Report of Independent Auditors in
Accordance with OMB Circular A-133
and Financial Statements
(with Supplementary Information) for
Oregon Museum of Science
and Industry
May 31, 2015 and 2014
CONTENTS
REPORTOFINDEPENDENTAUDITORS
FINANCIALSTATEMENTS
Statementoffinancialposition
Statementofactivities
Statementsoffunctionalexpenses
Statementsofcashflows
Notestofinancialstatements
REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIAL
REPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDIT
OFFINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITH
GOVERNMENTAUDITINGSTANDARDS
REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJOR
FEDERALPROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCE
SCHEDULEOFFINDINGSANDQUESTIONEDCOSTS
SUPPLEMENTARYINFORMATION
Scheduleofexpendituresoffederalawards
Notestoscheduleofexpendituresoffederalawards
PAGE
1–2
3
4
5–6
7
8–26
27–28
29–30
31–32
33
34
REPORTOFINDEPENDENTAUDITORS
TotheBoardofTrustees
OregonMuseumofScienceandIndustry
ReportontheFinancialStatements
We have audited the accompanying financial statements of Oregon Museum of Science and Industry (the
Museum),whichcomprisethestatementoffinancialpositionasofMay31,2015,andtherelatedstatements
of activities, functional expenses, and cash flows for the year then ended, and the related notes to the
financialstatements.
Management’sResponsibilityfortheFinancialStatements
Management is responsible for the preparation and fair presentation of these financial statements in
accordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthe
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditor’sResponsibility
Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconducted
ourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthe
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthe
financialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentof
therisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthose
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,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accountingpoliciesusedandthereasonablenessofsignificantaccountingestimatesmadebymanagement,as
wellasevaluatingtheoverallpresentationofthefinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforour
auditopinion.
1
REPORTOFINDEPENDENTAUDITORS(continued)
Opinion
Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancial
positionofOregonMuseumofScienceandIndustryasofMay31,2015,andthechangesinitsnetassetsand
its cash flows for the year then ended in accordance with accounting principles generally accepted in the
UnitedStatesofAmerica.
OtherMatters
ReportonSummarizedComparativeInformation
We have previously audited Oregon Museum of Science and Industry’s 2014 financial statements, and we
expressed an unmodified audit opinion on those audited financial statements in our report dated
September23,2014.Inouropinion,thesummarizedcomparativeinformationpresentedhereinasofandfor
theyearendedMay31,2014isconsistent,inallmaterialrespects,withtheauditedfinancialstatementsfrom
whichithasbeenderived.
OtherInformation
Ourauditwasconductedforthepurposeofforminganopiniononthefinancialstatementsasawhole.The
accompanyingscheduleofexpendituresoffederalawardsasrequiredbyOfficeofManagementandBudget
CircularA‐133,AuditsofStates,LocalGovernments,andNon‐ProfitOrganizationsispresentedforpurposesof
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
otherrecordsusedtopreparethefinancialstatements.Theinformationhasbeensubjectedtotheauditing
procedures applied in the audit of the financial statements and certain additional procedures, including
comparingandreconcilingsuchinformationdirectlytotheunderlyingaccountingandotherrecordsusedto
preparethefinancialstatementsortothefinancialstatementsthemselves,andotheradditionalprocedures
inaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica.Inouropinion,the
informationisfairlystated,inallmaterialrespects,inrelationtothefinancialstatementsasawhole.
OtherReportingRequiredbyGovernmentAuditingStandards
InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdatedSeptember22,2015
on our consideration of Oregon Museum ofScienceandIndustry’sinternalcontroloverfinancialreporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreementsandothermatters.Thepurposeofthatreportistodescribethescopeofourtestingofinternal
controloverfinancialreportingandcomplianceandtheresultsofthattesting,andnottoprovideanopinion
on internal control over financial reporting or on compliance. That report is an integral part of an audit
performedinaccordancewithGovernmentAuditingStandardsinconsideringOregonMuseumofScienceand
Industry'sinternalcontroloverfinancialreportingandcompliance.
Portland,Oregon
September22,2015
2
OREGONMUSEUMOFSCIENCEANDINDUSTRY
STATEMENTOFFINANCIALPOSITION
(WITHSUMMARIZEDFINANCIALINFORMATIONFORMAY31,2014)
Unrestricted
May31,2015
Temporarily Permanently
Restricted
Restricted
$ 2,485,649
$ 3,451,656
1,696,613
1,432,329
23,379
810,548
‐
May31,2014
Total
Total
$ ‐
$5,937,305
$6,259,843
5,573,626
483,596
‐
‐
563,771
‐
476,573
‐
‐
‐
7,270,239
2,392,498
23,379
810,548
563,771
5,589,060
1,156,569
41,551
303,241
68,420
6,448,518
10,072,649
476,573
16,997,740
13,418,684
LONG‐TERMASSETS
Accounts,pledgesandcontractsreceivable,
netofcurrentportion
Beneficialinterestinperpetualtrust
Land,buildings,exhibitsandequipment,net
Debtissuancecosts,net
144,498
‐
37,153,872
171,576
593,847
‐
‐
‐
‐
372,472
‐
‐
738,345
372,472
37,153,872
171,576
1,422,682
380,045
35,442,767
54,456
Totallong‐termassets
37,469,946
593,847
372,472
38,436,265
37,299,950
$ 43,918,464
$ 10,666,496
$ 849,045
$55,434,005
$50,718,634
$ 2,245,353
‐
563,771
2,113,680
7,400
363,367
261,106
$ ‐
‐
‐
‐
‐
‐
‐
$ ‐
‐
‐
‐
‐
‐
‐
$2,245,353
‐
563,771
2,113,680
7,400
363,367
261,106
$1,872,577
21,099
68,420
2,399,311
7,400
378,488
122,235
5,554,677
‐
‐
5,554,677
4,869,530
830,415
19,957
‐
‐
‐
‐
830,415
19,957
1,551,236
21,212
1,040,098
536,710
4,160,000
‐
‐
‐
‐
‐
‐
1,040,098
536,710
4,160,000
1,223,361
3,970,592
‐
Totallong‐termliabilities
6,587,180
‐
‐
6,587,180
6,766,401
Totalliabilities
12,141,857
‐
‐
12,141,857
11,635,931
NETASSETS
31,776,607
10,666,496
849,045
43,292,148
39,082,703
TOTALLIABILITIESANDNETASSETS
$ 43,918,464
$ 10,666,496
$ 849,045
$55,434,005
$50,718,634
ASSETS
CURRENTASSETS
Cashandcashequivalents
Accounts,pledgesandcontracts
receivable,netofcurrentportion
Investments
Inventories
Prepaidexpensesandotherassets
Duefromotherfunds
Totalcurrentassets
TOTALASSETS
LIABILITIESANDNETASSETS
CURRENTLIABILITIES
Accountspayableandaccruedexpenses
Accruedinterestpayable
Duetootherfunds
Deferredrevenues,currentportion
Annuityagreement,currentportion
Capitalleaseobligations,currentportion
Long‐termdebt,currentportion
Totalcurrentliabilities
LONG‐TERMLIABILITIES
Deferredrevenues,netofcurrentportion
Annuityagreement,netofcurrentportion
Capitalleaseobligations,netofcurrent
portion
Long‐termdebt,netofcurrentportion
Bondspayable
Seeaccompanyingnotes.
