 2014, respectively.
Of the pledges outstanding, approximately $22,959 and $34,303 is due from related parties
of the Foundation, primarily from the Board of Directors, as of June 30, 2015 and 2014,
respectively.
NOTE 6
EMPLOYEE BENEFIT PLANS
Employees of the Foundation are participants in various employee benefit programs of which
the College pays on their behalf. The expense for the defined contribution retirement plan
totaled $38,932 and $37,269 for the years ended June 30, 2015 and 2014, respectively.
(12)
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 7
ENDOWMENTS
The Foundation's endowment is pooled amongst all investments, which are established for a
variety of purposes. Its endowment includes only funds designated as endowment by the
Board of Directors. The Foundation has a policy within the endowment gift agreements that
provides for a variance power. This power gives the Foundation the power to use the funds if
necessary at their discretion. Because of this, all of the endowments are reported as
unrestricted in the statements of activities and financial position. Interpretation of relevant
law: The Board of Directors of the Foundation interprets Uniform Prudent Management of
Institutional Funds Act (UPMIFA) to require consideration of the following factors, if relevant,
in making a determination to appropriate or accumulate donor-advised endowment funds:







The duration and preservation of the endowment fund
The purpose of the institutional and the endowment fund
General economic conditions
The possible effect of inflation or deflation
The expected total return from income and the appreciation of investments
The investment policy of the institution
Other resources of the institution
The state of Iowa, as well as the Foundation, follows the Uniform Prudent Management of
Institutional Funds Act (UPMIFA) regarding the Foundation's ability to spend the net
appreciation in the value of donor advised endowments funds. UPMIFA authorizes
institutions to appropriate for expenditure income as well as the net appreciation, realized
and unrealized, in the fair value of the assets of the endowment fund over the historic dollar
value of the fund, as is prudent.
The Foundation has implemented a spending policy goal of up to 5% of a three-year (12quarter) rolling average of the market value of each endowment fund. Spendable amounts
from endowed funds will be calculated as soon as is practical after March 31 to allow
scholarship budgeting for the following academic year. Once the scholarship budget is
approved by the Foundation's executive committee, the spendable amount will be
considered to be available for scholarship awards through June 30 of the following year.
Changes in endowment, not total, net assets for the years ended June 30 is as follows:
Endowment Net Assets, Beginning
Investment Return:
Interest Income
Net Appreciation/(Depreciation)
Total Investment Return
Contributions
Appropriations for Expenditures
Endowment Net Assets, Ending
(13)
2015
$ 26,716,925
2014
$ 23,078,888
436,646
(235,695)
200,951
523,489
(888,948)
$ 26,552,417
349,207
3,302,092
3,651,299
767,864
(781,126)
$ 26,716,925
KIRKWOOD COMMUNITY COLLEGE FOUNDATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015 AND 2014
NOTE 8
CONCENTRATION OF CREDIT RISK
The Foundation maintains cash balances that exceed the maximum amount insured by the
Federal Deposit Insurance Corporation. At June 30, 2015, the Foundation had $654,145 of
cash deposited in one bank. Management believes the credit risk related to the uninsured
balance is minimal.
NOTE 9
AMOUNTS HELD ON THEIR BEHALF
The Foundation receives money from a local community foundation for the change in
investments designated to the Foundation and held by the local community foundation on
their behalf, with variance power. Because the local community foundation holds variance
power over the funds, these investments are not recorded by the Foundation; rather the
amount of funds received is recorded as revenue when received. The amount of investments
held on the Foundation's behalf as of June 30, 2015 and 2014 was $1,073,674 and
$1,070,271, respectively.
NOTE 10 PRIOR PERIOD ADJUSTMENT
The financial statements for the year ended June 30, 2014 have been restated to correct an
error in reporting a beneficial interest in a trust agreement and reclassifying pledges
receivable from unrestricted net assets to temporarily restricted net assets.
The effect of the beneficial interest in a trust agreement restatement as of July 1, 2013 was
to increase long-term assets and temporarily restricted net assets by $396,399. This
adjustment caused a decrease to change in net assets by $9,864 as of June 30, 2014.
The effect of reclassifying pledges receivable as temporarily restricted net assets as of July
1, 2013 was a decrease to unrestricted net assets and an increase to temporarily restricted
net assets of $1,006,955. This reclassification had no impact on the change in total net
assets as of June 30, 2014.
(14)