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DRAFT LCS Audit Report 2022.10.19LEWIS COUNT/effi/i/ ENIORS MOUNTAIN VIEW CPA'S P.S., CERTIFIED PUBLIC ACCOUNTANTS LEWIS COUNTY SENIORS A Washington Not -For -Profit Corporation FINANCIAL STATEMENT REVIEW For the Period Ended December 315t, 2021 Table of Contents Independent Auditor's Report ..................................................... ,;,;%........................................ Page 1 Financial Statements Statement of Financial Position ........ Statement of Activities....... Statement of Functional Expens ........................ Page 2 ............ Page 3 .................................... Page 4 .............................................................. Page 5 :......................................................... Page 6 Member American Institute of Certified Public Accountants and Washington State Society of Certified Public Accountants Mountain View CPA's P.S. Certified Public Accountants www.mtvcpas.com w " Centralia Office • 1218 Harrison Ave • Centralia, WA 98531 • (360)740-5697 - mtvadmin@mtvcpas.com ,7 To the Board Members of Lewis County Seniors 2545 N. National Avenue Chehalis, WA 98532 INDEPENDENT AUDITOR'S REPORT Report on the Financial Statements We have audited the accompanying financial statements of Lewis County Seniors, which comprise the statement of financial position as of December 3 Pt, 2021, and the related statement of activities, functional ekpenses, and cash flows for the year then ended, and the related notes to the financial statements.AIMEN Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair pre principles generally accepted in these United States. Mana maintenance of internal control relevant to the preparation misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on t11G accordance with auditing standards generally acc perform the audit to obtain reasonable assurance An audit involves performing F The procedures selected depeni financial statements, wheth rG relevant to the entity's appropriate in the circumstan control. Accordingly, we expre used and the reasonableness of resentation i to"2 �c a-1 p„9„i,,,,;,�1,,,,,,,,,,,,,,,s� We belie&,,3,h'dt the audit Opinion In our opinion, the fi County Seniors as of generally accepted in Other -Matter dures to obtain and fRA Rthegauditor s judgemeno �M,�jF or. In mak and fair preRentation of f. Lit not for tl�purpose of ,, %�/ & such Winn An audit have statements rej ber 31st, 2021 Nnted States.. Ztatiop/of,�B�these financiaf"stft''ements in accordance with accounting nen ra"�tso responsible for th/design, implementation, and presentation of financial s ale ents that are free from material j '! j statements base .on our audit. We conducted ur audit in ,United States o ,,Aknerica. Those standards require that we plan and /Ache financial - T I't. is are free from material misstatement. ER/the amounts1';""d%disclosures in the financial statements. /�//%� ''a/��,, ems a sment on/mg %risks of material misstatement of the /�%,. s j se ��}j � the auditor considers internal control statemen"sm!brder to design audit procedures that are ,�i� an opinion on the effectiveness of the entity's internal es evaluating the appropriateness of accounting policies iy management, as well as evaluating the overall is sufficienW appropriate to provide a basis for our audit opinion. to above"present fairly, in all material respects, the financial position of Lewis its activities for the year then ended in accordance with accounting principles The 2020 financial statements were fKiewed by us and our report thereon, dated February 25, 2022, stated we were not aware of any material modifications that should be made to those statements for them to be in conformity with the financial reporting framework. However, a review is substantially less in scope than an audit and does not provide a basis for the expression of an opinion on the financial statements taken as a whole. Chehalis, WA October 19th, 2022 Page 1 THIS REPORT IS ISSUED WITH THE UNDERSTANDING THAT WHILE IT MAYBE REPRODUCED IN ITS ENTIRETY, EXCTRACTS FROMIT OR REFERENCES TO IT SHALL FIRST BE SUBMITTED FOR OUR WRITTENAPPROVAL. LEWIS COUNTY SENIORS A Washington Not -For -Profit Organization STATEMENT OF FINANCIAL POSITION - MODIFIED CASH BASIS As of December 31st, 2021 ASSETS CURRENT ASSETS Cash and Cash Equivalents NONCURRENT ASSETS Restricted Cash Property, Plant, and Equipment, Net Investments Construction In Progress TOTAL ASSETS LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts Payable Payroll Liabilities Sales Tax Payable Rental Deposits Total Liabilities NET ASSETS Without Donor