3
OREGONMUSEUMOFSCIENCEANDINDUSTRY
STATEMENTOFACTIVITIES
(WITHSUMMARIZEDFINANCIALINFORMATIONFOR
THEYEARENDEDMAY31,2014)
Unrestricted
YearEndedMay31,2015
Temporarily Permanently
Restricted
Restricted
$4,369,586
2,395,160
2,308,794
1,726,523
1,350,777
1,720,699
‐
$‐
‐
‐
‐
‐
7,766,477
‐
908,298
559,908
YearEnded
May31,2014
Total
Total
$‐
‐
‐
‐
‐
‐
(7,573)
$4,369,586
2,395,160
2,308,794
1,726,523
1,350,777
9,487,176
(7,573)
$4,615,657
2,134,318
2,330,545
1,282,821
1,307,433
8,000,161
(1,025)
‐
15,515
‐
‐
908,298
575,423
1,411,303
723,436
Revenues
Admissions
Memberships
Educationalprograms
Auxiliaryactivities
Exhibitfees
Contributionsandgrants
Changeinvalueofperpetualtrust
Contributedservicesofvolunteers
andin‐kinddonations
Interestandotherincome
Lossonsaleofland,buildings,
exhibitsandequipment
Netassetsreleasedfrom
restriction
(676)
‐
‐
(676)
(159,466)
4,088,143
(4,088,143)
‐
‐
‐
Totalrevenues
19,427,212
3,693,849
(7,573)
23,113,488
21,645,183
10,751,117
3,251,982
‐
‐
‐
‐
10,751,117
3,251,982
11,191,516
3,819,970
14,003,099
‐
‐
14,003,099
15,011,486
3,369,944
1,302,698
‐
‐
‐
‐
3,369,944
1,302,698
2,611,025
1,585,361
4,672,642
‐
‐
4,672,642
4,196,386
228,302
‐
‐
228,302
250,301
18,904,043
‐
‐
18,904,043
19,458,173
CHANGEINNETASSETS
523,169
3,693,849
(7,573)
4,209,445
2,187,010
NETASSETS,beginningofyear
31,253,438
6,972,647
856,618
39,082,703
36,895,693
NETASSETS,endofyear
$ 31,776,607
$ 10,666,496
$ 849,045
$43,292,148
$39,082,703
Expenses
Programservices:
Museumactivities
Educationalprograms
Totalprogramservices
Supportingservices:
Managementandgeneral
Fund‐raising
Totalsupportingservices
Auxiliaryactivities
Totalexpenses
4
Seeaccompanyingnotes.
OREGONMUSEUMOFSCIENCEANDINDUSTRY
STATEMENTOFFUNCTIONALEXPENSES
Salaries,wages,andrelatedexpenses
Depreciationandamortizationof
capitalassets
Suppliesandmiscellaneous
Rentals
Museumsupportservices
Contributedservicesofvolunteers
andin‐kinddonations
Professionalservices
Utilities
Repairsandmaintenance
Bankfees
Publicity,printing,andpostage
Insurance
Transportation
Interestexpense
Food
Travel
Telephone
Other
Costofmerchandisesold
Totalfunctionalexpenses
Seeaccompanyingnotes.
YearEndedMay31,2015
SupportingServices
Management
Fund‐
andGeneral
Raising
Subtotal
Museum
Activities
ProgramServices
Educational
Programs
Subtotal
$ 4,642,423
$ 2,218,442
$ 6,860,865
$ 1,243,991
$843,492
1,649,324
369,934
900,798
625,476
55,869
112,373
131,405
197,627
1,705,193
482,307
1,032,203
823,103
‐
945,597
2,417
‐
418,504
272,998
607,534
359,825
212,567
308,286
963
204,108
‐
39,332
85,358
52,456
‐
1,231
58,691
45,673
22,517
57,422
8,226
24,175
9,797
83,450
‐
153,085
54,005
10,391
31
8,803
477,195
318,671
630,051
417,247
220,793
332,461
10,760
287,558
‐
192,417
139,363
62,847
31
10,034
$ 10,751,117
$ 3,251,982
$ 14,003,099
Auxiliary
Activities
Total
$ 2,087,483
$133,163
$ 9,081,511
‐
9,119
2,797
90,406
‐
954,716
5,214
90,406
22,471
13,721
1,350
34,943
1,727,664
1,450,744
1,038,767
948,452
90,000
363,368
‐
4,538
123,446
4,998
299,760
696
249,914
21,074
5,593
2,423
12,129
‐
206,103
87,692
‐
3,579
10,358
15,828
‐
304
‐
16,852
12,569
2,815
784
‐
296,103
451,060
‐
8,117
133,804
20,826
299,760
1,000
249,914
37,926
18,162
5,238
12,913
‐
‐
2,263
‐
408
7,149
8,126
‐
‐
‐
3,608
110
990
‐
‐
773,298
771,994
630,051
425,772
361,746
361,413
310,520
288,558
249,914
233,951
157,635
69,075
12,944
10,034
$ 3,369,944
$1,302,698
$ 4,672,642
$228,302
$ 18,904,043
5
OREGONMUSEUMOFSCIENCEANDINDUSTRY
STATEMENTOFFUNCTIONALEXPENSES
Salaries,wages,andrelatedexpenses
Depreciationandamortizationof
capitalassets
Suppliesandmiscellaneous
Rentals
Museumsupportservices
Contributedservicesofvolunteers
andin‐kinddonations
Professionalservices
Utilities
Repairsandmaintenance
Bankfees
Publicity,printing,andpostage
Insurance
Transportation
Interestexpense
Food
Travel
Telephone
Other
Costofmerchandisesold
Baddebts
Totalfunctionalexpenses
YearEndedMay31,2014
SupportingServices
Management
Fund‐
andGeneral
Raising
Subtotal
Museum
Activities
ProgramServices
Educational
Programs
Subtotal
$ 4,769,483
$ 2,439,750
$ 7,209,233
$ 1,187,397
$721,217
1,584,033
320,040
768,547
683,054
45,470
135,377
225,629
302,941
1,629,503
455,417
994,176
985,995
‐
84,712
1,025
47,356
433,250
403,063
595,941
372,809
159,362
474,678
963
354,357
‐
26,504
187,780
54,055
1,891
1,531
175
104,957
64,067
27,670
39,441
40,235
31,829
13,154
98,953
‐
160,114
69,367
10,637
4
10,175
200
538,207
467,130
623,611
412,250
199,597
506,507
14,117
453,310
‐
186,618
257,147
64,692
1,895
11,706
375
$ 11,191,516
$ 3,819,970
$ 15,011,486
Auxiliary
Activities
Total
$ 1,908,614
$105,969
$ 9,223,816
‐
15,292
4,433
20,475
‐
100,004
5,458
67,831
52,566
3,089
204
27,149
1,682,069
558,510
999,838
1,080,975
61,815
564,013
‐
10,031
51,949
4,411
299,959
1,350
251,721
22,528
13,063
2,390
7,160
‐
145
524,609
224,061
‐
5,141
8,793
19,397
‐
339
‐
26,843
12,250
2,511
‐
‐
‐
586,424
788,074
‐
15,172
60,742
23,808
299,959
1,689
251,721
49,371
25,313
4,901
7,160
‐
145
‐
3,462
‐
5,812
5,798
5,920
‐
‐
‐
1,286
134
440
‐
38,472
‐
1,124,631
1,258,666
623,611
433,234
266,137
536,235
314,076
454,999
251,721
237,275
282,594
70,033
9,055
50,178
520
$ 2,611,025
$1,585,361
$ 4,196,386
$250,301
$ 19,458,173
6
Seeaccompanyingnotes.
