THE NEW COMMUNITY SCHOOL FOUNDATION FINANCIAL STATEMENTS June 30, 2015 · 2018-10-31 · Notes to Financial Statements ... September 3, 2015 . Temporarily Permanently Unrestricted

THE NEW COMMUNITY SCHOOL FOUNDATION

FINANCIAL STATEMENTS

June 30, 2015

TABLE OF CONTENTS Independent Auditor’s Report .................................................................................................. 1-2 Financial Statements Statement of Financial Position .............................................................................................. 3-4 Statement of Activities ............................................................................................................ 5 Statement of Functional Expenses ........................................................................................ 6 Statement of Cash Flows ........................................................................................................ 7-8 Notes to Financial Statements .................................................................................................. 9-20

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INDEPENDENT AUDITOR’S REPORT To the Board of Trustees The New Community School Foundation Richmond, Virginia We have audited the accompanying financial statements of The New Community School Foundation (a nonprofit organization) (the “School”) which comprise the statement of financial position as of June 30, 2015, and the related statements of activities, functional expenses, and cash flows for the year 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 School’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 School’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 opinion.

- Continued -

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Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The New Community School Foundation as of June 30, 2015, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited The New Community School Foundation’s 2014 financial statements, and our report dated December 4, 2014, expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2014, is consistent, in all material respects, with the audited financial statements from which it has been derived.

September 3, 2015

Temporarily PermanentlyUnrestricted Restricted Restricted 2015 2014

Current AssetsCash 818,408$ -$ -$ 818,408$ 447,986$ Invested cash equivalents - 2,155,556 166,000 2,321,556 800,172

Total cash and cashequivalents 818,408 2,155,556 166,000 3,139,964 1,248,158

Accounts receivable, net 155,534 - - 155,534 132,552 Pledges receivable 8,610 280,778 - 289,388 381,317 Due from unrestricted fund - 1,209,989 - 1,209,989 1,181,389 Prepaid expenses 22,641 - - 22,641 11,294 Inventory 13,988 - - 13,988 13,916 Investments - 433,788 3,257,614 3,691,402 3,641,363

Total current assets 1,019,181 4,080,111 3,423,614 8,522,906 6,609,989

Property, Plant, and Equipment, net 2,902,920 - - 2,902,920 2,881,896

Other AssetsPledges receivable - 94,322 - 94,322 146,446 Construction-in-progress 199,161 - - 199,161 70,261 Security deposit 3,852 - - 3,852 3,852

Total other assets 203,013 94,322 - 297,335 220,559

Total Assets 4,125,114$ 4,174,433$ 3,423,614$ 11,723,161$ 9,712,444$

Totals


STATEMENT OF FINANCIAL POSITION

(with comparative totals for June 30, 2014)June 30, 2015

ASSETS

See accompanying notes to financial statements.

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Current LiabilitiesAccounts payable and

accrued expenses 29,728$ -$ -$ 29,728$ 9,631$ Due to temporarily restricted

fund 1,209,989 - - 1,209,989 1,181,389 Deferred tuition 439,878 - - 439,878 454,508 Agency funds 15,750 - - 15,750 27,727 Capital lease obligation -

current portion 30,722 - - 30,722 20,641

Total current liabilities 1,726,067 - - 1,726,067 1,693,896

Long-Term LiabilitiesCapital lease obligation -

long-term portion 58,585 - - 58,585 47,316

Total liabilities 1,784,652 - - 1,784,652 1,741,212

Net Assets 2,340,462 4,174,433 3,423,614 9,938,509 7,971,232

Total Liabilities and Net Assets 4,125,114$ 4,174,433$ 3,423,614$ 11,723,161$ 9,712,444$

LIABILITIES AND NET ASSETS

Totals

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Revenue and Other SupportTuition and fees net of

financial aid; 2015 -$458,750, 2014 -$361,400 3,243,257$ -$ -$ 3,243,257$ 2,479,134$

