Foundation for
Muskegon Community College
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
June 30, 2015 and 2014
Foundation for Muskegon Community College
CONTENTS
INDEPENDENT AUDITORS' REPORT .................................................................................................. 1
FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION ....................................................................................... 3
STATEMENT OF ACTIVITIES .......................................................................................................... 4
STATEMENT OF CASH FLOWS ....................................................................................................... 6
NOTES TO FINANCIAL STATEMENTS .......................................................................................... 7
SUPPLEMENTAL INFORMATION
SCHEDULE OF ACTIVITIES ........................................................................................................... 15
BRICKLEY DELONG
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
December 10, 2015
Foundation Board of Directors
Foundation for Muskegon Community College
Muskegon, Michigan
We have audited the accompanying financial statements of the Foundation for Muskegon Community College (a
Michigan nonprofit corporation), a component unit of Muskegon Community College, which are comprised of the
statements of financial position as of June 30, 2015 and 2014, and the related statements of activities and cash
flows for the years 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 audits. We conducted our
audits 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 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.
1
678 Front Ave., NW Suite 230
Grand Rapids, MI 49504
PHONE (616) 742-1300
FAX (616) 742-1318
316 Morris Ave., Suite 500, P.O. Box 999
Muskegon, MI 49443
PHONE (231) 726-5800
FAX (231) 722-0260
www.brickleydelong.com
907 S. State St., P.O. Box 331
Hart, MI 49420
PHONE (231) 873-1040
FAX (231) 873-0602
BRICKLEY DELONG
Foundation for Muskegon Community College
June 30, 2015
Page 2
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Foundation for Muskegon Community College as of June 30, 2015 and 2014, and the changes in
its net assets and its cash flows for the years then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matter
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The
schedule of activities on pages 15 through 16 is presented for purposes of additional analysis and is not a required
part of the financial statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the financial statements. The
information has been subjected to the auditing procedures applied in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the financial statements or to the financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated in all material respects in relation to the financial
statements as a whole.
Muskegon, Michigan
2
Foundation for Muskegon Community College
STATEMENT OF FINANCIAL POSITION
June 30, 2015 and 2014
ASSETS
2015
CURRENT ASSETS
Cash
Unconditional promises to give
$
Total current assets
BENEFICIAL INTEREST IN ASSETS HELD BY OTHERS
248,943
1,293
2014
$
74,908
2,887
250,236
77,795
147,361
154,534
$
397,597
$
232,329
$
352,819
44,778
$
210,938
21,391
$
397,597
$
232,329
LIABILITIES AND NET ASSETS
NET ASSETS
Unrestricted
Temporarily restricted
The accompanying notes are an integral part of these statements.
3
Foundation for Muskegon Community College
STATEMENT OF ACTIVITIES
Years ended June 30, 2015 and 2014
Unrestricted
Revenues and support
Contributions
Cash
Building
In-kind
Income from beneficial interest in assets held by others
Net assets released from restrictions
Satisfaction of purpose restrictions
$
2,407
2015
Temporarily
Restricted
$
326,469
350,000
184,666
-
Total
$ 326,469
350,000
184,666
2,407
837,748
(837,748)
840,155
23,387
863,542
528,822
137,123
32,329
-
528,822
137,123
32,329
Total expenses
698,274
-
698,274
Change in net assets
141,881
23,387
165,268
Net assets at beginning of year
210,938
21,391
232,329
44,778
$ 397,597
Total revenues and support
Expenses
Distributions for the benefit of Muskegon Community College
Management and general
Fundraising
Net assets at end of year
$
The accompanying notes are an integral part of these statements.
4
352,819
$
-
Unrestricted
$
$
19,978
2014
Temporarily
Restricted
$
Total
177,180
195,757
-
$
177,180
195,757
19,978
404,702
(404,702)
-
424,680
(31,765)
392,915
198,982
85,911
63,405
-
198,982
85,911
63,405
348,298
-
348,298
76,382
(31,765)
44,617
134,556
53,156
187,712
210,938
$
21,391
$
232,329
5
Foundation for Muskegon Community College
STATEMENT OF CASH FLOWS
Years ended June 30, 2015 and 2014
2015
Operating activities
Change in net assets
$
Adjustments to reconcile change in net assets to net
cash provided by operating activities:
Gain from beneficial interest in assets held by others
165,268
2014
$
(2,407)
162,861
(Increase) decrease in operating assets
Unconditional promises to give
(19,978)
24,639
1,594
Net cash provided by operating activities
Investing activities
Proceeds from beneficial interest in assets held by others
INCREASE IN CASH
Cash at beginning of year
$
Cash at end of year
The accompanying notes are an integral part of these statements.
