12 Share AFS Audit.pdf

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SHARE

Audited Financial Statements andSupplemental Financial Information and Reports

on Compliance and Internal Control

December 31, 2012 and 2011


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Audited Financial Statements andSupplemental Financial Information andReports on Compliance and Internal Control


INDEPENDENT AUDITORS REPORT.......................................................................... 1-2

AUDITED FINANCIAL STATEMENTS

Statements of Financial Position ........................................................................................... 3

Statements of Activities ........................................................................................................ 4

Statements of Functional Expenses ....................................................................................5-6

Statements of Cash Flows ..................................................................................................7-8

Notes to Financial Statements ..........................................................................................9-22

SUPPLEMENTAL FINANCIAL INFORMATION

Schedule of Expenditures of Federal Awards ..................................................................... 23

Note to Schedule of Expenditures of Federal Awards ........................................................ 24

REPORTS ON COMPLIANCE AND INTERNAL CONTROL

Independent Auditors Report on Internal Control over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards...............................25-26

Independent Auditors Report on Compliance for Each MajorProgram and on Internal Control over Compliance in Accordancewith OMBCircular A-133 ..........................................................................................27-28

Schedule of Findings and Questioned Costs and Prior Year Federal AwardAudit Findings .............................................................................................................29-30


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Independent Auditors Report

Board of DirectorsShareVancouver, Washington

Report on the Financial Statements

We have audited the accompanying financial statements of Share (a nonprofit organization)

(the Organization) which comprise the statements of financial position as of December 31,2012 and 2011, and the related statements of activities, functional expenses and cash flows forthe years then ended, and the related notes to the financial statements.

Managements Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financialstatements in accordance with accounting principles generally accepted in the United States ofAmerica; this includes the design, implementation and maintenance of internal controlrelevant to the preparation and fair presentation of financial statements that are free frommaterial misstatement, whether due to fraud or error.

Auditors 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 theUnited States of America and the standards applicable to financial audits contained inGovernment Auditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditorsjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Organizations preparation and fair presentation ofthe 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 theOrganizations internal control. Accordingly, we express no such opinion. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.


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Board of Directors Page 2Share

OpinionIn our opinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of Share as of December 31, 2012 and 2011, and the changesin its net assets and its cash flows for the years then ended in accordance with accounting

principles generally accepted in the United States of America.

Other MattersOur audit was conducted for the purpose of forming an opinion on the financial statements asa whole. The accompanying 2012 schedule of expenditures of federal awards is presented forpurposes of additional analysis and is not a required part of the financial statements. Suchinformation is the responsibility of management and was derived from and relates directly tothe underlying accounting and other records used to prepare the financial statements. Theinformation has been subjected to the auditing procedures applied in the audit of the financialstatements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare thefinancial statements or to the financial statements themselves, and other additional proceduresin accordance with auditing standards generally accepted in the United States of America. Inour opinion, the information is fairly stated, in all material respects, in relation to the financialstatements as a whole.

Other Reporting Required by Government Auditing StandardsIn accordance with Government Auditing Standards, we have also issued our report datedJune 25, 2013 on our consideration of Shares internal control over financial reporting and onour tests of its compliance with certain provisions of laws, regulations, contracts, and grantagreements and other matters. The purpose of that report is to describe the scope of ourtesting of internal control over financial reporting and compliance and the results of thattesting, and not to provide an opinion on internal control over financial reporting or oncompliance. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards in considering Shares internal control over financial

reporting and compliance.

JOHNSON, STONE & PAGANO, P.S.

June 25, 2013


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AUDITED FINANCIAL STATEMENTS


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The accompanying notes are an integral part of these financial statements.

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STATEMENTS OF FINANCIAL POSITION


ASSETS

Cash and cash equivalents $ 1,194,899 $ 1,648,570

Contract payments receivable 613,554 468,132Contributions receivable 317,059 333,927

Prepaid expenses and other assets 21,078 13,759Investments 19,394 19,079

Beneficial interest in assets held by the Community Foundation for Southwest Washington 883,927 814,558

Property and equipment, net 6,176,276 5,319,592

TOTAL ASSETS $ 9,226,187 $ 8,617,617

LIABILITIES AND NET ASSETS

LIABILITIES

Accounts payable and accrued liabilities $ 766,044 $ 912,734Accrued payroll and related expenses 140,273 135,425

Deferred revenue 38,345 76,692Funds held on behalf of others 148,728 122,374

Notes payable 158,996 763,835

Total Liabilities 1,252,386 2,011,060

NET ASSETS

Unrestricted

Available for programs and general operations 324,101 315,860Designated by Board 689,061 681,725

Net investment in property and equipment and restricted reserves 6,233,635 5,377,747

7,246,797 6,375,332

Temporarily restricted 697,904 202,125Permanently restricted 29,100 29,100

Total Net Assets 7,973,801 6,606,557

TOTAL LIABILITIES AND NET ASSETS $ 9,226,187 $ 8,617,617

2012 2011


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STATEMENTS OF ACTIVITIES

Years Ended December 31, 2012 and 2011

OPERATING REVENUES, GAINS AND OTHER SUPPORT

OPERATING REVENUES

Government grants and contracts $ 3,404,869 $ 3,404,869 $ 2,544,587 $ 2,544,587Private grants and contributions 749,226 $ 61,822 811,048 354,991 $ 142,466 497,457