Contributions 468,952 2,018,865 54,097 2,541,914 1,300,743 Gain (loss) on sale of

equipment (7,600) - - (7,600) 1,800 Interest and dividend

income 2,061 105,958 - 108,019 86,991 Net gain (loss) on investments - (20,580) - (20,580) 387,771 Miscellaneous 8,916 - - 8,916 19,883 Net assets released from

restrictions 300,011 (300,011) - - - Total revenue and

other support 4,015,597 1,804,232 54,097 5,873,926 4,276,322

Expenses and LossesProgram services

Educational 3,136,047 - - 3,136,047 2,530,456 Supporting services

General and administrative 433,670 - - 433,670 352,154

Development 336,932 - - 336,932 259,992 Total expenses

and losses 3,906,649 - - 3,906,649 3,142,602

Change in net assets 108,948 1,804,232 54,097 1,967,277 1,133,720

Net Assets, beginning of year 2,231,514 2,370,201 3,369,517 7,971,232 6,837,512

Net Assets, end of year 2,340,462$ 4,174,433$ 3,423,614$ 9,938,509$ 7,971,232$

Totals


STATEMENT OF ACTIVITIES

For the year ended June 30, 2015(with comparative totals for the year ended June 30, 2014)


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Development 2015 2014

Salaries 1,999,853$ 71,423$ 166,654$ 142,847$ 2,380,777$ 1,923,576$ Employee benefits 301,546 10,769 25,129 21,539 358,983 304,692 Payroll taxes 147,977 5,285 12,331 10,570 176,163 140,763

Total salaries and related expenses 2,449,376 87,477 204,114 174,956 2,915,923 2,369,031 Advertising and marketing - - 8,485 34,537 43,022 19,125 Bank and investment fees - - 33,898 - 33,898 29,731 Bad debts - - 9,526 - 9,526 15,749 Contractual services 5,548 17,606 16,261 1,460 40,875 72,201 Capital campaign - - - 61,358 61,358 22,077 Depreciation and amortization - 195,660 - - 195,660 153,662 Employee support 64,344 - 7,947 1,329 73,620 54,676 Insurance and taxes - - 26,127 - 26,127 20,862 Interest - - 6,289 - 6,289 - Janitorial services - 39,540 - - 39,540 35,555 Materials and supplies 36,467 19,840 40,703 8,852 105,862 90,246 Maintenance and repairs 65,223 103,141 15,354 1,894 185,612 128,215 Memberships and dues 399 - 8,001 575 8,975 8,846 Miscellaneous 7,508 - 1,303 - 8,811 1,407 Postage - - 3,998 4,018 8,016 7,757 Printing - - - 11,958 11,958 7,711 Professional growth - - - 3,017 3,017 1,857 Student activities 29,012 - - - 29,012 22,024 Telephone - - 13,191 - 13,191 12,512 Utilities - 86,357 - - 86,357 69,358 Allocation of facilities, operation,

and maintenance 478,170 (549,621) 38,473 32,978 - -

Total expenses 3,136,047$ -$ 433,670$ 336,932$ 3,906,649$ 3,142,602$

Totals


STATEMENT OF FUNCTIONAL EXPENSES


Maintenance Operation, and

Facilities,General and

AdministrativeProgram ServicesEducational


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2015 2014

Cash Flows from Operating ActivitiesChange in net assets 1,967,277$ 1,133,720$ Adjustments to reconcile change in net assets to net cash

and cash equivalents provided by operating activities Depreciation and amortization 195,660 153,662 Realized and unrealized (gains) loss on investments 20,580 (387,771) Interest and dividends reinvested (102,541) (83,820) Investment management fees 32,101 28,858 Provision for doubtful accounts and bad debt expense 9,526 15,749 (Gain) loss on sale of property and equipment 7,600 (1,800) Discount on pledges receivable 6,162 7,887

(Increase) decrease in operating assetsAccounts receivable (32,508) (37,221) Pledges receivable 137,891 (474,540) Prepaid expenses (11,347) 7,287 Inventory (72) (761)

Increase (decrease) in operating liabilitiesAccounts payable and accrued expenses 20,097 (15,014) Deferred tuition (14,630) 86,143 Agency funds (11,977) (218)

