North Carolina Marriage and Family Therapy Licensure Board : financial statements ... and independent auditor's report.

              NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
Financial Statements and
Supplemental Schedules for the
Years Ended June 30, 2011 and 2010 and
Independent Auditor’s Report
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
Financial Statements and
Supplemental Schedules for the
Years Ended June 30, 2011 and 2010 and
Independent Auditor’s Report
BOARD MEMBERS (2011)
Jon Winek, PhD, LMFT, Chairperson
Jennifer Hodgson, PhD, LMFT, (Vice-Chairperson December-June)
Susan Brooks, LMFT, Vice-Chairperson (July-November)
Mary Blakeney (July-November)
Sherman Childers (February-June)
Deana Guido
Chad Jordan, LMFT (February-June)
Pamela Richey, LMFT
Sally Smith Stein
EXECUTIVE OFFICER
Wanda Nicholson, Executive Director
LEGAL COUNSEL
North Carolina Department of Justice
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
TABLE OF CONTENTS
Page
MANAGEMENT’S DISCUSSION AND ANALYSIS 1-2
INDEPENDENT AUDITOR’S REPORT 3
FINANCIAL STATEMENTS FOR THE
YEARS ENDED JUNE 30, 2011 AND 2010
Statements of Net Assets 4
Statements of Revenues, Expenses and Changes in Net Assets 5-6
Statements of Cash Flows 7
Notes to Financial Statements 8-11
SUPPLEMENTAL INFORMATION
Schedules of Receipts and Disbursements - Modified Cash Basis 12
1
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the Board’s financial report represents Management’s analysis of the Board’s financial
performance during the years ending June 30, 2011 and 2010. Please read it in conjunction with the
financial statements which follow this section.
Financial Highlights
During 2011, the Board’s net assets decreased by $4,719, or 15.5% , due primarily to a consistent
recurrence of expenses exceeding revenues. During 2010, the Board’s net assets decreased by $12,664,
or 29.3%, due primarily to an increase in expenses.
During 2011, the operating revenues of the Board increased by $19,515, or 26.8%, due primarily to an
increase in license, application fees, and exam fees. During 2010, the operating revenues of the Board
increased by $2,712, or 3.9%, due primarily to an increase in license, application fees, and exam fees.
During 2011, the non-operating revenues of the Board decreased by $26, or 19.5%, due to a decrease in
interest earnings rates. During 2010, the non-operating revenues of the Board decreased by $494, or
78.8%, due to a decrease in cash on hand and a decrease in interest earnings rates.
During 2011, the operating expenses of the Board increased by $11,544, or 13.5%, due primarily to an
increase in website expenses and board members expenses. During 2010, the operating expenses of the
Board increased by $9,816, or 12.9%, due primarily to an increase in website expenses and exam expenses.
Overview of the Financial Statements
This financial report consists of two sections: Management’s Discussion and Analysis and the Financial
Statements. The Board has no other supplementary information required by GASB 34. The Financial
Statements also include notes to the financial statements that provide detail of the information included in
the financial statements.
Basic Financial Statements
The financial statements of the Board report information about the Board using accounting methods similar
to those used by private sector companies. These statements offer short and long-term financial information
about the activities of the Board.
The Statements of Net Assets present the current and long-term portions of assets and liabilities separately.
The Statements of Revenues, Expenses, and Changes in Net Assets present information on how the Board’s
assets changed as a result of its operations.
The Statements of Cash Flows present information on how the Board’s cash changed as a result of its
financial activities.
2
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
MANAGEMENT’S DISCUSSION AND ANALYSIS
Condensed Financial Information
The following presents condensed financial information on the operations of the Board:
Current Year Current Year
as of and for as of and for
the year ended the year ended
June 30, 2011 June 30, 2010
Current assets $ 88,629 $ 80,491
Capital assets 716 1,537
Total assets $ 89,345 $ 82,028
Current liabilities $ 63,542 $ 51,506
Total liabilities $ 63,542 $ 51,506
Invested in capital assets $ 716 $ 1,537
Unrestricted 25,087 28,985
Total net assets $ 25,803 $ 30,522
Operating revenues $ 92,415 $ 72,900
Operating expenses ( 97,241) ( 85,697)
Operating income ( 4,826) ( 12,797)
Non-operating revenues 107 133
Change in net assets $ ( 4,719) $ ( 12,664)
Events Affecting Future Operations
The Board has no significant events affecting future operations which are reportable pursuant to GASB 34.
