NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION BOARD
Financial Statements for the
Years Ended June 30, 2014 and 2013 and
Independent Auditor’s Report
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION BOARD
Financial Statements for the
Years Ended June 30, 2014 and 2013 and
Independent Auditor’s Report
BOARD MEMBERS (2013-2014)
Robert Scott Makey, Chairman
John W. Scott, Vice-Chairman
Jeffrey L. Tuttle, Secretary-Treasurer
Connie Joyce
Chris W. Mitchell
Tracy Sides
Peggy VanDevender
Skip Warrick
Marsha L. Wyly
EXECUTIVE OFFICER
Calvin M. Kirven, Executive Administrator
LEGAL COUNSEL
North Carolina Department of Justice
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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
1
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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 $10,411, or 15.6%, due to the Board’s operating
revenues exceeding its operating expenses. During 2013, the Board’s net position increased by $14,968,
or 28.8%, due to the Board’s operating revenues exceeding its operating expenses.
During 2014, the operating revenues of the Board decreased by $2,933, or 3.4%, due primarily to a
decrease in application fees. During 2013, the operating revenues of the Board decreased by $2,609, or
2.9%, due primarily to a decrease in application fees and examination fees.
During 2014, the non-operating revenues of the Board were the same as the preceding year’s non-operating
revenues, a zero percent change. During 2013, the non-operating revenues of the Board decreased by $65,
or 32.3%, due primarily to a decrease in interest earnings rates.
During 2014, the operating expenses of the Board increased by $1,624, or 2.3%, due primarily to an
increase in contractual management services. During 2013, the operating expenses of the Board increased
by $2,917, or 4.2%, due primarily to an increase in board member expenses, professional fees, and books
and manuals 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 Governmental Accounting
Standards Board (GASB) Statement No. 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 LANDSCAPE CONTRACTORS’ REGISTRATION 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 $ 107,471 $ 97,213
Capital assets 0 0
Total assets $ 107, 471 $ 97,213
Current liabilities $ 30,176 $ 30,329
Total liabilities $ 30,176 $ 30,329
Investment in capital assets $ 0 $ 0
Unrestricted 77,295 66,884
Total net position $ 77,295 $ 66,884
Operating revenues $ 83,559 $ 86,492
Operating expenses (73,284) (71,660)
Operating income $ 10, 275 $ 14,832
Non-operating revenues $ 136 $ 136
Change in net position $ 10,411 $ 14,968
Events Affecting Future Operations
The Board has indicated it 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 Landscape Contractors’ Registration Board, PO Box
20875, Raleigh, NC 27619.
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 Landscape Contractors’ Registration Board
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 Landscape Contractors’ Registration Board (the
"Board"), 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 the 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 Landscape Contractors’ Registration Board 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 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.
Shelton L. Hawley, C.P.A., P.A.
Angier, North Carolina
September 9, 2014
-5-
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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 in bank (Note 2) $ 75,211 $ 65,216
Cash in State Treasurer (Note 2) 31,044 30,907
Accounts receivable 420
Inventory (books and decals for resale, at cost) 796 1,090
Total current assets 107,471 97,213
Property and equipment (Note 1):
Furniture and office equipment 0 0
Total property and equipment - net of depreciation 0 0
TOTAL ASSETS $ 107,471 $ 97,213
LIABILITIES AND NET POSITION
Current liabilities:
Accounts payable $ 120 $ 358
Due to other state agencies 56 61
Unearned revenue (Note 3) 30,000 $ 29,910
Total current liabilities 30,176 30,329
TOTAL LIABILITIES 30,176 30,329
NET POSITION (NOTE 4)
Investment in capital assets 0 0
Unrestricted net position 77,295 66,884
TOTAL NET POSITION 77,295 66,884
TOTAL LIABILITIES AND NET POSITION $ 107,471 $ 97,213
See notes to financial statements.
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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:
Renewal fees (including reinstatement fees) $ 61,890 $ 61,590
Certificate fees 2,700 2,340
Application fees 4,125 5,775
Examination fees 4,740 5,160
Late filing fees 3,925 3,715
Decal sales 2,618 3,248
Books and manuals sales 3,534 4,551
Miscellaneous income 27 113
Total operating revenues $ 83,559 $ 86,492
OPERATING EXPENSES:
Contractual management services (Note 6) $ 47,520 $ 43,200
Staff travel expenses 185 164
Board members expenses - travel and per diem 7,078 7,124
Website 334 334
Exam expenses 1,409 1,941
Office supplies 40
Printing and copying 4,330 4,081
Postage and related costs (Note 5) 3,223 4,092
Audit and accounting 4,095 4,390
Books, manuals and decals 2,025 2,995
Trade show and advertising 1,587 1,728
Bank fees and credit card discount fees 1,059 1,137
Miscellaneous 399 474
Total operating expenses $ 73,284 $ 71,660
Operating income $ 10,275 $ 14,832
See notes to financial statements.
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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):
Interest income $ 136 $ 136
Total non-operating revenues $ 136 $ 136
Change in net position $ 10,411 $ 14,968
Net position - beginning of year 66,884 51,916
Net position - end of year $ 77,295 $ 66,884
See notes to financial statements.