OREGONMUSEUMOFSCIENCEANDINDUSTRY
STATEMENTSOFCASHFLOWS
YearsEndedMay31,
2015
2014
CASHFLOWSFROMOPERATINGACTIVITIES
Changeinnetassets
Adjustmentstoreconcilechangeinnetassetsto
netcashfromoperatingactivities:
Netrealizedandunrealized(gains)lossesoninvestments
Contributionofland,exhibits,andequipment
Depreciationandamortizationexpense
Presentvalueadjustmenttoannuitiespayable
Fairvalueadjustmenttoperpetualtrust
Lossondispositionofassets
$4,209,445
$2,187,010
6,052
(135,000)
1,727,664
6,145
7,573
676
(119,240)
(294,062)
1,682,069
4,238
1,025
159,466
(996,842)
18,172
(507,307)
372,776
(21,099)
(1,006,452)
(1,917,540)
101,858
151,729
480,148
1,431
(116,317)
3,681,803
2,321,815
(1,241,981)
‐
‐
(3,112,018)
(30,151)
(12,292)
18,000
(1,412,341)
Netcashfrominvestingactivities
(4,353,999)
(1,436,784)
CASHFLOWSFROMFINANCINGACTIVITIES
Proceedsfromissuanceofbondspayable
Proceedsfromlong‐termdebt
Paymentsonlong‐termdebt
Paymentsoncapitalleaseobligations
Paymentsofdebtissuancecosts
Paymentsofannuities
4,160,000
860,000
(4,155,011)
(383,866)
(124,065)
(7,400)
‐
‐
(116,617)
(221,988)
‐
(7,400)
Netcashfromfinancingactivities
349,658
(346,005)
(DECREASE)INCREASEINCASHANDCASHEQUIVALENTS
(322,538)
539,026
CASHANDCASHEQUIVALENTS,beginningofyear
6,259,843
5,720,817
CASHANDCASHEQUIVALENTS,endofyear
$ 5,937,305
$6,259,843
SUPPLEMENTALDISCLOSUREOFCASHFLOW
INFORMATION
Cashpaidduringtheyearforinterest
$ 271,013
$ 250,290
SUPPLEMENTALDISCLOSUREOFNONCASHINVESTING
ANDFINANCINGACTIVITIES
Acquisitionofcapitalequipmentthrough
capitalleasefinancing
$185,482
$1,343,921
Changesinassetsandliabilities:
Accounts,pledgesandcontractsreceivable
Inventories
Prepaidexpensesandotherassets
Accountspayableandaccruedexpenses
Accruedinterestpayable
Deferredrevenues
Netcashfromoperatingactivities
CASHFLOWSFROMINVESTINGACTIVITIES
Purchaseofinvestments
Reinvesteddividends
Proceedsfromsaleofland,buildings,exhibits,andequipment
Purchaseofland,buildings,exhibits,andequipment
Seeaccompanyingnotes.
7
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note1–OrganizationandSummaryofSignificantAccountingPolicies
Organization–OregonMuseumofScienceandIndustry(OMSIortheMuseum)wasfoundedin1946to
provide the public with science and technology learning through relevant and entertaining exhibits,
programs,andexperiences.TheMuseumislocatedinPortland,Oregon.
Financial statement presentation – The accompanying financial statements of OMSI have been
prepared on the accrual basis of accounting and in accordance with accounting principles generally
accepted in the United States of America. The balances and activities of the Museum have been
segregatedintonetassetclassificationsaccordingtothenatureoftheactivityandrelatedrestrictions
imposedbydonors.Theprincipalclassificationsareasfollows:
Unrestricted–Thisclassificationreflectsrevenuesandactivitiesprimarilyrelatedtotheoperationand
managementoftheMuseum.
Temporarily restricted – This classification is used to account for contributions whose use by the
Museum is limited by donor‐imposed stipulations that expire either by the passage of time or can be
fulfilledandremovedbyactionsoftheMuseumpursuanttothosestipulations.Whenadonorrestriction
expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished,
temporarily restricted net assets are transferred to unrestricted net assets and reported in the
statementsofactivitiesasnetassetsreleasedfromrestrictions.
Permanentlyrestricted–Thisclassificationisusedtoaccountforallcontributionsreceivedwithadonor
stipulationthattheprincipalbemaintainedintactinperpetuityandsuchstipulationneitherexpiresby
thepassageoftimenorcanbefulfilledorotherwiseremovedbyactionsoftheMuseum.Suchdonations
havebeendepositedinaninvestmentaccountandtherelatedinvestmentsconsistprimarilyofmutual
funds,stocks,andexchangetradedfunds.
Cashandcashequivalents–Cashandcashequivalentsincludecashonhandandamountsdepositedin
banks,moneymarketaccounts,commercialpaper,andcertificatesofdeposit,withanoriginalmaturity
oflessthan90days.CertainamountsmayexceedthelimitsofFDICinsurancecoverage.However,the
Museumhasnotincurredanycreditrelatedlossestodate.
Accountsandcontractsreceivable–Accountsreceivableconsistprimarilyofadmissionsandfeesdue
totheMuseumfromvariousorganizationsandisreportedonthestatementoffinancialpositionnetof
theallowancefordoubtfulaccountsof$20,000atMay31,2015and2014.Theallowancefordoubtful
accountsisestimatedbyevaluatingthecreditworthinessofthosefromwhomamountsaredueaswell
ascurrenteconomictrends.Receivablesareconsidereddelinquentifnotpaidbytheduedate.Accounts
arechargedoffwhenallcollectioneffortshavebeenexhausted.
8
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note1–OrganizationandSummaryofSignificantAccountingPolicies(continued)
Pledges receivable – Pledges are considered unconditional commitments of the donors. Accordingly,
recognition of these contributions is recognized when the pledge is made. Management evaluates
collectability at the time the pledge is recorded and annually thereafter. There was no allowance for
uncollectiblepledgesatMay31,2015or2014.
Investments – Investments in securities with readily determinable fair values are measured at fair
value in the statement of financial position. Investment income or loss (including gains or losses on
investments,interest,anddividends)isincludedinthestatementofactivitiesasincreasesordecreases
inunrestrictednetassetsunlesstheincomeorlossisrestrictedbydonororlaw.
Inventories–Inventories,principallyretailmerchandise,arerecordedatthelowerofaveragecostor
market.
Land,buildings,exhibits,andequipment–Land,buildings,exhibits,andequipmentarestatedatcost
or, for donated items, estimated fair value at the date of donation. Upon retirement or sale of such
assets, the cost of the asset and the related accumulated depreciation are removed from the accounts
andanyresultinggainorlossisrecorded.Depreciationofbuildings,exhibits,andequipmentisrecorded
overtheestimatedusefullivesoftherespectiveassetsonthestraight‐linebasiswithsuchlivesranging
from3to50years.
New equipment and expenditures for major repairs and improvements exceeding $2,500 are
capitalized; conversely, expenditures for minor repairs and maintenance costs are expensed when
incurred. Costs related to the design, construction, and refurbishment of traveling exhibits are
capitalizedanddepreciatedovertheperiodduringwhichtheexhibitisactivelydisplayed,generallyfive
years.Costsrelatedtoallothernontravelingexhibitsareexpensedduringtheperiodinwhichtheyare
incurred.
Collections – During 1994, the U.S. Department of the Navy donated the use of the U.S.S. Blueback
submarine to the Museum as a permanent exhibit. Additionally, during 2006, an anonymous donor
contributed a neonatal exhibit to the Museum. It is not practicable to estimate the fair value of these
collections and, as such, they have not been capitalized in the accompanying statements of financial
position.Purchasesofcollectionitemsarerecordedasdecreasesinunrestrictednetassetsintheyearin
whichtheitemsareacquired,andastemporarilyorpermanentlyrestrictednetassetsiftheassetsused
topurchasetheitemsarerestrictedbydonors.Proceedsfromde‐accessionsorinsurancerecoveriesare
reflectedasincreasesintheappropriatenetassetclasses.
Debtissuancecosts–Allcostsrelatedtotheissuanceofdebtarecapitalized.Amortizationiscomputed
on the straight‐line basis over the term of the debt. Amortization expense at May31,2015 and 2014
totaled$6,945and$6,536,respectively.
9
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note1–OrganizationandSummaryofSignificantAccountingPolicies(continued)
Deferred revenues – OMSI owns certain traveling exhibits which have been contracted to other
museums through fiscal year 2018. Revenues from these contracts, deferred initially, are recognized
over the terms of the contracts upon delivery of the exhibit at each site. At May31,2015 and 2014,
deferredrevenuerelatedtothesecontractsaggregated$1,799,221and$2,248,164,respectively.OMSI
alsoreceivesprepaymentsoncertaincamps,classes,andotherevents.Suchprepaymentsaredeferred
and recognized as revenue when the event occurs. Deferred revenue relating to these prepayments
aggregated$1,118,406and$1,129,552atMay31,2015and2014,respectively.
DuringtheyearendedMay31,2013,OMSIenteredintoafour‐yeargroundleaseagreementwithTri‐
County Metropolitan Transportation District of Oregon (TriMet). The lease amount of $1,217,535 was
paidbyTriMettoOMSIattheinceptionofthelease.OMSIrecognizesrevenue(permonth)overthelife
of the lease agreement. Deferred revenue related to the TriMet lease agreement was $26,468 and
$558,558 as of May 31, 2015 and 2014, respectively. During the year ended May 31, 2014, TriMet
exercisedanearlyleasecancellation,whichresultedinaliabilityforOMSIduetotheadvancedpayment
structure of the original lease agreement. As of May 31, 2015 and 2014, this liability approximated
$129,614 and is recorded in accounts payable and accrued expenses on the statement of financial
position.ThisliabilityisscheduledtobepaidinJanuary2016.
