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HomeMy WebLinkAboutCOM 0696.004 2008-2010 HAWAII ISLAND (, UU zr "1 11 URI HUB SO@IETY October 21, 2010 Council Chair J. Yoshimoto Hawaii County Council 25 Aupuni Street Hilo, HI 96720 Aloha Mr. Yoshimoto, Enclosed please find your copy of the FYE 2010 Audit for the Hawaii Island Humane Society. Thank you, v Cindy Kennedy Accounting Department Hawaii Island Humane Society Enclosure cc: Police Chief Kubojiri Mayor Billy Kenoi Finance Director Nancy Crawford Legislative Auditor Colleen Schrandt Comm, No. CO - 1 '7 Ref. To: r Ref: Date 42CT 22 2010 74 -5225 Queen Kaahumanu Hwy • Kailua -Kona, HI 96740 • Telephone (808) 329 -1175 • Fax (808) 329 -4618 Keaau (808) 966 -5458 • Kamuela (808) 885 -4558 HAWAII ISLAND HUMANE SOCIETY (A Hawai'i Nonprofit Corporation) AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2010 (With Comparative Totals for June 30, 2009) Public Accountants Carbonaro ' Member: AICPA • CPA & C ertified P Associates HSCPA INDEPENDENT AUDITORS' REPORT To the Board of Directors Hawaii Island Humane Society Kailua Kona, Hawaii 96740 -2701 We have audited the accompanying statement of financial position of Hawaii Island Humane Society (a Hawaii non - profit corporation) as of June 30, 2010, and the related statements of activity, functional expenses, changes in net assets, cash flows and the statement of County program activity for the year then ended. These financial statements are the responsibility of Hawaii Island Humane Society's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from the organization's 2009 financial statements and, in our report dated October 28, 2009 we expressed a qualified opinion on those financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hawaii Island Humane Society as of June 30, 2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule of county program activity on page 10 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. C avna4 - c.494 G.i)-Doc . a±D' Mountain View, Hawai'i September 15, 2010 P.O.Box 4372 • Hilo, Hawaii 96720 • Phone: (808) 968 -1002 Fax: 1 -(866) 728 -6430 HAWAII ISLAND HUMANE SOCIETY Statement of Financial Position As of June 30, 2010 (With Comparative Totals for June 30, 2009) ASSETS 2010 2009 CURRENT ASSETS Cash: Checking - BOH Operating County $ 40,432 $ 149,253 Checking - BOH Operating Humane Society 74,125 193,486 Checking - BOH Operating Spay Neuter 59,030 28,532 HCFCU - Money Manager 5,167 267,855 HCFCU Share Dram - Checking 100 100 HCFCU- Savings 50 50 HCFCU - Certificate of Deposit 15,982 - HFSFCU - Certificate of Deposit 25,000 - HCFCU - 12 Month Share Certificate 226,617 - HFSFCU - Savings 117 - Total Cash 446,620 639,276 Other Current Assets Accounts Receivable 103,919 - Petty Cash 664 373 Prepaid Expense 25,182 50,266 Retail Inventory 7,901 33,609 Total Other Current Assets 137,666 84,248 Total Current Assets 584,286 723,524 PROPERTY AND EQUIPMENT (Note 2) Kea'au Land (Note 14) 100,000 - Buildings 486,491 478,536 Vehicles 270,584 329,394 Equipment - Office 89,293 127,400 Operating Room Equipment 39,652 29,878 Leasehold Improvements 75,961 44,826 Miscellaneous Assets 58,604 81,890 1,120,585 1,091,924 Accumulated Depreciation (585,243) (621,495) Total Fixed Assets 535,342 470,429 OTHER ASSETS Deposits - Other 300 500 Total Other Assets 300 500 TOTAL ASSETS $ 1,119,928 $ 1,194,453 The accompanying notes and Auditors' report are an integral part of these financial statements. Page 2 HAWAII ISLAND HUMANE SOCIETY Statement of Financial Position As of June 30, 2010 (With Comparative Totals for June 30, 2009) LIABILITIES AND NET ASSETS 2010 2009 CURRENT LIABILITIES Accounts Payable $ 67,386 $ 149,088 STN Coupon Liability (Note. 11) 45,000 45,000 Credit Cards 10,246 5,683 Total Accounts Payable and