Board Package Narrative

MEMORANDUM

To: From: Date: Re:

Board of Directors Executive Director, Association for a Better Community, Inc. June 15, 2013 Summary of Financial Results as of May 31, 2013

The purpose of this memo is to summarize the financial results of Association for a Better Community (ABC) as of May 31, 2013. Please find a copy of the following reports in this Board Package:

1. Budget-to-Actual Variance Report for the period ended May 31, 2013: Organization-Wide and by Program, including Year-End Forecast

2. Statement of Financial Position as of May 31, 2013

3. FY 2013 Monthly Cash Flow Projection

1. Budget-to-Actual Variance Reports

While ABC expected to generate a surplus of $36,010 by the end of the period, the organization reports a deficit of ($98,787).

Year-to-date Revenues:

The total revenue budgeted for this period is $2,702,835, while actual revenue earned is $2,497,365. This ($205,470) variance in earned revenue is primarily attributable to the following:

Foundation Contributions: Year-to-date Foundation contributions total $490,390, which is $92,344 short of budget. This variance is partly due to a change in funding from Foundation XYZ. At the end of FY 12, ABC applied for a $200,000 grant from Foundation XYZ. However, Foundation XYZ indicated through a letter of commitment dated August, 30, 2012 that only $125,000 would be provided in program funding.

Government Grants & Contracts: Approximately $1,520,677 of contract revenue was expected to be earned by May 31, 2013. However, revenue from government sources has fallen short by $95,655 year-to-date. This is due to an unanticipated mid-year reduction in the contract amount for ABC's after school program. Revenue constraints at the state level have led to similar reductions for all youth serving programs in the city.

Special Events: Due to inclement weather conditions, ABC's summer picnic took place indoors at the City Arena instead of outside at the City Park. Attendance did not reach predicted levels, and ABC's summer picnic fell short of its revenue goal by $35,754.

Year-to-date Expenses:

Year-to-date expenses total $2,596,152, approximately 3% less than budgeted, or a positive variance of approximately $70,672. Significant variances of specific line item expenses include:

Personnel: Salary expenses of $1,312,280 are $41,575 short of budget, as the Director of Youth Programs resigned in December of 2012 and a replacement has not yet been hired.

Professional Services: Professional service expenses are $24,799 below budget for the year to date, primarily due to lower than anticipated legal and management consulting costs.

 Supplies & Materials: Supply expenses are under budget by $6,638 due to various cost savings measures that have been implemented to offset the revenue shortfall. Cost savings have included reductions in the number of books ordered for the after school program as well as savings on other program and office supplies realized when ABC joined a group purchasing collaborative of nonprofits in October 2012.

Software, Technology & Website: Expenses of $22,481 have been incurred year-to-date, which represents a ($5,358) budget overrun for the period. The additional expenses in this line item are a result of a reconfiguration of ABC's online registration system by our software provider. The reconfiguration took place in February of this year to address unanticipated system errors.

FY 13 Year-End Forecast

As we approach the end of the current fiscal year, we project the organization to be on pace to conclude the year with an operating deficit of $107,020, in contrast to the originally budgeted surplus of $39,284. This is due primarily to the negative variance in organizational revenues described above. We believe that the organization has sufficient reserves to absorb this loss without jeopardizing its long-term sustainability, although the deficit will bring our year-end liquid unrestricted net asset balance down to $136,374. Per the fiscal year 2014 budget adopted last month by the board, we expect that additional private fundraising will be able to mitigate the unexpected shortfalls in government contract revenue experienced during 2013, including a strong prospect that the Pierce Foundation will increase its commitment to our after-school program in our anticipated grant renewal from September 1, 2014.

2. Statement of Financial Position

Total assets as of May 31, 2013 are $3,210,081, which consists of $555,098 in current assets and $2,654,983 in net fixed assets. ABC reports levels of cash adequate to cover approximately one month of operating expenses. Accounts receivable totaling $248,130 are somewhat high, due in part to the delay in receipt of approximately $180,000 in government contract reimbursements.