Net cash and cash equivalents provided by operating activities 2,223,819 432,161

Cash Flows from Investing ActivitiesPurchase of investments (2,826,580) (2,180,062) Sales of investments 2,826,401 2,179,801 Purchases of property and equipment (173,574) (149,233) Proceeds from sale of property and equipment - 1,800 Additions to construction-in-progress (128,900) (30,200) Security deposit paid on leased equipment - (3,852)

Net cash and cash equivalents usedby investing activities (302,653) (181,746)


STATEMENT OF CASH FLOWS


- Continued -


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2015 2014Cash Flows from Financing Activities

Repayment of capital lease obligations (29,360) -

Net cash and cash equivalents usedby financing activities (29,360) -

Net increase in cash and cash equivalents 1,891,806 250,415

Cash and Cash Equivalents, beginning 1,248,158 997,743

Cash and Cash Equivalents, ending 3,139,964$ 1,248,158$

Supplemental Disclosure of Cash Flow InformationInterest paid 6,289$ -$

Noncash Investing and Financing ActivitiesDuring the year ended June 30, 2015, the School acquired additional educational equipment

totaling $50,710 by entering into a capital lease obligation.

During the year ended June 30, 2014, the School acquired educational equipmenttotaling $67,957 by entering into a capital lease obligation.


STATEMENT OF CASH FLOWS - CONTINUED



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NOTES TO FINANCIAL STATEMENTS

June 30, 2015

1. Summary of Significant Accounting Policies

Nature of Activities: The New Community School Foundation (the School) is a not-for-profit organization operating in the Richmond, Virginia metropolitan area as a private school for children with dyslexia and other language-learning disabilities. Tuition, fees, and local area contributions support operations. The School is accredited through the Virginia Association of Independent Schools, and is a member of the National Association of Independent Schools.

Basis of Presentation: Financial statement presentation follows the recommendations of the

Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 958, “Not-For-Profit Entities”. Under those provisions, net assets and revenues, gains, and losses are classified based on the existence or absence of donor-imposed restrictions as follows:

x Unrestricted net assets - Net assets that are not subject to donor-imposed

stipulations.

x Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that can be filled by actions of the School pursuant to those stipulations or that expire by the passage of time.

x Permanently restricted net assets - Net assets subject to donor-imposed stipulations

that the School maintain them permanently. The donors of such assets permit the School to use the income earned on the assets. Certain donors have stipulated that their contributions be invested in perpetuity (permanently restricted) and that the related earnings be used to support specific programs or activities. Unexpended investment income earned on these assets is recorded as temporarily restricted net assets.

Cash and Cash Equivalents: For purposes of the statement of cash flows, the School

considers all highly liquid debt instruments with a maturity at the date of purchase of three months or less to be cash equivalents.

Accounts and Pledges Receivable: Accounts receivable are primarily due within one year.

Unconditional promises to give (pledges) are recognized as assets and revenue in the period the promise is received. Promises to give are recorded at net realizable value if expected to be collected in one year and at present value of their estimated cash flows if expected to be collected in more than one year. The discounts on amounts to be collected in more than one year are computed using risk-free interest rates applicable to the years in which the promises are received. Amortization of the discounts is included in contribution revenue. Conditional promises to give are recognized when the conditions on which they depend are substantially met.

Allowance for uncollectible accounts and pledges receivable is determined by a review of

specific accounts by management.

Inventory: Inventory consists of textbooks and supplies for sale to students and is stated at the lower-of-cost-or-market, with cost determined using the first-in, first-out method.

Investments: Investments are stated at fair market value. Unrealized gains and losses are

included in the change in net assets. Investment expenses totaling $32,101 and $28,858 in 2015 and 2014, respectively, are included in general and administrative expenses.

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NOTES TO FINANCIAL STATEMENTS - CONTINUED

June 30, 2015

1. Summary of Significant Accounting Policies - Continued

Property and Equipment: Property and equipment are stated at cost or, if donated, at fair value at date of receipt. Acquisitions of new buildings, equipment, and land improvements and major betterments are capitalized. Repairs and maintenance costs are expensed as incurred. Depreciation is provided by use of the straight-line method over the following estimated useful lives of the assets:

Years

Buildings 31-39Building improvements 10-39Furniture, equipment, vehicles, software, and library books 3-10Land improvements 5-15

Donated Materials and Services: Donated materials and donated services that enhance non-

financial assets or require specialized skills are reflected as contributions in the accompanying financial statements at their estimated fair values at the date of receipt. A number of unpaid volunteers who serve in the capacity of board members and other school volunteers have made significant contributions of their time in the furtherance of the School’s programs. The value of this time is not reflected in these statements, because it did not meet the criteria for such recognition.