Restrictions With Donor Restrictions Total Net Assets TOTAL LIABILITIES AND NET ASSETS 50,294 40,355 71,084 1,784 8,950 11,753 46,581 46,465 11,872 - 188,781 100,357 8,378 323 1,390 1,326 106,828 961123 $ 188,781 $ 100,357 Page 2 SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS LEWIS COUNTY SENIORS A Washington Not -For -Profit Organization STATEMENT OF ACTIVITIES - MODIFIED CASH BASIS As of December 31st, 2021 SUPPORT AND REVENUES Direct Public Support Indirect Public Support In -Kind Revenue Government Support G ra nts Rental Income Thrift Store Sales Recycling Program Income Interest Net Assets Released from Restrictions Total Support and Revenues EXPENSES Program Fundraising Management and General Total Expenses CHANGE IN NET ASSETS NET ASSETS, BEGINNING OF YEAR NET ASSETS, END OF YEAR 2021 Without Donor With Donor 2021 2020 Restrictions Restrictions Total Total $ 38,421 $ 81,172 $ 119,593 $ 84,031 2,255 2,255 52,925 644,997 644,997 - 400,344 400,344 405,279 21,793 21,793 74,520 1,275 1,275 6,953 220,928 220,928 189,429 2,189 2,189 6,427 596,439 596,439 398,833 278 278 855 11,872 (11,872) - 1,940,790 69,300 2,010,091 1,219,252 1,822,085 1,822,085 1,130,234 5,042 5,042 4,853 102,959 102,959 109,400 1,930,087 - 1,930,087 1,244,487 10,704 69,300 80,004 (25,235) 96,124 1,784 97,908 123,143 $ 106,828 $ 71,084 $ 177,912 $ 97,907 Page 3 SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS LEWIS COUNTY SENIORS A Washington Not -For -Profit Organization STATEMENT OF FUNCTIONAL EXPENSES - MODIFIED CASH BASIS For the period ending December 31st, 2021 2021 Program Fundraising Management 2021 2020 Total Total College Classes $ - $ - $ Advertising 5,042 Permits 2,796.44 Contract Services 21,799.06 Depreciation - Vehicle Expense 23,786.44 Repairs & Maintenance 3,210.18 Utilities 66,201.81 Leases 682,368.03 Small Tools and Equipment 2,140.20 Office 17,398.79 Business Operations 628.81 Banking Fees 4,581.99 Supplies 334,190.63 Business Taxes - Insurance - Wages 537,257.79 Payroll Taxes 62,412.08 Employee Benefits 60,784.08 Conferences 163.39 Meals 430.15 Travel 1,827.14 Training 108.34 Staff Appreciation - - $ - $ 3,355 5,042 41853 10.00 2,806 3,298 21,202.18 24,001 10,982 2,803.00 2,803 1,723 2,372.31 26,159 8,326 - 3,210 965 51.94 66,254 63,744 1,951.19 684,319 33,403 - 2,140 3,216 9,447.79 26,847 12,958 800.92 1,430 1,102 1,071.72 5,654 5,457 988.07 335,179 392,627 1,257.01 1,257 814 41184.13 4,184 11,519 43,751.11 581,009 546,469 3,685.19 66,097 49,077 22,707.03 83,491 74,548 511.16 675 1,020 578.22 1,008 1,183 320.03 2,147 3,972 565.66 674 599 3,700.58 3,701 3,277 $ 1,822,085 $ 5,042 $ 102,959 $ 1,930,087 $ 1,244,487 Page 4 SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS LEWIS COUNTY SENIORS A Washington Not -For -Profit Organization STATEMENT OF FUNCTIONAL EXPENSES - MODIFIED CASH BASIS For the period ending December 31st, 2021 CASH FLOWS FROM OPERATING ACTIVITES Increase (Decrease) in Net Assets Adjustments to Reconcile Change in Net Assets to Net Cash Used (Provided) by Operating Activities: Depreciation Increase (Decrease) In: Payroll Liabilities Sales Tax Payable Rental Deposits Net Cash Used (Provided) by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of Property, Plant, and Equipment Increase in Investments Net Cash Used (Provided) by Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Net Cash Used (Provided) by Financing Activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR 2021 2020 $ 80,004 $ (25,235) 2,803 1,723 8,055 16,009 64 (440) (11,872) (10,958) 79,239 (20,856) $ 121,378 $ 42,139 Page 5 SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 3111, 2021 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities Lewis County Seniors is a 501(c)(3) nonprofit organization focused on assisting senior citizens with nutritional, social, educational, and enrichment programs. They serve meals, create learning and enrichment opportunities, help seniors with issues directly impacting their health and wellness, and reach out to the community with fundraisers and other community events. Financial Statements Lewis County Seniors prepares its financial statements with the other comprehensive basis of accountingmodified cash basis and resents assets a abiliti �s;�within similar groups and classifying them — p1, e . in ways that provide relevant information about , :::r interreIations;'`;ps, liquidity, and financial flexibility. �%i�i/.ia� . . Under Accounting Standards Board (FASB) /�eeo-� nting Standards %Q cation (ASC) 958-205 Financial // !"