Credit Cards 122,632 199,771 OTHER CURRENT LIABILITIES Accrued Wages 38,080 28,880 Deferred County Funds (Note 12) 152,273 121,125 County of Hawai' i Payables 2,794 17,001 Accrued General Excise Tax 918 4,928 Accrued Payroll Taxes and Benefits 24,622 1,843 Accrued Vacation Payable 19,292 16,692 Total Other Current Liabilities 237,979 190,469 TOTAL CURRENT LIABILITIES 360,611 390,240 LONG TERM LIABILITIES Capitalized Leases Payable 23,973 32,854 TOTAL LIABILITIES 384,584 423,094 NET ASSETS (Notes) Unrestricted Net Assets 528,211 636,215 Temporarily Restricted 184,786 115,239 Permanently Restricted 22,347 19,905 Total Net Assets 735,344 771,359 TOTAL LIABILITIES AND NET ASSETS $ 1,119,928 $ 1,194,453 The accompanying notes and Auditors' report are an integral part of these financial statements, Page 3 HAWAII ISLAND HUMANE SOCIETY Statement of Activity For the Year Ended June 30, 2010 (With Comparative Totals for June 30, 2009) Temporarily Permanently 2010 2009 Unrestricted Restricted Restricted Total Total PUBLIC SUPPORT AND REVENUE County of Hawaii (Note 3) $ 1,857,031 $ - $ - $ 1,857,031 $ 1,929,994 Fundraising 180,522 - - 180,522 195,877 Adoptions 166,925 - - 166,925 154,614 STN CAP Coupon Sales (Note 10) 162,145 - - 162,145 99,695 Donations 67,201 79,206 2,442 148,849 283,672 Sales 39,562 - - 39,562 37,333 Less Cost of Goods Sold (23,426) - - (23,426) (23,282) Donated Rent (Note 3) 25,200 - - 25,200 - Humane Shelter Services 15,293 - - 15,293 16,315 Miscellaneous Revenue 13,492 - - 13,492 10,758 Recycling 2,878 - - 2,878 5,504 Volunteer Services - - - - 5,730 Net Assets Released from Restrictions 9,659 (9,659) - - - Total Public Support and Revenue $ 2,516,482 $ 69,547 $ 2,442 $ 2,588,471 $ 2,716,210 A The accompanying notes and Auditors' report are an integral part of these financial statements. Page 4 HAWAII ISLAND HUMANE SOCIETY Statement of Activity For the Year Ended June 30, 2010 (With Comparative Totals for June 30, 2009) Temporarily Permanently 2010 2009 Unrestricted Restricted Restricted Total Total EXPENSES Salaries and Wages $ 1,278,892 $ - $ - $ 1,278,892 $ 1,214,085 Surgery Programs and Supplies 239,684 - - 239,684 254,656 Kennel Supplies, Food and Medicine 193,951 - - 193,951 99,397 Employee Benefits 168,098 - - 168,098 144,498 Payroll Taxes 130,019 - - 130,019 102,310 Utilities 87,920 - - 87,920 83,442 Insurance 85,803 - = 85,803 106,299 Depreciation 76,823 - - 76,823 93,130 Auto Expense 66,035 - - 66,035 49,457 Legal and Professional Services 65,608 - - 65,608 45,482 Fundraising Expense 53,801 - - 53,801 69,276 Advertising 43,867 - - 43,867 41,017 Repairs and Maintenance 40,525 - - 40,525 43,240 Rent 26,250 - 26,250 - Office Supplies 23,262 - - 23,262 28,516 Printing 19,784 = = 19,784 14,752 Animal Disposal 17,644 - 17,644 15,064 Staff Meeting and Training 16,995 - - 16,995 13,267 Bank and Credit Card Fees 14,554 - - 14,554 13,930 Meals and Travel 13,874 - - 13,874 10,861 Adoption Expense 13,015 - - 13,015 25,954 Animal Control Equipment 10,750 - 10,750 1,226 Network Expense 7,707 - - 7,707 18,267 Veterinary Care and Evidence Animals 6,583 - - 6,583 4,330 Uniforms 6,442 - = 6,442 7,227 General Excise Tax and Other Taxes 4,651 - - 4,651 6,149 Dues, Licenses, Subs, Taxes 4,642 - - 4,642 8,172 Postage and Freight 4,075 - - 4,075 7,169 Volunteer Program and Other 1,732 - 1,732 6,428 Humane Education 1,500 - - 1,500 8,295 Total Expenses 2,724,486 - - 2,724,486 2,535,896 Change in Net Assets $ (208,004) $ 69,547 $ 2,442 $ (136,015) $ 180,314 The accompanying notes and Auditors' report are an integral part of these financial statements. Page 5 HAWAII ISLAND HUMANE SOCIETY Statement of Functional Expenses For the Year Ended June 30, 2010 (With Comparative Totals for June 30, 2009) Program Supporting 2010 2009 Services Services