Admissions and memberships – Revenues from admissions and memberships with a one‐year term
arerecognizedonreceipt.
Educationalprograms–Revenuesfromeducationalprogramsarerecognizedatthetimetheprogram
occurs.
Auxiliary activities – Revenues from auxiliary activities primarily include sales from the Museum’s
sciencestoreandcaféandarerecognizedonreceipt.
Exhibitfees–Revenuesfromexhibitfeesarerecognizedratablyoverthetermoftheexhibit.
Contributions and grants – Contributions and grants are reported as revenue, with a corresponding
receivable,intheperiodinwhichthepromiseisreceivedorthegrantisawarded.
AllcontributionsareconsideredtobeavailableforOMSI’sunrestricteduseunlessspecificallyrestricted
by the donor. Contributions restricted by the donor are recorded as temporarily restricted or
permanentlyrestricted,asappropriate.Grantsarerestrictedbythegrantorforspecificactivitiesandare
recorded as temporarily restricted. When the restrictions are satisfied, the temporarily restricted
amountsarereleasedtounrestrictednetassets.
10
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note1–OrganizationandSummaryofSignificantAccountingPolicies(continued)
Contributed services of volunteers and in‐kind donations – Donated materials are reported as
contributions in the accompanying financial statements at their estimated fair values at the date of
receipt.Donatedservicesaresimilarlyreportedwhenspecializedservicesareperformedsuchasexhibit
repairorproduction,orwouldotherwisebepurchasedorperformedbysalariedpersonnel,andwhen
theMuseumexercisescontroloverthedutiesofthedonor’sservices.Theseserviceshavebeenrecorded
asrevenueandexpenseintheaccompanyingstatementsofactivitiesasfollowsatMay31:
2015
2014
Contributedservicesofvolunteers
andin‐kinddonations
Capitalizedin‐kinddonations
$773,298
135,000
$1,124,631
286,672
$908,298
$1,411,303
Functionalallocationofexpenses–ThecostsoftheMuseum’svariousactivitiesandprogramshave
been summarized on a functional basis in the accompanying statements of functional expenses.
Accordingly,certaincostshavebeenallocatedamongtheprograms,supportingservices,andauxiliary
activitiesbenefited.AuxiliaryactivitiesincludetheMuseum’ssciencestoreandspecialevents.
Advertising expenses – The Museum advertises primarily through publications, broadcasts, and
outdoor media throughout the Portland metropolitan area. Advertising and development funding
promotion costs are expensed as incurred and are included in publicity, printing, and postage in the
statementoffunctionalactivities.Advertisingexpensesaggregated$279,040and$436,548fortheyears
endedMay31,2015and2014,respectively.
Incometaxes–TheMuseumisatax‐exemptorganizationandisnotsubjecttofederalorstateincome
taxes, except for unrelated business income, in accordance with Section 501(c)(3) of the Internal
Revenue Code. In addition, the Museum qualified for the charitable contribution deduction under
Section 170(b)(1)(A) and has been classified as an organization that is not a private foundation.
Unrelated business income tax, if any, is insignificant and no tax provision has been made in the
accompanyingfinancialstatements.
TheMuseumrecognizesthetaxbenefitfromuncertaintaxpositionsonlyifitismorelikelythannotthat
thetaxpositionswillbesustainedonexaminationbythetaxauthorities,basedonthetechnicalmerits
of the position. The tax benefit is measured based on the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement. The Museum recognizes interest and penalties
relatedtoincometaxmatters,ifany,inoperatingexpenses.
11
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note1–OrganizationandSummaryofSignificantAccountingPolicies(continued)
TheMuseumhadnounrecognizedtaxbenefitsatMay31,2015or2014.TheMuseumfilesanexempt
organizationreturnintheU.S.federaljurisdictionandapplicableunrelatedbusinessincometaxreturns
for U.S. federal and Oregon purposes, and is no longer subject to income tax examinations by taxing
authoritiesforyearsbefore2011foritsfederalandstatefilings.
Use of estimates – The preparation of financial statements, in conformity with generally accepted
accountingprinciples,requiresmanagementtomakeestimatesandassumptionsthataffectthereported
amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the
financialstatements,andthereportedamountsofpublicsupportandrevenuesandexpensesduringthe
reportingperiod.Actualresultscoulddifferfromthoseestimates.
Fairvalueoffinancialinstruments–AtMay31,2015and2014,thecarryingvaluesofcashandcash
equivalents,accountsreceivable,accountspayable,andaccruedexpensesapproximatefairvaluedueto
theshort‐termnatureoftheseinstruments.
Subsequent events – Subsequent events are events or transactions that occur after the statement of
financial position date but before financial statements are issued. The Museum recognizes in the
financial statements the effects of all subsequent events that provide additional evidence about
conditionsthatexistedatthedateofthestatementoffinancialposition,includingtheestimatesinherent
in the process of preparing the financial statements. The Museum’s financial statements do not
recognizesubsequenteventsthatprovideevidenceaboutconditionsthatdidnotexistatthedateofthe
statement of financial position but arose after the statement of financial position date and before
financialstatementswereavailabletobeissued.
The Museum has evaluated subsequent events through September 22, 2015, which is the date the
financialstatementswereissued.
Note2–ComparativeFinancialInformation
The financial statements include certain prior year summarized comparative information in total but
notbynetassetclass.Suchinformationdoesnotincludesufficientdetailtoconstituteapresentationin
conformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.Accordingly,
such information should be read in conjunction with the Museum’s financial statements for the year
endedMay31,2014,fromwhichthesummarizedinformationwasderived.
12
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note3–Accounts,PledgesandContractsReceivable
Accounts,pledgesandcontractsreceivableconsistofthefollowingatMay31:
2015
Unrestrictedaccounts,pledgesandcontractsreceivable:
Tradeandotherreceivables
Travelingexhibitandexhibitsalescontracts
Pledges,netofdiscount
Grants
2014
$630,649
674,305
334,595
221,562
$496,148
1,367,206
273,249
313,963
1,861,111
2,450,566
(20,000)
(20,000)
1,841,111
2,430,566
2,213,804
3,953,669
1,791,652
2,789,524
Temporarilyrestrictedaccounts,pledgesand
contractsreceivable
6,167,473
4,581,176
Totalaccounts,pledgesandcontractsreceivable
8,008,584
7,011,742
(7,270,239)
(5,589,060)
$738,345
$1,422,682
Lessallowancefordoubtfulaccounts
Unrestrictedaccounts,pledgesandcontracts
receivable,netofdiscount
Temporarilyrestrictedaccounts,pledgesandcontracts
receivable:
Pledges,netofdiscount
Grants
Lessaccounts,pledgesandcontractsreceivabledue
withinoneyear
Long‐termaccounts,pledgesandcontracts
receivable
13
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note3–Accounts,PledgesandContractsReceivable(continued)
Pledgesreceivablegreaterthanoneyeararereflectedatthepresentvalueofestimatedfuturepayments
usinganestimateddiscountrateoffourpercent.Thediscounttotaled$96,319and$99,975fortheyears
endedMay31,2015and2014,respectively.
AsofMay31,2015,pledgesreceivablearedueasfollows:
Lessthanoneyear
$ 1,954,552
Onetofiveyears
690,166
2,644,718
Less:Discounttonetpresentvalue
(96,319)
Pledgesreceivable,netofdiscount
$ 2,548,399
Note4–BeneficialInterestinPerpetualTrust
OMSIisthesolebeneficiaryofaperpetualtrustwherebytheinvestmentprincipalremainspartofthe
trust and is not the property of the Museum. The trust is managed by a third‐party trustee, Bank of
America,N.A.Eachyear,OMSIreceivesannualincomedistributionsfromthetrustinperpetuity,which
is to be used for scholarship or educational purposes. The Museum has no right to the investment
principal.Theannualfluctuationinthefairvalueofthetrustisincludedinthestatementsofactivitiesas
anincreaseordecreaseinpermanentlyrestrictednetassets.AsofMay31,2015and2014,thefairvalue
ofthetrustassetstotaled$372,472and$380,045,respectively.