/-, Statements of Not -For -Profit Organizations, L; s� ounty Seniors is require;;/jjj��report information regarding Mi/„ its net assets according to following two classes:%yytj;�.out restriction and with •restiction. Donated and program funds are account the donation. Revenue is reported as an donor -imposed restrictions;, Accordingly, t Net Assets "Wit donor -imposed i Managemerit?y financial repo r 1" liabilities, the dis results may vary nrestricted % assets wit organ cted as provided in the particular terms of inor restrictions unless their use is limited by g/ are classified and reported asfollows: wis County Seniors without program or ram, donor, grantor, or other outside party for a particular i expires with either the passage of time or the purpose 'sets without restriction and reported in the statement of ;umptions in preparing financial statements in accordance with the applicable estimates and assumptions affect the reported amounts of assets and it assets and liabilities, and the reported revenues and expenses. Actual that were used. Page 5 See Associated Financial Statements and Independent Auditor's Report Dated October 19`h, 2022 LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 315t, 2021 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON'T.) Recently Adopted Accountiniz Pronouncements In August 2018, the FASB issued ASU NO 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. This ASU eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. This standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019. The adoption of this guidance did not have a material impact 00�tie organization's financial statements. The organization has adopted ASU 2018-08, Not For -Profit E . t: t'es ; pic 958): Clarifying the Scope and the %, Accounting Guidance for Contributions Received and Cont/(,J, . n ;;,ade. Investments The organization records its investments in accor'darice with Accounting Standards/=edification (ASC) 958, Not for '�%/i,%ice,, Profit Entities. Under ASC 958 investments in market-a`l.e securities with readily determinable fair values and all investments in debt securities are reported at their fair x��a`rket v��s�in the balance sh.edt,. Unrealized gains and losses are included in the change ine�t%assets. Cash and Cash Eauivalents Cash and cash equivalepsi,elude cash on Y►'�,'r,'jd and castor%„deposit iri%francial institutions. Furniture and equipmen//�urcha ��`y Lewis Count /Seniors is recorded at cost. Furniture and equipment donated //�,,,. to theorgani-zation is cap;t jt/e/ j/m/a/ted f' V' lue. The organizations policy is to expense the acquisition COS' o:, equrprn�" the yea jiffs purchase.d> if its Co t is less than $2,500. Depreciation is provided over the e��mated useful hvv-/ f the arse %.using the str/gig j�ine method. moo,, � � Mainte,ce costs are ch-;:eed to ex e.; se as incurred; major renewals and improvements are capitalized. When items of u " iture and a u:p.r-'p; ent are":d or are otherwise disposed of, the appropriate cost and related accumulate; Depreciation amo;,Q;nts are removed from the accounts and any gain or loss is included in income. Support The organization receive'sjb"stantial amount of its support from public contributions and governmental grants. If a significant reduction in the`le�l of this support occurred, it could have a significant effect on the Fund's future programs and activities. Fund -Raising Events The organization holds fund-raising events and reports the revenues generated, net of any direct operating costs, as revenue, gains, and other support in the accompanying statements of activities. Page 6 See Associated Financial Statements and Independent Auditor's Report Dated October 19`h, 2022 LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 311t, 2021 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON'T.) Contributions The organization reports gifts of cash and other assets as restricted support if they are received with donor stipulations limiting the use of the donated assets. However, restricted gifts for which the donor restriction is met in the same period the gift is received are recorded as unrestricted revenue. When a donor restriction expires, that is, when a stipulated tiffiRS%"'striction ends or the purpose restriction is accomplished, restricted net assets are reclassified to unres<rie�t-e net assets and reported in the statement of revenue, expenses, and othersu ort—modi —modified cash basis s�ssets released from restrictions. P PP f ,�;,i��,,, g„ The organization reports gifts of long-lived assets, as%Wkiell"as gifts 0,6t jjr assets restricted to the acquisition or u%/////////, / construction of long-lived assets as unrestrictedd/ j rf unless explicit nor stipulations specify how the donated