In-kind contributions 729,594 729,594 846,770 846,770Special events, net of direct expenses ($239,176 - 2012, $148,805 - 2011) 118,283 118,283 129,369 129,369Interest income 1,591 1,591 3,326 3,326

Rental income 22,450 22,450 31,670 31,670Other revenue 18,229 18,229 79,896 79,896

Total Operating Revenues 5,044,242 61,822 5,106,064 3,990,609 142,466 4,133,075

GAINS AND OTHER SUPPORTNet assets released from restrictions 144,539 (144,539) 299,484 (299,484)

Total Operating Revenues, Gains and Other Support 5,188,781 (82,717) 5,106,064 4,290,093 (157,018) 4,133,075

EXPENSES

Program servicesShelters 917,302 917,302 1,036,737 1,036,737Hunger response 871,020 871,020 912,543 912,543

Street outreach 116,156 116,156 116,450 116,450Transitional and permanent housing 1,989,969 1,989,969 1,391,848 1,391,848Share service center 34,107 34,107 49,003 49,003

3,928,554 3,928,554 3,506,581 3,506,581

Supporting servicesManagement and general 503,338 503,338 432,905 432,905Fundraising 263,980 263,980 304,335 304,335

767,318 767,318 737,240 737,240Total Expenses 4,695,872 4,695,872 4,243,821 4,243,821

INCREASE (DECREASE) IN NET ASSETS BEFORE

NONOPERATING ACTIVITIES 492,909 (82,717) 410,192 46,272 (157,018) (110,746)

NONOPERATING ACTIVITIES

Private contributions for capital acquisition 317,578 573,077 890,655 1,135,048 1,135,048Government grants for capital acquisition 6,679 6,679

Net change in beneficial interest in assets held by the CommunityFoundation for Southwest Washington 60,978 5,419 66,397 22,743 (4,606) 18,137

Total Nonoperating Revenues 378,556 578,496 957,052 1,164,470 (4,606) 1,159,864

INCREASE (DECREASE) IN NET ASSETS 871,465 495,779 1,367,244 1,210,742 (161,624) 1,049,118Net Assets at Beginning of the Year 6,375,332 202,125 $ 29,100 6,606,557 5,164,590 363,749 $ 29,100 5,557,439

NET ASSETS AT END OF YEAR $ 7,246, 797 $ 697,904 $ 29,100 $ 7,973,801 $ 6,375,332 $ 202,125 $ 29,100 $ 6,606,557

2012 2011TemporarilyRestrictedUnrestricted

TemporarilyRestricted Total

PermanentlyRestricted

PermanentlyRestrictedT otal Unrest ri ct ed


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The accompanying notes are an integral part of t hese financial statements.

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STATEMENTS OF FUNCTIONAL EXPENSES

Year Ended December 31, 2012 with Comparative Totals for 2011

Salaries and related expenses $ 572,136 $ 103,974 $ 99,336 $ 439,005 $ 828 $ 1,215,279 $ 380,199 $ 93,570 $ 473,769 $ 1,689,048 $Client assistance 1,169 2,163 1,406,145 1,409,477 143 143 1,409,620 Food and supplies 35,625 658,285 4,300 21,464 483 720,157 13,736 4,503 18,239 738,396 Rent 162,365 71 28,638 191,074 100,278 105 100,383 291,457 Advertising 100 438 791 1,329 731 10,123 10,854 12,183 Utilities 78,336 21,390 4,802 24,343 921 129,792 12,285 3,313 15,598 145,390 Professional fees 1,973 220 2,728 (300) 4,621 668 86,861 87,529 92,150

Repairs and maintenance 32,075 10,660 1,489 5,956 2,216 52,396 1,985 341 2,326 54,722 Newsletter and appeals 39,927 39,927 39,927 Mileage and travel expenses 1,307 7,419 2,091 13,780 2 24,599 5,349 1,602 6,951 31,550 Insurance 3,030 3,712 316 3,082 2,262 12,402 8,722 983 9,705 22,107 Bank fees 5 13,750 13,755 5,202 5,202 18,957 Postage 18 3 2,187 2,208 2,110 1,558 3,668 5,876 Printing 171 953 1,124 7,942 875 8,817 9,941 Other 3,244 4,607 60 22,705 13,945 44,561 857 857 45,418

Total Expenses before Depreciation and Allocations 891,554 810,559 114,777 1,971,777 34,107 3,822,774 539,350 244,618 783,968 4,606,742

Depreciation 16,738 16,738 72,157 235 72,392 89,130 Allocations of volunteer support 25,748 60,461 1,379 1,454 89,042 (108,169) 19,127 (89,042)

TOTAL EXPENSES $ 91 7,3 02 $ 8 71,0 20 $ 116 ,15 6 $ 1, 989 ,96 9 $ 34, 107 $ 3,92 8,5 54 $ 5 03,3 38 $ 2 63, 980 $ 767,3 18 $ 4 ,69 5,8 72 $

Program Services

Shelters

Supporting Services

ExpensesTotal

TotalFundraisingResponse OutreachStreet

HousingPermanent

CenterService

and GeneralManagement

2012 Hunger

Transitionaland Share

Total


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The accompanying notes are an integral part of t hese financial statements.