6
44,617
(2,887)
164,455
21,752
9,580
-
174,035
21,752
74,908
53,156
248,943
$
74,908
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Foundation for Muskegon Community College (Foundation) was established in 1981. The Foundation’s
sole purpose is to support the mission of Muskegon Community College (College) through fund development.
As part of this purpose, it is responsible for managing the fundraising efforts of the College.
Basis of Accounting
The financial statements are presented on an accrual basis of accounting which recognizes income when earned
and expenses when incurred.
Basis of Presentation
The Foundation is required to report information regarding its financial position and activities according to
three classes of assets: unrestricted, temporarily restricted, and permanently restricted net assets. As of June
30, 2015 and 2014, all of the net assets of the Foundation were unrestricted or temporarily restricted.
Unrestricted net assets. Net assets that are not subject to donor-imposed stipulations.
Temporarily restricted net assets. Net assets subject to donor-imposed stipulations that may or will be met
either by actions of the Foundation and/or the passage of time.
Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donorimposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on
investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless
their use is restricted by explicit donor stipulation or by law.
These financial statements are discretely presented in the financial statements of Muskegon Community
College.
Revenue Recognition
The Foundation records appropriations, grants, and earned revenues on an accrual basis. The Foundation
records as revenue in the period received the following types of contributions, when they are received
unconditionally, at their fair value: cash, promises to give (pledges), certain contributed services and gifts of
long-lived and other assets. Conditional contributions are recognized as revenue when the conditions on which
they depend have been substantially met. Substantially all of the Foundation’s appropriations and grants are
considered to be contributions for purposes of applying revenue recognition policies. Contributions are
recorded net of estimated uncollectible amounts.
The Foundation reports gifts of cash or other assets as temporarily restricted support if they are received with
donor stipulations limiting the use of the donated assets. When a donor restriction expires, temporarily
restricted net assets are reclassified as unrestricted net assets and are reported in the statement of activities as
net assets released from restriction. If a restriction is fulfilled in the same period in which the contribution is
received, the Foundation reports the support as unrestricted.
Volunteers
A number of volunteers, including the members of the Board of Directors, have made significant contributions
of time to the Foundation’s policy-making, program, and support functions. The value of this contributed time
does not meet the criteria for recognition of contributed services and, accordingly, is not reflected in the
accompanying financial statements.
7
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued
Other Donated Services
Donated services are recognized in the financial statements at their fair market value if the following criteria
are met:
•
The services require specialized skills and the services are provided by individuals possessing those
skills.
•
The services would typically need to be purchased if not donated.
Those donated services for the years ended June 30, 2015 and 2014 include the following:
2015
Management services
Management
and General
Fundraising
$
$
137,123
15,058
Total
$
152,181
2014
Management services
Management
and General
Fundraising
$
$
85,742
42,434
Total
$
128,176
Non-monetary Transactions
Non-monetary transactions are recorded on the basis of the market value of services provided or assets
transferred.
Tax Status
The Foundation is exempt from federal income tax under Internal Revenue Code Section 501(c)(3).
In preparation of tax returns, tax positions are taken based on interpretation of federal, state and local income
tax laws. Management periodically reviews and evaluates the status of uncertain tax positions and makes
estimates of amounts, including interest and penalties, ultimately due or owed. No amounts have been
identified, or recorded, as uncertain tax positions. Federal, state and local tax returns generally remain open
for examination by the various taxing authorities for a period of three or four years.
Use of Estimates
Preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Date of Management's Review
Subsequent events have been evaluated through December 10, 2015, which is the date the financial statements
were available to be issued.
NOTE B—CASH
The Foundation’s cash is maintained in a separate bank account using the tax identification number of the
College. The combined Foundation and College balances are insured by the Federal Deposit Insurance
Corporation (FDIC) up to certain limitations. At June 30, 2015, the Foundation’s cash balances were
substantially uninsured as its share of the FDIC coverage of the combined Foundation and College accounts
was insignificant.
