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NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS Financial Statements for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS Financial Statements for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report BOARD MEMBERS (2014) Lindsey C. Walata, Chairman Richard Alan Kolb, Vice-Chairman John Stevens, Secretary-Treasurer John William Miller Robert Remsburg Kenneth Belk Taylor EXECUTIVE OFFICER Barbara U. Geiger, Administrator LEGAL COUNSEL North Carolina Department of Justice NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 9-15 1 NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 $20,999, or 3.4%, due primarily to annually recurring revenues in excess of expenses. During 2013, the Board’s net position increased by $39,359, or 6.8%, due primarily to annually recurring revenues in excess of expenses. During 2014, the operating revenues of the Board decreased by $10,412, or 6.7%, due primarily to a decrease in examination fees and late payment fees. During 2013, the operating revenues of the Board increased by $2,823, or 1.9%, due primarily to an increase in application fees and late fees. During 2014, the non-operating revenues of the Board decreased by $99, or 1.6%, due primarily to a decrease in the investment rate of return earned by the Board. During 2013, the non-operating revenues of the Board decreased by $4,156, or 40.6%, due primarily to a decrease in the investment rate of return earned by the Board. During 2014, the operating expenses of the Board increased by $7,849, or 6.5%, due primarily to an increase in board members expenses. During 2013, the operating expenses of the Board increased by $9,614, or 8.6%, due primarily to an increase in website 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 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 BOARD FOR LICENSING OF GEOLOGISTS 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 $ 483,439 $ 484,665 Capital assets 70 70 Other assets 274,914 270,860 Total assets $ 758,423 $ 755,595 Current liabilities $ 122,425 $ 140,596 Total liabilities $ 122,425 $ 140,596 Investment in capital assets $ 70 $ 70 Unrestricted 635,928 614,929 Total net position $ 635,998 $ 614,999 Operating revenues $ 144,207 154,619 Operating expenses (129,185) (121,336) Operating income 15,022 33,283 Non-operating revenues 5,977 6,076 Change in net position $ 20,999 $ 39,359 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 Board for Licensing of Geologists, PO Box 41225, Raleigh, NC 27629. 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 Board for Licensing of Geologists Raleigh, 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 Board for Licensing of Geologists (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 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 Board for Licensing of Geologists as of June 30, 2014 and 2013, and the results of its operations and its 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) Required Supplementary 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 audit 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. Shelton L. Hawley, C.P.A., P.A. Angier, North Carolina October 28, 2014 -5- NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 in State Treasurer (Note 2) $ 481,939 $ 483,165 Cash and cash equivalents - other (Note 2) 1,500 1,500 Total current assets 483,439 484,665 Capital assets (Note 1): Furniture and office equipment 70 70 Total capital assets - net of depreciation 70 70 Other assets: Investments (Note 2) 274,912 270,849 Accrued interest receivable (on investments) 2 11 Total other assets 274,914 270,860 TOTAL ASSETS $ 758,423 $ 755,595 LIABILITIES AND NET POSITION Current liabilities: Accounts payable $ 12,168 $ 18,538 Due to other state agencies 14,737 6,133 Unearned revenue (Note 3) 95,520 115,925 Total current liabilities 122,425 140,596 TOTAL LIABILITIES 122,425 140,596 NET POSITION (NOTE 4) Investment in capital assets 70 70 Unrestricted net position 635,928 614,929 TOTAL NET POSITION 635,998 614,999 TOTAL LIABILITIES AND NET POSITION $ 758,423 $ 755,595 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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: License and renewal fees $ 123,955 $ 126,585 New application fees and packets 7,260 7,985 Examination fees 10,800 15,260 Late payment fees 1,250 3,525 Miscellaneous operating income 942 1,264 Total operating revenues $ 144,207 $ 154,619 OPERATING EXPENSES: Contractual management services (Note 5) $ 57,000 $ 54,000 Management service staff expenses 266 233 Board members expenses 12,655 4,736 Peer review expenses (Note 6) 3,868 5,236 Telephone 2,096 1,721 Exam expenses 9,580 13,415 Public relations expenses - law awareness 237 Office supplies 455 837 Printing and copying (including newsletter) 1,840 4,439 Postage and freight 992 1,016 Dues 4,500 4,500 Insurance 1,658 1,508 Legal (including related costs), accounting and audit fees 16,566 10,286 Credit card discount fees 2,409 2,831 Stamps 745 819 Website expenses 14,205 15,759 Miscellaneous expenses 113 Total operating expenses $ 129,185 $ 121,336 Operating income (loss) $ 15,022 $ 33,283 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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): Interest