HomeMy WebLinkAboutCOM 0125.016 2012-2014HAWAII ISLAND
HUMANE
SOCIETY
October 27, 2014
Council Chair Yoshimoto
County of Hawaii
25 Aupuni Street
Hilo, HI 96720
Aloha Mr. Yoshimoto,
Enclosed is your copy of the Hawaii Island Humane Society's quarterly Income and Expense Report
for Animal Control Services for the period ending September 30, 2014.
Also included is your personal copy of our annual audit for our Fiscal Year ending June 30, 2014.
Sincerely,
0
Cindy Kenn dy
Accountant
Hawaii Island Humane Society
808 329 -2135 Email: accounting@hihs.org
Enclosure
cc: Mayor Kenoi
Police Chief Kubojiri
Legislative Auditor Nims
Finance Director Crawford
Ea
w
V
o�
Comm. No.
Ref. To:
Ref. Date_ NOV 0 6 2014
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
O
C
O
V
Q
T
v
O
N
_
N
3
L
O
CL
NNw
1.1.
W
v
Q
X
W
C
m
w
3
_
cu
w
cc
Ln
ri
O
N
r-i
M
1
Q
}J
V-1
O
N
r-I
21
O
O
v
a
C1
s
0
LL
[i
H
O
N
O
M
CL
(U
o,
c
W
y
o
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
o
0
0
bA
V1
O
1�
O
4
�-I
ul
M
Ol
l0
N
r-I
H
I,
lO
O
u)
�
O
co
ri
N
N
N
�h
O
N
N�
�
N
N
M
M
N
M
-i
N
-i
N
N
rl
dt
ri
d'
(V
N
N
N
N
N
r-I
3
m
W
N
O
V
(o
V
co
co
M
to
to
co
(o
t-
u)
M
0)
t(')
u)
r
00
O
(0
W
Lo
J
N
O
O
r�
V
V
O
M
6)
O
co
O
V
O
M
W
O
O
M
N
M
co
u)
M
r
M
N
07
M
O
r-
Lo
Lo
O
(0
r
N
CO
T
CO
_
(0
(0
0)
d•
r
L
a
(o
Lo
r-
Cl)
O
r
Cl)
N
CO
N
(0
I�
N
r
cei
O
0)
V
'V
N
N
N
O
°
C
3
o
°
A
o
°
L
Q
Q
o
°
o
°
O
W
LL
o
°
C
m
C)
°
v
o
°
O
Z
O
°
V
0
co
co
(0
O
Co
O
O
M
I�
M
M
(!'1
'V'
V
V
O
Lo
M
10
O
CO
N
O
V
O
O
O
(o
O
M
O
((')
co
O
co
W
co
1�
M
u1
u)
N
O
N
(0
to
u)
O)
to
V
(0
(D
w
I�
co
O
N
V
co
N
CO
co
co
(o
(o
N
o
r
cn
co
O
O)
O
I�
N
V
co
CO
V
0)
N
V
O
M
M
u7
O
V
CO
V
O
O
O
O
O
O
V
(o
Lo
(0
(0
(o
N
co
I�
O
m
O
m
CO
O
m
O
N
r
r
N
to
m
N
oc
W
N
'd
N
N
O
Lo
r
r
N
O_
I�
M
V
Lo
V
N
r`
O
N
-q
M
co
CO
CO
(0
to
a
co
O
I�
O
«)
N
'a'
r
M
M
m
O
N
r
V
M
O
m
W
u1
r-
u)
(o
O
M
CO
It
O
M
M
W
O
(0
O)
N
D7
Lo
V
N
C
(0
CO
N
u)
N
W
r
0)
(0
Lo
(o
(G
>>
N
O)
W
V
M
N
O
OO
M
u)
M
M
M
r
�o
M
N
I�
W
N
M
N
N
CO
N
C)
N
V
M
M
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
0
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
(0
O
O
(..�
r`
O
O
C
O
O
N
O
O
O
O
(1')
O
O
C
O
O
O
O
M
Cn
O
o)
O
O
O
N
O
N
(1')
(()
to
'd'
N
(o
N
O
(n
N
'd'
M
M
N
N
O
•ct
6)
r
N
(")
d'
r`
r•
ICD
N
W
a)
N
M
n
to
M
O
Cl)
r
r
r
O
r
O
W
r
�
r
N
O
U
N
C
O
N
N
y
(o
li
Q
N
C
U
U
0
Q
N
7
'O
U
U
W
Q_)
'O
(6
C
U)
d
i'
�+
CL
•3
a
C
f�4
m
`
N
C
a)
3
N
C
(E6
0
V
W
C
d
W
o
d
o
C
N
(m
�
O`
d
N
(0
r
.U-•
0
p•
3
O
y
M
t
N
N
E
N
�
C
a)
W
E
U
N
(a
CD
(L
t
ro
cn
=
+�3
N
L
y
L
O
Q
C
Q
N
a
'O
>
C
N
U
0
0
C
C
Y
U
C
C
d
y
C
X
W
a)
X
ca
N
N
7
_
N
�+
ci
otS
O
U
d
Q
V
2
d
Q
U
K
(7
fn
~
N
N
V
N
X
J
C
fn
W
W_
aNi
-0
d
C
d
�o
v
v
v°
•a
m
>-
`m
3
b
E
E
E
o
Y
v;
o
a
w
=
a
'E
'E
'c
�
(=o
E
E
H
a°)i
a�
('a
o
d
:°
a
2
c-
m
v
0
a
a
a
a
a
m
o
w
w
5
2
2
0
0
0
n.