Fundraising Total Total Salaries and Wages $ 1,082,481 $ 173,950 $ 22,461 $ 1,278,892 $ 1,214,085 Surgery Programs and Supplies 239,684 - - 239,684 254,656 Kennel Supplies, Food and Medicine 193,951 - - 193.951 99,397 Employee Benefits 145,960 22,138 168,098 144,498 Payroll Taxes 111,000 16,769 2,250 130,019 102,310 Utilities 82,445 5,475 - 87,920 83,442 Insurance 80,303 4,000 1,500 85,803 106,299 Depreciation 543 76,280 - 76,823 93,130 Auto Expense 59,025 7,010 - 66,035 49,457 Legal and Professional Services 59,048 6,560 - 65,608 45,482 Fundraising Expense - 15,107 38,694 53,801 69,276 Advertising 1,927 36,097 5,843 43,867 41,017 Repairs and Maintenance 31,834 8,691 - 40,525 43,240 Rent 25,000 1,250 - 26,250 - Office Supplies 16,158 5,710 1,394 23,262 28,516 Printing 15,829 3,955 - 19,784 14,752 Animal Disposal 17,644 - - 17,644 15,064 Staff Meeting and Training 15,683 1,312 - 16,995 13,267 Bank and Credit Card Fees - 11,984 2,570 14,554 13,930 Meals and Travel 10,336 3,538 - 13,874 10,861 Adoption Expense 13,015 - - 13,015 25,954 Animal Control Equipment 10,750 - - 10,750 1,226 Network Expense 5,780 1,927 - 7,707 18,267 Veterinary Care and Evidence Animals 6,583 - - 6,583 4,330 Uniforms 6,442 - - 6,442 7,227 General Excise Tax and Other Taxes - 1,151 3,500 4,651 6,428 Dues, Licenses, Subs, Taxes 4,542 100 - 4,642 8,172 Postage and Freight 2,817 958 300 4,075 7,169 Volunteer Program and Other 1,732 - - 1,732 6,149 Humane Education 1,500 - - 1,500 8,295 $ 2,242,012 $ 403,962 $ 78,512 $ 2,724,486 $ 2,535,896 The accompanying notes and Auditors' report are an integral part of these financial statements, Page 6 HAWAII ISLAND HUMANE SOCIETY Statement of Changes in Net Assets For the Year Ended June 30, 2010 Temporarily Permanently Total Unrestricted Restricted Restricted Net Assets Net Assets, Beginning of Year $ 636,215 $ 115,239 $ 19,905 $ 771,359 Excess Revenue Over (Under) Expenses (208,004) 69,547 2,442 (136,015) Adjustment to Net Assets for Kea'au Land 100,000 - - 100,000 (Note 14) Net Assets, End of Year $ 528,211 $ 184,786 $ 22,347 $ 735,344 The accompanying notes and Auditors' report are an integral part of these financial statements. Page 7 HAWAII ISLAND HUMANE SOCIETY Statement of Cash Flows For the Years Ended June 30, 2010 (With Comparative Totals for June 30, 2009) 2610 2009 CASH FLOWS FROM OPERATING ACTIVITIES Hawai' i County Funding 1,796,179 $ 2,051,119 Retail Sales and Services to Public 224,658 214,021 Fundraising 168,603 195,877 S/N CAP Coupon Sales 162,145 99,695 Foundations and Other Donations 150,133 283,672 Other Cash Received 8,991 10,504 Cash Paid to Employees and Vendors (2,661,629) (2,356,557) Net Cash Provided (Used) by Operating Activities (Note 7) (150,920) 498,331 CASH FLOWS FROM INVESTING ACTIVITIES Cash Used to Purchase Equipment (41,736) (116,158) Net Cash Used by Investing Activities (41,736) (116,158) CASH FLOWS FROM FINANCING ACTIVITIES - - Net Increase (Decrease) in Cash for the Year (192,656) 382,173 CASH BALANCE, BEGINNING OF YEAR 639,276 257,103 CASH BALANCE, END OF YEAR $ 446,620 $ 639,276 The accompanying notes and Auditors' report are an integral part of these financial statements. Page 8 HAWAII ISLAND HUMANE SOCIETY Schedule of County Program Activity For the Year Ended June 30, 2010 (With Comparative Totals for June 30, 2009) Animal S/N 2010 2009 Control CAP Total Total Receipts: County ofHawafi Contracted Funds $ 1,760,499 $ 127,680 $ 1,888,179 $ 2,051,119 Total Receipts 1,760,499 127,680 1,888,179 2,051,119 Operating Expenses Salaries and Wages 984,074 - 984,074 1,075,077 Surgery Programs and Supplies - 127,680 127,680 123,711 Employee Benefits 123,960 - 123,960 121,904 Payroll Taxes 101,956 - . 