Contacting the Board’s Management
This financial report is designed to provide a general overview of the Board’s finances and to demonstrate
the Board’s accountability for the money it receives. If you have any questions about this report or need
additional information, contact: North Carolina Marriage and Family Therapy Licensure Board, PO Box
37669, Raleigh, NC 27627
3
Shelton L. Hawley, CPA, PA
Certified Public Accountant
Suite B1
800 N. Raleigh St.
P.O. 1545
Angier, North Carolina 27501-1545
Telephone: (919) 639-4825
Facsimile: (919) 639-3102
INDEPENDENT AUDITOR’S REPORT
Members of the Board
North Carolina Marriage and Family Therapy Licensure Board
Raleigh, North Carolina
We have audited the accompanying financial statements as listed in the table of contents of the
North Carolina Marriage and Family Therapy Licensure Board (the "Board"), an agency of the
State of North Carolina, as of June 30, 2011 and 2010, and for the years then ended. These
financial statements are the responsibility of the Board’s management. 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 audits 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 and disclosures
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 audits provide 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 North Carolina Marriage and Family Therapy Licensure Board, as
of June 30, 2011 and 2010, and the results of its operations, changes in financial position, and
cash flows for the years then ended in conformity with accounting principles generally accepted
in the United States of America.
Management’s Discussion and Analysis is not a required part of the financial statements but is
supplementary information required by the Governmental Accounting Standards Board. We
have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit this information and express no opinion thereon.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental information listed in the accompanying table of contents is
presented for purposes of additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures applied in our audit
of the basic financial statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Shelton L. Hawley, C.P.A., P.A
September 8, 2011
-4-
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
STATEMENTS OF NET ASSETS
JUNE 30, 2011 AND 2010
June 30, 2011 June 30, 2010
Proprietary-
Enterprise
Fund
Proprietary-
Enterprise
Fund
ASSETS
Current assets:
Cash and cash equivalents (Note 2) $ 84,704 $ 79,991
Prepaid expenses (management fee) 3,925 500
Total current assets 88,629 80,491
Property and equipment (Note 1):
Furniture and office equipment 716 1,537
Total property and equipment - net of depreciation 716 1,537
TOTAL ASSETS $ 89,345 $ 82,028
LIABILITIES AND NET ASSETS
Current liabilities:
Accounts payable $ 4,655 $ 2,558
Due to other state agencies 787 3,048
Deferred revenue (Note 3) 58,100 45,900
Total current liabilities 63,542 51,506
TOTAL LIABILITIES 63,542 51,506
NET ASSETS (NOTE 4)
Invested in capital assets 716 1,537
Unrestricted net assets 25,087 28,985
TOTAL NET ASSETS 25,803 30,522
TOTAL LIABILITIES AND NET ASSETS $ 89,345 $ 82,028
See notes to financial statements.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEARS ENDED JUNE 30, 2011 AND 2010
-5-
2011 2010
Proprietary-
Enterprise
Fund
Proprietary-
Enterprise
Fund
OPERATING REVENUES:
Application and exam fees $ 26,400 $ 11,100
Renewals and license fees (including late fees) 63,425 60,450
Miscellaneous operating income 2,590 1,350
Total operating revenues $ 92,415 $ 72,900
OPERATING EXPENSES:
Contractual management services and office rent (Note 5) $ 43,100 $ 41,100
Staff travel 1,291 1,354
Other contracted services 3,333 3,554
Storage space rental 1,264 1,144
Board members expenses (including special meeting expenses) 12,457 9,916
Exam expenses 997 1,769
Telephone 2,433 3,206
Internet costs 1,318 1,375
Office supplies and expenses 3,119 2,847
Printing and copying 1,284 892
Depreciation 821 1,009
Postage 1,997 2,298
Dues 500 500
Legal fees 3,483 3,097
Audit and accounting fees 5,095 3,595
Bank charges 228 196
Website expenses 14,521 7,845
Total operating expenses $ 97,241 $ 85,697
Operating income (loss) $ ( 4,826) $ ( 12,797)
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEARS ENDED JUNE 30, 2011 AND 2010
2011 2010
Proprietary-
Enterprise
Fund
Proprietary-
Enterprise
Fund
-6-
NON-OPERATING REVENUES (EXPENSES):
Interest income $ 107 $ 133
Total non-operating revenues $ 107 $ 133
Change in net assets $ ( 4,719) $ ( 12,664)
Net assets - beginning of year 30,522 43,186
Net assets - end of year $ 25,803 $ 30,522
See notes to financial statements.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2011 AND 2010
-7-
2011 2010
Proprietary-
Enterprise
Fund
Proprietary-
Enterprise
Fund
Cash flows from operating activities:
Cash received from fees and other operating income $ 104,615 $ 74,200
Cash payments for operating expenses ( 100,009) ( 82,949)
Net cash provided (used) by operating activities $ 4,606 $ ( 8,749)
Cash flows from investing activities:
Transfer of certificate(s) of deposit (from) to operating account $ $ 38,750
Interest earned 107 145
Net cash provided by investing activities $ 107 $ 38,895
Net increase (decrease) in cash $ 4,713 $ 30,146
Cash - beginning of year 79,991 49,845
Cash - end of year $ 84,704 $ 79,991
Reconciliation of operating income