a
(n
(n
U)
F-
>
>>
a
y
=
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
C)
0
0
0
r
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
O
Q
0
o
ui
0
0
0
n
co
0
0
0
0
0
0
0
0
0
o
0
0
0
w
0
0
0
V
X
M
M
r
N
v
m
0
On-
0
0
O
r
N
N
(D
(O
to
N
O
N
N
t
00
M
W
w
w
O
O
O
O
It
O
O
O
=
N
M
M
M
M
M
N
N
N
M
(0
(D
(D
r•
N
(o
N
h
(o
co
(o
(n
(n
to
(o
(o
(o
u)
GO
W
r
to
(o
LLY
to
N
to
(o
(O
(1)
(o
(o
(o
(0
Q;
bo
_0
N
-�e !-!
v- -O
O N
a)
t �
O v
u 0
4J
L
O
V
v
O
N_
_j
Q
QJ
i
O K
O
O
E
0
•� N
4- O
� O
l0 po
� N
N
� N
U O
Q
l
HAWAII ISLAND HUMANE SOCIETY
(A Hawaii Nonprofit Corporation)
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2014 AND 2013
HAWAII ISLAND HUMANE SOCIETY
Contents
Independent Auditor's Report
Financial Statements:
Statements of Financial Position
Statements of Activities and Change in Net Assets
Statements of Functional Expenses
Statements of Cash Flows
Schedules of County Program Activity
Notes to the Financial Statements
we
10
CarbonaroI/
CPAs Management Group
INDEPENDENT AUDITOR'S REPORT
To the Management and Board of Directors of
Hawaii Island Humane Society
Kailua Kona, Hawaii 96740 -2701
Certified Public Accountants
Member: AiCPA
HSCPA
We have audited the accompanying financial statements of Hawaii Island Humane Society (a Hawaii nonprofit
Organization) (the Organization) which comprise the statements of financial position as of June 30, 2014 and
2013, and the related statements of activities and change in net assets, functional expenses and cash flows for the
years then ended, and the related notes to the financial statements.
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
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free from 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 judgment, 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, we 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
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, 2014 and 2013, and the related statements of activities
and changes in net assets, functional expense and cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Maui: Big Island:
1885 Main Street, Suite 408 • Wailuku, H imdi 901-9 1 Location: 136 Kinoole Street • Hilo, Hawaii 96720
3 10 Ohul<ai Road, Suite 305 • Kihei, Hawaii 1)()7') 1) Mailing: P.O. Box 4372 • Hilo, Hawaii 96720
Phone: 808.24 2.5002 ^,\ti , .carbocpa.com Phone: 808.930.6850
To the Management and Board of Directors of
Hawaii Island Humane Society
Other Matter
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The
Schedules of County Program Activity on page 10 is presented for purposes of additional analysis and is not a
required part of the financial statements. Such information is the responsibility of management and was derived
from and relates directly to the underlying accounting and other records used to prepare the financial statements.
The information has been subjected to the auditing procedures applied in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the financial statements or to the financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated in all material respects in relation to the financial
statements as a whole.