101,956 93,121 Insurance 85,126 - 85,126 105,575 Utilities 82,445 - 82,445 75,813 Auto Expense 65,575 - 65,575 43,972 Legal and Professional Services 63,641 - 63,641 33,514 Kennel Supplies, Food and Medicine 61,639 - 61,639 62,343 Repairs and Maintenance 31,834 - 31,834 42,253 Animal Disposal 17,644 - 17,644 14,681 Staff Meeting and Training 15,683 - 15,683 10,647 Animal Control Equipment 1 0,751 - I0,751 1 ,226 Office Supplies 8,933 - 8,933 11,121 Meals and Travel 6,755 - 6,755 6,344 Uniforms 6,402 - 6,402 7,227 Network Expense 4,034 - 4,034 14,940 Veterinary Care and Evidence Animals 4,028 4,028 545 Bank and Credit Card Fees 3,212 - 3,212 1,409 Printing 3,194 - 3,194 1,475 Postage and Freight 2,817 - 2,817 4,680 Dues, Licenses, Subs, Taxes 2,554 - 2,554 6,114 Advertising 1,927 - 1,927 1,467 Depreciation 543 - 543 - Total Operating Expenses 1,688,727 127,680 1,816,407 1,859,159 Fixed Assets Purchased/Leased 40,624 - 40,624 70,835 Excess Receipts over Expenditures (Note 12) $ 31, 148 $ - $ 31,148 $ 121, 125 The accompanying notes and Auditors' report are an integral part of these financial statements. Page 9 HAWAII ISLAND HUMANE SOCIIETY Notes to the Financial Statements June 30, 2010 Note 1, OR The Hawaii Island Humane Society is a non - profit organization incorporated under the laws of the State of Hawai' i on May 10, 1962. Hawaii Island Humane Society is organized to prevent cruelty to animals, to eliminate pet overpopulation and to enhance the bond between humans and animals. The Hawaii Island Humane Society is responsible for carrying out animal control for the County of Hawaii for the entire island of Hawai'i. They maintain shelters in each of three island locations; Kona, Kea'au and Waimea. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Method of Accounting: The Organization uses the accrual method of accounting for financial statement reporting according to generally accepted accounting principles. Under this method of accounting, revenue is recognized when earned rather than when received and expenses are recognized when incurred rather than when paid. Revenue Recognition: Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Grants and other contributions of cash are reported as temporarily restricted support if they are received with donor stipulations that limit the use of the donated assets. When the donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Cash and Cash Equivalents: For the purpose of the statement of cash flows, cash is defined as demand deposits and savings accounts. Investments; The Organization has adopted SFAS No. 124, "Accounting for Certain Investments Held by Not = for - Profit Organizations." Under SFAS No. 124, investments are stated at fair value and the net unrealized appreciation or depreciation on investments held is included in the change in net assets in the accompanying statements of activities. Purchased investments are carried at market value. Donated investments are recorded at their fair market value on the date of donation. Gains and losses on the sale of investments are accounted for in the net asset group where the related investments are recorded. Ordinary investment income is also accounted for in the net asset group where the investments are recorded. Property and Equipment: The Society capitalizes all furniture and equipment with a useful life greater than one year and a cost greater than $1,000. Property and equipment are stated at cost or, if donated, at the approximate fair value at the date of donation. Depreciation is computed using the straight -line method over the assets' estimated useful lives Page 10 HAWAII ISLAND HUMANE SOCIETY Notes to the Financial Statements June 30, 2010 Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment: The Society has purchased various fixed assets with County grant funds. As a result, these assets revert back to the grantor upon discontinuance of their intended purposes. However, management plans to use the assets for their intended purposes for the life of the assets and the likelihood of the assets having to be returned is remote. Income Taxes: Hawaii Island Humane Society is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code and also from State of Hawaii income taxes under Sections 416 -19 and 416 -20 of the Hawaii Revised Statutes. Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. According ly, actual results could differ from those estimates. Note 3. CONCENTRATIONS The Society received approximately 71% of its revenue from the County of Hawaii. Continued County funding at present service levels is dependent upon economic conditions on the Island of Hawaii and budgetary restraints experienced by the County. Reductions in this funding could affect the organization's ability to continue as a going concern. Funds received pursuant to the County of Hawai' i purchase of service agreement are for operating the County Animal Shelter and enforcing the County's animal control regulations. These funds are to be used in accordance with the agreement. Costs charged against the agreement are subject to review and acceptance by the County of Hawai' i. The shelter building and land on which the Kona shelter is located belong to the County of Hawaii. The County provides the site at no cost to the Society. This agreement must be renewed annually. The annual estimated value of the donated rent from the County of Hawai' i is $25,200. Note 4. LEASES On January 28, 2008, a copier was acquired through a 60 month non - cancelable lease agreement requiring monthly payments. The lease payment in the contract of $667.64 per month includes both equipment and service. The service portion of the lease is $127.08 per month. In the agreement, it states that Ricoh can increase the monthly service portion of the lease by up to 12% per year if so chosen. Estimated payments using the straight -line method over the life of the lease for the remaining lease term are as follows: June 30, 2011 $ 8,013 June 30, 2012 8,013 June 30, 2013 8,013 Total $ 24,039 Page 11 HAWAII ISLAND HUMANE SOCIETY Notes to the Financial Statements June 30, 2010 Note 5. NET ASSETS The Hawaii Island Humane Society has conformed to Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statements of Not - for - Profit Organizations ". Accordingly, the Society is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Unrestricted net assets represent those assets whose usage is neither temporarily nor permanently restricted by donors. These revenues are used for the general operating expenditures of the Society or for such other purposes as determined by the Board of Directors. Temporarily restricted net assets include those assets having donor restrictions that must be met either through some specific actions of the Society or by the passage of time. At June 30, 2010, temporarily restricted net assets consisted of the following: Katie Fund $ 22,606 Second Chance 37,342 Spay/Neuter 25,857 Michi Haga 21,882 West Hawai'i Cattery 19,550 Capital Campaign 7,281 Keau'au Kennels 21,433 Waimea Kennels 11,410 Equine Fund 17,425 Total Temp Rest Funds $ 184,786 Permanently restricted net assets are endowment funds restricted in perpetuity to continue the purpose of the Society. Income generated by these assets can be used for activities as specified by the donor. At June 30, 2010, permanently restricted net assets consisted of the $22,347 for the Spay/Neuter program. Note 6. DONA _ ED SERViCES Under SFAS No. 116, contributions of donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received. No amounts have been reflected in the statements for donated services inasmuch as no objective basis is available to measure