Deferred Tuition: Regular session tuition revenue is recognized in the period in which the

related educational instruction is provided. Accordingly, registration and tuition fees received for the next school term are deferred until instruction commences.

Contributions: Contributions received are recorded as unrestricted, temporarily restricted, or

permanently restricted support, depending on the existence and nature of any donor restrictions. When a 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. However, contributions received with donor restrictions which are met in the same fiscal year in which the contributions are given are recorded as unrestricted support.

Scholarships and Financial Aid: Tuition and fees reflect the School’s normal tuition rates for

all students less scholarships awarded on the basis of financial need.

Income Tax Status: The School is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code and is exempt from Federal and Virginia income taxes. The School is not considered a private foundation. The School’s income tax returns from 2011 forward are subject to examination by the Internal Revenue Service, generally for three years after they are filed.

Advertising Costs: Advertising costs are expensed in the period they are incurred. Evaluation of Subsequent Events: Management has evaluated subsequent events through

September 3, 2015, which is the date the financial statements were available to be issued.

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June 30, 2015

1. Summary of Significant Accounting Policies - Continued

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Prior-Year Comparative Totals: The financial statements include certain prior-year

summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the School’s financial statements for the year ended June 30, 2014, from which the summarized information was derived.

2. Functional Allocation of Expenses

The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

3. Accounts and Pledges Receivable

Accounts receivable consist of the following at June 30, 2015 and 2014:

2015 2014

Accounts receivable 224,262$ 213,455$ Allowance for uncollectible accounts (68,728) (80,903)

155,534$ 132,552$

Pledges receivable consist of the following at June 30, 2015:

Pledges Present Value2015 Receivable Discount Total

Unrestricted 8,610$ -$ 8,610$ Temporarily restricted 381,261 (6,161) 375,100

389,871$ (6,161)$ 383,710$

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June 30, 2015 3. Accounts and Pledges Receivable - Continued

Pledges receivable consist of the following at June 30, 2014:

Pledges Present Value2014 Receivable Discount Total

Unrestricted 5,350$ -$ 5,350$ Temporarily restricted 530,300 (7,887) 522,413

535,650$ (7,887)$ 527,763$

Expected collections of pledges receivable, net of discount at June 30, 2015, are as follows:

Year ending Temporarily June 30 Unrestricted Restricted Total

2016 8,610$ 280,778$ 289,388$ 2017 - 2020 - 94,322 94,322

8,610$ 375,100$ 383,710$

All pledges are considered collectible; therefore, no allowance for uncollectible pledges has been deemed necessary. The present value discount is computed using a rate of 4%.

4. Fair Value Measurements

FASB ASC 820-10, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority; Level 2 inputs consist of observable inputs other than quoted prices for identical assets; and Level 3 inputs have the lowest priority. The School uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. At June 30, 2015, the School’s investments were valued based on Level 1 inputs.

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June 30, 2015

4. Fair Value Measurements - Continued

Quoted Pricesin ActiveMarkets Significant Significant

for Identical Observable UnobservableAssets Inputs Inputs

Fair Value (Level 1) (Level 2) (Level 3)June 30, 2015

Money market funds 76,297$ 76,297$ -$ -$ Equities 1,923,638 1,923,638 - - Mutual funds 1,691,467 1,691,467 - -

3,691,402$ 3,691,402$ -$ -$

Fair Value Measurements Using

Quoted Pricesin ActiveMarkets Significant Significant

for Identical Observable UnobservableAssets Inputs Inputs

Fair Value (Level 1) (Level 2) (Level 3)June 30, 2014

Money market funds 72,171$ 72,171$ -$ -$ Equities 1,901,737 1,901,737 - - Mutual funds 1,667,455 1,667,455 - -

3,641,363$ 3,641,363$ -$ -$

Fair Value Measurements Using

The School’s investments are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in risks in the near-term would materially affect investment assets reported in the financial statements.