Hilo, Hawaii
September 25, 2014
Page 2
HAWAII ISLAND HUMANE SOCIETY
Statements of Financial Position
For the Years Ended June 30, 2014 and 2013
ASSETS
2014
2013
CURRENT ASSETS
Cash and Cash Equivalents
$ 1,283,643
$ 800,912
Other Current Assets
- Accounts Receivable
2,016
383
Pledge Receivable (Note 16)
83,600
60,346
Prepaid Expense
2,749
30,631
Retail Inventory
1,222
8,330
Total Other Current Assets
89,587
99,690
Total Current Assets
1,373,230
900,602
PROPERTY AND EQUIPMENT (Note 2)
Kea'au Land (Note 13)
100,000
100,000
Holualoa Land (Note 14)
452,646
452,646
Buildings
871,502
871,502
Vehicles
306,413
298,976
Equipment - Office
125,963
123,172
Operating Room Equipment
49,084
49,084
Leasehold Improvements (Note 15)
102,633
102,633
Miscellaneous Assets
21,954
21,954
2,030,195
2,019,967
Accumulated Depreciation and Amortization
(753,479)
(678,912)
Net Property and Equipment
1,276,716
1,341,055
OTHER ASSETS
Certificate of Deposit (Note 2)
23,505
23,281
Annuity Contracts (Note 2)
24,248
30,714
Deposits - Other
5,200
-
Total Other Assets
52,953
53,995
TOTAL ASSETS
$ 2,702,899
$ 2,295,652
The accompanying notes are an integral part of these financial statements.
Page 3
HAWAII ISLAND HUMANE SOCIETY
Statements of Financial Position
For the Years Ended June 30, 2014 and 2013
LIABILITIES AND NET ASSETS
2014
2013
CURRENT LIABILITIES
Accounts Payable $
47,570
$ 70,280
S/N Coupon Liability (Note l 1)
4,750
14,545
Credit Cards
10,364
10,052
Total Accounts Payable and Credit Cards
62,684
94,877
OTHER CURRENT LIABILITIES
Accrued Wages
23,870
46,602
Accrued Vacation Payable
29,262
30,102
Accrued Payroll Taxes and Benefits
8,023
18,632
Current Portion of Capitalized Leases (Note 4)
16,843
14,947
Total Other Current Liabilities
77,998
110,283
TOTAL CURRENT LIABILITIES
140,682
205,160
LONGTERM LIABILITIES
Capitalized Leases Payable (Note 4)
9,207
26,049
Total Long'Lerm Liabilities
9,207
26,049
'TOTAL LIABILITIES
149,889
231,209
NET ASSETS (Note 5)
Unrestricted
1 ,473,128
1,440,997
Board Designated
178,445
18,400
Unrestricted Net Assets
1,651,573
1,459,397
Temporarily Restricted
879,090
582,699
Permanently Restricted
22,347
22,347
Total Net Assets
2,553,010
2,064,443
TOTAL LIABILITIES AND NET ASSETS $
2,702,899
$ 2,295,652
The accompanying notes are an integral part of these financial statements.
Page 4
HAWAII ISLAND HUMANE SOCIETY
Statement of Activities and Change in Net Assets
For the Year Ended June 30, 2014
PUBLIC SUPPORT AND REVENUE
County of Hawai'i
Donated Services (Note 7)
Donations
Fundraising
Grants
Adoptions
S/N CAP Coupon Sales (Note 10)
Donated Rent (Note 3)
Sales
Cost of Goods Sold (Note 20)
Miscellaneous Revenue
Humane Shelter Services
Recycling
Net Assets Released from Restrictions
Total Public Support and Revenue
EXPENSES
Program Expenses
Supporting Services
Fundraising Expenses
Total Expenses
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
Temporarily Permanently 2014
Unrestricted Restricted Restricted Total
$ 1,961,875
$ - $
- $ 1,961,875
5,000
-
- 5,000
525,273
188,877
- 714,150
60,983
117,196
- 178,179
-
152,060
- 152,060
135,754
-
- 135,754
70,277
-
- 70,277
25,200
-
- 25,200
24,809
-
- 24,809
(17,636)
-
- (17,636)
5,990
10,469
- 16,459
16,804
-
- 16,804
1,339
- 1,339
172,211
(172,211)
-
2,987,879
296,391
- 3,284,270
2,401,606
2.43,514
150,583
2,795,703
$ 192,176 $ 296,391
1,459,397 582,699
$ 1,651,573 $ 879,090
- 2,401,606
- 243,514
- 150,583
- 2,795,703
$ - $ 488,567
22,347 2,064,443
$ 22,347 $ 2,553,010
The accompanying notes are an integral part of these financial statements.