assets must be used. Restricted are considerereleased from restrictions as the asset is depreciated over its useful life. Absent-ex/jjcit donor instructions aboyjhow long-lived assets must be maintained, the organization reports the expiration/ donor restriction when'tl�;/onated or acquired asset is placed in service. W AAAND/ The organization uses advertising to pri Advertising expense for the;,,year ended The organization p employq,g,,, ,,eml NOTE 2 — CASH costs are expensed as they are incurred. This benefit is funded through both pre-tax gories of expenses that are attributable to more than one program lenses require allocation on a reasonable basis that is consistently lude contract services and supplies. Lewis County Senior's ch"6'e `fig account did not exceed the $250,000 amount insured by the Federal Deposit Insurance Corporation (FDIC). Page 7 See Associated Financial Statements and Independent Auditor's Report Dated October 19`h, 2022 LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 315t, 2021 NOTE 3 — PROPERTY AND EQUIPMENT Property and equipment with useful lives greater than one year are capitalized and recorded at cost if purchased, or fair market value if contributed. Current depreciation is computed using the straight-line method. On December 31, 2021, property and equipment included the following: 2020 Additions 2021 Furniture and Equipment $ 4,359 $ 4,359 Vehicles 9,662 9,662 Construction In Progress - 11,872 /%Z803) 11,872 Less Accumulated Depreciation (2,268) (5,071) Total Property and Equipment $ 11,75j,,, $ 9;0;6%, $ 20,822 NOTE 4 — DONATED SERVICES & MATERIALS Donated equipment, certain donate'p'b .essional services!a""'% onated materials are'recorded as contributions at �j/��"''' �� b' tributed services are recognized at fair value if the their estimated fair value on the dates of,ND t, e&contributions. ;,�.i. "tf� services received (a) create or enhance dng 1r d,, ssets or (b fe.qu.ire specialized skills, are provided by individuals possessing those skills, and would typical eed "a,%,� j.urchase;f j t provided by donation. ///i�, The organization recea:slslhv:ces from vol:cfnteers wh:;ve-significa%amounts of their time, but which do not /, ////ice.. meet the criteria fdi, a/ncia1 ement recogha tio.r NOTE 5 -. ebruary 8, 2019 for $45,000. The value of the investment at 2019 2020 2021 $ 45,610 $ 46,465 $ 46,581 Page 8 See Associated Financial Statements and Independent Auditor's Report Dated October 19`h, 2022 LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 3111, 2021 NOTE 6 — LIQUIDITY AND AVAILABILITY The organization regularly monitors liquidity required to meet its operating needs, liabilities, and other obligations as they become due. The Organization is supported by revenue received from grants and contributions. The Organization operates with a balanced budget and anticipates collecting sufficient revenue to cover general expenditures for the next 12 months. In addition to financial assets available to meet general expenditures over the next twelve months, the organization has a certificate of deposit account that could be drawn upon in the event of financial distress with appropriate board approval. As of December 31, 2021, the following assets could readily be made available within one year of the date of the stafe:rn/ent of financial position to meet general expenditures: j j 2021j�2020 Total Assets $ 1 8,?78 $ 100,357 0�% Less: ��j/ Net assets with donor restrictions (71,084) ��(1,784) Land, building and equipment, net % (20,822)�j�(11,753) Financial assets available withrn;e�ea.r$ 96,875 $ 86,820 NOTE 7 — FAIR VALUE MEAS % REMENTS1I0 /Investment accounMa:lanceseriods endederri;;er,/2Q;2;1 and 2020, are shown as follows Fair Value'6flnvestments as of December 31, 2021 E/�. Level 2 Level 3 Total $S'8%1�i SM $ 46,581 $ 46,58% $ 46,581 FaifValue of Investments as of December 31, 2020 Level Level Level Total $ 46,465 $ 46,465 $ 46,465 $ 46,465 Page 9 See Associated Financial Statements and Independent Auditor's Report Dated October 19`h, 2022 LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 315t, 2021 NOTE 7 — FAIR VALUE MEASUREMENTS (CON'T.) The organization has adopted FASB ASC 820 Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements. This standard defines fair value as the price that would be received in the selling of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value framework is organized into three levels based on the following input assumptions: Level 1 Inputs —Valuations based on quoted prices (unadj11-01,1014kg > active markets for identical assets or liabilities that the reporting entity has the ability to