income $ 5,977 $ 6,076 Total non-operating revenues $ 5,977 $ 6,076 Change in net position $ 20,999 $ 39,359 Net position - beginning of year 614,999 575,640 Net position - end of year $ 635,998 $ 614,999 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 $ 123,802 $ 165,634 Cash payments for operating expenses (126,951) (107,313) Net cash provided by operating activities $ (3,149) $ 58,321 Cash flows from investing activities: Interest earned 5,977 6,076 Transfers from (to) investments $ (4,054) $ (4,266) Net cash provided by investing activities $ 1,923 $ 1,810 Net increase in cash $ (1,226) $ 60,131 Cash - beginning of year 484,665 424,534 Cash - end of year $ 483,439 $ 484,665 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 15,022 $ 33,283 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Changes in assets and liabilities: Other receivables $ $ 155 Accounts payable 2,234 14,023 Unearned revenue (20,405) 10,860 Total adjustments $ (18,171) $ 25,038 Net cash provided by operating activities $ (3,149) $ 58,321 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 Board for Licensing of Geologists (the "Board") is an independent State agency. It is an occupational licensing board and is authorized by Chapter 89E of the North Carolina General Statutes. The Board is composed of six members who are appointed by the Governor of the State of North Carolina. 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). The Board is established to maintain minimum standards for services provided by geologists. The Board’s operations are financed with self-generated revenues from fees charged to examinees and 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 BOARD FOR LICENSING OF GEOLOGISTS 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 and examination fees. The financial statements report all activities of the North Carolina Board for Licensing of Geologists 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 in State Treasurer This classification consists of funds deposited by the Board with the cash accounts of the North Carolina State Treasurer. Cash and Cash Equivalents This classification includes undeposited receipts, petty cash, checking accounts and time deposits (excluding certain certificates of deposit, if any) held by the Board. Investments The Board is authorized to invest idle funds in accordance with North Carolina General Statutes. This classification consists of certain certificates of deposits held by the Board for investment. Investments generally are reported at fair market value. Certificates of deposit are reported at cost (which is the same as fair value) if purchased in the primary certificate of deposit market, and at fair value if purchased in the secondary certificate of deposit market (as determined by quoted market prices). The net increase (decrease) in the fair value of investments for certificates of deposit is recognized as a component of investment interest income. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -11- Note 1 - Nature of Activities and Significant Accounting Policies (Continued) Fair Value of Financial Instruments 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. 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 $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 Cost 06-30-12 Acquisitions Disposals Cost 06-30-13 Accumulated Depreciation Net Amount Furniture/Equipment $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 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. No depreciation expense was recorded for the fiscal year ended June 30, 2014 or for the fiscal year ended June 30, 2013. 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. 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 BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -12- Note 2 - Deposits and Investments Cash in State Treasurer Short Term Investment Fund (STIF) Pursuant to North Carolina General Statute 147-69.3(b), the Board voluntarily deposits to the North Carolina Short Term Investment Fund (STIF). Disbursements are through the issuance of warrants by the Board. Investments of the Short Term Investment Fund are limited to those authorized for the State’s General Fund, generally high quality money market investments and US Government/agency securities. FDIC insurance and deposit collateralization rules do not apply. Deposit and investments risks associated with the State Treasurer’s Investment Pool (which includes the State Treasurer’s Short-Term Investment Fund) are included in the State of North Carolina’s Comprehensive Annual Financial Report. An electronic version of the financial report is available by accessing the North Carolina Office of the State Controller’s internet home page, www.ncosc.net, and clicking on “Financial Reports”, or calling the State Controller’s Financial Reporting Section at (919) 707- 0500. At June 30, 2014, the Board’s deposits with the State Treasurer STIF account had a carrying value and fair market value of $481,939 (including undeposited receipts), and a bank balance of $444,599 (including $25,800 in uncertified deposits). At June 30, 2013, the Board’s deposits with the State Treasurer STIF account had a carrying value and fair market