8
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE C—FAIR VALUE MEASUREMENTS
The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level
3). The three levels of the fair value hierarchy are described below:
Level 1
Inputs to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that the Organization has the ability to access.
Level 2
Inputs to the valuation methodology include the following:
-
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable
market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be
observable for substantially the full term of the asset or liability.
Level 3
Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value. There have
been no changes in the methodologies used at June 30, 2015 and 2014.
Beneficial interest in assets held by others: The assets are valued based upon the Foundation’s allocable
share of the Community Foundation for Muskegon County’s (Community Foundation) pooled investment
portfolio. The allocable share is based on the value of the underlying assets owned by the fund, minus its
liabilities.
The beneficial interests in assets held by others are valued monthly by the Community Foundation and
are allocated based upon each organization’s calculated share of the Community Foundation’s pooled
investment portfolio. Each entity with an interest within the pooled investments receives a statement
from the Community Foundation indicating the additions to the investment (via contributions),
withdrawals from the investment (via grants), and the investment returns allocated via a unitization
process. The Foundation calculates the fair value of its beneficial interest in the pooled investment assets
held by the Community Foundation based on the estimated fair value of the underlying assets. The
Community Foundation controls the investments and makes all management and investment decisions.
9
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE C—FAIR VALUE MEASUREMENTS—Continued
The preceding methods described above may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, while the Foundation believes its valuation
methods are appropriate and consistent with other market participants, the use of different methodologies or
assumptions to determine the fair value of certain financial instruments could result in a different fair value
measurement at the reporting date.
The following table sets forth by level, within the fair value hierarchy, the Foundation’s assets at fair value as
of June 30, 2015 and 2014:
Assets at Fair Value as of June 30, 2015
Level 1
Level 2
Level 3
Beneficial interest in assets
held by others
$
-
$
$
-
$
Assets at Fair Value as of June 30, 2014
Level 2
Level 3
Level 1
Beneficial interest in assets
held by others
$ 147,361
-
$ 154,534
$
-
$
Total
147,361
Total
154,534
NOTE D—BENEFICIAL INTEREST IN ASSETS HELD BY OTHERS
The Funds
The Foundation has multiple funds with the Community Foundation for Muskegon County (Community
Foundation).
Special Needs Fund
The Foundation for Muskegon Community College Special Needs Fund (Special Needs Fund) was
established in 1996 to provide financial support to Muskegon Community College in pursuing excellence
in education. The fund agreement allows the use of both the Fund’s principal and income in accordance
with the Community Foundation’s spending policy.
General Endowment Fund
The Foundation for Muskegon Community College Endowment Fund (General Endowment Fund) was
established in 1996 to provide financial support to Muskegon Community College in pursuing excellence
in education. The fund agreement allows the use of the Fund’s income only in accordance with the
Community Foundation’s spending policy.
Scholarship Funds
The Foundation also has approximately twenty separate Scholarship Funds (Scholarship Funds)
established to provide financial support to Muskegon Community College Students. The fund
agreements generally allow the use of the Funds’ income only in accordance with the Community
Foundation’s spending policy.
10
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE D—BENEFICIAL INTEREST IN ASSETS HELD BY OTHERS
The Funds—Continued
The Community Foundation invests the contributions to the funds in various types of marketable equity and
debt securities, U.S. Treasuries, commercial paper, and certificates of deposit. The majority of investments
are uninsured and uncollateralized.
Reporting of the Assets of the Funds
The investments held at the Community Foundation, which were contributed by the Foundation along with
the earnings on these investments, are reported at fair value as unrestricted assets of the Foundation. The
contributions to these funds made by third party donors directly to the Community Foundation have been
excluded from the net assets of the Foundation.