Note5–Investments
InvestmentsarecomprisedofthefollowingatMay31:
2015
2014
Mutualfunds
Stocksandexchangetradedfunds
Totalinvestments
$1,451,007
941,491
$1,156,569
‐
$ 2,392,498
$1,156,569
14
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note6–FairValueofAssets
The Museum accounts for financial instruments in accordance with the standard for Fair Value
Measurements.Thisstandarddefinesfairvalueasthepricethatwouldbereceivedtosellanassetinan
orderlytransactionbetweenmarketparticipantsatthemeasurementdate.TheMuseumdeterminesfair
value based upon quoted prices when available or through the use of alternative approaches, such as
matrix or model pricing, when market quotes are not readily accessible or available. The valuation
techniques used are based on observable and unobservable inputs. Observable inputs reflect market
data obtained from independent sources, while unobservable inputs reflect the Museum’s market
assumptions.Thesetwotypesofinputscreatethefollowingfairvaluehierarchy:
Level1–Quotedpricesinactivemarketsforidenticalassets.
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or
similar instruments in markets that are not active, and model‐derived valuations whose inputs are
observableorwhosesignificantvaluedriversareobservable.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the asset. Unobservable inputs are used to measure fair value to the
extent that observable inputs are not available. The Museum’s own data used to develop
unobservableinputsisadjustedformarketconsiderationwhenavailable.
TheMuseumusedthefollowingmethodsandsignificantassumptionstoestimatefairvalueforitsassets
measuredandcarriedatfairvalueinthefinancialstatements:
Investments–Investmentsarecomprisedofmutualfunds,stocks,andexchangetradedfundsforwhich
fair values are based on quoted market prices in an active market. If a quoted market price is not
available,fairvalueisestimatedusingquotedmarketpricesforsimilarsecurities.
Beneficialinterestinperpetualtrust–TheMuseum’sbeneficialinterestinperpetualtrustisrecordedat
fairvaluebasedonthefairvalueoftheunderlyingtrustassetsasdeterminedbythethird‐partytrustee,
fairvalueisbasedonquotedmarketprices.Thethird‐partytrusteecontrolstheinvestmentsinthetrust
andmakesallmanagementandinvestmentdecisions.
The beneficial interest in perpetual trust classified as a Level 3 investment is based on valuations
providedbytheMuseum’sexternalinvestmentmanagers.TheFinanceCommittee,inconjunctionwith
theexternalinvestmentadvisors,monitorsandanalyzesthevaluationoftheinvestmentsonanannual
basis.TheFinanceCommitteereportstotheBoardofTrustees.Thevaluationsconsidervariablessuch
as financial performance of investments, recent sales prices of investments, and other pertinent
information.
TheMuseumhasnoliabilitiesthatarerequiredtobemeasuredatfairvalueatMay31,2015or2014.
15
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note6–FairValueofAssets(continued)
The following table presents the fair value measurements of assets recognized in the accompanying
statementoffinancialpositionmeasuredatfairvalueonarecurringbasisandthelevelwithinthefair
valuehierarchyinwhichthefairvaluemeasurementsfallatMay31,2015and2014:
FairValueMeasurementatReportDateUsing:
QuotedPrices
inActive
Significant
Marketsfor
Other
Significant
Identical
Observable
Unobservable
FairValueat
Assets
Inputs
Inputs
May31,2015
(Level1)
(Level2)
(Level3)
Mutualfunds
Stocksandexchangetradedfunds
Beneficialinterestinperpetualtrust
$ 1,451,007
941,491
372,472
$ 1,451,007
941,491
‐
$‐
‐
‐
$ ‐
‐
372,472
$ 2,764,970
$ 2,392,498
$‐
$372,472
FairValueMeasurementatReportDateUsing:
QuotedPrices
inActive
Significant
Marketsfor
Other
Significant
Identical
Observable
Unobservable
FairValueat
Assets
Inputs
Inputs
May31,2014
(Level1)
(Level2)
(Level3)
Mutualfunds
Beneficialinterestinperpetualtrust
$ 1,156,569
380,045
$ 1,156,569
‐
$‐
‐
$ ‐
380,045
$ 1,536,614
$ 1,156,569
$‐
$380,045
16
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note6–FairValueofAssets(continued)
The following table provides a reconciliation of assets measured at fair value using significant
unobservableinputs(Level3)onarecurringbasisduringtheyearsendedMay31,2015and2014:
Beneficial
Interestin
PerpetualTrust
Balance,May31,2014
Adjustmenttofairvalueincludedinearnings
$380,045
(7,573)
Balance,May31,2015
$372,472
Beneficial
Interestin
PerpetualTrust
Balance,May31,2013
Adjustmenttofairvalueincludedinearnings
$381,070
(1,025)
Balance,May31,2014
$380,045
17
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note7–Land,Buildings,Exhibits,andEquipment
Land,buildings,exhibits,andequipmentconsistofthefollowingatMay31:
2015
2014
Land
Buildingsandimprovements
Exhibits
Equipment
$ 9,683,547
41,657,778
6,647,796
6,947,482
$9,683,547
41,023,257
7,094,334
7,538,627
Totalland,buildings,exhibitsandequipment
Lessaccumulateddepreciationandamortization
64,936,603
(33,586,961)
65,339,765
(33,033,131)
Constructioninprogress
31,349,642
5,804,230
32,306,634
3,136,133
$37,153,872
$35,442,767
Land,buildings,exhibitsandequipment,net
Equipment includes assets purchased under capital leases with an aggregate cost of $2,498,818 and
$2,354,852, and accumulated amortization of $673,930 and $404,013 at May 31, 2015 and 2014,
respectively. Amortization expense for the years ended May 31, 2015 and 2014 totaled $269,917 and
$188,555,respectively.
Note8–LineofCredit
At May 31, 2014, the Museum had an operating line of credit which had an approved maximum
borrowing limit of $125,000 from a bank. There was no outstanding balance on the line of credit at
May31, 2014. The line was secured by a deed of trust, inventory, accounts, general intangibles, and
rightstopaymentsandboreinterestat5.00%atMay31,2014(calculatedasthebank’sprimerateplus
.125%perannum,subjecttoa5.00%floor).TheoperatinglinematuredonDecember31,2014andwas
notrenewed.
At May 31, 2015, the Museum entered into a new operating line of credit which has an approved
maximumborrowinglimitof$200,000fromabank.Therewasnooutstandingbalanceonthelineof
credit at May 31, 2015. The line bears interest at 4.25% at May 31,2015(calculatedatbank’sprime
rate plus 1.00% per annum, subject to a 4.00% floor). The operating line matured on September10,
2015andwasnotrenewed.
18
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note9–Long‐TermDebtandBondsPayable
Long‐termdebtconsistsofthefollowingatMay31:
WellsFargo,interestrateof3.45%,withmonthly
paymentsof$23,945,maturingonMay1,2018,and
andsecuredbyaDeedofTrustencumberingreal
propertyownedbytheMuseum.
OregonDepartmentofEnergy,interestrateof5.88%,
withquarterlyinstallmentsof$90,093.Paidoffin
2015.
Lesscurrentportion
2015
2014
$797,816
$‐
‐
797,816
4,092,827
4,092,827
(261,106)
(122,235)
$536,710
$3,970,592
Followingisasummaryofscheduledprincipalmaturitiesoflong‐termdebt:
YearsendingMay31, 2016
$261,106
2017
270,848
2018
265,862
$797,816
2015 Series Bonds – In January 2015, the Museum issued SeriesAbondstorefinancetheMuseum’s
long‐termdebtwiththeOregonOfficeofEnergy.ThebondswereissuedandpurchasedbyWellsFargo
asaprivateplacement.Tosecureits2015bondobligations,theMuseumhasgrantedasecurityinterest
intherealpropertyheldbytheMuseum.ThefacevalueoftheSeriesAbondsis$4,160,000.
Debtfinancingcostsassociatedwiththe2015SeriesAbondshadanunamortizedbalanceof$171,576
atMay31,2015.Thecostswillbeamortizedoverthelifeofthebonds.