value of $483,165 (including undeposited receipts), and a bank balance of $472,660 (including $5,265 in uncertified deposits). Deposits in Financial Institution(s) All of the Board’s deposits which are uninsured 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 (or counterparty), the Board will not be able to recover the value of 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 of $276,412 and a bank balance of $276,412. Of the bank balance, $251,500 was covered by federal depository insurance, and $24,912 was uninsured and uncollateralized [unless collateralized pursuant to NC Administrative Code (20 NCAC 7)]. Certificates of deposit in the amount of $274,912 are considered time deposits for this disclosure and are classified as investments on the Statement of Net Position. At June 30, 2013, the Board’s deposits had a carrying amount of $272,349 and a bank balance of $272,349. Of the bank balance, $251,500 was covered by federal depository insurance, and $20,849 was uninsured and uncollateralized [unless collateralized pursuant to NC Administrative Code (20 NCAC 7)]. Certificates of deposit in the amount of $270,849 are considered time deposits for this disclosure and are classified as investments on the Statement of Net Position. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -13- Note 2 - Deposits and Investments (Continued) Investments At June 30, 2014 and 2013, the Board had the following investments and maturities. June 30, 2014 June 30, 2013 Investment Type Fair Value Over 12 Months Fair Value Over 12 Months Certificate of Deposit $ 141,091 $ 141,091 $ 137,296 $ 137,296 Certificate of Deposit 133,821 133,821 133,553 133,553 Total $ 274,912 $ 274,912 $ 270,849 $ 270,849 Risk Disclosures for Investments Interest rate risk - As a means of limiting its exposure to fair value losses arising from rising interest rates, the Board limits its investment in certificates of deposits to maturities of no more than 60 months. Credit risk - State law limits the investments of the Board to certain types of investments, however the Board’s present policy for managing credit risk is to limit its investments to certificates of deposits. Custodial credit risk - For an investment, custodial credit risk is the risk that in the event of the failure of the depository (or counterparty), the Board will not be able to recover the value of its investments that are in the possession of the outside party. The Board does not have policies regarding custodial credit risk for investments. Concentration of credit risk - The Board places no limit on the amount that it may invest in any one issuer. All of the Board’s deposits and investments are with one financial institution (other than deposits with the North Carolina State Treasurer). NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -14- Note 2 - Deposits and Investments (Continued) Reconciliation of Deposits and Investments A reconciliation of deposits and investments for the Board to the basic financial statements at June 30, 2014 and 2013, is as follows: June 30, 2014 June 30, 2013 Carrying Amount of Cash in State Treasurer $ 481,939 $ 483,165 Carrying Amount of Bank Deposits 1,500 1,500 Certificates of Deposits 274,912 270,849 Total Deposits and Investments $ 758,351 $ 755,514 Current: Cash in State Treasurer $ 481,939 $ 483,165 Cash and Cash Equivalents - Other 1,500 1,500 Noncurrent: Investments 274,912 270,849 Total Deposits and Investments $ 758,351 $ 755,514 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 unearned 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 - 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 had no restricted net position at year end. 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. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -15- Note 5 - Contractual Management Services The Board does not have any employees. The Board contracts with a management service to provide services for the Board. The contract includes all services related to the process of licensure application and renewal and various other clerical duties. The Board also reimburses the management service for printing, copying, postage and miscellaneous office supplies and expenses. Payments to the management service totaled $62,660 during the fiscal year ended June 30, 2014. Payments to the management service totaled $61,193 during the fiscal year ended June 30, 2013. Note 6 - Related Party Transactions The Board contracts with former Board members to perform peer review services for the Board. Peer review services are expenses incurred and paid for professional services rendered to investigate complaints against Board licensees and to investigate unlicensed practice. Payments to former Board members (for peer review services) totaled $486 during the fiscal year ended June 30, 2014. Payments to former Board members (for peer review services) totaled $4,766 during the fiscal year ended June 30, 2013. 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. Additionally, the Board protects itself from exposure to loss through the purchase of 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 28, 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. This audit required 45 audit hours at a cost of $4,295.