to net cash provided by operating activities:
Operating income (loss) $ ( 4,826) $ ( 12,797)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation $ 821 $ 1,009
Changes in assets and liabilities:
Prepaid expense ( 3,425) 3,425
Accounts payable ( 164) ( 1,686)
Deferred revenue 12,200 1,300
Total adjustments $ 9,432 $ 4,048
Net cash provided by operating activities $ 4,606 $ ( 8,749)
See notes to financial statements.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2011 AND 2010
-8-
Note 1 - Nature of Activities and Significant Accounting Policies
Description of Organization
The North Carolina Marriage and Family Therapy Licensure Board (the "Board") is an independent State
agency. It is an occupational licensing board and is authorized by Chapter 90 of the North Carolina General
Statutes. The Board is composed of seven members who are appointed by the Governor of the State of North
Carolina.
The Board is established to maintain minimum standards for services provided by marriage and family
therapists.
The Board’s operations are financed with self-generated revenues from fees charged to licensees.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB)
is the accepted standard setting body for establishing governmental accounting principles and reporting
standards. The Board applied all applicable Financial Accounting Standards Board (FASB) pronouncements
issued after November 30, 1989.
All activities of the Board are accounted for within a single proprietary (enterprise) fund. Proprietary funds
are used to account for operations that are financed and operated in a manner similar to private business
enterprises where the intent of the governing body is that the cost of providing goods or services to the general
public on a continuing basis be financed or recovered primarily through user charges.
Reporting Entity
GASB Codification Section 2100 has defined the governmental reporting entity to be the State of North
Carolina because the State exercises oversight responsibility in that the Governor appoints the Board
members, and public service is rendered within the State’s boundaries. The accompanying financial
statements present only the activity of the North Carolina Marriage and Family Therapy Licensure Board.
Basis of Accounting
In accordance with Statement of Governmental Accounting Standards 34, the Board herewith presents
Statements of Net Assets, Statements of Revenues, Expenses, and Changes in Net Assets; and Statements of
Cash Flows. These statements reflect entity-wide operations of the Board. The Board has no fiduciary funds
or component units.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2011 AND 2010
-9-
Note 1 - Nature of Activities and Significant Accounting Policies (Continued)
The Statements of Revenues, Expenses, and Changes in Net Assets demonstrate the degree to which the direct
expenses of the Board are offset by license fees.
The financial statements report all activities of the North Carolina Marriage and Family Therapy Licensure
Board using the current financial resource measurement focus and the full accrual basis of accounting.
Revenues are recognized in the accounting period in which they are earned and become measurable. Expenses
are recognized when incurred, if measurable.
Operating revenues and expenses consist of those revenues and expenses that result from the ongoing
principal operations of the Board. Operating revenues consist primarily of license fees. Non-operating
revenues and expenses consist of those revenues and expenses that are related to investing activities and are
classified as non-operating in the financial statements.
Cash and Cash Equivalents, and Investments
These classifications include undeposited receipts, petty cash, checking accounts and time deposits held
by the Board. Certificates of deposits are considered investments for Statements of Net Assets
presentation. The carrying amounts of the Board’s financial instruments approximate their fair value.
Capital assets
Capital assets are stated at cost and are being depreciated over their useful lives on a straight-line basis.
The Board capitalizes assets that have a value or cost of $500 or greater at the date of acquisition and an
estimated useful life of more than one year. Summaries follow:
Cost
06-30-10 Acquisitions Disposals
Cost
06-30-11
Accumulated
Depreciation
Net
Amount
Furniture/Equipment $ 7,260 $ - $ - $ 7,260 $ 6,544 $ 716
$ 7,260 $ - $ - $ 7,260 $ 6,544 $ 716
Cost
06-30-09 Acquisitions Disposals
Cost
06-30-10
Accumulated
Depreciation
Net
Amount
Furniture/Equipment $ 9,491 $ - $ 2,231 $ 7,260 $ 5,723 $ 1,537
$ 9,491 $ - $ 2,231 $ 7,260 $ 5,723 $ 1,537
When an asset is disposed of, the cost of the asset and the related accumulated depreciation are removed
from the books. Any gain or loss on disposition is reflected in earnings for the period.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the
United States of America requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2011 AND 2010
-10-
Note 2 - Deposits
Deposits
All of the Board’s deposits which are uninsured, if any, are uncollateralized by the financial institution
holding said deposits. For deposits, custodial credit risk is the risk that in the event of the failure of the
depository, the Board will not be able to recover its deposits that are in the possession of the outside party.