Page 5
HAWAII ISLAND HUMANE SOCIETY
Statement of Activities and Change in Net Assets
For the Year Ended June 30, 2013
PUBLIC SUPPORT AND REVENUE
County of Hawai'i
Donated Services (Note 7)
Donations
Adoptions
Fundraising
S/N CAP Coupon Sales (Note 10)
Sales
Cost of Goods Sold (Note 20)
Grants
Donated Rent (Note 3)
Humane Shelter Services
Miscellaneous Revenue
Recycling
Net Assets Released from Restrictions
Total Public Support and Revenue
EXPENSES
Program Expenses
Supporting Services
Fundraising Expenses
Total Expenses
CHANGE IN NET ASSETS
Temporarily Permanently 2013
Unrestricted Restricted Restricted Total
$ 1,900,000 $
- $
- $ 1,900,000
816,962
-
- 816,962
407,760
228,290
- 636,050
139,467
-
- 139,467
85,054
11,000
- 96,054
106,978
-
- 106,978
31,526
-
- 31,526
(19,984)
-
- (19,984)
30,870
-
- 30,870
25,200
-
- 25,200
17,165
-
- 17,165
5,447
-
- 5,447
1,740
-
- 1 ,740
99,458
(99,458)
- -
3,647,643
139,832
- 3,787,475
2,331,149 -
- 2,331,149
277,318 -
- 277,318
208,488 -
- 208,488
2,816,955 - - 2,816,955
$ 830,688 $ 139,832 $ - $ 970,520
NET ASSETS, BEGINNING OF YEAR 628,709 442,867 22,347 1,093,923
NET ASSETS, END OF YEAR $ 1,459,397 $ 582,699 $ 22,347 $ 2,064,443
The accompanying notes are an integral part of these financial statements.
Page 6
HAWAII ISLAND HUMANE SOCIETY
Statement of Functional Expenses
For the Year Ended June 30, 2014
The accompanying notes are an integral part of these financial statements.
Page 7
Program
Supporting
2014
Services
Services
Fundraising
Total
Salaries and Wages
$ 1,093,640
$ 126,700
$ 14,250
$ 1,234,590
Employee Benefits
224,979
26,163
4,210
255,352
Kennel Supplies, Food and Medicine
226,780
-
-
226,780
Payroll Taxes
119,719
13,803
1,200
134,722
Surgery Programs and Supplies
113,380
10,574
-
123,954
Fundraising Expense
-
-
124,230
124,230
Utilities
91,661
5,734
-
97,395
Auto Expense
95,564
-
-
95,564
Depreciation
74,567
-
-
74,567
Insurance
66,363
4,576
-
70,939
Legal and Professional Services
33,273
11,513
-
44,786
Repairs and Maintenance
28,999
15,614
-
44,613
Advertising
40,594
-
-
40,594
Office Supplies
26,831
6,708
-
33,539
Rent
25,200
1,250
-
26,450
Network Expense
12,749
8,499
-
21,248
Other Expenses
7,954
1,774
-
9,728
Animal Disposal
18,600
-
-
18,600
Staff Meeting and Training
12,338
4,796
-
17,134
Printing
15,482
-
813
16,295
Veterinary Care and Evidence Animals
14,550
-
-
14,550
Animal Control Equipment
11,595
-
-
11,595
General Excise Tax and Other Taxes
9,000
-
3,163
12,163
Humane Education
8,772
-
-
8,772
Bank and Credit Card Fees
5;786
148
1,483
7,417
Postage and Freight
2,952
2,791
1,234
6,977
Uniforms
5,671
-
-
5,671
Meals and Travel
4,662
891
-
5,553
In Kind - Service (Note 7)
5,000
-
-
5,000
Dues, Licenses, Subscriptions
2,643
1,980
-
4,623
Adoption Expense
2,302
-
-
2,302
Interest
-
-
-
-
TOTAL EXPENSES
$ 2,401,606
$ 243,514
$ 150,583
$ 2,795,703
The accompanying notes are an integral part of these financial statements.
Page 7
HAWAII ISLAND HUMANE SOCIETY
Statement of Functional Expenses
For the Year Ended June 30, 2013
The accompanying notes are an integral part of these financial statements.
Page 8
Program
Supporting
2013
Services
Services
Fundraising
Total
Salaries and Wages
$ 1,074,132
$ 124,105
$ 13,053
$ 1,211,290
Employee Benefits
196,746
22,732
2,391
221,869
Kennel Supplies, Food and Medicine
227,136
-
-
227,136
Payroll Taxes
123,674
14,289
1,503
139,466
Surgery Programs and Supplies
148,374
12,560
1,041
161,975
Fundraising Expense
-
-
184,232
184,232
Utilities
92,639
5,913
-
98,552
Auto Expense
95,723
-
-
95,723
Depreciation
73,362
-
-
73,362
Insurance
44,925
3,098
-
48,023
Legal and Professional Services
25,609
15,068
-
40,677
Repairs and Maintenance
41,643
22,423
-
64,066
Advertising
2,144
40,070
-
42,214
Office Supplies
19,115
4,779
-
23,894
Rent
25,200
1,250
-
26,450
Network Expense
5,541
3,694
-
9,235
Other Expenses
5,240
518
-
5,758
Animal Disposal
17,460
-
-
17,460
Staff Meeting and training
6,996
2,720
-
9,716
Printing
8,092
-
425
8,517
Veterinary Care and Evidence Animals
13,286
-
-
13,286
Animal Control Equipment
25,412
-
-
25,412
General Excise Tax and Other Taxes
7,150
-
2,780
9,930
Humane Education
12,709
-
-
12,709
Bank and Credit Card Fees
8,520
218
2,185
10,923
Postage and Freight
2,100
1,986
878
4,964
Uniforms
3,569
-
-
3,569
Meals and Travel
3,372
645
-
4,017
In Kind - Service (Note 7)
-
-
-
-
Dues, Licenses, Subscriptions
1,668
1,250
-
2,918
Adoption Expense
2,554
-
-
2,554
Interest
17,058
-
-
17,058
TOTAL EXPENSES
$ 2,331,149
$ 277,318
$ 208,488
$ 2,816,955
The accompanying notes are an integral part of these financial statements.