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STATEMENTS OF FUNCTIONAL EXPENSES (Continued)

Year Ended December 31, 2011

Salaries and related expenses $ 623,457 $ 100,325 $ 96,416 $ 391,691 $ 82 $ 1,211,971 $ 324,097 $ 96,330 $ 420,427 $ 1,632,398Client assistance 43,513 6,455 869,174 919,142 919,142

Food and supplies 20,739 679,554 3,642 17,733 721,668 13,377 4,698 18,075 739,743Rent 168,922 806 29,499 199,227 98,196 98,196 297,423Advertising 50 92 25 175 342 1,356 13,671 15,027 15,369Utilities 79,425 21,515 3,817 1,082 105,839 10,711 3,162 13,873 119,712

Professional fees 5,019 2,382 184 43,383 946 51,914 34,272 87,532 121,804 173,718Repairs and maintenance 31,360 10,257 489 4,427 418 46,951 1,040 194 1,234 48,185Newsletter and appeals 74,186 74,186 74,186

Mileage and travel expenses 1,147 11,986 1,431 7,506 22,070 5,500 4,850 10,350 32,420Insurance 2,583 927 282 3,878 7,589 15,259 8,976 580 9,556 24,815Bank fees 175 4,757 4,932 8,674 8,311 16,985 21,917Postage 31 67 73 1,334 1,505 2,361 698 3,059 4,564

Printing 211 32 648 891 3,718 2,232 5,950 6,841Other 1,369 472 75 2,331 35,211 39,458 4,783 328 5,111 44,569

Total Expenses before Depreciation and Allocations 977,826 828,415 112,889 1,373,036 49,003 3,341,169 517,061 296,772 813,833 4,155,002

Depreciation 29,874 26,790 2,888 17,060 76,612 11,972 235 12,207 88,819Allocations of volunteer support 29,037 57,338 673 1,752 88,800 (96,128) 7,328 (88,800)

TOTAL EXPENSES $ 1 ,03 6,7 37 $ 9 12 ,543 $ 11 6,4 50 $ 1,39 1,8 48 $ 49, 003 $ 3,5 06, 581 $ 4 32, 905 $ 30 4,3 35 $ 737 ,24 0 $ 4 ,243 ,82 1

FundraisingResponse OutreachStreet

HousingPermanent

CenterService

Program Services

Shelters

Supporting Services

ExpensesTotal

Totaland GeneralManagement

2011Hunger

Transitionaland Share

Total


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STATEMENTS OF CASH FLOWS


CASH FLOWS FROM OPERATING ACTIVITIES

Cash received from governmental agencies,contributors and others $ 5,203,102 $ 4,022,377

Cash paid to employees, suppliers and others (4,980,763) (3,409,929)Interest received 1,591 3,326

Interest paid (14,316) (10,724)

Net Cash Provided by Operating Activities 209,614 605,050

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment (945,814) (1,562,589)

Proceeds from sale of investments 10,684 10,591Purchases of investments (13,971) (22,856)

Net Cash Used by Investing Activities (949,101) (1,574,854)

CASH FLOWS FROM FINANCING ACTIVITIES

Contributions restricted for capital acquisition 890,655 1,141,727Proceeds from notes payable 765,000Payments on notes payable (604,839) (1,165)

Net Cash Provided by Financing Activities 285,816 1,905,562

NET INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS (453,671) 935,758

Cash and cash equivalents at beginning of year 1,648,570 712,812

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,194,899 $ 1,648,570

2012 2011


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STATEMENTS OF CASH FLOWS (Continued)


RECONCILIATION OF NET INCREASE IN NET ASSETS

TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Increase in net assets $ 1,367,244 $ 1,049,118Adjustments to reconcile increase in net assets

to net cash provided by operating activitiesDepreciation and amortization 89,130 88,819

Net change in beneficial interest in assets held

by the Community Foundation for SouthwestWashington (66,397) (18,137)Proceeds from contributions restricted for

capital acquisition (890,655) (1,141,727)(Increase) decrease in assets

Contract payments receivable (145,422) (125,222)Contributions receivable 16,868 (165,317)

Prepaid expenses and other assets (7,319) 14,247Increase (decrease) in liabilities

Accounts payable and accrued liabilities (146,690) 866,096

Accrued payroll and related expenses 4,848 2,314Deferred revenue (38,347) 34,362

Funds held on behalf of others 26,354 497

NET CASH PROVIDED BY OPERATING ACTIVITIES $ 209,614 $ 605,050

2012 2011


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NOTES TO FINANCIAL STATEMENTS


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NOTE 1 - ORGANIZATION

Share (the Organization) was formed in 1983 as a nonprofit organization in the State ofWashington by a group of caring people coming together with the common goal of caring forthe homeless and hungry in the Vancouver area. The mission of Share is to lead the hungryand homeless to self-sufficiency by providing food, shelter, housing, education andcompassion through the strength of its community. Share envisions a community withouthunger, where all people have safe and adequate housing and the skills to enhance theirquality of life. Share provides temporary, emergency housing as well as food, clothing, streetoutreach, case management and counseling to men, women and children. During the yearsended December 31, 2012 and 2011, the Organization incurred program service expenses in

the following major categories:

SheltersShare provides temporary, emergency housing at three shelters. Share Orchards and ShareHomestead shelter homeless families and are operated by the Organization but owned by theVancouver Housing Authority. The Share House for single men is both owned and operatedby Share.

Hunger ResponseShare provides daily meals for the homeless and low-income members of the community.The program serves more than 100,000 meals each year. Much of the food used in theprogram is donated by area grocery stores and is prepared each day by volunteers and staff.

