Office of Internal Audit
One University Drive
P.O. Box 1510
Pembroke, NC 28372
910.775.4403
Friends of the University of North Carolina at Wilmington, Inc.
Financial Audit for the Fiscal Year Ending June 30, 2015
November 24, 2015
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Contents
Independent Auditor’s Report
1
Financial Statements
Statement of Financial Position
2
Statement of Activities
3
Statement of Cash Flows
4
Notes to the Financial Statements
5
November 24, 2015
To the Board of Friends of the University of North Carolina at Wilmington, Inc.:
We have audited the accompanying statement of financial position of the Friends of the
University of North Carolina at Wilmington, Inc. (Friends) as of June 30, 2015 and 2014, and the
related statements of activities and cash flows for the years then ended. These financial
statements are the responsibility of Friends’ Board of Directors. 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 of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts in
the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Friends of the University of North Carolina at Wilmington, Inc. as of
June 30, 2015 and 2014, and the changes in its net assets and cash flows for the years then
ended in conformity with generally accepted accounting principles in the United States of
America.
We also audited Friends’ compliance with the requirements of a Minor Associated Entity to the
University of North Carolina Wilmington. We are pleased to report that the Friends of the
University of North Carolina at Wilmington, Inc. continues to meet all of the requirements.
Sincerely,
Kelley Horton, Chief Audit Officer
Office of Internal Audit
University of North Carolina at Pembroke
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Friends of the University of North Carolina at Wilmington, Inc.
Statement of Financial Position
June 30, 2015 and 2014
Increase
06/30/2015
06/30/2014
(Decrease)
$ 13,503.46
$ 14,242.70
$
(739.24)
$ 13,503.46
$ 14,242.70
$
(739.24)
13,503.46
14,242.70
$ 13,503.46
$ 14,242.70
Assets
Cash
Total Assets
Liabilities & Net Assets
Net Assets-Unrestricted
Total Liabilities & Net Assets
See Notes to the Financial Statements
2
(739.24)
$
(739.24)
Friends of the University of North Carolina at Wilmington, Inc.
Statement of Activities
For the Years Ended June 30, 2015 and 2014
Increase
06/30/2015
06/30/2014
(Decrease)
Revenues and other support
Donations
$
12,217.52
Interest Income
$
11,971.00
$
246.52
62.30
60.94
1.36
12,279.82
12,031.94
247.88
11,662.68
12,498.95
(836.27)
Supplies & Materials
621.00
321.08
299.92
Contracted Services
99.50
87.90
11.60
610.88
598.55
12.33
25.00
5.00
20.00
13,019.06
13,511.48
(492.42)
(1,479.54)
740.30
Total Revenue
Expenses
Scholarships & Grants
Gift Admin Fees
Accounting and Audit Fees
Total Expenses
Change in Net Assets
(739.24)
Net Assets - Beginning
Net Assets - Ending
14,242.70
$
13,503.46
See Notes to the Financial Statements
3
15,722.24
$
14,242.70
(1,479.54)
$
(739.24)
Friends of the University of North Carolina at Wilmington, Inc.
Statement of Cash Flows
For the Year Ended June 30, 2015
Cash Flows from Operating Activites
Change in Net Assets
$
Net Cash Used by Operating Activities
(739.24)
(739.24)
Net Decrease in Cash
(739.24)
Cash - July 1, 2014
Cash - June 30, 2015
14,242.70
$ 13,503.46
See Notes to the Financial Statements
4
Notes to the Financial Statements
A. Organization - The Friends of the University of North Carolina at Wilmington, Inc.
(Friends) is a not-for-profit entity exempt from tax under Section 501(c)(3) of the
Internal Revenue Code.
B. Basis of Presentation –The financial statements of Friends have been prepared in
accordance with generally accepted accounting principles as described by the Financial
Accounting Standards Board (FASB). Net assets and revenues, expenses, gains, and
losses are classified based on the existence or absence of donor-imposed restrictions.
Accordingly, net assets of Friends are classified and reported as follows:
Unrestricted net assets: Unrestricted net assets consist of operating funds
available for any purpose authorized by the Board.
Temporarily restricted net assets: Temporarily restricted net assets consist of
funds that are restricted for a specific use or time determined by the donor.
Friends’ temporarily restricted net assets are primarily used to contribute to a
UNCW scholarship fund. Friends had no temporarily restricted net assets as of
June 30, 2015 and 2014.
Permanently restricted net assets: Permanently restricted net assets consist of
funds arising from a gift or bequest in which the donor has stipulated, as a
condition of the gift, that the principal be maintained in perpetuity and only the
investment income from investment of the funds be expended. Friends had no
permanently restricted net assets as of June 30, 2015 and 2014.
C. Basis of Accounting – The financial statements are presented using the accrual method
of accounting.
D. Tax Status – The entity is exempt from federal and state income taxes under Section
501(c)(3) of the U.S. Internal Revenue Code and the applicable state tax statutes.
Consequently, no provision for income taxes has been made in the accompanying
statements.
E. Cash –This classification includes cash held in an agency fund with the University of
North Carolina Wilmington (UNCW). The UNCW agency funds are held by the North
Carolina State Treasurer and earn interest monthly.
F. Donations – Friends’ primary source of revenue is gifts received from members. In
addition, donors may contribute to an academic scholarship fund maintained by UNCW
and awarded to UNCW students. During the fiscal years ended June 30, 2015 and 2014,
Friends did not receive any donations intended for the scholarship fund.
Unrestricted donations received were $12,217.52 and $11,971.00 for the fiscal years
ended June 30, 2015 and 2014, respectively.
G. Scholarships & Grants – Each year Friends makes contributions to UNCW based on
grant requests. Contributions from Friends remain in the Friends agency fund for
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deposit into the departmental fund that is receiving the grant award as expenditures
occur. Transferred funds cover the actual cost of the items purchased up to the grant
award amount.
During FYE 6/30/2015, a total of $11,960.57 was approved in awards to UNCW for FYE
6/30/2016. These awards are approved for expenditures to occur during FYE 6/30/2016.
During FYE 6/30/2014, a total of $11,833.90 was approved in awards to UNCW. A total
of $11,662.68 was contributed to UNCW departments during FYE 6/30/2015.
H. Donated Services – Higher level positions, for which the entity would otherwise be
required to pay in order to maintain the quality of its program, have been provided to
the entity by the UNCW employees. These amounts are not included in the
accompanying statements as donated services as they are provided through the
employees’ affiliation with the Friends’ Board and are considered an insignificant
portion of their job responsibilities.
A substantial number of board volunteers donated their time to support the Friends’
mission. No amounts have been recognized in the accompanying statements for these
volunteers because the services donated are not identical to services the donor would
usually charge a fee to provide; therefore, a monetary amount cannot be assigned to
the value of these services.
This audit was conducted by the Office of Internal Audit at UNC Pembroke in compliance with the UNC
Board of Governors’ policy 600.2.5.2[R] for the Required Elements of University-Associated Entity
Relationship, adopted 11/16/2005, amended 06/25/2014, amended 06/08/2015.
(http://www.northcarolina.edu/apps/policy/index.php?pg=vs&id=430).
The UNC Board of Governors is the policy-making body legally charged with “The general determination,
control, supervision, management, and governance of all affairs of the [UNC] constituent institutions.”
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