access at the,,r�t date. Level 2 Inputs —Valuations based on quoted prices (oih�oan levdQ// inputs) that are observable for the asset or liability, either directly or indirectly with fair value, Ong determined tfa:�bugh the use of models or other valuation methodologies. jj/j�� Level 3 Valuations based on inputs are unobse, a e inputs for the asset ors ability and are used to the extent that observable inputs do not exist. Level 3 inputs regyresignificant,managementJgdgement and estimation. The organization values its investme . is in readily ava %ii NOTE 8 — CONTRIBUTED USE OF FACILITIE1P j��/o� %% %%� During the year ended eee: n er 31, 202oer//,��S lease which is less than the f r � rket,value. Th e1ut1114UA and Packwood. Th''" i revenue. The estimaj financial statements NO once b'etiiveen the I it value of�this use xpense I/ah the res ble securities usi'h"glevel 1 inputs. �' /v�of its pro ,//'!' from Lewis County for 1 per month /�j i' Olequa, Toledo, Morton, ilrtaeo��located in Chehalis, q punt and ;eo,bir market value was recorded as in -kind ies is $644,997 which was recorded as in -kind revenue in the expense type. There area jopending s i g n i f ia%fin -,legal pfft&dings wo which the organization is a party for which management believes ///�. the ultimate �tcome would haMUa matenaaadverse effect on the organizations financial position. %ice,, %/ Amounts rece`iyed or receivable from government agencies are subject to audit and potential adjustment by the contracting agen I'll Any disallowed claims, including amounts already collected, would become a liability of the organization if so detorined%i ; the future. It is managements belief that no material amounts received or receivable, unless already provided%foj,;w.,jll e required to be returned in thefuture. NOTE 10 — CORONA VIRUS OUTBREAK Coronavirus (COVID-19) has impacted the organization's operations since the global pandemic was declared in March 2020. In response, the organization took measures to respond to the needs of the mission and continue to provide services. With COVID-19, seniors and the community have experienced an increased demand for assistance. The organization, while complying with government mandates, has continued to serve seniors during the crisis. In the summer of 2020. Due to the uncertainty of the continued spread of the virus and economic outlook, there may be short- term and long-term implication for operations of the Organization. Page 10 See Associated Financial Statements and Independent Auditor's Report Dated October 19`h, 2022 LEWIS COUNTY SENIORS AWashington Not -For -Profit Organization NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 315t, 2021 NOTE 11— RELATED PARTY TRANSACTIONS During the year ended December 3111, 2021, the organization received various services and donations from some of the Board members, which do not meet the criteria for financial statement recognition. NOTE 12 — NET ASSETS The organization honors donor -imposed, program -imposed, restrictions are found in the form of specific written or verba restrictions are created by specific instruction from a don0 giving. The detail of Lewis County Senior's net assets is/s;;fo91 Net Assets 1 Without restrictions 111 With restrictions (held in Total Net aill4ts, NOTE 13 — INCOME TAXES Lewis Count y Sen.io`rs�isra not'fo'r% ofia�� t or ariizatiad the Internal RevenueKode and i m;Q.t classified The or a.n,ization files in rne.ta, �return:s;i:n the U.91 sublectl�xma.nation by to%fRS%for t�ire.e,;y -:a,r. aft ////ce,,.. ',,.{///%/r;. fed:era/income tax ex�/manationsb j//x authon <�e e nation with the In ri aI Reveh,' rvice (IRS). rd restrictions on its net assets. Donor imposed on associating with a donation or grant. Program organization in its management of the charitable $ 106,828 1,084 177,912 em t'ro""'%federal income tax under Section 501(c) (3) of p ' /;/Q vate foundation. eral jurisdiction. The organization tax returns are generally hey were filed. The organization is no longer subject to U.S. irs before 2018. Currently, there is no examination or pending As of SepU' ber 30, 2022 / 1" e are ri'o xx positions for which the deductibility is certain but for which there is //Z,% ll uncertainty r,;�garding the tim' gg ofsuch 17 uctibility. NOTE 14 — SUBSEA Lewis County Seniors dick%riot%'have any subsequent events through October 19t", 2022, which the date the financial statements were available to be issued for events requiring recording or disclosure in the financial statements for the year ended December 31, 2021. Page 11 See Associated Financial Statements and Independent Auditor's Report Dated October 19`', 2022