What going hungry means for a child - research indicates that even mild under-nutritionexperienced by young children during critical periods of growth impacts their behavior,school performance and overall cognitive development.

Shares Backpack program provides weekend food packs to children at 72 schools in sixschool districts every week that school is in session. While increased from the original 75food packs per week to 1,500 food packs per week, the program is still meeting less than 10%of the need in local area school districts. Share provides recipes and nutritional information inthe food packs, and in addition, will be offering nutrition classes and food preparation classes.

Summer SLAM partners with Washington State University (Vancouver's At Home at School(AHAS) program), Vancouver and Evergreen School Districts to provide a summer meal

and education program at two schools. The master's degree program, teaching students fromWashington State University, provides curriculum for a half-day that begins with breakfastand ends with lunch, with the meals provided by Share. In 2012, Share provided nearly27,000 meals for this program.


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NOTE 1 - ORGANIZATION(Continued)

Street OutreachStreet Outreach was established in 1996, the result of a taskforce formed by communityleaders to find solutions to the issues of transiency in downtown Vancouver. The programprovides street outreach to nearly 1,000 hard-to-reach and hard-to-serve homeless individualseach year. Services such as access to showers, laundry facilities, clothing, mail andtransportation are made available on a walk-in basis. In addition, case managers meet withclients on a one-to-one basis to assist them in accessing existing social services, stablehousing situations or to assist with whatever needs they may have. Work is focused on thearea of addressing issues pertaining to mental illness and alcohol and chemical dependencies.

Transitional and Permanent HousingShare Achieving Self-sufficiency Personal Improvement and Resource Education(ASPIRE) provides supported housing through case management to families and singleadults on their way to stability and self-sufficiency. ASPIRE is a coordinated system forproviding case management, housing and connection to supportive services in the communityfor homeless families and individuals. Currently, the ASPIRE program serves 80 householdseach month. The program has experienced a 75% success rate and has served more than 79households over the past twelve years.

Share also has received funding for Individual Development Accounts (IDAs) for ASPIREclients. The IDAs are savings accounts for a future asset such as a down payment on a home,to purchase a car or computer, start a business or pursue higher education. Share also recordsa liability for amounts held on behalf of participants in this program.

Share purchased four homes to provide group living environments for single individuals.Share provides case management to three of these homes (two serving single women, oneserving single men). The fourth house serves five single veteran men who are leaving theprison system. The veterans receive case management services from the Washington StateOffice of Veterans Affairs.

In the fall of 2011, Share began a Housing and Essential Needs program for individuals foundby the State to be temporarily unable to work due to a mental health or physical health issues.This program was originally an entitlement program offered by the Department of Health andSocial Services. In November of 2011, it was reallocated to nonprofit organizations and

counties across the State as a non-entitlement program that could pay rent, utilities andprovide essential needs such as hygiene products, toilet paper and other such needs.

Share Service CenterThe Center represents the operating costs of a facility to house various programs.


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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)

In-Kind Contributions (Continued)In-kind contributions of equipment are recorded where there is an objective basis upon whichto value these contributions and where the contributions are an essential part of theOrganization's activities. No amounts have been recorded in the accompanying financialstatements for such in-kind contributions.

In addition, the Organization regularly receives contributed services from a large number ofvolunteers who assist in program activities and other supporting efforts. The value of suchservices has not been recognized in the accompanying financial statements as they do not

meet the criteria for such recognition. Significant services received which create or enhance anon-financial asset or require specialized skills that Share would have purchased if notdonated are recognized in the statements of activities.

Cash and Cash EquivalentsThe Organization considers cash to be cash on hand, in checking accounts and savingsaccounts. Cash equivalents represent short-term, highly liquid investments with originalmaturities of three months or less.

InvestmentsInvestments consist primarily of certificates of deposit with initial maturities of greater thanthree months. Certificates of deposit are carried at cost plus accrued interest. Interest income,if significant is accrued as earned.

Accounts and Grants ReceivableAccounts and grants receivable are recorded when the Organization incurs allowable expensesthat are reimbursable under the provisions of the corresponding grant or other activity. TheOrganization believes accounts and grants receivable are fully collectible; therefore, noallowance for uncollectible amounts has been established.

Beneficial Interest in Assets Held by the Community Foundation forSouthwest Washington

Share accounts for its interest in these funds at fair value using the equity method ofaccounting, which approximates the present value of the expected future cash flows that willinure to Share.

Property and EquipmentProperty and equipment are recorded at cost or fair market value on the date of the gift.Depreciation is computed using straight-line and accelerated methods over the estimateduseful life of the assets ranging from 5 to 39 years. Maintenance and repairs are charged tocurrent operations as incurred and major improvements and replacements of property andequipment are capitalized.


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Accounting for Long-Lived AssetsThe Organization periodically reviews the recorded value of its long-lived assets. Such assetsare generally evaluated for impairment based on estimated fair market value of long-livedassets. In the event that the carrying value of long-lived assets exceeds estimated fair marketvalue, the assets would be written down to fair value. No adjustments due to impairment oflong-lived assets were recorded by the Organization at December 31, 2012 or 2011, asmanagement of the Organization is of the opinion that fair market value is substantially inexcess of carrying value.

Deferred RevenueDeferred revenue represents amounts received on contracts or grants that will be earned in thefollowing year.