Summary of Foundation Funds
A summary of revenues, expenses, and changes in the net assets at fair value of the funds for the years ended
June 30, 2015 and 2014 follows:
2015
Special
Needs
Fund
Revenues
Contributions
$
Dividends and interest
Realized and unrealized gains (losses)
on investments
Expenses
Disbursements
Investment fees
Change in net assets
100
5,259
(433)
General
Endowment
Fund
Scholarship
Funds
$
$
1,400
11,736
58,494
26,507
Totals
$
59,994
43,502
(1,013)
(1,890)
(3,336)
4,926
12,123
83,111
100,160
9,580
1,016
2,275
9,275
10,026
18,855
13,317
10,596
2,275
19,301
32,172
(5,670)
9,848
63,810
67,988
Net assets at beginning of year
207,549
452,249
1,003,817
1,663,615
Net assets at end of year
201,879
462,097
1,067,627
1,731,603
(162,903)
(353,712)
(1,067,627)
(1,584,242)
Less assets recorded as those of
the Community Foundation
Assets reported on the
Statement of Financial Position
$
38,976
11
$ 108,385
$
-
$
147,361
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE D—BENEFICIAL INTEREST IN ASSETS HELD BY OTHERS—Continued
2014
Special
Needs
Fund
Revenues
Contributions
Dividends and interest
Realized and unrealized gains
on investments
$
200
6,382
General
Endowment
Fund
Scholarship
Funds
$
$
26,180
13,112
62,738
29,701
Totals
$
89,118
49,195
21,709
44,608
100,701
167,018
28,291
83,900
193,140
305,331
967
2,002
14,270
8,706
14,270
11,675
967
2,002
22,976
25,945
27,324
81,898
170,164
279,386
Net assets at beginning of year
180,225
370,351
833,653
1,384,229
Net assets at end of year
207,549
452,249
1,003,817
1,663,615
(159,428)
(345,836)
(1,003,817)
(1,509,081)
Expenses
Disbursements
Investment fees
Change in net assets
Less assets recorded as those of
the Community Foundation
Assets reported on the
Statement of Financial Position
$
48,121
$ 106,413
$
-
$
154,534
The Board of Trustees of the Community Foundation has the power to modify any restriction or condition on
the distribution of funds for any specified charitable purpose or to a specified organization if, in the sole
judgment of the Board, such restriction or condition becomes, in effect, unnecessary, incapable of fulfillment,
or inconsistent with the charitable needs of the community served. The authority to modify restrictions is
sometimes referred to as “variance power” and is a legal standard imposed on all community foundations.
NOTE E—TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets are available for the following purposes at June 30, 2015 and 2014:
2015
Academics
Equipment/facilities improvements
Scholarships
Other
12
2014
$
1,700
13,179
29,699
200
$
8,504
12,887
-
$
44,778
$
21,391
Foundation for Muskegon Community College
NOTES TO FINANCIAL STATEMENTS
June 30, 2015 and 2014
NOTE F—TRANSACTIONS WITH MUSKEGON COMMUNITY COLLEGE
Distributions to the College or for the College’s benefit by the Foundation for the years ended June 30, 2015
and 2014 are summarized as follows:
2015
Academics
Building
Equipment/facilities improvements
Planetarium
Scholarships
Student services
Unrestricted
Other
2014
$
42,809
350,000
12,319
74,909
11,368
19,891
17,526
$
43,329
22,306
24,611
56,209
5,267
3,949
43,311
$
528,822
$
198,982
For the years ended June 30, 2015 and 2014, the College also provided $152,181 and $128,176, respectively,
of in-kind contributions to the Foundation by providing personnel support, supplies and equipment to the
Foundation.
13
SUPPLEMENTAL INFORMATION
Foundation for Muskegon Community College
SCHEDULE OF ACTIVITIES
Years ended June 30, 2015 and 2014
Total
Revenues and support
Contributions
Income from beneficial interest in assets held by others
$ 676,469
2,407
863,542
184,666
678,876
528,822
137,123
32,329
15,214
137,123
32,329
513,608
-
Total expenses
698,274
184,666
513,608
Change in net assets
165,268
-
165,268
Net assets at beginning of year
232,329
-
232,329
-
$ 397,597
Expenses
Distributions for benefit of Muskegon Community College
Management and general
Fundraising
$ 397,597
Net assets at end of year
15
$
Net
184,666
-
Total revenues and support
$ 861,135
2,407
2015
Less in-kind
$
2014
Less in-kind
Total
$ 372,937
19,978
195,757
-
$ 177,180
19,978
392,915
195,757
197,158
198,982
85,911
63,405
46,610
85,742
63,405
152,372
169
-
348,298
195,757
152,541
44,617
-
44,617
187,712
-
187,712
-
$ 232,329
$ 232,329
$
Net
$
16