Page 8
HAWAII ISLAND HUMANE SOCIETY
Statements of Cash Flows
For the Years Ended June 30, 2014 and 2013
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Lease Payable
2014
2013
CASH FLOWS FROM OPERATING ACTIVITIES
-
(14,553)
Hawai'i County Funding
$ 1,961,875
$ 1,900,000
Retail Sales and Services to Public
177,367
188,158
Fundraising
178,179
96,054
S/N CAP Coupon Sales
70,277
106,978
Foundations and Other Donations
840,940
602,753
Other Cash Received
17,798
7,187
Cash Paid for Interest
-
(17,058)
Cash Paid to Employees and Vendors
(2,744,773)
(2,715,679)
Net Cash Provided by Operating Activities (Note 8)
501,663
168,393
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Used to Purchase Certificates of Deposit
(224)
(232)
Proceeds from Annuity Contracts
6,466
6,346
Cash Used to Purchase Property and Equipment
(10,228)
(11,735)
Net Cash Used by Investing Activities
(3,986)
(5,621)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Lease Payable
(14,946)
(13,265)
Repayment of Debt
-
(14,553)
Net Cash Used by Financing Activities
(14,946)
(27,818)
Net Increase in Cash for the Year
482,731
134,954
CASH BALANCE, BEGINNING OF YEAR
800,912
665,958
CASH BALANCE, END OF YEAR
$ 1,283,643 $
800,912
Non -Cash Investing and Financing Activities
In -Kind Forgiveness of Debt (Note 7)
$ - $
816,962
Donated Vehicle
$ - $
4,000
The accompanying notes are an integral part of these financial statements.
Page 9
HAWAII ISLAND I IUMANE SOCIETY
Schedules of County Program Activity
For the Years Ended June 30, 2014 and 2013
2014 2013
Operating Expenses
Salaries and Wages
Animal
S/N
Animal
S/N
Employee Benefits
Control
CAP Total
Control
CAP Total
Receipts:
131,813
131,813
152,649
- 152,649
County of 1- lawai'i Contracted Funds
$ 1,840,275
$ 121,600 $ 1,961,875
$ 1,778,400
$ 121,600 $ 1,900,000
Total Receipts
1,840,275
121,600 1,961,875
1,778,400
121,600 1,900,000
Operating Expenses
Salaries and Wages
1,038,262
1.038,262
970,680
970,680
Employee Benefits
213,920
213,920
_ 176,555
- 176.555
Kennel Supplies, Food and Medicine
131,813
131,813
152,649
- 152,649
Payroll Taxes
110,127 -
110,127
110,817
- 110,817
Auto Expense
90,408
90,408
87,558
- 87,558
Surgery Programs and Supplies (Note 10)
(35,848) 123,954
88,106
-
63,977 63,977
Utilities
77,028 -
77,028
76,670
- 76,670
Insurance
59,775
59,775
36,408
36,408
Legal and Professional Services
33,632 -
33,632
25,235
- 25,235
Repairs and Maintenance
30,1 1 1
30,111
37,948
- 37,948
Animal Disposal
18,600 -
18,600
17,460
- 17,460
Office Supplies
16,705 -
16,705
16,897
- 16,897
Staff Meeting and Training
11,947 -
11.947
4,979
- 4,979
Animal Control Equipment
11,595 -
11,595
25,412
- 25,412
Network Expense
10,706 -
10,706
4,618
- 4,618
Office Equipment and Rentals
9,524 -
9,524
-
- -
Uniforms
5.639 -
5,639
3,857
- 3,857
Travel and Mileage
4,387 -
4,387
3,022
- 3,022
Bank and Credit Card Fees
3,153 -
3,153
953
- 953
Postage and Freight
2,370 -
2,370
2,436
- 2,436
Dues, Licenses, Subs, Taxes
2,171 -
2,171
1,314
- 1,314
Printing
1,039 -
1,039
567
- 567
Advertising
658 -
658
1,144
- 1,144
Veterinary Care and Evidence Animals
467 -
467
-
- -
Miscellaneous
126 -
126
- -
Total Operating Expenses
1,848,315 123,954
1,972,269
1,757,179
63,977 1,821,156
Capital Lease Payments
7,473 -
7,473
6,632
- 6,632
Fixed Assets Purchased
-
_
Excess Revenue Over (Under) Receipts $
(15,513) $ (2,354)
$ (17,867)
$ 14,589
$ 57,623 $ 72,212
The accompanying notes are an integral part of these financial statements.