Net Assets Designated by BoardPrior to January 1, 2007, the Board of Directors of the Organization designated a portion of itsunrestricted net assets for future major capital purchases deemed necessary to expand orimprove its program activities and created an operating reserve. During the year endedDecember 31, 2008, the Organization purchased two such pieces of property. The majority ofthe funding for these purchases was obtained from two government agencies; the remainingfunding was obtained from investments related to the designated unrestricted net assets thathad been set aside for such purposes. At the time of the purchase, the Board of Directorsdetermined the purchase of this property met the criteria of the prior unrestricted net asset

designation and therefore removed the related designations. The remaining board designationfor an operating reserve is $689,061 and $681,725 at December 31, 2012 and 2011,respectively.

Income TaxesThe Organization is exempt from federal income taxes under Internal Revenue Code Section501(c)(3). The Organizations federal information returns for the years previous toDecember 31, 2009 are closed to examination.

Use of EstimatesThe preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America requires that management make estimates andassumptions that affect the reported amounts of assets and liabilities, the disclosure of

contingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Actual results could differfrom those estimates.

Outstanding LegaciesThe Organization is the beneficiary under various will and trust agreements, the totalrealizable amounts of which are not presently determinable. The Organization's share of suchbequests is recorded when the probate courts declare the testamentary instrument valid andthe proceeds measurable. Distributions from revocable trusts are recorded as revenue in theperiod the distribution is received.


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Advertising and Marketing ExpensesAdvertising and marketing costs are charged to expense as they are incurred. Advertisingexpenses for the years ended December 31, 2012 and 2011 totaled $12,183 and $15,369,respectively (including donated advertising expenses valued at $4,127 and $5,908,respectively).

Functional ExpensesFunctional expenses are allocated between program and supporting services based onmanagements estimates and studies of the costs attributable to the various programs or

support services.

ReclassificationsCertain reclassifications have been made to the 2011 financial statements to be comparablewith the 2012 presentation.

Subsequent EventsManagement evaluated for subsequent events and transactions for potential recognition anddisclosure through June 25, 2013, the date the financial statements were available to beissued.

NOTE 3 - CONCENTRATION OF CREDIT RISK

The Organization maintains cash balances at financial institutions. Accounts at each of thefinancial institutions are insured by the Federal Deposit Insurance Corporation (FDIC) withbasic coverage up to $250,000 to December 31, 2012; non-interest bearing accounts haveunlimited FDIC deposit insurance through December 31, 2012 and up to $250,000 subsequentto that date. At December 31, 2012, Shares cash balances exceeded the insured amounts by$512,386.

The Organization receives a majority of its revenues from various federal, state and localgovernment agencies, and is subject to certain risks of the legislative process in securingcontinued funding for the Organizations programs. A significant reduction in the level ofthis funding could adversely affect the Organizations ability to provide programs and

services.


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NOTE 4 - CONTRACT AND CONTRIBUTIONS RECEIVABLE

Contract payments receivable consist of the following at December 31:

2012 2011

Clark County Department of Community Services $ 300,252 $ 129,206Vancouver Housing Authority 11,250U.S. Department of Housing and Urban Development 31,792 133,957WA State Department of Commerce 89,959City of Vancouver 45,044Various other 146,507 193,719

$ 613,554 $ 468,132

Contributions receivable as of December 31, 2012 and 2011 consist of the following:

2012 2011

Unconditional promises expected to be collected in:

Less than one year $ 163,400 $ 211,000One year to five years 157,500 126,000

320,900 337,000

Less discount (3,841) (3,073)

$ 317,059 $ 333,927

NOTE 5 - BENEFICIAL INTEREST

Beneficial interest in assets consists of a pooled investment account managed by theCommunity Foundation for Southwest Washington (CFSW). The pooled investmentaccount consists of common stocks and other equity securities, fixed income securities,mutual funds, publicly traded partnerships and limited liability companies. The Organizationis allocated a prorata portion of interest, dividends, realized and unrealized gains and lossesand service fees on a quarterly basis.

The funds were established through a transfer of assets to CFSW in return for thecontractual promise of a perpetual stream of future distributions back to Share, based onCFSW's spending rate and related policies (described below). Although CFSW accepted thetransferred assets subject to its own variance power, Share has retained a future economicbeneficial interest in the transferred assets, having named itself as the beneficiary of thetransferred fund and related future investment return. As of December 31, 2012, managementbelieves that future distributions from CFSW are capable of fulfillment and consistent withCFSW's mission.


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NOTE 5 - BENEFICIAL INTEREST (Continued)

Under the terms of its agreement with CFSW, the funds are invested at the discretion ofCFSW and are held in a mixture of asset classes designed to maximize return whileminimizing risk. The Organization receives semi-annual distributions of investment returnfrom its endowment fund totaling 5% of the funds value based on a three-year rollingaverage. The Organization can request distributions in writing from the operating reservefund at any time.

The balances in these investment funds are as follows as of December 31:

2012 2011

Operating reserve fund $ 762,409 $ 700,631Endowment fund 55,535 53,683Replacement reserve fund 65,983 60,244

$ 883,927 $ 814,558

The changes in the Organizations beneficial interest in the funds above for the years endedDecember 31, 2012 and 2011 are summarized as follows:

2012 2011

Balance at January 1 $ 814,558 $ 784,156Increase in the fair value of the funds 66,397 18,137Appropriations for expenditure (2,871) (2,857)Additions to the funds 13,971 22,856Fees (8,128) (7,734)

Balance at December 31 $ 883,927 $ 814,558

NOTE 6 - ENDOWMENTS

The Organization has designated unrestricted net assets to recognize capital and endowment

investments which function as endowments. Net assets associated with endowment funds,including funds designated by the Organization to function as endowments and are classifiedand reported based on the existence or absence of donor-imposed restrictions. Donor-restricted funds are classified as permanently restricted net assets and are subject to theWashington State Uniform Prudent Management of Institutional Funds Act (UPMIFA).