The Board does not have policies regarding custodial credit risk for deposits.
At June 30, 2011, the Board's deposits had a carrying amount of $84,704 and a bank balance of $72,989,
which was covered by federal depository insurance. At June 30, 2010, the Board's deposits had a carrying
amount of $79,991 and a bank balance of $46,421, which was covered by federal depository insurance.
Note 3 - Deferred Revenue
The Board’s fees are assessed and collected on an annual basis for the period July 1 through June 30, which
corresponds with the Board’s accounting period. License renewal fees received in the latter part of the fiscal
year are deferred and recognized as revenue over the one year period to which they relate.
Note 4 - Net Assets
Invested in capital assets - This component of net assets consists of capital assets, net of accumulated
depreciation and reduced by the outstanding balances of any loan proceeds that are attributable to the
acquisition, construction, or improvement of those capital assets.
Restricted net assets - expendable - This component of net assets consists of net assets which the Board is
legally or contractually obligated to spend in accordance with restrictions imposed by external parties. The
Board has no restricted net assets.
Unrestricted net assets - This component of net assets consists of net assets that do not meet the definition of
restricted or invested in capital assets.
Note 5 - Contractual Management Services
The Board treats its administrative officer as an independent contractor. The Board contracts with the
management service individual to provide services and provide office space for the Board. The contract
for management services includes all services related to the process of licensure application and renewal,
and various other secretarial duties. The Board also reimburses the management service for printing,
copying, postage, miscellaneous office supplies and other expenses. Payments to the management service
(including reimbursements) totaled $45,147 during the fiscal year ended June 30, 2011. Payments to the
management service (including reimbursements) totaled $42,344 during the fiscal year ended June 30,
2010.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2011 AND 2010
-11-
Note 6 - Risk Management
The Board is exposed to various risks of loss related to torts; theft of, damage to, and the destruction of
assets; errors and omissions; injuries to employees; and natural disasters. These exposures to loss are
handled by participation in certain state-administered risk programs and self retention of certain risks. The
Board has no commercial insurance coverage.
Note 7 - Contingencies
The Board is involved in occasional disciplinary hearings throughout the year which arise in the ordinary
course of its operations. In the opinion of management of the Board, the results of such actions during the
years under audit do not materially affect the Board’s operations, changes in financial position, or cash
flows for the years herein ended.
Note 8 - Subsequent Events
Subsequent events have been evaluated through September 8, 2011, the date the financial statements were
available to be issued. Events occurring after that date have not been evaluated to determine whether a
change in the financial statements would be required.
NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD
SCHEDULES OF RECEIPTS AND DISBURSEMENTS - MODIFIED CASH BASIS
YEAR ENDED JUNE 30, 2011 AND 2010
-12-
2011 2010
Proprietary-
Enterprise
Fund
Proprietary-
Enterprise
Fund
RECEIPTS:
Application and exam fees $ 26,400 $ 11,100
Renewals and license fees (including late fees) 75,625 61,750
Interest income 107 145
M iscellaneous operating income 2,590 1,350
Total receipts 104,722 $ 74,345
DISBURSEMENTS:
Contractual management services and office rent (Note 5) $ 46,525 $ 37,675
Staff travel 198 2,843
Other contracted services 1,976 3,554
Storage space rental 1,264 1,144
Board members expenses (including special meeting expenses) 12,457 9,916
Exam expenses 2,567
Telephone 2,455 3,359
Internet 1,318 1,375
Office supplies and expenses 2,933 2,849
Printing and copying 1,284 1,002
Postage 1,997 2,322
Dues 500 500
Legal fees 4,651 4,814
Audit and accounting fees 5,095 3,595
Bank charges 228 196
W ebsite expenses 14,561 7,805
Total disbursements $ 100,009 $ 82,949
Receipts over (under) disbursements $ 4,713 $ ( 8,604)
Change in cash $ 4,713 $ ( 8,604)
Cash and investments - beginning of year 79,991 88,595
Cash and investments - end of year $ 84,704 $ 79,991