Object Description
Description
Title | North Carolina Board for Licensing of Geologists : financial statements for the years ended... and independent auditor's report. |
Other Title | Financial statements for the years ended... and independent auditor's report |
Date | 2014 |
Description | Years Ended June 30, 2014 and 2013 |
Digital Characteristics-A | 129 KB; 19 p. |
Digital Format |
application/pdf |
Pres File Name-M | pubs_serial_licensinggeologistsfinancial20132014.pdf |
Full Text | NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS Financial Statements for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS Financial Statements for the Years Ended June 30, 2014 and 2013 and Independent Auditor’s Report BOARD MEMBERS (2014) Lindsey C. Walata, Chairman Richard Alan Kolb, Vice-Chairman John Stevens, Secretary-Treasurer John William Miller Robert Remsburg Kenneth Belk Taylor EXECUTIVE OFFICER Barbara U. Geiger, Administrator LEGAL COUNSEL North Carolina Department of Justice NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 9-15 1 NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 $20,999, or 3.4%, due primarily to annually recurring revenues in excess of expenses. During 2013, the Board’s net position increased by $39,359, or 6.8%, due primarily to annually recurring revenues in excess of expenses. During 2014, the operating revenues of the Board decreased by $10,412, or 6.7%, due primarily to a decrease in examination fees and late payment fees. During 2013, the operating revenues of the Board increased by $2,823, or 1.9%, due primarily to an increase in application fees and late fees. During 2014, the non-operating revenues of the Board decreased by $99, or 1.6%, due primarily to a decrease in the investment rate of return earned by the Board. During 2013, the non-operating revenues of the Board decreased by $4,156, or 40.6%, due primarily to a decrease in the investment rate of return earned by the Board. During 2014, the operating expenses of the Board increased by $7,849, or 6.5%, due primarily to an increase in board members expenses. During 2013, the operating expenses of the Board increased by $9,614, or 8.6%, due primarily to an increase in website 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 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 BOARD FOR LICENSING OF GEOLOGISTS 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 $ 483,439 $ 484,665 Capital assets 70 70 Other assets 274,914 270,860 Total assets $ 758,423 $ 755,595 Current liabilities $ 122,425 $ 140,596 Total liabilities $ 122,425 $ 140,596 Investment in capital assets $ 70 $ 70 Unrestricted 635,928 614,929 Total net position $ 635,998 $ 614,999 Operating revenues $ 144,207 154,619 Operating expenses (129,185) (121,336) Operating income 15,022 33,283 Non-operating revenues 5,977 6,076 Change in net position $ 20,999 $ 39,359 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 Board for Licensing of Geologists, PO Box 41225, Raleigh, NC 27629. 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 Board for Licensing of Geologists Raleigh, 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 Board for Licensing of Geologists (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 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 Board for Licensing of Geologists as of June 30, 2014 and 2013, and the results of its operations and its 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) Required Supplementary 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 audit 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. Shelton L. Hawley, C.P.A., P.A. Angier, North Carolina October 28, 2014 -5- NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 in State Treasurer (Note 2) $ 481,939 $ 483,165 Cash and cash equivalents - other (Note 2) 1,500 1,500 Total current assets 483,439 484,665 Capital assets (Note 1): Furniture and office equipment 70 70 Total capital assets - net of depreciation 70 70 Other assets: Investments (Note 2) 274,912 270,849 Accrued interest receivable (on investments) 2 11 Total other assets 274,914 270,860 TOTAL ASSETS $ 758,423 $ 755,595 LIABILITIES AND NET POSITION Current liabilities: Accounts payable $ 12,168 $ 18,538 Due to other state agencies 14,737 6,133 Unearned revenue (Note 3) 95,520 115,925 Total current liabilities 122,425 140,596 TOTAL LIABILITIES 122,425 140,596 NET POSITION (NOTE 4) Investment in capital assets 70 70 Unrestricted net position 635,928 614,929 TOTAL NET POSITION 635,998 614,999 TOTAL LIABILITIES AND NET POSITION $ 758,423 $ 755,595 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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: License and renewal fees $ 123,955 $ 126,585 New application fees and packets 7,260 7,985 Examination fees 10,800 15,260 Late payment fees 1,250 3,525 Miscellaneous operating income 942 1,264 Total operating revenues $ 144,207 $ 154,619 OPERATING EXPENSES: Contractual management services (Note 5) $ 57,000 $ 54,000 Management service staff expenses 266 233 Board members expenses 12,655 4,736 Peer review expenses (Note 6) 3,868 5,236 Telephone 2,096 1,721 Exam expenses 9,580 13,415 Public relations expenses - law awareness 237 Office supplies 455 837 Printing and copying (including newsletter) 1,840 4,439 Postage and freight 992 1,016 Dues 4,500 4,500 Insurance 1,658 1,508 Legal (including related costs), accounting and audit fees 16,566 10,286 Credit card discount fees 2,409 2,831 Stamps 