TheloanagreementcontainscovenantswhichrequiretheMuseumtomaintainaminimumliquidityof
notlessthan$1,000,000asofthelastdayofthesecondandfourthquarterofeachfiscalyear.
19
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note9–Long‐TermDebtandBondsPayable(continued)
BondspayableconsistsofthefollowingatMay31:
OregonFacilitiesAuthority2015SeriesABonds‐
interestonlypaymentsthroughMay1,2018ataninterest
rateof3.45%.BeginningMay1,2018,monthlyprincipaland
interestpaymentsof$35,905,maturingFebruary1,2030.
2015
2014
$ 4,160,000
$‐
Thefollowingisasummaryofscheduledredemptionsofbondspayable:
YearsendingMay31, 2016
$‐
2017
‐
2018
14,612
2019
287,742
2020
297,418
Thereafter
3,560,228
$ 4,160,000
TotalbondinterestexpensefortheyearendedMay31,2015was$30,528.Therewasnobondinterest
expenserecordedfortheyearendedMay31,2014.
Note10–TrustFundsHeldbyOthers
Securities and cash with a fair value of $1,009,047 and $1,033,231 at May 31, 2015 and 2014,
respectively, are held in trust for the benefit of OMSI and various other charitable organizations. No
portion of these assets held in trust for OMSI have been included in the accompanying financial
statements. The principal is to remain in trust in perpetuity and investment income is distributed to
OMSIatthediscretionofthetrustees.Suchdistributionsarerecordedascontributionswhenreceived.
20
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note10–TrustFundsHeldbyOthers(continued)
In addition, an endowment fund was established on July 16, 1998, for the benefit of OMSI, for the
maintenance or renovation of OMSI’s buildings, and the construction or maintenance of exhibits. The
endowment is subject to various conditions, including the continued support of state and local
governments until the existing indebtedness to the ODOE is satisfied. Because the ODOE debt was
satisfiedin2015,theendowmentisnolongersubjecttothesevariousconditionsasofMay31,2015.No
portionoftheseassetsheldintheendowmentfundforthebenefitofOMSIhavebeenincludedinthe
accompanyingfinancialstatements.Aportionoftheearningsontheendowmentfundsisdistributedon
an annual basis. The fair value of the endowment, including matching funds, totaled $5,780,421 and
$5,877,775atMay31,2015and2014,respectively.OMSIrecordedtemporarilyrestrictedcontributions
fromtheendowmentof$240,162and$235,162fortheyearendedMay31,2015and2014,respectively.
Note11–BenefitPlans
Definedcontributionplan–TheMuseumsponsorsa403(b)plan(thePlan)wherebyeligibleemployees
maydeferaportionoftheirgrosswages.EmployeesareeligibletoparticipateinthePlanonthefirst
dayofemployment.EmployeesareeligibletoparticipateinthePlanmatchoncetheyhavecompleted
oneyearofservice.Employeesmaycontributeamaximumof100%oftheircompensationtothePlan
(subjecttoannuallimitationsbytheIRS).OMSImakesdiscretionarymatchingcontributionstothePlan,
the amountofwhichisdeterminedattheendofthePlanyear, December31.Employercontributions
vest over a period of five years. OMSI contributed $81,961 and $83,077 to the Plan for the Plan year
endedMay31,2015and2014,respectively.
457(b) deferred compensation plan – Effective October 1, 2013, the Museum established a deferred
compensationplan(thePlan)undertheprovisionsofSection457(b)oftheInternalRevenueCodefor
selectedemployeesattheMuseum.InvestmentsareownedbytheMuseumandmanagedindividually
bytheparticipant.Participantsare100%vestedinbothemployeeandemployerdeferralsatalltimes.
Paymentswillbemadeupondeath,retirement,orunforeseeableemergency.Untilsuchtime,planassets
aresubjecttotheclaimoftheMuseum’screditors.
TheMuseumdidnotmakediscretionarycontributionstotheplanduringtheyearendedMay31,2015
or2014.TheMuseumrecordedanassetandliabilityintheamountof$45,577asofMay31,2015.The
Museum recorded an asset and liability in the amount of $25,915 as of May 31, 2014. The asset and
liability are recorded in net accounts, pledges and contracts receivable, current portion and accounts
payableandaccruedexpenses,respectively,onthestatementoffinancialposition.
21
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note12–CommitmentsandContingencies
Capital leases – As of May 31, 2015, the Museum leased certain equipment under capital lease
obligations.
Futureminimumpaymentsassociatedwithcapitalleaseagreementsforsucceedingyearsareasfollows:
2016
$440,127
2017
427,085
2018
348,492
2019
297,522
2020
35,560
Totalminimumpayments
Lessamountrepresentinginterest
1,548,786
(145,321)
Presentvalueoftotalminimumcapitalleasepayments
Lesscurrentportion
1,403,465
(363,367)
Capitalleaseobligations,netofcurrentportion
$ 1,040,098
Operating leases – The Museum enters into various short‐term operating leases for items such as
equipment, exhibit rentals, facilities, and storage fees. Rent expense related to these leases was
$877,287and$998,099fortheyearsendedMay31,2015and2014,respectively.
Grantrevenues–Thegrantrevenuesreportedintheaccompanyingstatementsofactivitiesaresubject
toauditandadjustmentbygrantoragencies.Grantrevenuesrelatingtocosts,whichmaybeultimately
questionedordisallowedbythegrantoragencies,maybecomealiabilityoftheMuseumasaresultof
audit findings. However, management does not expect any significant liabilities related to grant
revenues.
22
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note13–NetAssetsReleasedFromRestrictions
Net assets relating to restricted contributions and grants are released from temporarily restricted net
assetstounrestrictednetassetswhentheMuseumincursexpensessatisfyingtherestrictedpurposesor
whenothereventsspecifiedbydonorsoccur.SuchreleasesaresummarizedasfollowsatMay31:
2015
2014
Satisfactionofprogramrestrictionsforgrants
Satisfactionofprogramrestrictionsforcontributions
$ 2,403,982
1,684,161
$2,419,320
1,360,058
$ 4,088,143
$3,779,378
Note14–TemporarilyRestrictedNetAssets
TemporarilyrestrictednetassetsarerestrictedforthefollowingpurposesatMay31:
2015
Donationsandgrantsrestrictedfor
variousprojectsandexhibits
Donationsandgrantsrestrictedforspecial
operatingpurposes
Donationsrestrictedbytimeforoperations
Donationsrestrictedforscholarships
2014
$ 3,933,572
$2,554,362
6,020,466
482,304
230,154
3,664,607
635,490
118,188
$10,666,496
$6,972,647
23
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note15–PermanentlyRestrictedNetAssets
PermanentlyrestrictednetassetsconsistofatMay31:
GeneralEducationEndowment
SteereEducationEndowment
NaftalinEducationEndowment
PoulsenEducationEndowment
Totalendowments
PetersonTrust‐BeneficialInterestinTrust
Totaltrustsheldforendowment
Totalpermanentlyrestrictednetassets
2015
2014
$442,602
26,282
6,294
1,395
$442,602
26,282
6,294
1,395
476,573
476,573
372,472
380,045
372,472
380,045
$849,045
$856,618
Note16–Endowments
Unrestrictedendowmentsrepresentquasi‐endowmentswhichareunrestrictednetassetsdesignatedby
the Board of Trustees to provide support and resources for Museum operations. A Board‐designated
endowment, which results from an internal Board designation, is not an outside donor‐restricted
endowmentandis,therefore,classifiedasunrestrictednetassets.TheBoardofTrusteesoftheMuseum
hastherighttodecideatanytimetoexpendthedesignatedportionofsuchfunds.TheMuseumdidnot
haveanyunrestrictedendowmentsasofMay31,2015or2014.
TemporarilyrestrictedendowmentsarethosefundsresultingfromearningswhoseusebytheMuseum
isrestrictedbydonor‐imposedstipulationsthateitherexpirebythepassageoftimeorbyfulfillingthe
specifiedpurposerestriction.
Permanentlyrestrictedendowmentshaveoutsidedonor‐imposedstipulations,whichneitherexpireby
the passage of time nor can be fulfilled by actions of the Museum. Income earned from permanently
restrictedendowmentsisgenerallytemporarilyrestrictedbydonor‐imposedstipulations.