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June 30, 2015

5. Property and Equipment

Property and equipment consists of the following:

2015 2014

Land 323,068$ 323,068$ Land improvements 113,758 99,805 Buildings 3,990,109 3,990,109 Building improvements 424,099 356,279 Grounds equipment 19,401 35,762 Educational equipment 309,186 423,977 Vehicles 71,167 71,167 Other equipment 84,822 93,792

5,335,610 5,393,959 Accumulated depreciation (2,432,690) (2,512,063)

2,902,920$ 2,881,896$ 6. Retirement Plan

The School maintains a defined-contribution retirement plan for the benefit of eligible

employees. The Board of Trustees establishes the contribution annually. Contributions for 2015 and 2014 were $103,148 and $87,335, respectively.

7. Donor-Restricted Endowment Funds

The School’s endowment consists of approximately 23 individual restricted funds established for scholarships, faculty support, and undesignated. There are no individual endowment funds which were designated by the Board of Trustees. Net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

Interpretation of Applicable Law

The Board of Trustees of The New Community School Foundation has interpreted the

Virginia Prudent Management of Institutional Funds Act (VPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the School classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the School in a manner consistent with the standard of prudence prescribed by VPMIFA. In accordance with VPMIFA, the School considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

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June 30, 2015 7. Donor-Restricted Endowment Funds - Continued

a. The duration and preservation of the fund b. The purposes of the School and the donor-restricted endowment fund c. General economic conditions d. The possible effect of inflation and deflation e. The expected total return from income and the appreciation of investments f. Other resources of the School g. The investment policies of the School

Funds with Deficiencies

From time to time, the fair value of assets associated with individual donor-restricted

endowment funds may fall below the level that the donor or VPMIFA requires the School to retain as a fund of perpetual duration. Deficiencies of this nature are reported in unrestricted net assets. As of June 30, 2015 and 2014, there were no deficiencies in endowment funds included in unrestricted net assets.

Return Objectives and Risk Parameters

The School has adopted investment and spending policies for endowment assets that

attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Under this policy, as approved by the Board of Trustees, the endowment assets are invested in a manner intended to produce conservative growth. The School expects its endowment funds, over time, to attain a real total return of at least 5% per annum over the long-term. Actual returns in any given year may vary from this amount.

Strategies Employed for Achieving Objectives

To satisfy its long-term rate-of-return objectives, the School relies on a total return strategy in

which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends) with more emphasis toward capital appreciation. The School uses a third-party asset manager to invest endowment assets. In accordance with the investment policy of the School, the asset manager invests endowment assets primarily in equities and bonds with an approximate target allocation of 80% equity-based investments and 20% bond exposure.

Spending Policy and How the Investment Objectives Relate to Spending Policy

Each year as part of the annual budget process, the Board of Trustees approves for

expenditure from endowment investment income a fixed amount based on the expected investment return of the endowment assets for the fiscal year, the accumulated investment income that has yet to be appropriated, and the current operating needs of the School. In establishing the amount, the School considers the long-term expected return on its endowment.

Changes in endowment net assets for the fiscal years ended June 30, 2015 and 2014 are as

follows:

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Temporarily Permanently Restricted Restricted Total

June 30, 2015

Contributions -$ 54,097$ 54,097$

Investment returnInterest and dividends 102,946 - 102,946 Net appreciation (realized and unrealized) (20,580) - (20,580)

Total investment return 82,366 - 82,366

Appropriation of endowment assets forexpenditure - - -

Net change in endowment net assets 82,366 54,097 136,463

Endowment net assets, beginning of year 952,849 3,369,517 4,322,366

Endowment net assets, end of year 1,035,215$ 3,423,614$ 4,458,829$

Temporarily Permanently Restricted Restricted Total

June 30, 2014

Contributions -$ 23,924$ 23,924$

Investment returnInterest and dividends 84,114 - 84,114 Net appreciation (realized and unrealized) 387,771 - 387,771

