North Carolina Marriage and Family Therapy Licensure Board : financial statements... and independent auditor's report |
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NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD Financial Statements and Supplemental Schedules for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD Financial Statements and Supplemental Schedules for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report BOARD MEMBERS (2013-2014) Jennifer Hodgson, PhD, LMFT, Chairperson Pamela Richey, LMFT, Vice-Chairperson Ruby Bullard Sherman Childers Chad Jordan, LMFT Chris Rodriguez, LMFT Roger Woodard 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 3-4 FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 Statements of Net Position 5 Statements of Revenues, Expenses and Changes in Net Position 6-7 Statements of Cash Flows 8 Notes to Financial Statements 9-13 SUPPLEMENTAL INFORMATION YEARS ENDED JUNE 30, 2014 AND 2013 Schedules of Receipts and Disbursements - Modified Cash Basis 14 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 ended June 30, 2014 and 2013. Please read it in conjunction with the financial statements which follow this section. Financial Highlights During 2014, the Board’s net position increased by $29,118, or 68.9%, due primarily to a decrease in expenses. During 2013, the Board’s net position decreased by $5,224, or 11.0% , due primarily to an increase in expenses. During 2014, the operating revenues of the Board increased by $5,280, or 4.9%, due primarily to an increase in license and application fees. During 2013, the operating revenues of the Board increased by $11,720, or 12.3%, due primarily to an increase in license and application fees. During 2014, the non-operating revenues of the Board decreased by $113, or 86.3%, due to a decrease in interest earnings rates and a loss on disposition of capital assets. During 2013, the non-operating revenues of the Board decreased by $11, or 7.7%, due to a decrease in interest earnings rates. During 2014, the operating expenses of the Board decreased by $29,175, or 25.9%, due primarily to a decrease in website expenses, board members expenses and legal fees. During 2013, the operating expenses of the Board increased by $38,639, or 52.2%, due primarily to an increase in website expenses, board members expenses and legal fees. 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 Position present the current and long-term portions of assets and liabilities separately. The Statements of Revenues, Expenses, and Changes in Net Position 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, 2014 June 30, 2013 Current assets $ 139,283 $ 130,544 Capital assets 1,977 914 Other assets 750 Total assets $ 142,010 $ 131,458 Current liabilities $ 70,607 $ 89,173 Total liabilities $ 70,607 $ 89,173 Investment in capital assets $ 1,977 $ 914 Unrestricted 69,426 41,371 Total net position $ 71,403 $ 42,285 Operating revenues $ 112,575 $ 107,295 Operating expenses (83,475) (112,650) Operating income 29,100 (5,355) Non-operating revenues 18 131 Change in net position $ 29,118 $ (5,224) 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 5549, Cary, NC 27512. 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 Cary, North Carolina Report on the Financial Statements I have audited the accompanying financial statements and the related notes to the financial statements as listed in the table of contents of the North Carolina Marriage and Family Therapy Licensure Board (the "Board"), an independent state agency which is a nonmajor enterprise fund of the primary government of the State of North Carolina, as of June 30, 2014 and 2013. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my 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, 2014 and 2013, and the results of its operations, changes in financial position, and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. 4 INDEPENDENT AUDITOR’S REPORT (CONCLUDED) Management’s Discussion and Analysis - Required Supplemental Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historic context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management' s responses to our inquiries, the basic financial statements, and other knowledge I obtained during my audits of the basic financial statements. I do not express an opinion or provide any assurance on the supplementary information because the limited procedures do not provide sufficient evidence to express an opinion or provide any assurance thereon. Other Supplemental Information My audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Receipts and Disbursements - Modified Cash Basis is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audits of the basic financial statements, and accordingly, I do not express an opinion or provide any assurance thereon. Shelton L. Hawley, C.P.A., P.A. Angier NC October 22, 2014 -5- NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF NET POSITION JUNE 30, 2014 AND 2013 June 30, 2014 June 30, 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund ASSETS Current assets: Cash and cash equivalents (Note 2) $ 135,186 $ 130,044 Prepaid expenses (management fee) 4,097 500 Total current assets 139,283 130,544 Property and equipment (Note 1): Furniture and office equipment 1,977 914 Total property and equipment - net of depreciation 1,977 914 Other assets: Security deposit (on rental of office space) 750 Total other assets 750 0 TOTAL ASSETS $ 142,010 $ 131,458 LIABILITIES AND NET POSITION Current liabilities: Accounts payable $ 744 $ 5,337 Due to other state agencies 3,553 20,436 Unearned revenue (Note 3) 66,310 63,400 Total current liabilities 70,607 89,173 TOTAL LIABILITIES 70,607 89,173 NET POSITION (NOTE 4) Investment in capital assets 1,977 914 Unrestricted net position 69,426 41,371 TOTAL NET POSITION 71,403 42,285 TOTAL LIABILITIES AND NET POSITION $ 142,010 $ 131,458 See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEARS ENDED JUNE 30, 2014 AND 2013 -6- 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund OPERATING REVENUES: Application and exam fees $ 34,650 $ 32,200 Renewals and license fees 76,500 72,600 Miscellaneous operating income 1,425 2,495 Total operating revenues $ 112,575 $ 107,295 OPERATING EXPENSES: Contractual management services (Note 5) $ 34,755 $ 34,755 Travel - contractual management service 537 1,651 Other contracted services 2,631 3,183 Office rent (Note 6) 8,400 8,400 Storage space rental 1,308 1,298 Board members expenses (including special meeting expenses) 10,459 13,891 Exam expenses 750 151 Telephone 3,414 3,280 Internet costs 1,259 1,259 Office supplies and expenses 3,261 3,057 Printing and copying 423 548 Depreciation 295 502 Postage 544 603 Dues 500 500 Legal fees 4,757 7,495 Audit and accounting fees 6,395 6,050 Bank charges 118 468 Website expenses 3,669 25,559 Total operating expenses $ 83,475 $ 112,650 Operating income (loss) $ 29,100 $ (5,355) See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEARS ENDED JUNE 30, 2014 AND 2013 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund -7- NON-OPERATING REVENUES (EXPENSES): Gain (loss) on disposition of capital assets $ (60) $ Interest income 78 131 Total non-operating revenues $ 18 $ 131 Change in net position $ 29,118 $ (5,224) Net position - beginning of year 42,285 47,509 Net position - end of year $ 71,403 $ 42,285 See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2014 AND 2013 -8- 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund Cash flows from operating activities: Cash received from fees and other operating income $ 115,485 $ 108,095 Cash payments for operating expenses (109,003) (88,674) Net cash provided (used) by operating activities $ 6,482 $ 19,421 Cash flows from investing activities: Interest earned $ 78 $ 131 Net cash provided by investing activities $ 78 $ 131 Cash flows from capital and related financing activities: Acquisition of capital assets $ (1,418) $ (419) Net cash provided (used) by capital and financing activities $ (1,418) $ (419) Net increase (decrease) in cash $ 5,142 $ 19,133 Cash - beginning of year 130,044 110,911 Cash - end of year $ 135,186 130,044 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 29,100 $ (5,355) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation $ 295 $ 502 Changes in assets and liabilities: Prepaid expense and other assets (4,347) 3,596 Accounts payable (21,476) 19,878 Unearned revenue 2,910 800 Total adjustments $ $ 24,776 Net cash provided by operating activities $ 6,482 $ 19,421 See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -9- 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. It is a nonmajor enterprise fund of the primary government of the State of North Carolina and is reported as such in the State’s Comprehensive Annual Financial Report (CAFR). 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. 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 The concept underlying the definition of the financial reporting entity is that elected officials are accountable to their constituents for their actions. As required by accounting principles generally accepted in the United States of America (GAAP), the financial reporting entity includes both the primary government and all of its component units. An organization other than a primary government serves as a nucleus for a reporting entity when it issues separate financial statements. The accompanying financial statements present all funds and activities for which the Board is responsible. For financial reporting purposes, the Board is a nonmajor enterprise fund of the primary government of the State of North Carolina and is reported as such in the State’s Comprehensive Annual Financial Report (CAFR). These financial statements for the Board are separate and apart from those of the State of North Carolina and do not present the financial position of the State nor changes in the State’s financial position and cash flows. