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Home My WebLink AboutFY2015-LexMedia-Financial-ReportANSTISS CERTI FI ED PUBLIC ACCOU NTANTS Lexington Community Media Center, Inc. Financial Statements For the Years Ended June 30,2015 and 2014 Auorr, Tnx & AovrsoRv SeRvrces Slruce 1964 ANSTISS Auorr Tax AovrsoRY SeRvrces CERTiFIEO PUB!-IC aCC0Ui\iTAr'iTs INDEPENDENT ACCO{-INTANT' S REVIEW REPORT To the Board of Directors of Lexington Community Media Center, Inc. We have reviewed the accompanying financial statements of Lexington Community Media Center, Inc. (a nonprofit organization), 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. A review includes primarily applying analyical procedures to management's financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. 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. Accountant's Responsibility Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion. Accountant's Conclusion Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America. Pntrucrrory CoqpcRnrE f EtrRr t '11i5 \n/rsrrcrpp Slnrer r i_cu/i,Lr.. fuiA. c155 i P 978't+52-?5oo c F g7E'h58^a425 e www.ANsrissePA.cc*r Prior Period Financial Statements The 2014 financial statements were audited by us, and we expressed an unmodified opinion qn them in our report dated October 6, 2014, but we have not performed any auditing procedures since that date. G,""frr/e,'K Anstiss & Co., P.C. September 15,20L5 ANSTISS Current assets Cash and cash equivalents Accounts receivable Other current assets Total current assets Fixed assets Leasehold improvements Studio equipment Computer equipment Furniture and fixtures Total fixed assets Less : accumulated depreciation Fixed assets - net Total assets Current liabilities Accrued payroll and vacation Accrued expenses Deferred revenue Total current liabilities Net assets Unrestricted Temporarily restricted Total net assets Total liabilities and net assets Lexington Community Media Center, Inc. Statements of Financial Position As of June 30, 2015 and 2014 Assets Liabilities and Net Assets 546,293 568,331 $ 731,613 $ 744,245 Reviewed 2015 Audited 2014 r14,911 64,129 6,340 $ 145,564 28,288 2,Q62 185.380 t75.9t4 509,980 523,044 5r,776 38,172 500,480 465,760 49,r78 38,172 1,122,372 (516,079) 1,053,590 (485,259) 14,979 5,781 30,000 10,622 1,687 30,000 50,760 42,309 665,r35 15,778 665,722 36,2r4 680,913 701.936 $ 731,673 s 744,245 See accompanying notes and independent accountant's review report. 'L) vt 'lo+X 0a4* 't+l a, r, ,t.)2 ;soArriA =6llid=u'{ i = =A a(! 3EQ=tr g+Ea--^*tr:.<d >3(,3a O-.P;l.E' e r! 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Statements of Cash Flows For the Years Ended June 30,2015 and 2014 Reviewed 201s Audited 2014 Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash from operating activities Depreciation Changes in assets and liabilities Increase in accounts receivable (Increase) decrease in other current assets Increase in accrued payroll and vacation Increase (decrease) in accrued expenses Net cash provided by operating activities Cash flows from investing activities Purchase offixed assets Net cash utilized by investing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents - beginning Cash and cash equivalents - ending (2r,023) $ (21,0i3) 90,820 (35,841) (4,278) 4,357 4,094 92,374 (ss1) 9,784 3,085 (r2,368) 7r,30738,r29 (68,182) (68,782) (30,653) 145,564 (19,951) (19,951) 51,356 94,208 rl4,9r1 145,564 See accompanying notes and independent accountant's review report, Lexington Community Media Center, Inc. Notes to Financial Statements June 30,2015 and 2014 Note I - Organization Lexington Community Media Center, Inc. (the "Organrzation") was organized in May of 2005 to provide facilities and equipment to train residents in the production and distribution of local television programming on the Public, Educational, and Govemmental ('.PEG") access channels on both RCN and Comcast cable television systems operated in the Town of Lexington. Note 2 - Summary of Significant Accounting Policies Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with the accounting principles generally accepted in the United States of America. Basis of Presentation Financial statement presentation follows the recommendations of the ASC 958- 205, "Presentation of Financial Statements." Under ASC 958-205, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Accordingly, net assets of the Organization and changes therein are classified and reported as follows: Unrestricted Net Assets Unrestricted net assets comprise those assets upon which donors have placed no restrictions on expenditure of the principal or income subject to the approval of the Organrzalion's Board of Directors. Temporarily Restricted Net Assets Net assets subject to donor imposed stipulations that may or will be met, either by actions of the Organization and/or the passage of time are classified as temporarily restricted. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. As of June 30, 2015 and 2014 the Organization had temporarily restricted net assets of $ I 5,778 and $36,214, respectively. Lexington Community Media Center, Inc. Notes to Financial Statements June 30,201,5 and 2014 Note 2 - Summary of Significant Accounting Policies (continued) Basis of Presentation (continued) Permanently Restricted Net Assets Permanently restricted net assets are subject to donor-imposed stipulations that they be maintained permanently by the Organizatron. Generally, the donors of these assets permit the Organization to use all or part of the income earned on any related investments for general or specific purposes. As of June 30, 2015 and2014, the Organization had no permanently restricted net assets. Cash and Cash Equivalents The Organization considers highly iiquid investments with original maturities of three months or less when purchased to be cash equivalents. Fair Value of Financial Instruments The Organization follows the provisions of ASC 820-10 "Fqir Value Meosurements." ASC 820-10 applies to reported balances that are required or permitted to be measured at fair value under an existing accounting pronouncement. ASC 820-10 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fat value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability and establishes a fair value hierarchy. The fair value hierarchy consists of three levels of inputs that may be used to measure fair value as follows: Level 1 - Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Organtzation has the ability to access. Level2 - Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of financial instrument. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows" Level 3 - Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. Lexington Community Media Center, Inc. Notes to Financial Statements June 30,2415 and2014 Note 2 - Summary of Significant Accounting Policies (continued) Fair Value of Financial Instruments (continued) Instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. ASC 825-10, "The Fair Value Option for Financial Assets and Financial Liabilities, " permits an entity to measure many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis. Lexington Community Media Center, Inc. has not adopted any of the additional fair value options allowed in the standard. Management has determined that the fair values of its financial instruments not carried at fair value, including cash and cash equivalents, other current assets, accrued payroll and vacation, and accrued expenses are substantially equivalent to their carrying values as of June 30,2015 and2014 because of their relatively short-term nature. Accounts Receivable The Organization carries its accounts receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Organization evaluates its accounts receivable and establishes an allowance for doubtful accounts, based on the history of write-offs, collections, and current credit conditions. As of June 30, 2015 and 2014, there was no allowance for doubtful accounts. Fixed Assets The Organization capitalizes major purchases of fixed assets that are not in the nature of replacements or repairs. Minor equipment purchases, replacements, maintenance, and repairs that do not significantly enhance the value or increase the basic productive capacity of the assets are charged to expense as incurred. Capitalized fixed assets are recorded at cost if purchased or constructed, or at fair market value at the date of the gift, if donated. Depreciation is provided using the straight-line method over the estimated useful lives of the assets capitalize d as fo I I ows : Leasehold improvements Studio equipment Computer equipment Furniture and fixtures Years 6-40 3-5 5 7 Lexington Communify Media Center, Inc. Notes to Financial Statements June 30,2015 and 2014 Note 2 - Summary of Significant Accounting Policies (continued) Fixed Assets (continued) ASC 360-10, "Property, Plan, and Equipment," reqvires that long-lived assets and certain identifiable intangible assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived assets is measured by a comparison of the asset's carrying amount to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the difference between the carrying amount of the assets and the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell. Revenue Recognition In accordance with ASC 958-605 "Accounting for Contributions Received and Contributions Made, " contributions are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets by fulf,rllment of the donor- stipulated purpose or by passage of the stipulated time period are reported as net assets released from restrictions in the statement of activities. Franchise Fees The Organization has been recognized by the Town of Lexington, Massachuseffs, through Contract #10-25, dated October 2010, as the provider of telecommunication access services as referenced in separate Franchise Agreements between the Town and RCN and Comcast cable systems" The Organization receives its primary source of support from this agreement. The contract with the Town which expired June 30,2014, was renewed for an additional three years through June 30, 2017. Under this agreement the Organization will receive monthly payments of $30,190 adjusted annually based on the Boston Area Consumer Price Index for All Urban Consumers (CPI-U) for the prior calendar year ending December 31't. In addition, the Organization will receive $59,084, adjusted annually based on the CPI-U, for capital expenditures, and 522,492 annually for cablecasting of additional town meetings and indexing. 10 Lexington Communify Media Center, Inc. Notes to Financial Statements June 30,2015 and 2014 Note 2 - Summary of Significant Accounting Policies (continued) Donated Services The Organization receives services from volunteers in various aspects of its programs and fundraising events. No value has been placed upon other donated services, as there is no objective basis for valuation. Functional Allocation of Expenses The costs of providing the various programs and supporting services have been summarized on a functional basis in the statements of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 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 amounts and disclosures. Accordingly, actual results could differ from those estimates. Income Taxes and Uncertain Tax Positions The Organization has been recognized as tax-exempt under Intemal Revenue Code Section 501(c)(3) and is, therefore, generally exempt from federal and state income taxes. Accordingly, ilo provision for income taxes has been provided for in the accompanying financial statements. ASC 740-10, "Accounting for Uncertainty in Income Taxes," requires the Organization to evaluate and disclose tax positions that could have an effect on the Organization's financial statements. The Organization reports its activities to the Internal Revenue Service and to the Commonwealth of Massachusetts on an annual basis. These informational returns are generally subject to audit and review by the governmental agencies for a period of three years after filing. Substantially all of the Organization's income, expenditures, and activities relate to its exempt purpose, therefore, management has determined that the Organization is not subject to unrelated business income taxes and will continue to qualiff as a tax-exempt, not-for-profit entity. 11 Lexington Community Media Center, Inc. Notes to Financial Statements June 30,2015 and 2014 Note 3 - Net Assets Released from Restrictions Net assets released from donor restrictions by investing in fixed assets and by incurring expenses satisfuing the restricted purposes specified by donors amounted to $79,520 and$22,069 during the years ended June 30,2015 and 2A14, respectively. Note 4 - Commitments The Organization entered into a ten year sublease with the Town of Lexington for new office space commencing March 2008. Rent Expense for the period ended June 30, 2015 and 2014 was $120. The future minimum rental payments are as follows as of June 30: 20r6 20t7 201 8 $ 120 $ 120 $ 120 Note 5 - Contingencies In accordance with the agreement signed with the Town of Lexington, any and all equipment and furnishings acquired by the Organization with funds provided by the agreement shall be the property of the Town. Note 6 - Concentrations Financial instruments which potentially subject the Organization to concentrations of credit risk consist principally of cash and cash equivalents. The Organization maintains its cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits. The Organizatron has not experienced any losses in such accounts. Management considers credit risk to be minimal. The Organization is primarily funded by the Town of Lexington pursuant to an agreement which authorizes the Organizatron to act as the Town's designated public access agent. The cable franchise and capital funding fees represent approximately 96Yo of total support and revenue for the years ended June 30, 2015 and2014. 12 Lexington Community Media Center, Inc. Notes to Financial Statements June 30,2015 and 2014 Note 7 - Subsequent Events ASC 855-10, "Subsequent Events, " defines further disclosure requirements for events that occur after the statement of financial position date but before financial statements are issued. ln accordance with ASC 855-10, management has evaluated events subsequent to June 30,2A15 through September 15,2015, which is the date the financial statements were available to be issued. There were no material events noted during this period that would either impact the results reflected in this report or the Organization's results going forward. 13