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NOTE 6 - ENDOWMENTS (Continued)

The composition of endowment net assets by type of fund at December 31, 2012 and 2011 isas follows:

Temporarily PermanentlyRestricted Restricted Total

Endowments at December 31, 2012 $ 26,435 $ 29,100 $ 55,535

Endowments at December 31, 2011 $ 24,583 $ 29,100 $ 53,683

Changes in endowment net assets for the year ended December 31, 2012 are as follows:


Endowment net assets atJanuary 1, 2012 $ 24,583 $ 29,100 $ 53,683

Net change in beneficial interest inassets held by Community foundationfor Southwest Washington 5,419 5,419

Appropriation of endowment assetsfor expenditure (3,567) (3,567)

Endowment Net Assets atDecember 31, 2012 $ 26,435 $ 29,100 $ 55,535

Changes in endowment net assets for the year ended December 31, 2011 are as follows:


Endowment net assets atJanuary 1, 2011 $ 32,046 $ 29,100 $ 61,146

Net change in beneficial interest inassets held by Community foundationfor Southwest Washington (4,606) (4,606)

Appropriation of endowment assetsfor expenditure (2,857) (2,857)

Endowment Net Assets atDecember 31, 2011 $ 24,583 $ 29,100 $ 53,683


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NOTE 6 - ENDOWMENTS (Continued)

Funds with DeficienciesFrom time to time, the fair value of assets associated with individual donor-restrictedendowment funds may fall below the level that the Board, donor or UPMIFA requires theOrganization to retain as a fund of perpetual duration. In accordance with accountingprinciples generally accepted in the United States of America, deficiencies of this nature are tobe reported as a reduction in unrestricted net assets with subsequent restorations reported asan increase until such deficiencies are eliminated. There were no deficient amounts to reportin 2012 or 2011.

Return Objectives and Risk ParametersThe Organization has adopted investment policies for endowment assets that attempt toprovide a predictable stream of funding to programs supported by its endowment whileseeking to maintain the purchasing power of the endowment assets. Endowment assetsinclude those assets that are board-designated funds. Under this policy, as approved by theOrganization, the endowment assets are invested in a manner that is intended to produceresults that equal or exceed the long-term certificate of deposit interest rate while assuming amoderate level of investment risk. The Organization expects its endowment funds, over time,to provide an average rate of return of approximately 5% annually. Actual returns in anygiven year may vary from this amount.

Strategies Employed for Achieving ObjectiveTo satisfy its long-term rate-of-return objectives, the Organization relies on a total returnstrategy in which investment returns are achieved through both capital appreciation (realizedand unrealized) and current yield (interest and dividends). The Organization has invested itsendowments with a community foundation meeting its overall investment objectives.

Spending Policy and How the Investment Objectives Relate to Spending Policy The Organization provides funding to its various programs supported by its endowment funds.The permanently restricted net assets are held such that the corpus is maintained per the donorrestrictions; there is no requirement to increase the corpus through earnings. All earnings areavailable for expenditure when earned and are transferred to its unrestricted net assets in theyear earned.


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NOTE 7 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31:2012 2011

Land $ 1,290,999 $ 1,206,930Building and improvements 3,790,329 2,997,370Equipment 392,466 387,247Construction in progress 1,578,308 1,514,741

7,052,102 6,106,288

Less accumulated depreciation 875,826 786,696

$ 6,176,276 $ 5,319,592

Depreciation expense was $89,130 and $88,819 for the years ended December 31, 2012 and2011, respectively.

NOTE 8 - NOTES PAYABLE

Notes payable consist of the following at December 31:

2012 2011

Revolving construction loan from a trust having amaximum available to borrow of $750,000 withsimple annual interest at 2.5%, secured by certainproperty, subject to certain financial covenants,due March 2013. Principal payments range from$150,000 to $200,000 plus accrued interest.Subsequent to December 31, 2012, the balancewas paid in full in accordance with theagreement. $ 150,000 $ 750,000

Note payable to a bank with monthly payments of$447, including interest at 4.5%, secured by a

van, due August 2014. 8,996 13,835$ 158,996 $ 763,835

Aggregate annual maturities of long-term debt, for the remaining terms are as follows:

2013 $ 155,0602014 3,936

$ 158,996


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NOTE 9 - UNRESTRICTED NET ASSETS SUBJECT TO REQUIREMENTS

Over its history, Share has received significant financing in the form of grants fromgovernment agencies to assist in underwriting the acquisition, development and renovation ofits program facilities. If the properties are sold, transferred, refinanced or changed as to use,the grants generally become immediately payable. As of December 31, 2012, Share hascomplied with all asset restrictions referred to above, and also has the intention and ability tocontinue to comply with those restrictions. Accordingly, no liability has been recorded in theaccompanying financial statements.

