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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.
Object Description
Description
Title | North Carolina Landscape Contractors' Registration Board : financial statements... and independent auditor's report |
Other Title | Financial statements... and independent auditor's report; Financial statements for the years ended... and independent auditor's report |
Date | 2014 |
Description | Years ended June 30, 2014 and 2013 |
Digital Characteristics-A | 115 KB; 17 p. |
Digital Format |
application/pdf |
Pres File Name-M | pubs_serial_landscapecontractorsregistrationfinancial20132014.pdf |
Full Text | 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. |
OCLC number | 36320193 |