the value of such services. However, a number of volunteers have donated significant amounts of their time in program services. Page 12 HAWAII ISLAND HUMANE SOCIETY Notes to the Financial Statements June 30, 2010 Note 7. RECONCILIATION OF CHANGE IN NET ASSETS CASH USED BY OPERATING ACTIVITIES Change in Net Assets $ (136,015) Adjustments to Reconcile: Depreciation 76,823 Change in Other Current Assets 50,702 Change in Accounts Receivable (103,919) Change in Accounts Payable (81, 158) Change in Credit Cards 4,563 Change in Copier Lease (8,881) Change in County Payable (14,207) Change in Deferred Revenue (4,010) Change in Accrued GET 31,148 Change in Accrued Payroll Expense 22,234 Change in Accrued Wages 9,200 Change in Accrued Vacation Pay 2,600 Net Cash Used by Operating Activities $ (150,920) Note 8. RETIREMENT PLAN The Hawaii Island Humane Society maintains an IRA retirement plan for all eligible employees whereby the Organization contributes 5% of each eligible employee's wages. Employees are considered eligible after they have been employed by the Organization for at least two years. During the year, retirement plan expenses totaled $26,173. Note 9. FUNCTIONAL EXPENSES The Hawaii Island Humane Society allocates expenses on a functional basis among three categories: direct program services, supporting services, and fundraising. Most expenses are allocated to the program and support services benefited. Note 10. SPAY/NEUTER PROGRAM The Hawaii Island Humane Society sells coupons that enable the client to take their animal to a participating veterinarian for spay /neuter services. As a service to the community, the veterinarian has agreed to perform his services at a reduced rate which is the price that the client paid for the coupon. The veterinarian accepts the coupon as payment for the spay /neuter services that he has performed and then bills the Hawaii Island Humane Society for payment of his services. Page 13 HAWAII ISLAND HUMANE SOCIETY Notes to the Financial Statements June 30, 2010 Note 10. SPAY/NEUTER PROGRAM (continued) The County of Hawai'i subsidized the payments to the veterinarian by funding Hawaii Island Humane Society the amount of $127,680 for June 30, 2010. The Spay/Neuter program expenses exceed the county funding. The remaining expenses are paid from the revenues generated by HIHS coupon sales. As of June 30, 2010, the spay /neuter program incurred a gain of $72,213 after expenses generated by both coupon sales and county funds. Note 11. S/N COUPON LIABILITY The coupons sold through the S/N CAP program are redeemed by the client when veterinary services are performed. The estimated amount of $45,000 on the balance sheet represents unredeemed coupons. Note 12. DEFERRED REVENUE Deferred Revenue of $1 52,273 at June 30, 2010, represents the unspent County of Hawaii contract funds that support the County Animal Control program. The total is comprised of the following: 2009 Contract $121,125 2010 Contract $ 31,148 Note 13. FINANCIAL STATEMENT PRESENTATION The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the organization's financial statements for the year ended June 30, 2009 from which the summarized information is derived. Note 14, KEA'AU LAND The Kea'au shelter is located on three acres of land owned by the Hawaii Island Humane Society. The land was acquired in February 1968 from W.H. Shipman, Limited for the amount of $10,00. The value of the land at acquisition has not been reflected in the fixed assets of the Society. At June 30, 2010, the assessed value of the land, which was approximately $100,000, was added to the balance sheet, NOTE 15. SUBSEQUENT EVENTS In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through September 15, 2010, the date the financial statements were available for use. Page 14