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -10- Note 1 - Nature of Activities and Significant Accounting Policies (Continued) Basis of Accounting In accordance with Statement of Governmental Accounting Standards 34 (as amended, if applicable), the Board herewith presents Statements of Net Position, Statements of Revenues, Expenses, and Changes in Net Position; and Statements of Cash Flows. These statements reflect entity-wide operations of the Board. The Board has no fiduciary funds or component units. The Statements of Revenues, Expenses, and Changes in Net Position 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 economic 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, regardless of the timing of cash flows. 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. Operating expenses are all expense transactions incurred other than those related to capital and noncapital financing or investing activities as defined by GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting. Non-operating revenues and expenses consist of those revenues and expenses that are related to investing, capital, and non-capital financing activities; and are classified as non-operating in the financial statements. Cash and Cash Equivalents 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 Position presentation. Fair Value of Financial Instruments The carrying amounts of the Board’s financial instruments approximate their fair value. Prepaid Expenses This classification includes prepaid management fees at year end. Income Taxes The Board is a nonmajor enterprise fund of the primary government of the State of North Carolina and is exempt from federal and state income taxes. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -11- Note 1 - Nature of Activities and Significant Accounting Policies (Continued) 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 $250 or greater at the date of acquisition and an estimated useful life of more than one year. Depreciation is computed using the straight-line method of depreciation over the estimated useful lives of the assets, generally estimated as follows: office furniture and equipment, 5 to 7 years. Summaries follow: Cost 06-30-13 Acquisitions Disposals Cost 06-30-14 Accumulated Depreciation Net Amount Furniture/Equipment $ 8,488 $ 1,418 $ 3,301 $ 6,605 $ 4,628 $ 1,977 $ 8,488 $ 1,418 $ 3,301 $ 6,605 $ 4,628 $ 1,977 Cost 06-30-12 Acquisitions Disposals Cost 06-30-13 Accumulated Depreciation Net Amount Furniture/Equipment $ 8,069 $ 419 $ - $ 8,488 $ 7,574 $ 914 $ 8,069 $ 419 $ - $ 8,488 $ 7,574 $ 914 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. Depreciation expense was $295 for the fiscal year ended June 30, 2014 and $502 for the fiscal year ended June 30, 2013. 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. Note 2 - Deposits Deposits All of the Board’s deposits which are uninsured, if any, are uncollateralized [unless collateralized pursuant to NC Administrative Code (20 NCAC 7)] 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, 2014, the Board' s deposits had a carrying amount (including undeposited receipts) of $135,186 and a bank balance of $122,926, which was covered by federal depository insurance. At June 30, 2013, the Board' s deposits had a carrying amount (including undeposited receipts) of $130,044 and a bank balance of $119,644, which was covered by federal depository insurance. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -12- Note 3 - Unearned 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 Position Investment in capital assets - This component of net position 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 position - expendable - This component of net position consists of net position which the Board is legally or contractually obligated to spend in accordance with restrictions imposed by external parties. The Board has no restricted net position. Unrestricted net position - This component of net position consists of net position that does not meet the definition of restricted or investment in capital assets. Note 5 - Contractual Management Services The Board treats its administrative officer as an independent contractor. The Board contracts with this management service individual to provide services and provide office space (see Note 6) 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 and office space rent) totaled $43,575 during the fiscal year ended June 30, 2014. Payments to the management service (including reimbursements and office space rent) totaled $44,240 during the fiscal year ended June 30, 2013. Note 6 - Operating Lease The Board leased office space on a month to month lease (as a part of the contractual management service