Page 10
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 1. ORGANIZATION
The Hawaii Island Humane Society is a nonprofit Organization (the Organization) incorporated under the
laws of the State of Hawaii 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 Hawaii. 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 in the United States of America. 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. The Organization has adopted the policy of recording donor restrictions met in
the same year as increases to unrestricted net assets.
Cash and Cash Equivalents: For the purpose of the statement of cash flows, the Organization considers
all cash other highly liquid investments with initial maturities of three months or less to be cash
equivalents.
Investments: The Organization has implemented FASB ASC 820- 10 -50 -1 which establishes a fair value
hierarchy for inputs used in measuring fair market value that maximizes the use of observable inputs, and
minimizes the use of unobservable inputs by requiring that the most observable inputs be used when
available. Observable inputs are those that market participants would use in pricing the asset or liability
based on the best information available in the circumstances. This fair value hierarchy consists of three
broad levels.
Level 1 inputs consist of unadjusted quoted prices in active markets such as stock
exchanges for identical assets and have the highest priority.
Level 2 inputs consist of significant other observable inputs such as quoted prices for
similar assets and liabilities in active markets, and inputs that are observable for the asset
and liability, either directly or indirectly, for substantially the full term of the financial
instrument.
Level 3 inputs consist of significant unobservable inputs and include situations where there
is little, if any, market activity for the investment. The inputs require significant judgment
or estimates, such as those associated with discounted cash flow methodologies and
appraisals.
Page 1 1
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Fair values of assets measured on a recurring basis are as follows, there are no liabilities or other
assets measured at fair value on a recurring or non- recurring basis.
* - Annuity Contracts: Annuities Contracts are valued at present value of cash receipts.
The following table summarizes the changes in fair values associated with FASB ASC 820 Level 3
assets:
Level Level
Balance Beginning of Year
Donation of Annuities
Capital Distributions
Net Unrealized and Realized Losses
Balance as of Year End
Page 12
(7,045) (7,044)
June 30 2014
Significant
Significant Non-
Quoted Prices: Other Inputs:
Observable Inputs:
Assets
Total
Level l Level
Level
Certificate of Deposit
$
23,505
$ 23,505 $
$
Annuity Contracts*
24,248
- -
24,248
Total
$
47,753
$ 23,505 $ -
$ 24,248
June 30. 2013
Significant
Significant Non -
Quoted Prices: Other Inputs:
Observable Inputs:
Assets
'total
Level l Level
Level
Certificate of Deposit
$
23,281
$ 23,281
Annuity Contracts*
30;714
-
30,714
Total
$
53,995
$ 23,281 $
$ 30,714
* - Annuity Contracts: Annuities Contracts are valued at present value of cash receipts.
The following table summarizes the changes in fair values associated with FASB ASC 820 Level 3
assets:
Level Level
Balance Beginning of Year
Donation of Annuities
Capital Distributions
Net Unrealized and Realized Losses
Balance as of Year End
Page 12
(7,045) (7,044)
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Property and Equipment: The Organization 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.
The Organization 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.
Use of 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. Accordingly, actual results could differ
from those estimates.
Inventory: Inventory is stated at cost. Cost is determined using the first -in, first -out (FIFO) method.
Note 3. CONCENTRATIONS
The Organization received approximately 60 %, and 50% of its revenue from the County of Hawaii as of
June 30, 2014 and 2013, respectively. 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 Hawaii 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 Hawaii.
The building and land on which the Kona shelter is located belongs to the County of Hawaii. The
County provides the site at no cost to the Organization. This agreement must be renewed annually. The
annual estimated value of the donated rent from the County of Hawaii is $25,200.
Note 4. LEASES
In December 2010 a copier was acquired through a 60 -month non - cancelable lease agreement requiring
monthly payments. The new copier was capitalized at $56,020 and is being depreciated over the life of
the asset. In December of 2011 a second copier was leased from Ricoh for 48 months. It is being
capitalized at $13,002 and depreciated over the life of the asset. Current maturity of leases are as follows:
June 30, 2015 $ 16,843
June 30, 2016 $ 9,207
Page 13
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 5. NET ASSETS
The Hawaii island Humane Society has conformed to FASB ASC 958 - 210 -45 -9, "Not-for-Profit Entities,
Classifications of Net Assets," and the Statement of Financial Accounting Standards formerly (SFAS) No.