As of December 31, 2012 and 2011, Share has received grants from the following agencies

with continuing compliance requirements:

State of Washington, Department of Community,Trade and Economic Development 1 $ 1,382,500

Washington State Housing Assistance Program andHOME Investment Partnership Program 2 763,410

Clark County HOME and Community DevelopmentBlock Grant 3 198,450

Clark County Community Development Block Grant 4 438,250

City of Vancouver Community Development BlockGrant 5 225,000

$ 3,007,610

NOTE 10 - TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets consist of the following at December 31:

2012 2011

Backpack program $ 10,589 $ 31,327Share shelters 49,057 69,522Various other programs 23,470 53,743Unrestricted purpose in a future period 41,711 47,533Capital acquisition 573,077

$ 697,904 $ 202,125


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NOTE 11 - IN-KIND CONTRIBUTIONS OF FOOD SUPPLIES

The Organization receives substantially all food supplies from the Surplus FoodCommodities, local area grocers and public donations. In addition, the Organization isqualified to purchase food from the Oregon Food Bank at a reduced rate. The fair marketvalue of donated items and discounts has been estimated and recorded in the statements ofactivities. The fair market value of such items was approximately $435,800 and $419,300 for2012 and 2011, respectively. The continued availability of these food supply resources isessential to the Organizations program services.

NOTE 12 - OPERATING LEASES

The Organization has entered into various operating lease agreements for its shelters andadministrative facilities. Certain lease agreements provide the Organization with donatedrent. The leases extend for various periods up to six years.

The Organization has recorded the actual lease payments and fair market value of donatedrent as contributions with a corresponding increase in rent expense. Contributions were$268,000 and $275,000 for 2012 and 2011, respectively. Cash paid for leases wasapproximately $23,000 and $22,500 for 2012 and 2011, respectively.

NOTE 13 - RETIREMENT PLAN

Share makes available to its regular employees a Simple IRA (the Plan) and will matcheligible employee contributions to the Plan up to 3% of gross salary. Employees are eligibleto participate in the Plan after one year of employment with annual earnings of at least$5,000. Contributions made by Share to the Plan were approximately $18,500 and $20,100for the years ended December 31, 2012 and 2011, respectively.

NOTE 14 - COMMITMENTS

Share has signed a commitment for completion of the rehabilitation of certain property ofapproximately $780,500 as of December 31, 2012.

NOTE 15 - LEASE AGREEMENTS

Subsequent to year end, the Organization entered into a lease agreement with Council for theHomeless to lease a portion of the Andresen building. The term is February 1, 2013 throughDecember 31, 2017. The rent shall be $1,000 per month for the first year and increase eachyear by 3%.


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NOTE 15 - LEASE AGREEMENTS (Continued)

The Organization also entered into a lease agreement with CDM Long-Term Care Services.The Organization received the full payment of $300,000 after year end which is the total leasepayment for six years. The lease term is from January 1, 2013 to December 31, 2018. Theagreement includes an option for the lessee to purchase the property at the end of six years.


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SUPPLEMENTAL FINANCIAL INFORMATION


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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


CFDA

NumberDepartment of Housing and Urban Development

Community Development Block Grants / Entitlement Grants

Direct awardsOutreach 14.218 $ 68,053

Passed through the City of VancouverASPIRE 14.218 79,573

Outreach 14.218 125,969

273,595

Home Investment Partnerships Programs

Direct awardsWise Moves ASPIRE 14.239 32,071

Operation Homestretch 14.239 77,151

B2H Match 14.239 30,111Passed through Clark County

HOME 14.239 394,335Passed through City of Vancouver

HOME 14.239 226,078ASPIRE - Second Step Housing 14.239 75,316

835,062

Homelessness Prevention and Rapid Re-HousingPassed through Clark County

CDBG HPRP 14.257 20,581

Passed through City of VancouverCDBG HPRP 14.257 14,481

35,062

Total Department of Housing and Urban Development 1,143,719

Department of Homeland Security

Direct awardEmergency Food and Shelter National Board Program 97.024 64,502

Department of Agriculture

Direct award

Child Nutrition 10.558 104,920

Department of Health and Human Services

Direct AwardAssets for Independence Demonstration Program 93.602 5,350

$ 1,318,491

Expenditures


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NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


NOTE 1 - BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards includes the federal grantactivity of Share and is presented on the accrual basis of accounting. The information in thisschedule is presented in accordance with the requirements of OMB Circular A-133, Audits ofStates, Local Governments and Non-Profit Organizations. Therefore, some amountspresented in this schedule may differ from amounts presented in, or used in the presentationof, the basic financial statements.


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REPORTS ON COMPLIANCE ANDINTERNAL CONTROL


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Independent Auditors Report on Internal Control over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance with Government Auditing Standards


We have audited, in accordance with the auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards issued by the Comptroller General of the United States, the financialstatements of Share (a nonprofit organization) as of and for the year ended December 31,2012, and the related notes to the financial statements, which collectively comprise Sharesbasic financial statements, and have issued our report thereon dated June 25, 2013.

Internal Control over Financial ReportingIn planning and performing our audit of the financial statements, we considered Sharesinternal control over financial reporting (internal control) to determine the audit proceduresthat are appropriate in the circumstances for the purpose of expressing our opinion on thefinancial statements, but not for the purpose of expressing an opinion on the effectiveness of

Shares internal control. Accordingly, we do not express an opinion on the effectiveness ofShares internal control.