contract) during the fiscal years ended June 30, 2014 and June 30, 2013. The Board has entered into a long term lease agreement (effective September 1, 2014) for a new office space location. Total rent expense charged to operations under the lease agreement was $8,400 for the fiscal year ended June 30, 2014 and $8,400 for the fiscal year ended June 30, 2013. Rental commitments under the new noncancellable operating lease at June 30, 2014 are as follows: Year Ended June 30, 2015 $ 7,500 2016 9,000 2017 1,500 $ 18,000 NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -13- Note 7 - 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 purchased no commercial insurance coverage. Note 8 - 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 9 - Subsequent Events Subsequent events have been evaluated through October 22, 2014, 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, 2014 AND 2013 -14- 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund RECEIPTS: Application and exam fees $ 34,650 $ 32, 200 Renewals and license fees (including late fees) 79,410 73, 400 Miscellaneous operating income 1,425 2, 495 Interest income 78 131 Total receipts 115,563 $ 108, 226 DISBURSEMENTS: Contractual management services (Note 5) $ 38,351 $ 31, 159 Staff travel 923 3, 555 Other contracted services 2,707 4, 212 Building rent (Note 6) 8,400 8, 400 Security deposit (new office space) 750 Storage space rental 1,308 1, 298 Board members expenses (including special meeting expenses) 12,431 11, 919 Exam expenses 750 151 Telephone 3,425 3, 289 Internet 1,259 1, 259 Office supplies and expenses 3,261 3, 313 Capital asset purchases 1,418 419 Printing and copying 423 548 Postage 544 603 Dues 500 500 Legal fees 6,541 4, 233 Audit and accounting fees 6,395 6, 050 Bank charges 118 468 Website expenses 20,917 7, 717 Total disbursements $ 110, 421 $ 89, 093 Receipts over (under) disbursements $ 5,142 $ 19,133 Change in cash $ 5,142 $ 19, 133 Cash and investments - beginning of year 130,044 110, 911 Cash and investments - end of year $ 135,186 $ 130, 044 ____________________________________________________________________________________ This audit required 45 audit hours at a cost of $4,195
Object Description
Description
Title | North Carolina Marriage and Family Therapy Licensure Board : financial statements... and independent auditor's report |
Other Title | Financial statements... and independent auditor's report ; Financial statements and supplemental schedules for the years ended June 30... and independent auditor's report |
Date | 2014-06-30 |
Description | 2013/2014 |
Digital Characteristics-A | 122 KB; 18 p. |
Digital Format |
application/pdf |
Pres File Name-M | pubs_serial_ncmarriagefinancial20132014.pdf |
Full Text | NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD Financial Statements and Supplemental Schedules for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD Financial Statements and Supplemental Schedules for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report BOARD MEMBERS (2013-2014) Jennifer Hodgson, PhD, LMFT, Chairperson Pamela Richey, LMFT, Vice-Chairperson Ruby Bullard Sherman Childers Chad Jordan, LMFT Chris Rodriguez, LMFT Roger Woodard 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 3-4 FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 Statements of Net Position 5 Statements of Revenues, Expenses and Changes in Net Position 6-7 Statements of Cash Flows 8 Notes to Financial Statements 9-13 SUPPLEMENTAL INFORMATION YEARS ENDED JUNE 30, 2014 AND 2013 Schedules of Receipts and Disbursements - Modified Cash Basis 14 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 ended June 30, 2014 and 2013. Please read it in conjunction with the financial statements which follow this section. Financial Highlights During 2014, the Board’s net position increased by $29,118, or 68.9%, due primarily to a decrease in expenses. During 2013, the Board’s net position decreased by $5,224, or 11.0% , due primarily to an increase in expenses. During 2014, the operating revenues of the Board increased by $5,280, or 4.9%, due primarily to an increase in license and application fees. During 2013, the operating revenues of the Board increased by $11,720, or 12.3%, due primarily to an increase in license and application fees. During 2014, the non-operating revenues of the Board decreased by $113, or 86.3%, due to a decrease in interest earnings rates and a loss on disposition of capital assets. During 2013, the non-operating revenues of the Board decreased by $11, or 7.7%, due to a decrease in interest earnings rates. During 2014, the operating expenses of the Board decreased by $29,175, or 25.9%, due primarily to a decrease in website expenses, board members expenses and legal fees. During 2013, the operating expenses of the Board increased by $38,639, or 52.2%, due primarily to an increase in website expenses, board members expenses and legal fees. 