117, "Financial Statement of Not-for-Profit Organization." Accordingly, the Organization 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 Organization
or for such other purposes as determined by the Board of Directors.
The Board of Directors has selected certain unrestricted net assets to be identified as Board Designated
net assets for the Capital Campaign. Board Designated Net Assets at June 30, 2014 and 2013, were
$178,445 and $18,400, respectively.
Temporarily restricted net assets represent restricted grants and funds received from foundations and
donors for which the restriction had not yet been fulfilled. The temporarily restricted net assets consisted
of the following at June 30:
Permanently restricted net assets are endowment funds restricted in perpetuity to continue the purpose of
the Organization. Income generated by these assets can be used for activities as specified by the donor.
At June 30, 2014 and 2013, permanently restricted net assets consisted of $22,347 for the Spay/Neuter
(S/N) program.
The Uniform Prudent Management of Institutional Funds Act (UPMIFA) applies to nonprofit
organizations in Hawaii. UPMIFA updates the prudence standard for the management and investment of
charitable funds, and it amends the provisions governing the release and modification of restrictions on
charitable funds. Management has evaluated the provisions of the standard and has concluded that the
adoption of UPMIFA in fiscal year 2014 and 2013 did not have a significant effect on the
Organization's financial statements.
Page 14
2014
2013
Capital Campaign
$ 378,027
$ 309,074
Second Chance
150,463
105,061
Spay/Neuter
104,656
20,982
Equine Fund
56,601
46,459
Kona Kennels
55,450
25,450
Katie Fund
50,648
47,281
Kea'au Kennels
44,311
-
Michi Haga
20,756
20,756
Education
15,881
3,761
Waimea Kennels
1,229
1,204
Wish List
1,068
1,171
Mobile Adoption
-
1,500
Total
$ 879,090
$ 582,699
Permanently restricted net assets are endowment funds restricted in perpetuity to continue the purpose of
the Organization. Income generated by these assets can be used for activities as specified by the donor.
At June 30, 2014 and 2013, permanently restricted net assets consisted of $22,347 for the Spay/Neuter
(S/N) program.
The Uniform Prudent Management of Institutional Funds Act (UPMIFA) applies to nonprofit
organizations in Hawaii. UPMIFA updates the prudence standard for the management and investment of
charitable funds, and it amends the provisions governing the release and modification of restrictions on
charitable funds. Management has evaluated the provisions of the standard and has concluded that the
adoption of UPMIFA in fiscal year 2014 and 2013 did not have a significant effect on the
Organization's financial statements.
Page 14
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 6. FUNCTIONAL EXPENSES
The Hawaii Island Humane Society allocates expenses on a functional basis among three categories:
direct program services, supporting services, and fundraising. Expenses are allocated to the
program and support services benefited.
Note 7. IN -KIND DONATIONS
Donated Services: Under FASB ASC 958, contributions of donated services that create or enhance non-
financial assets or that require specialized skills, and 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. Donated services at June 30, 2014 and 2013 are $5,000 and $ -0 -, respectively. A
number of volunteers have donated significant amounts of their time however, no objective basis is
available to measure the value of these services.
Forgiveness of Debt: In January, 2013 the lender of the Holualoa Land Note made an in -kind donation by
way of cancellation and release of a Promissory Note. The balance of the Promissory Note and amount
recognized as a donation at June 30, 2013 was $816,962, see Note 14.
Note 8. RECONCILIATION_ OF CHANGE IN NET ASSETS TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Change in Net Assets
Adjustments to Reconcile:
Depreciation
Donated Vehicle
Forgiveness of Debt Donation (Note 7)
Change in Accounts and Pledges Receivable
Change in Other Current Assets
Change in Deposits Other
Change in Accounts Payable
Change in Credit Cards
Change in Accrued Expenses
Net Cash Provided by Operating Activities
Note 9. RETIREMENT PLAN
2014
2013
$ 488,567
$ 970,520
74,567
73,362
-
(4,000)
-
(816,962)
(24,887)
(60,167)
34,990
159
(5,200)
3,407
(22,710)
17,153
312
2,128
(43,976) (17,207)
$ 501,663 $ 168,393
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. For the years ending June 30,
2014 and 2013, the retirement plan expenses totaled $39,244 and $37,286, respectively.
Page 15
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 10. SPAY/NEUTER PROGRAM
The Hawaii Island Humane Society sells coupons that enable the patron to take their animal to a
participating veterinarian for spay /neuter services. As a service to the community, the veterinarian has
agreed to perform these 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 is has performed, and
then bills the Hawaii Island Humane Society for payment of these services.