A deficiency in internal control exists when the design or operation of a control does notallow management or employees, in the normal course of performing their assigned functions,to prevent or detect and correct misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control such that there is a reasonablepossibility that a material misstatement of the entitys financial statements will not beprevented, or detected and corrected on a timely basis. A significant deficiency is adeficiency, or a combination of deficiencies, in internal control that is less severe than amaterial weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first

paragraph of this section and was not designed to identify all deficiencies in internal controlthat might be material weaknesses or significant deficiencies. Given these limitations, duringour audit we did not identify any deficiencies in internal control that we consider to bematerial weaknesses. However, material weaknesses may exist that have not been identified.


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Board of DirectorsShare

Compliance and Other MattersAs part of obtaining reasonable assurance about whether Shares financial statements are freefrom material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grant agreements, noncompliance with which could have a

direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit,and accordingly, we do not express such an opinion. The results of our tests disclosed noinstances of noncompliance or other matters that are required to be reported underGovernment Auditing Standards.

Purpose of this ReportThe purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectivenessof the entitys internal control or on compliance. This report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the entitysinternal control and compliance. Accordingly, this communication is not suitable for anyother purpose.


June 25, 2013


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Independent Auditors Report on Compliance for Each MajorProgram and on Internal Control over Compliance in Accordance

with OMBCircular A-133


Report on Compliance for Each Major Federal Program

We have audited Shares (a nonprofit organization) compliance with the types of compliancerequirements described in the OMBCircular A-133 Compliance Supplementthat could have adirect and material effect on each of Shares major federal programs for the year endedDecember 31, 2012. Share's major federal programs are identified in the summary ofauditor's results section of the accompanying schedule of findings and questioned costs.

Managements ResponsibilityManagement is responsible for compliance with the requirements of laws, regulations,contracts, and grants applicable to its federal programs.

Auditors Responsibility

Our responsibility is to express an opinion on compliance for each of Shares major federalprograms based on our audit of the types of compliance requirements referred to above. Weconducted our audit of compliance in accordance with auditing standards generally acceptedin the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States; andOMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations.Those standards and OMB Circular A-133 require that we plan and perform the audit toobtain reasonable assurance about whether noncompliance with the types of compliancerequirements referred to above that could have a direct and material effect on a major federalprogram occurred. An audit includes examining, on a test basis, evidence about Sharescompliance with those requirements and performing such other procedures as we considerednecessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for eachmajor federal program. However, our audit does not provide a legal determination of Sharescompliance.


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Board of DirectorsShare

Opinion on Each Major Federal ProgramIn our opinion, Share complied, in all material respects, with the types of compliancerequirements referred to above that could have a direct and material effect on each of itsmajor federal programs for the year ended December 31, 2012.

Report on Internal Control over Compliance

Management of Share is responsible for establishing and maintaining effective internalcontrol over compliance with the types of compliance requirements referred to above. Inplanning and performing our audit of compliance, we considered Shares internal control overcompliance with the types of requirements that could have a direct and material effect on eachmajor federal program to determine the auditing procedures that are appropriate in thecircumstances for the purpose of expressing an opinion on compliance for each major federalprogram and to test and report on internal control over compliance in accordance with OMBCircular A-133, but not for the purpose of expressing an opinion on the effectiveness ofinternal control over compliance. Accordingly, we do not express an opinion on theeffectiveness of Shares internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of acontrol over compliance does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent, or detect and correct, noncompliance with atype of compliance requirement of a federal program on a timely basis. A material weaknessin internal control over complianceis a deficiency, or combination of deficiencies, in internalcontrol over compliance, such that there is a reasonable possibility that materialnoncompliance with a type of compliance requirement of a federal program will not beprevented, or detected and corrected, on a timely basis. A significant deficiency in internalcontrol over complianceis a deficiency, or a combination of deficiencies, in internal controlover compliance with a type of compliance requirement of a federal program that is lesssevere than a material weakness in internal control over compliance, yet important enough to

merit attention by those charged with governance.Our consideration of internal control over compliance was for the limited purpose describedin the first paragraph of this section and was not designed to identify all deficiencies ininternal control over compliance that might be material weaknesses or significantdeficiencies. We did not identify any deficiencies in internal control over compliance that weconsider to be material weaknesses. However, material weaknesses may exist that have notbeen identified.

The purpose of this report on internal control over compliance is solely to describe the scopeof our testing of internal control over compliance and the results of that testing based on therequirements of OMB Circular A-133. Accordingly, this report is not suitable for any otherpurpose.


June 25, 2013


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SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND PRIOR YEARFEDERAL AWARD AUDIT FINDINGS


Section I - Summary of Auditors Results

Financial Statements

Type of auditors report issued Unqualified

Internal control over financial reporting:Material weaknesses identified? NoSignificant deficiencies identified that are not considered

material weaknesses? None

Noncompliance material to financial statements noted? No

Federal Awards

Internal control over financial reporting:Material weaknesses identified? NoSignificant deficiencies identified that are not considered

material weaknesses? None

Type of auditors report issued on compliance for major programs: Unqualified

Any audit findings disclosed that are required to be reported inaccordance with section 510(a) of Circular A-133? No

Identification of major programs:14.239 HOME Investment Partnerships Programs

Dollar threshold used to distinguish between type A and type B programs: $ 300,000

Auditee qualified as a low-risk auditee? Yes


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SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND PRIOR YEARFEDERAL AWARD AUDIT FINDINGS (Continued)


Section II - Financial Statement Findings

No matters were noted.

Section III - Federal Award Findings and Questioned Costs


Section IV - Prior Federal Award Audit Findings


Documents

12 Share AFS Audit.pdf