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 Position present the current and long-term portions of assets and liabilities separately. The Statements of Revenues, Expenses, and Changes in Net Position 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, 2014 June 30, 2013 Current assets $ 139,283 $ 130,544 Capital assets 1,977 914 Other assets 750 Total assets $ 142,010 $ 131,458 Current liabilities $ 70,607 $ 89,173 Total liabilities $ 70,607 $ 89,173 Investment in capital assets $ 1,977 $ 914 Unrestricted 69,426 41,371 Total net position $ 71,403 $ 42,285 Operating revenues $ 112,575 $ 107,295 Operating expenses (83,475) (112,650) Operating income 29,100 (5,355) Non-operating revenues 18 131 Change in net position $ 29,118 $ (5,224) 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 5549, Cary, NC 27512. 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 Cary, North Carolina Report on the Financial Statements I have audited the accompanying financial statements and the related notes to the financial statements as listed in the table of contents of the North Carolina Marriage and Family Therapy Licensure Board (the "Board"), an independent state agency which is a nonmajor enterprise fund of the primary government of the State of North Carolina, as of June 30, 2014 and 2013. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my 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, 2014 and 2013, and the results of its operations, changes in financial position, and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. 4 INDEPENDENT AUDITOR’S REPORT (CONCLUDED) Management’s Discussion and Analysis - Required Supplemental Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historic context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management' s responses to our inquiries, the basic financial statements, and other knowledge I obtained during my audits of the basic financial statements. I do not express an opinion or provide any assurance on the supplementary information because the limited procedures do not provide sufficient evidence to express an opinion or provide any assurance thereon. Other Supplemental Information My audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Receipts and Disbursements - Modified Cash Basis is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audits of the basic financial statements, and accordingly, I do not express an opinion or provide any assurance thereon. Shelton L. Hawley, C.P.A., P.A. Angier NC October 22, 2014 -5- NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF NET POSITION JUNE 30, 2014 AND 2013 June 30, 2014 June 30, 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund ASSETS Current assets: Cash and cash equivalents (Note 2) $ 135,186 $ 130,044 Prepaid expenses (management fee) 4,097 500 Total current assets 139,283 130,544 Property and equipment (Note 1): Furniture and office equipment 1,977 914 Total property and equipment - net of depreciation 1,977 914 Other assets: Security deposit (on rental of office space) 750 Total other assets 750 0 TOTAL ASSETS $ 142,010 $ 131,458 LIABILITIES AND NET POSITION Current liabilities: Accounts payable $ 744 $ 5,337 Due to other state agencies 3,553 20,436 Unearned revenue (Note 3) 66,310 63,400 Total current liabilities 70,607 89,173 TOTAL LIABILITIES 70,607 89,173 NET POSITION (NOTE 4) Investment in capital assets 1,977 914 Unrestricted net position 69,426 41,371 TOTAL NET POSITION 71,403 42,285 TOTAL LIABILITIES AND NET POSITION $ 142,010 $ 131,458 See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEARS ENDED JUNE 30, 2014 AND 2013 -6- 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund OPERATING REVENUES: Application and exam fees $ 34,650 $ 32,200 Renewals and license fees 76,500 72,600 Miscellaneous operating income 1,425 2,495 Total operating revenues $ 112,575 $ 107,295 OPERATING EXPENSES: Contractual management services (Note 5) $ 34,755 $ 34,755 Travel - contractual management service 537 1,651 Other contracted services 2,631 3,183 Office rent (Note 6) 8,400 8,400 Storage space rental 1,308 1,298 Board members expenses (including special meeting expenses) 10,459 13,891 Exam expenses 750 151 Telephone 3,414 3,280 Internet costs 1,259 1,259 Office supplies and expenses 3,261 3,057 Printing and copying 423 548 Depreciation 295 502 Postage 544 603 Dues 500 500 Legal fees 4,757 7,495 Audit and accounting fees 6,395 6,050 Bank charges 118 468 Website expenses 3,669 25,559 Total operating expenses $ 83,475 $ 112,650 Operating income (loss) $ 29,100 $ (5,355) See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEARS ENDED JUNE 30, 2014 AND 2013 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund -7- NON-OPERATING REVENUES (EXPENSES): Gain (loss) on disposition of capital assets $ (60) $ Interest income 78 131 Total non-operating revenues $ 18 $ 131 Change in net position $ 29,118 $ (5,224) Net position - beginning of year 42,285 47,509 Net position - end of year $ 71,403 $ 42,285 See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2014 AND 2013 -8- 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund Cash flows from operating activities: Cash received from fees and other operating income $ 115,485 $ 108,095 Cash payments for operating expenses (109,003) (88,674) Net cash provided (used) by operating activities $ 6,482 $ 19,421 Cash flows from investing activities: Interest earned $ 78 $ 131 Net cash provided by investing activities $ 78 $ 131 Cash flows from capital and related financing activities: Acquisition of capital assets $ (1,418) $ (419) Net cash provided (used) by capital and financing activities $ (1,418) $ (419) Net increase (decrease) in cash $ 5,142 $ 19,133 Cash - beginning of year 130,044 110,911 Cash - end of year $ 135,186 130,044 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 29,100 $ (5,355) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation $ 295 $ 502 Changes in assets and liabilities: Prepaid expense and other assets (4,347) 3,596 Accounts payable (21,476) 19,878 Unearned revenue 2,910 800 Total adjustments $ $ 24,776 Net cash provided by operating activities $ 6,482 $ 19,421 See notes to financial statements. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -9- 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. It is a nonmajor enterprise fund of the primary government of the State of North Carolina and is reported as such in the State’s Comprehensive Annual Financial Report (CAFR). 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. 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 The concept underlying the definition of the financial reporting entity is that elected officials are accountable to their constituents for their actions. As required by accounting principles generally accepted in the United States of America (GAAP), the financial reporting entity includes both the primary government and all of its component units. An organization other than a primary government serves as a nucleus for a reporting entity when it issues separate financial statements. The accompanying financial statements present all funds and activities for which the Board is responsible. For financial reporting purposes, the Board is a nonmajor enterprise fund of the primary government of the State of North Carolina and is reported as such in the State’s Comprehensive Annual Financial Report (CAFR). These financial statements for the Board are separate and apart from those of the State of North Carolina and do not present the financial position of the State nor changes in the State’s financial position and cash flows. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -10- Note 1 - Nature of Activities and Significant Accounting Policies (Continued) Basis of Accounting In accordance with Statement of Governmental Accounting Standards 34 (as amended, if applicable), the Board herewith presents Statements of Net Position, Statements of Revenues, Expenses, and Changes in Net Position; and Statements of Cash Flows. These statements reflect entity-wide operations of the Board. The Board has no fiduciary funds or component units. The Statements of Revenues, Expenses, and Changes in Net Position 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 economic 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, regardless of the timing of cash flows. 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. Operating expenses are all expense transactions incurred other than those related to capital and noncapital financing or investing activities as defined by GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting. Non-operating revenues and expenses consist of those revenues and expenses that are related to investing, capital, and non-capital financing activities; and are classified as non-operating in the financial statements. Cash and Cash Equivalents 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 Position presentation. Fair Value of Financial Instruments The carrying amounts of the Board’s financial instruments approximate their fair value. Prepaid Expenses This classification includes prepaid management fees at year end. Income Taxes The Board is a nonmajor enterprise fund of the primary government of the State of North Carolina and is exempt from federal and state income taxes. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -11- Note 1 - Nature of Activities and Significant Accounting Policies (Continued) 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 $250 or greater at the date of acquisition and an estimated useful life of more than one year. Depreciation is computed using the straight-line method of depreciation over the estimated useful lives of the assets, generally estimated as follows: office furniture and equipment, 5 to 7 years. Summaries follow: Cost 06-30-13 Acquisitions Disposals Cost 06-30-14 Accumulated Depreciation Net Amount Furniture/Equipment $ 8,488 $ 1,418 $ 3,301 $ 6,605 $ 4,628 $ 1,977 $ 8,488 $ 1,418 $ 3,301 $ 6,605 $ 4,628 $ 1,977 Cost 06-30-12 Acquisitions Disposals Cost 06-30-13 Accumulated Depreciation Net Amount Furniture/Equipment $ 8,069 $ 419 $ - $ 8,488 $ 7,574 $ 914 $ 8,069 $ 419 $ - $ 8,488 $ 7,574 $ 914 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. Depreciation expense was $295 for the fiscal year ended June 30, 2014 and $502 for the fiscal year ended June 30, 2013. 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. Note 2 - Deposits Deposits All of the Board’s deposits which are uninsured, if any, are uncollateralized [unless collateralized pursuant to NC Administrative Code (20 NCAC 7)] 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, 2014, the Board' s deposits had a carrying amount (including undeposited receipts) of $135,186 and a bank balance of $122,926, which was covered by federal depository insurance. At June 30, 2013, the Board' s deposits had a carrying amount (including undeposited receipts) of $130,044 and a bank balance of $119,644, which was covered by federal depository insurance. NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -12- Note 3 - Unearned 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 Position Investment in capital assets - This component of net position 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 position - expendable - This component of net position consists of net position which the Board is legally or contractually obligated to spend in accordance with restrictions imposed by external parties. The Board has no restricted net position. Unrestricted net position - This component of net position consists of net position that does not meet the definition of restricted or investment in capital assets. Note 5 - Contractual Management Services The Board treats its administrative officer as an independent contractor. The Board contracts with this management service individual to provide services and provide office space (see Note 6) 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 and office space rent) totaled $43,575 during the fiscal year ended June 30, 2014. Payments to the management service (including reimbursements and office space rent) totaled $44,240 during the fiscal year ended June 30, 2013. Note 6 - Operating Lease The Board leased office space on a month to month lease (as a part of the contractual management service contract) during the fiscal years ended June 30, 2014 and June 30, 2013. The Board has entered into a long term lease agreement (effective September 1, 2014) for a new office space location. Total rent expense charged to operations under the lease agreement was $8,400 for the fiscal year ended June 30, 2014 and $8,400 for the fiscal year ended June 30, 2013. Rental commitments under the new noncancellable operating lease at June 30, 2014 are as follows: Year Ended June 30, 2015 $ 7,500 2016 9,000 2017 1,500 $ 18,000 NORTH CAROLINA MARRIAGE AND FAMILY THERAPY LICENSURE BOARD NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -13- Note 7 - 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 purchased no commercial insurance coverage. Note 8 - 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 9 - Subsequent Events Subsequent events have been evaluated through October 22, 2014, 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, 2014 AND 2013 -14- 2014 2013 Proprietary- Enterprise Fund Proprietary- Enterprise Fund RECEIPTS: Application and exam fees $ 34,650 $ 32, 200 Renewals and license fees (including late fees) 79,410 73, 400 Miscellaneous operating income 1,425 2, 495 Interest income 78 131 Total receipts 115,563 $ 108, 226 DISBURSEMENTS: Contractual management services (Note 5) $ 38,351 $ 31, 159 Staff travel 923 3, 555 Other contracted services 2,707 4, 212 Building rent (Note 6) 8,400 8, 400 Security deposit (new office space) 750 Storage space rental 1,308 1, 298 Board members expenses (including special meeting expenses) 12,431 11, 919 Exam expenses 750 151 Telephone 3,425 3, 289 Internet 1,259 1, 259 Office supplies and expenses 3,261 3, 313 Capital asset purchases 1,418 419 Printing and copying 423 548 Postage 544 603 Dues 500 500 Legal fees 6,541 4, 233 Audit and accounting fees 6,395 6, 050 Bank charges 118 468 Website expenses 20,917 7, 717 Total disbursements $ 110, 421 $ 89, 093 Receipts over (under) disbursements $ 5,142 $ 19,133 Change in cash $ 5,142 $ 19, 133 Cash and investments - beginning of year 130,044 110, 911 Cash and investments - end of year $ 135,186 $ 130, 044 ____________________________________________________________________________________ This audit required 45 audit hours at a cost of $4,195 |
OCLC number | 36320112 |