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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 $ 83,229 $ 86,462
Cash payments for operating expenses (73,233) (71,555)
Net cash provided (used) by operating activities $ 9,996 $ 14,907
Cash flows from investing activities:
Interest on investments $ 136 $ 136
Net cash provided by investing activities $ 136 $ 136
Net increase(decrease) in cash $ 10,132 $ 15,043
Cash - beginning of year 96,123 81,080
Cash - end of year $ 106,255 $ 96,123
Reconciliation of operating income
to net cash provided by operating activities:
Operating income $ 10,275 $ 14,832
Adjustments to reconcile operating income
to net cash provided by operating activities:
Changes in assets and liabilities:
Accounts receivable $ (420) $
Inventory 294 187
Accounts payable (243) (82)
Unearned revenue 90 (30)
Total adjustments $ (279) $ 75
Net cash provided by operating activities $ 9,996 $ 14,907
See notes to financial statements.
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION 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 Landscape Contractors’ Registration Board (the "Board") is an independent State
agency. It is an occupational licensing board and is authorized by Chapter 89D of the North Carolina
General Statutes. The Board is a nonmajor enterprise fund of the primary government of the State of North
Carolina. The Board is composed of nine members who are appointed by the Governor, the Commissioner
of the NC Department of Agriculture, and certain associations designated by statute.
The Board is established to maintain minimum standards for services provided by landscape contractors.
The Board’s operations are financed with self-generated revenues from fees charged to licensees.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for establishing governmental accounting principles and
reporting standards. The Board applied all applicable Financial Accounting Standards Board (FASB)
pronouncements issued after November 30, 1989.
All activities of the Board are accounted for within a single proprietary (enterprise) fund. Proprietary funds
are used to account for operations that are financed and operated in a manner similar to private business
enterprises where the intent of the governing body is that the cost of providing goods or services to the
general public on a continuing basis be financed or recovered primarily through user charges.
Reporting Entity
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 LANDSCAPE CONTRACTORS’ REGISTRATION 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, 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 Landscape Contractors’ Registration
Board using the current financial resource measurement focus and the full accrual basis of accounting.
Revenues are recognized in the accounting period in which they are earned and become measurable.
Expenses are recognized when incurred, if measurable.
Operating revenues and expenses consist of those revenues and expenses that result from the ongoing
principal operations of the Board. Operating revenues consist primarily of license fees. Non-operating
revenues and expenses, if any, consist of those revenues and expenses that are related to investing activities
and are classified as non-operating in the financial statements.
Cash in Bank
This classification includes undeposited receipts, petty cash, checking accounts and time deposits (excluding
certificates of deposit, if any) held by the Board.
Cash in State Treasurer
This classification consists of funds deposited by the Board with the cash accounts of the North Carolina
State Treasurer.
Fair Value of Financial Instruments
The carrying amounts of the Board’s financial instruments approximate their fair value.
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
-11-
Note 1 - Nature of Activities and Significant Accounting Policies (Continued)
Property and Equipment
Property and equipment are stated at cost and are being depreciated over their useful lives on a straight-line
basis. The Board capitalizes assets that have a value or cost of $500 or greater at the date of acquisition
and an estimated useful life of more than one year. Summaries follow:
Cost
06-30-13 Acquisitions Disposals
Cost
06-30-14
Accumulated
Depreciation
Net
Amount
Furniture/Equipment $ 852 $ - $ - $ 852 $ 852 $ 0
$ 852 $ - $ - $ 852 $ 852 $ 0
Cost
06-30-12 Acquisitions Disposals
Cost
06-30-13
Accumulated
Depreciation
Net
Amount
Furniture/Equipment $ 852 $ - $ - $ 852 $ 852 $ 0
$ 852 $ - $ - $ 852 $ 852 $ 0
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.
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.
Note 2 - Deposits
Cash in Bank
All of the Board’s bank deposits are insured 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 (including undeposited receipts, if any) of
$75,211 and a bank balance of $75,038, which was covered by federal depository insurance. At June 30,
2013, the Board' s deposits had a carrying amount (including undeposited receipts, if any) of $65,216 and
a bank balance of $65,289, which was covered by federal depository insurance.
NORTH CAROLINA LANDSCAPE CONTRACTORS’ REGISTRATION BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
-12-
Note 2 - Deposits (Continued)
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, if applicable, 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 $31,044 (including undeposited receipts, if any), and a bank balance of $31,044. At June
30, 2013, the Board' s deposits with the State Treasurer STIF account had a carrying value and fair market
value of $30,907 (including undeposited receipts, if any), and a bank balance of $30,907.
Note 3 - Unearned Revenue
The Board’s license fees are assessed and collected on a calendar year basis. Licenses are renewed for a
period of one year. License fees 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 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 LANDSCAPE CONTRACTORS’ REGISTRATION BOARD
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2014 AND 2013
-13-
Note 5 - Operating Leases
The Board leased office equipment under an operating lease. Total rent expense charged to operations
under the lease agreement was $319 in 2014 and $439 in 2013.
Rental commitments under noncancellable operating leases at June 30, 2014 are as follows:
Year Ended June 30,
2015 $ 319
2016 80
$ 399
Note 6 - Contractual Management Services and Related Party Transactions
The Board contracted with a management consultant agency to provide services for the Board during the
years ended June 30, 2014 and 2013. The contract included all services related to the process of licensure
application and renewal and various other secretarial duties. The Board also reimbursed the management
service agency for occasional purchases of miscellaneous office supplies and expenses. Payments to the
management service agency totaled $47,600 during the fiscal year ended June 30, 2014 and $44,016 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. The
Board has not purchased any 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 September 9, 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 47 audit hours at a cost of $4,295.