745 819 Website expenses 14,205 15,759 Miscellaneous expenses 113 Total operating expenses $ 129,185 $ 121,336 Operating income (loss) $ 15,022 $ 33,283 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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): Interest income $ 5,977 $ 6,076 Total non-operating revenues $ 5,977 $ 6,076 Change in net position $ 20,999 $ 39,359 Net position - beginning of year 614,999 575,640 Net position - end of year $ 635,998 $ 614,999 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 $ 123,802 $ 165,634 Cash payments for operating expenses (126,951) (107,313) Net cash provided by operating activities $ (3,149) $ 58,321 Cash flows from investing activities: Interest earned 5,977 6,076 Transfers from (to) investments $ (4,054) $ (4,266) Net cash provided by investing activities $ 1,923 $ 1,810 Net increase in cash $ (1,226) $ 60,131 Cash - beginning of year 484,665 424,534 Cash - end of year $ 483,439 $ 484,665 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 15,022 $ 33,283 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Changes in assets and liabilities: Other receivables $ $ 155 Accounts payable 2,234 14,023 Unearned revenue (20,405) 10,860 Total adjustments $ (18,171) $ 25,038 Net cash provided by operating activities $ (3,149) $ 58,321 See notes to financial statements. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS 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 Board for Licensing of Geologists (the "Board") is an independent State agency. It is an occupational licensing board and is authorized by Chapter 89E of the North Carolina General Statutes. The Board is composed of six members who are appointed by the Governor of the State of North Carolina. 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). The Board is established to maintain minimum standards for services provided by geologists. The Board’s operations are financed with self-generated revenues from fees charged to examinees and 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 BOARD FOR LICENSING OF GEOLOGISTS 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 and examination fees. The financial statements report all activities of the North Carolina Board for Licensing of Geologists 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 in State Treasurer This classification consists of funds deposited by the Board with the cash accounts of the North Carolina State Treasurer. Cash and Cash Equivalents This classification includes undeposited receipts, petty cash, checking accounts and time deposits (excluding certain certificates of deposit, if any) held by the Board. Investments The Board is authorized to invest idle funds in accordance with North Carolina General Statutes. This classification consists of certain certificates of deposits held by the Board for investment. Investments generally are reported at fair market value. Certificates of deposit are reported at cost (which is the same as fair value) if purchased in the primary certificate of deposit market, and at fair value if purchased in the secondary certificate of deposit market (as determined by quoted market prices). The net increase (decrease) in the fair value of investments for certificates of deposit is recognized as a component of investment interest income. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -11- Note 1 - Nature of Activities and Significant Accounting Policies (Continued) Fair Value of Financial Instruments 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. 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 $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 Cost 06-30-12 Acquisitions Disposals Cost 06-30-13 Accumulated Depreciation Net Amount Furniture/Equipment $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 $ 1,237 $ - $ - $ 1,237 $ 1,167 $ 70 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. No depreciation expense was recorded for the fiscal year ended June 30, 2014 or for the fiscal year ended June 30, 2013. 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. 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 BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -12- Note 2 - Deposits and Investments Cash in State Treasurer Short Term Investment Fund (STIF) Pursuant to North Carolina General Statute 147-69.3(b), the Board voluntarily deposits to the North Carolina Short Term Investment Fund (STIF). Disbursements are through the issuance of warrants by the Board. Investments of the Short Term Investment Fund are limited to those authorized for the State’s General Fund, generally high quality money market investments and US Government/agency securities. FDIC insurance and deposit collateralization rules do not apply. Deposit and investments risks associated with the State Treasurer’s Investment Pool (which includes the State Treasurer’s Short-Term Investment Fund) are included in the State of North Carolina’s Comprehensive Annual Financial Report. An electronic version of the financial report is available by accessing the North Carolina Office of the State Controller’s internet home page, www.ncosc.net, and clicking on “Financial Reports”, or calling the State Controller’s Financial Reporting Section at (919) 707- 0500. At June 30, 2014, the Board’s deposits with the State Treasurer STIF account had a carrying value and fair market value of $481,939 (including undeposited receipts), and a bank balance of $444,599 (including $25,800 