Endowment dollars invested with growth in mind may have the fair value of assets, associated with
individualdonorrestrictedfunds,fallbelowthelevelthatthedonorrequirestheMuseumtoretainasa
fundofperpetualduration.TherewerenosuchdeficienciesasofMay31,2015and2014.
24
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note16–Endowments(continued)
TheMuseumfollowstheUniformPrudentManagementofInstitutionalFundsActof2007(UPMIFAor
theAct),theprovisionsofwhichapplytoendowmentfundsexistingonorestablishedaftertheeffective
dateofJanuary1,2008.TheBoardofTrusteesoftheMuseumhasinterpretedtheActasrequiringthe
preservationofthefairvalueoftheoriginalgift,asofthegiftdateofthedonor‐restrictedendowment
funds,absentexplicitdonorstipulationstothecontrary.Asaresultofthisinterpretation,theMuseum
classifiesaspermanentlyrestrictednetassets:(a)theoriginalvalueofgiftsdonatedtothepermanent
endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c)
accumulations to the permanent endowment made in accordance with the direction of the applicable
donorgiftinstrumentatthetimetheaccumulationisaddedtothefund.
The remaining portion of the donor restricted endowment fund that is not classified in permanently
restricted net assets is classified as temporarily restricted net assets until those amounts are
appropriated for expenditure by the Museum in a manner consistent with the standard of prudence
prescribedbytheAct.InaccordancewiththeAct,theMuseumconsidersthefollowingfactorsinmaking
adeterminationtoappropriateoraccumulatedonor‐restrictedendowmentfunds:
1. Thedurationandpreservationofthefund
2. ThepurposesoftheMuseumandthedonor‐restrictedendowmentfund
3. Generaleconomicconditions
4. Thepossibleeffectofinflationanddeflation
5. Theexpectedtotalreturnfromincomeandtheappreciationofinvestments
6. OtherresourcesoftheMuseum
7. TheinvestmentpoliciesoftheMuseum
TheMuseumhasimplementedaspendingpolicythatallowsapercentageoftotalprogramcost,varied
byprogram,tobespentonfinancialassistanceforcampattendees.
EndowmentnetassetsconsistofthefollowingatMay31,2015:
Temporarily Permanently
Unrestricted
Restricted
Restricted
Total
Donor‐restrictedendowmentfunds
$ ‐
$ 71,485
$ 476,573
$548,058
25
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOFINANCIALSTATEMENTS
Note16–Endowments(continued)
EndowmentnetassetsconsistofthefollowingatMay31,2014:
Temporarily Permanently
Unrestricted
Restricted
Restricted
Donor‐restrictedendowmentfunds
$ ‐
$ 83,500
$ 476,573
ChangesinendowmentnetassetsfortheyearendedMay31,2015isasfollows:
Temporarily Permanently
Unrestricted
Restricted
Restricted
Total
$560,073
Total
Endowmentnetassets,
May31,2014
$ ‐
$ 83,500
$ 476,573
$560,073
Investmentreturn
Investmentincome
‐
15,515
‐
15,515
Appropriationofendowment
assetsforexpenditure
‐
(27,530)
‐
(27,530)
Endowmentnetassets,
May31,2015
$ ‐
$ 71,485
$ 476,573
$548,058
ChangesinendowmentnetassetsfortheyearendedMay31,2014isasfollows:
Temporarily Permanently
Unrestricted
Restricted
Restricted
Total
Endowmentnetassets,
May31,2013
$ ‐
$ 65,458
$ 476,573
$542,031
Investmentreturn
Investmentincome
‐
20,816
‐
20,816
Appropriationofendowment
assetsforexpenditure
‐
(2,774)
‐
(2,774)
Endowmentnetassets,
May31,2014
$ ‐
$ 83,500
$ 476,573
$560,073
26
REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIAL
REPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDITOF
FINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITH
GOVERNMENTAUDITINGSTANDARDS
TotheBoardofTrustees
OregonMuseumofScienceandIndustry
Wehaveaudited,inaccordancewiththeauditingstandardsgenerallyacceptedintheUnitedStatesof
America and the standards applicable to financial audits contained in Government Auditing Standards
issuedbytheComptrollerGeneraloftheUnitedStates,thefinancialstatementsofOregonMuseumof
Science and Industry (the Museum), which comprise the statement of financial position as of May31,
2015, and the related statements of activities, functional expenses, and cash flows for the year then
ended, and the related notes to the financial statements, and have issued our report thereon dated
September22,2015.
InternalControlOverFinancialReporting
Inplanningandperformingourauditofthefinancialstatements,weconsideredtheMuseum’sinternal
control over financial reporting (internal control) to determine the audit procedures that are
appropriateinthecircumstancesforthepurposeofexpressingouropiniononthefinancialstatements,
butnotforthepurposeofexpressinganopinionontheeffectivenessoftheMuseum’sinternalcontrol.
Accordingly,wedonotexpressanopinionontheeffectivenessoftheMuseum’sinternalcontrol.
A deficiency in internal control exists when the design or operation of a control does not allow
managementoremployees,inthenormalcourseofperformingtheirassignedfunctions,toprevent,or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combinationofdeficiencies,ininternalcontrol,suchthatthereisareasonablepossibilitythatamaterial
misstatementoftheentity’sfinancialstatementswillnotbeprevented,ordetectedandcorrectedona
timelybasis.Asignificantdeficiencyisadeficiency,oracombinationofdeficiencies,ininternalcontrol
thatislessseverethanamaterialweakness,yetimportantenoughtomeritattentionbythosecharged
withgovernance.
Ourconsiderationofinternalcontrolwasforthelimitedpurposedescribedinthefirstparagraphofthis
section and was not designed to identify all deficiencies in internal control that might be material
weaknessesorsignificantdeficiencies.Giventheselimitations,duringourauditwedidnotidentifyany
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknessesmayexistthathavenotbeenidentified.
27
REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIAL
REPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDITOF
FINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITH
GOVERNMENTAUDITINGSTANDARDS(continued)
ComplianceandOtherMatters
As part of obtaining reasonable assurance about whether the Museum’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
materialeffectonthedeterminationoffinancialstatementamounts.However,providinganopinionon
compliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonotexpress
suchanopinion.Theresultsofourtestsdisclosednoinstancesofnoncomplianceorothermattersthat
arerequiredtobereportedunderGovernmentAuditingStandards.
PurposeofthisReport
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance.Accordingly,thiscommunicationisnotsuitableforanyotherpurpose.
Portland,Oregon
September22,2015
28
REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJORFEDERAL
PROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCE
TotheBoardofTrustees
OregonMuseumofScienceandIndustry
ReportonCompliancefortheMajorFederalProgram
We have audited Oregon Museum of Science and Industry’s (the Museum) compliance with the types of
compliance requirements described in the OMB Circular A‐133 Compliance Supplement that could have a
direct and material effect on the Museum’s major federal program for the year ended May 31, 2015. The
Museum’s major federal program is identified in the summary of auditor's results section of the
accompanyingscheduleoffindingsandquestionedcosts.
Management’sResponsibility
Managementisresponsibleforcompliancewiththerequirementsoflaws,regulations,contracts,andgrants
applicabletoitsfederalprograms.
Auditor’sResponsibility
OurresponsibilityistoexpressanopiniononcompliancefortheMuseum’smajorfederalprogrambasedon
ourauditofthetypesofcompliancerequirementsreferredtoabove.Weconductedourauditofcompliance
in accordance with auditing standards generally accepted in the United States of America; the standards
applicabletofinancialauditscontainedinGovernmentAuditingStandards,issuedbytheComptrollerGeneral
of the United States; and OMB Circular A‐133, Audits of States, Local Governments, and Non‐Profit
Organizations.ThosestandardsandOMBCircularA‐133requirethatweplanandperformtheaudittoobtain
reasonableassuranceaboutwhethernoncompliancewiththetypesofcompliancerequirementsreferredto
above that could have a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about the Museum’s compliance with those requirements and
performingsuchotherproceduresasweconsiderednecessaryinthecircumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal
program.However,ourauditdoesnotprovidealegaldeterminationoftheMuseum’scompliance.