Total investment return 471,885 - 471,885

Appropriation of endowment assets forexpenditure (57,339) - (57,339)

Net change in endowment net assets 414,546 23,924 438,470

Endowment net assets, beginning of year 538,303 3,345,593 3,883,896

Endowment net assets, end of year 952,849$ 3,369,517$ 4,322,366$

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The following is a description of endowment funds classified as permanently restricted net

assets and temporarily restricted net assets at June 30, 2015 and 2014:

2015 2014Endowment funds classified as permanently restricted

net assets

The portion of endowment funds that is requiredto be retained permanently either by explicit donor stipulation or by VPMIFA 3,423,614$ 3,369,517$

Endowment funds classified as temporarily restrictednet assets

The portion of endowment funds subject to a timerestriction under VPMIFA with purpose restrictions 1,035,215$ 952,849$

June 30

8. Restrictions on Net Assets

Temporarily restricted net assets (including temporarily restricted endowment funds) are available for the following purposes:

2015 2014Temporarily restricted net assets

Property, equipment, and capital improvements 2,898,633$ 1,219,247$

Restricted operating purposes 189,325 149,857 Scholarships and faculty support 1,086,475 1,001,097

Total temporarily restricted net assets 4,174,433$ 2,370,201$

9. Capital Lease Obligations

During the years ended June 30, 2015 and 2014, the School entered into capital lease agreements for educational equipment costing $50,710 and $67,957, respectively. Accumulated depreciation on the equipment at June 30, 2015 and 2014 was $23,176 and $1,133, respectively. Minimum lease payments have been capitalized for the financial statements. The following is a schedule of future minimum lease payments and the present value of the net minimum lease payments as of June 30, 2015:

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June 30, 2015

9. Capital Lease Obligations - Continued

2015

Total minimum lease payments 100,102$ Less: amount representing interest (10,795) Present value of net minimum lease payments 89,307 Less: current portion (30,722)

58,585$ Future maturities of capital lease obligations are as follows: Year ending June 30

2016 30,722$ 2017 36,285$ 2018 9,414$ 2019 10,204$ 2020 2,682$

10. Operating Leases

The School leases copier equipment under a four-year operating lease which expires in December 2015 and a five-year operating lease which expires in January 2020. Monthly lease payments include a minimum base amount plus charges for copies over the maximum monthly copy allowance. Rent expense was $21,154 and $16,601 for 2015 and 2014, respectively. Future minimum lease payments are as follows:

Year ending June 302016 8,017$ 2017 3,264$ 2018 3,264$ 2019 3,264$

In February 2015, the school signed a 24-month lease for two modular trailers to be used as

temporary classrooms. In connection with the lease, the School will be responsible for installation costs of approximately $53,000. These costs will be paid in full upon commencement of the lease term and will be amortized over the life of the lease. The lease term begins upon substantial completion of the installation of the trailers. This occurred in August 2015. The total monthly rental under the lease agreement is $944, which includes personal property and sales tax expenses.

11. Concentrations of Credit Risk

Financial instruments which potentially subject the School to concentrations of credit risk consist principally of cash and cash equivalents. The School maintains cash and cash equivalents in financial institutions located in Richmond, Virginia. From time to time, balances in these accounts exceed the federally insured limit.

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June 30, 2015

11. Concentrations of Credit Risk - Continued

The School grants credit to the parents of students located primarily in the Richmond, Virginia, area. Its ability to collect these unsecured receivables is influenced by economic conditions in the region. The School does not normally require collateral. Accounts receivable past due sixty days or more totaled $149,217 and $173,158 at June 30, 2015 and 2014, respectively.

12. Selected Highlights of Financial Results

2015 2014Total Current Assets 8,522,906$ 6,609,989$ Total Current Liabilities 1,726,067$ 1,693,896$

Current Ratio 4.94 3.90

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June 30, 2015 12. Selected Highlights of Financial Results - Continued

Documents

THE NEW COMMUNITY SCHOOL FOUNDATION FINANCIAL STATEMENTS June 30, 2015 · 2018-10-31 · Notes to Financial Statements ... September 3, 2015 . Temporarily Permanently Unrestricted