in uncertified deposits). At June 30, 2013, the Board’s deposits with the State Treasurer STIF account had a carrying value and fair market value of $483,165 (including undeposited receipts), and a bank balance of $472,660 (including $5,265 in uncertified deposits). Deposits in Financial Institution(s) All of the Board’s deposits which are uninsured 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 (or counterparty), the Board will not be able to recover the value of 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 of $276,412 and a bank balance of $276,412. Of the bank balance, $251,500 was covered by federal depository insurance, and $24,912 was uninsured and uncollateralized [unless collateralized pursuant to NC Administrative Code (20 NCAC 7)]. Certificates of deposit in the amount of $274,912 are considered time deposits for this disclosure and are classified as investments on the Statement of Net Position. At June 30, 2013, the Board’s deposits had a carrying amount of $272,349 and a bank balance of $272,349. Of the bank balance, $251,500 was covered by federal depository insurance, and $20,849 was uninsured and uncollateralized [unless collateralized pursuant to NC Administrative Code (20 NCAC 7)]. Certificates of deposit in the amount of $270,849 are considered time deposits for this disclosure and are classified as investments on the Statement of Net Position. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -13- Note 2 - Deposits and Investments (Continued) Investments At June 30, 2014 and 2013, the Board had the following investments and maturities. June 30, 2014 June 30, 2013 Investment Type Fair Value Over 12 Months Fair Value Over 12 Months Certificate of Deposit $ 141,091 $ 141,091 $ 137,296 $ 137,296 Certificate of Deposit 133,821 133,821 133,553 133,553 Total $ 274,912 $ 274,912 $ 270,849 $ 270,849 Risk Disclosures for Investments Interest rate risk - As a means of limiting its exposure to fair value losses arising from rising interest rates, the Board limits its investment in certificates of deposits to maturities of no more than 60 months. Credit risk - State law limits the investments of the Board to certain types of investments, however the Board’s present policy for managing credit risk is to limit its investments to certificates of deposits. Custodial credit risk - For an investment, custodial credit risk is the risk that in the event of the failure of the depository (or counterparty), the Board will not be able to recover the value of its investments that are in the possession of the outside party. The Board does not have policies regarding custodial credit risk for investments. Concentration of credit risk - The Board places no limit on the amount that it may invest in any one issuer. All of the Board’s deposits and investments are with one financial institution (other than deposits with the North Carolina State Treasurer). NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -14- Note 2 - Deposits and Investments (Continued) Reconciliation of Deposits and Investments A reconciliation of deposits and investments for the Board to the basic financial statements at June 30, 2014 and 2013, is as follows: June 30, 2014 June 30, 2013 Carrying Amount of Cash in State Treasurer $ 481,939 $ 483,165 Carrying Amount of Bank Deposits 1,500 1,500 Certificates of Deposits 274,912 270,849 Total Deposits and Investments $ 758,351 $ 755,514 Current: Cash in State Treasurer $ 481,939 $ 483,165 Cash and Cash Equivalents - Other 1,500 1,500 Noncurrent: Investments 274,912 270,849 Total Deposits and Investments $ 758,351 $ 755,514 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 unearned 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 - 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 had no restricted net position at year end. 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. NORTH CAROLINA BOARD FOR LICENSING OF GEOLOGISTS NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013 -15- Note 5 - Contractual Management Services The Board does not have any employees. The Board contracts with a management service to provide services for the Board. The contract includes all services related to the process of licensure application and renewal and various other clerical duties. The Board also reimburses the management service for printing, copying, postage and miscellaneous office supplies and expenses. Payments to the management service totaled $62,660 during the fiscal year ended June 30, 2014. Payments to the management service totaled $61,193 during the fiscal year ended June 30, 2013. Note 6 - Related Party Transactions The Board contracts with former Board members to perform peer review services for the Board. Peer review services are expenses incurred and paid for professional services rendered to investigate complaints against Board licensees and to investigate unlicensed practice. Payments to former Board members (for peer review services) totaled $486 during the fiscal year ended June 30, 2014. Payments to former Board members (for peer review services) totaled $4,766 during the fiscal year ended June 30, 2013. 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. Additionally, the Board protects itself from exposure to loss through the purchase of 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 28, 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. This audit required 45 audit hours at a cost of $4,295. |
OCLC number | 33935424 |