OpinionontheMajorFederalProgram
Inouropinion,OregonMuseumofScienceandIndustrycomplied,inallmaterialrespects,withthetypesof
compliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectonitsmajorfederal
programfortheyearendedMay31,2015.
29
REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJORFEDERAL
PROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCE(continued)
ReportonInternalControlOverCompliance
Management of the Museum is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the Museum’s internal control over compliance with the types of
requirements that could have a direct and material effect on the major federal program to determine the
auditingproceduresthatareappropriateinthecircumstancesforthepurposeofexpressinganopinionon
compliance for the major federal program and to test and report on internal control over compliance in
accordancewithOMBCircularA‐133,butnotforthepurposeofexpressinganopinionontheeffectivenessof
internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the
Museum’sinternalcontrolovercompliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federalprogramonatimelybasis.Amaterialweaknessininternalcontrolovercomplianceisadeficiency,ora
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected on a timely basis. A significant deficiency in internal control over
complianceisadeficiency,oracombinationofdeficiencies,ininternalcontrolovercompliancewithatypeof
compliancerequirementofafederalprogramthatislessseverethanamaterialweaknessininternalcontrol
overcompliance,yetimportantenoughtomeritattentionbythosechargedwithgovernance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraphofthissectionandwasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliance
thatmightbematerialweaknessesorsignificantdeficiencies.Wedidnotidentifyanydeficienciesininternal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
existthathavenotbeenidentified.
Thepurposeofthisreportoninternalcontrolovercomplianceissolelytodescribethescopeofourtestingof
internalcontrolovercomplianceandtheresultsofthattestingbasedontherequirementsofOMBCircularA‐
133.Accordingly,thisreportisnotsuitableforanyotherpurpose.
Portland,Oregon
September22,2015
30
OREGONMUSEUMOFSCIENCEANDINDUSTRY
SCHEDULEOFFINDINGSANDQUESTIONEDCOSTS
YEARENDEDMAY31,2015
SectionI–SummaryofAuditor’sResults
FinancialStatements
Typeofauditor’sreportissued:
Unmodified
Internalcontroloverfinancialreporting:
 Materialweakness(es)identified?
yes
X_no
 Significantdeficiency(ies)identified? _____yes X__nonereported
Noncompliancematerialtofinancial
statementsnoted?
yes
X_no
FederalAwards
Internalcontrolovermajorfederalprograms:
 Materialweakness(es)identified?
yes
X_no
 Significantdeficiency(ies)identified? _________yes Xnonereported
Typeofauditor’sreportissuedoncomplianceformajorfederalprograms:
Unmodified
Anyauditfindingsdisclosedthatare
requiredtobereportedinaccordance
withsection510(a)ofCircularA‐133?
_________yes
X__no
Identificationofmajorfederalprograms:
CFDANumber
NameofFederalProgramorCluster
Various
ResearchandDevelopmentCluster
Dollarthresholdusedtodistinguish
betweentypeAandtypeBprograms:
$300,000
Auditeequalifiedaslow‐riskauditee? ____X____yes ___no
31
OREGONMUSEUMOFSCIENCEANDINDUSTRY
SCHEDULEOFFINDINGSANDQUESTIONEDCOSTS(continued)
YEARENDEDMAY31,2015
SectionII–FinancialStatementFindings
Nomatterswerereported
SectionIII–FederalAwardFindingsandQuestionedCosts
Nomatterswerereported
32
SUPPLEMENTARYINFORMATION
OREGONMUSEUMOFSCIENCEANDINDUSTRY
SCHEDULEOFEXPENDITURESOFFEDERALAWARDS
YEARENDEDMAY31,2015
FederalGrantor/Pass‐Through
Grantor/ProgramorClusterTitle
ResearchandDevelopmentCluster
NationalScienceFoundationDirectPrograms:
EducationandHumanResources
Federal
CFDA
Number
Pass‐Through
EntityIdentifying
Number
47.076
$1,494,566
SubtotalNationalScienceFoundationDirectPrograms
NationalScienceFoundationPass‐ThroughProgramsFrom:
MuseumofScience‐NanoscaleInformalScienceEducation
OregonStateUniversity‐MathematicalandPhysicalSciences
UniversityofMinnesota‐PRIMECASNET
MuseumofScience‐LivingLab
PacificScienceCenter‐PoPNetMini‐Grant
WashingtonStateUniversity‐Geosciences
Cornell‐UrbanBirds
MusemofScience‐SynBio
Federal
Expenditures
1,494,566
47.076
47.076
47.076
47.049
47.076
47.050
47.076
47.076
940143
S1412C‐F
A002923102
4552‐OMSI‐01
2013‐1213E
111821_G003330
72627‐10372
Unknown
150,492
29,213
36,222
23,864
3,647
9,737
3,016
5,746
SubtotalNationalScienceFoundationPass‐ThroughPrograms
261,937
TotalNationalScienceFoundation
1,756,503
DepartmentofHealthandHumanServices:
NationalInstitutesofHealthDirectPrograms:
ResearchInfrastructurePrograms
93.351
379,423
TotalDepartmentofHealthandHumanServices
379,423
TotalResearchandDevelopmentCluster
2,135,926
NationalAeronauticsandSpaceAdministrationDirectPrograms:
Education
43.008
31,836
SubtotalNationalAeronauticsandSpaceAdministrationDirectPrograms
NationalAeronauticsandSpaceAdministrationPass‐ThroughProgramsFrom:
AquariumofthePacific‐Education
31,836
43.008
NASA‐OMSI
88,620
TotalNationalAeronauticsandSpaceAdministration
InstituteofMuseumandLibraryServicesDirectPrograms:
NationalLeadershipGrants
MuseumsforAmerica
45.312
45.301
19,542
124,330
SubtotalInstituteofMuseumandLibraryServicesDirectPrograms
InstituteofMuseumandLibraryServicesPass‐ThroughProgramsFrom:
Children'sMuseumofHouston‐NationalLeadershipGrants
143,872
45.312
Unknown
TotalInstituteofMuseumandLibraryServices
NationalOceanicandAtmosphericAdministrationPass‐ThroughProgramsFrom:
NationalMarineSanctuaryFoundation‐MarineSanctuaryProgram
3,221
147,093
11.429
TotalNationalOceanicandAtmosphericAdministration
U.S.DepartmentofAgricultureDirectPrograms:
SpecialtyCropBlockGrantProgram‐FarmBill
56,784
14‐10‐B‐00010
12,600
12,600
10.170
19,744
TotalU.S.DepartmentofAgriculture
19,744
TotalExpendituresofFederalAwards
$2,403,983
Seeaccompanyingnotes toscheduleofexpendituresoffederalawards.
33
OREGONMUSEUMOFSCIENCEANDINDUSTRY
NOTESTOSCHEDULEOFEXPENDITURESOFFEDERALAWARDS
YEARENDEDMAY31,2015
Note1–BasisofPresentation
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal
grantactivityofOregonMuseumofScienceandIndustry(theMuseum)underprogramsofthefederal
governmentfortheyearendedMay31,2015.TheinformationpresentedinthisScheduleispresented
in accordance with the requirements of the Office of Management and Budget (OMB) Circular A‐133,
AuditsofStates,LocalGovernments,andNon‐ProfitOrganizations.BecausetheSchedulepresentsonlya
selectedportionoftheoperationsoftheMuseum,itisnotintendedtoanddoesnotpresentthefinancial
position,changesinnetassetsorcashflowsoftheMuseum.
Note2–SummaryofSignificantAccountingPolicies
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such
expenditures are recognized following the cost principles contained in OMB Circular A‐122, Cost
Principlesfor Non‐Profit Organizations,whereincertaintypesofexpendituresarenotallowableorare
limitedastoreimbursement.Pass‐throughentityidentifyingnumbersarepresentedwhereavailable.
Note3–Subrecipients
Of the federal expenditures presented in the Schedule, the Museum provided federal awards to
subrecipientsasfollows:
Amounts
Providedto
CFDANumber
ProgramName
Subrecipients
47.076
EducationandHumanResources
$284,903
34