The veterinarian employed at the Hawaii Island Humane Society also performs spay /neuter services
accepting the Free Coupon as payment. The Organization incurs these costs in compensation to the
veterinarian as well as related payroll taxes and benefits. As a result, an allocation of S/N expenses of
$35,848 related to the County of Hawaii CAP program expenses has been reclassified.
The Organization also provides coupons free of charge under the County of Hawaii S/N program. See
Note 11.
Note 11. S/N COUPON LIABILITY
The coupons sold through the S/N CAP program are redeemed by the patron when veterinary services are
performed. Estimated amounts of $4,750 and $14,545 are recorded as a liability for the years ending June
30, 2014 and 2013, respectively, which represent the value of unredeemed coupons.
At June 30, 2014 and 2013 the Organization was obligated to honor a number of unredeemed coupons
issued for the County of Hawaii S/N program with an associated estimated veterinarian cost of $29,670
for 2014 and $24,677 for 2013. No funds were received when these coupons were issued and a liability
has not been recorded as the surgeries have yet to be performed.
Note 12. 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 Hawai'i income taxes under Sections 416 -19 and 416 -20 of
the Hawaii Revised Statutes.
The accounting standard on accounting for uncertainty in income taxes addresses the determination of
whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements. Under that guidance, the Organization may recognize the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be sustained on examination by taxing
authorities based on the technical merits of the position. Examples of tax positions include the tax - exempt
status of the Organization and various positions related to the potential sources of unrelated business
taxable income (UBIT). The tax benefits recognized in the financial statements from such a position are
measured based on the largest benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement. There were no unrecognized tax benefits identified or recorded as liabilities for 2014
and 2013.
The Organization files its Forms 990 in the U.S. Federal jurisdiction and the office of the State's Attorney
General for the State of Hawaii. The Organization is generally no longer subject to examination by the
Internal Revenue Service for years before 2011.
Page 16
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
Note 13. 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. The value of the
land at acquisition has not been reflected in the fixed assets of the Organization. At June 30, 2010 the
assessed value of the land was approximately $100,000, and was added to the capitalized assets.
Note 14. HOLUALOA LAND AND BUILDING
The Hawaii Island Humane Society purchased a 12 -acre parcel with three existing buildings that will
require renovation prior to occupancy on April 13, 2011. Depreciation will not be taken while
construction is in process. The land valued at $452,646, and buildings valued at $377,354, were secured
with a $832,562 Promissory Note from a private lender at 5% per annum. In January 2013, the lender
forgave the debt, see Note 7.
NOTE 15. LEASEHOLD IMPROVEMENTS
To provide enhanced quality care for animals, the Hawaii Island Humane Society has made various site
improvements to the leased properties (see Note 3) including a dog park, puppy kennels, a horse shed, as
well as complying with the Americans with Disabilities Act requirements. Total improvements to leased
facilities are $102,633 for the years ending June 30, 2014 and 2013.
NOTE 16. PLEDGE RECEIVABLE
The Organization began a fundraising campaign for the improvement of its building. Towards that end,
many generous donors have pledged funds to be received over future fiscal years. Contributions received
are recognized as support in the period the promise is received at their fair value. Pledge receivable is
stated at net estimated realizable value. Pledge receivable consists of the following as of June 30, 2014:
Gross Pledge Receivable
$
83,600
Allowance for Doubtful Accounts
-
Net Pledge Receivable
$
83,600
Amounts due in:
Less than one year
$
33,600
One to three years
$
50,000
NOTE 17. RELATED PARTY
A Board of Director member is also the owner of Alii Veterinary Hospital which the Hawaii Island
Humane Society utilizes for veterinary care and also leases facilities. The total amount paid to Alii
Veterinary Hospital during the years ending June 30, 2014 and 2013 were $7,884 and $5,771,
respectively.
Page 17
HAWAII ISLAND HUMANE SOCIETY
Notes to the Financial Statements
June 30, 2014 and 2013
NOTE 18. SUBSEQUENT EVENTS
In preparing these financial statements, Management has evaluated events and transactions for potential
recognition or disclosure through September 25, 2014, the date the financial statements were available for
use.
NOTE 19. RECLASSIFICATION
Certain reclassifications have been made to the prior year's financial statements to conform to the current
year presentation. These reclassifications had no effect on previously reported results of operations and
net assets.
Note 20. COST OF GOODS SOLD
Cost of goods sold consists of the cost of inventory merchandise purchased for resale that has been sold.
The cost of goods sold for fiscal years ending June 30, 2014 and 2013 were $17,636 and $19,984,
respectively.
Page 18