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, 2014 December 17, 2014 WWW.UNCP.EDU • AN EQUAL OPPORTUNITY EMPLOYER
Contents Independent Auditor’s Report Financial Statements Statement of Financial Position Statement of Activities Statement of Cash Flows Notes to the Financial Statements Distribution List 1 2 3 4 5 7 December 17, 2014 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, 2014 and 2013, 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, 2014 and 2013, 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, Director Office of Internal Audit University of North Carolina at Pembroke 1
Friends of the University of North Carolina at Wilmington, Inc.
Statement of Financial Position
June 30, 2014 and 2013
Increase
06/30/2014
06/30/2013
(Decrease)
$ 14,242.70
$ 15,722.24
$ (1,479.54)
$ 14,242.70
$ 15,722.24
$ (1,479.54)
14,242.70
15,722.24
(1,479.54)
$ 14,242.70
$ 15,722.24
$ (1,479.54)
Assets
Cash
Total Assets
Liabilities & Net Assets
Net Assets-Unrestricted
Total Liabilities & Net Assets
See Notes to the Financial Statements 2
Friends of the University of North Carolina at Wilmington, Inc.
Statement of Activities
For the Years Ended June 30, 2014 and 2013
Increase
06/30/2013
06/30/2014
(Decrease)
Revenues and other support
Donations
$
11,971.00
Interest Income
$
11,885.00
$
86.00
60.94
57.19
3.75
12,031.94
11,942.19
89.75
12,498.95
7,118.99
5,379.96
Supplies & Materials
321.08
508.48
(187.40)
Contracted Services
87.90
76.08
11.82
598.55
0.00
598.55
5.00
0.00
5.00
Total Expenses
13,511.48
7,703.55
5,807.93
Change in Net Assets
(1,479.54)
4,238.64
(5,718.18)
Net Assets - Beginning
15,722.24
11,483.60
4,238.64
Total Revenue
Expenses
Scholarships & Grants
Gift Admin Fees
Accounting and Audit Fees
Net Assets - Ending
$
14,242.70
See Notes to the Financial Statements 3
$
15,722.24
$
(1,479.54)
Friends of the University of North Carolina at Wilmington, Inc.
Statement of Cash Flows
For the Year Ended June 30, 2014
Cash Flows from Operating Activites
Change in Net Assets
$ (1,479.54)
Net Cash Used by Operating Activities
(1,479.54)
Net Decrease in Cash
(1,479.54)
Cash - July 1, 2013
Cash - June 30, 2014
15,722.24
$ 14,242.70
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, 2014 and 2013. 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, 2014 and 2013. 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, 2014 and 2013, Friends did not receive any donations intended for the scholarship fund. Unrestricted donations received were $11,971.00 and $11,885.00 for the fiscal years ended June 30, 2014 and 2013, 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 5
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 6/30/2014, a total of $11,833.90 was approved in awards to UNCW for FYE 6/30/2015. These awards are approved for expenditures to occur during FYE 6/30/2015. During FYE 6/30/2013, a total of $12,638.83 was approved in awards to UNCW. A total of $12,498.95 was contributed to UNCW departments during FYE 6/30/2014. 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. 6
Distribution List Ms. Elizabeth Donald, Board President, Friends of the University of North Carolina at Wilmington, Inc. Ms. Marcie Nance, Board Treasurer, Friends of the University of North Carolina at Wilmington, Inc. Mr. Donald Metzger, Audit Committee Chair, UNC Pembroke Board of Trustees Dr. Kyle R. Carter, Chancellor, UNC Pembroke Dr. William Sederburg, Chancellor, UNC Wilmington Mr. Max Allen, Chief of Staff, UNC Wilmington Dr. Denise Battles, Provost and Vice Chancellor for Academic Affairs, UNC Wilmington Dr. Rick Whitfield, Vice Chancellor for Business Affairs, UNC Wilmington Ms. Sara Thorndike, Assistant Vice Chancellor for Finance & Controller, UNC Wilmington Mr. Eddie Stuart, Vice Chancellor of University Advancement, UNC Wilmington Ms. Claire Stanley, Assistant Vice Chancellor, Donor Relations, University Advancement, UNC Wilmington Ms. Lynne Sanders, Vice President for Compliance and Audit Services, UNC General Administration North Carolina Office of Internal Audit, Office of State Budget and Management 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. (http://www.northcarolina.edu/content.php/legal/policymanual/uncpolicymanual_600_2_5_2r.htm). 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.” 7