The 24nd Annual Professional Development Conference for Nonprofits

1. The 24nd Annual Professional Development Conference for Nonprofits WHAT DO YOUR ORGANIZATION’S FINANCIAL STATEMENTS SAY ABOUT YOU Bakersfield, California March 4, 2014  Presented by: Patrick Paggi, CPA (661) 834-7411 Patrick@dpvb.com

2. Overview • Users of financial statements • Roles in the financial statement process • Levels of financial reporting • Presentation basis of statements

3. Statement of Financial Condition • Definition • Listed in order of declining liquidity • Measure liquidity and leverage • The basis for the Statement of Financial Position is the Accounting Equation

4. Statement of Financial Condition • Current Assets – Assets convertible into cash in one year or less • Property, Plant and Equipment – Tangible assets that will last more than one year • Other Assets– Longer-term assets not meeting the description of PP&E • Current Liabilities – Those obligations due within one year or less • Long Term Liabilities – Obligations of more than one year • Net Assets – Net worth

5. Statement of Financial Condition • Current Ratio – Is working capital adequate? • Debt to Equity Ratio – how does an organization finance its operations

6. Statement of Financial Condition • Identifying financial statement misrepresentations • Warning signs

7. Statement of Activities • Definition • Major Components • Revenues or Support • Expenses

8. Cash Flow Statement • Defined • Indicators (good and bad) • Presentation • Operating • Investing • Financing • Supplemental disclosures • Analysis

9. Footnote reporting requirements • General • Assets • Liabilities • Net Assets

10. 990 Reporting • The Internal Revenue Service requires all not-for-profit organizations to file annual reports with the federal government • $49,999 and below, postcard reporting • Gross receipts less than $200,000 and total assets less than $500,000 qualify for limited reporting • Above $200,000 full reporting • Mission • Exempt Purpose Achievement

11. Mission • The mission of the United Way of Kern County is to "mobilize donors, advocates and volunteers to improve lives in kern county." The organization accomplishes this by raising and investing financial resources in programs that advance the common good; collaborating with other organizations to leverage resources around critical community issues; engaging volunteers in service; and advocating for public policies that further its objectives. • Education and training

12. Exempt purpose achievement • Donor designations and community investment grant-making UWKC reinvests donor funds in the community through an annual grant-making process. This volunteer-led process includes review of written applications and financial records; on-site visits; interviews with leaders of the applicant organizations; and review of program outcomes. The objective is to support community based programs that reduce homelessness and hunger, improve educational outcomes, and provide other services to the community. • To provide education to pastors and church leaders.