Current liabilities are made up largely of accounts payable. Due in part to high levels of accounts receivable, accounts payable levels have been increasing. As of May 31, accounts payable total $72,456. Management is working to pay outstanding invoices in a timely, tactical manner, carefully considering ABC's credit terms.

The organization's balance of operating reserves (also known as liquid unrestricted net assets, or LUNA) is positive at $144,606. The organization is making efforts to grow this amount going forward, including through the board's recent adoption of a surplus budget for fiscal 2014.

3. FY 13 Cash Flow Projection

ABC has been in a manageable cash position throughout FY13. ABC did experience cash shortfalls in several months due to delays in funder payments; however, the organization held sufficient cash so as not to have to access its line of credit during these shortfall periods. (Note that our cash balance includes both restricted and unrestricted cash.)

ABC anticipates that cash flow will be negative for the month of June but that the organization will end the fiscal year with $137,594 in cash. The Finance team is currently working to finalize cash flow projections for the upcoming fiscal year.

Association for a Better Community, Inc.

Statement of Financial Position

As of May 31, 2013

ASSETS

Current Assets Cash Grants & Contracts Receivable Accounts Receivable Prepaid Expenses Other Current Assets

Total Current Assets

Non-Current Assets Property & Equipment, Net

TOTAL ASSETS

LIABILITIES & NET ASSETS

Current Liabilities Accounts Payable Accrued Liabilities Current Portion of Mortgage Payable Deferred Revenue

Total Current Liabilities

Long-Term Liabilities Long-Term Mortgage Payable

Total Liabilities

Net Assets Unrestricted Operating (liquid unrestricted net assets) Fixed Assets, net of related debt Total Unrestricted Net Assets

Temporarily Restricted Net Assets

Total Net Assets

TOTAL LIABILITIES & NET ASSETS

As of 5/31/13

286,459 210,130

38,000 17,259

3,250 555,098

2,654,983 $ 3,210,081

72,456 74,870 31,573

418 179,317

1,002,009

1,181,326

144,606 1,621,401 1,766,007

262,748

2,028,755 $ 3,210,081

Association for a Better Community, Inc.

Accounts Receivable Aging

As of May 31, 2013

Accounts Receivable Center for Living and Working EDIC MCD Grant MCD Northshore MCD Southeast

Accounts Receivable Total Grants and Contracts Receivable

AAA-Elderly Commission Public Health Commission City Department of Children & Families State Office of Youth and Families State Office of Mental Health Grants and Contracts Receivable Total

Current

1,635 2,218

0 0 0 3,853

0 0 0 0 0 0

31 - 60

0 0 7,119 10,478 16,550 34,147

0 2,520

0 0 0 2,520

61 - 90

0 0 0 0 0 0

1,279 0

42,320 106,215

0 149,814

TOTAL

3,853

36,667

149,814

> 90

TOTAL

0

1,635

0

2,218

0

7,119

0

10,478

0

16,550

0

38,000

985 0 0 0

56,811 57,796

2,264 2,520 42,320 106,215 56,811 210,130

57,796

248,130

Page 1 of 1

Association for a Better Community, Inc.

Accounts Payable Aging

As of May 31, 2013

Alexander & Co. Benton, Donna M. Brantley, Patrick Burns, Linda C.O.R.D. Christopher, Diane Comcast FMA Four Star Catering Gompels, Elizabeth Lash Repair and Maintenance Co. Maxwell, Bradley J. New England Office Supply Northeast Printing Co. O'Brien, Evan Quill Corporation Schreyer, David Staples UPS Verizon Waste Management TOTAL

Current 0.00 0.00 0.00 0 0 445 212 0

3,352 279 0 117 0 0 140 0 0 716 0 493 543

6,297

31 - 60 0.00

200.00 792.45

3,269 0 0 0 0 0 0 0 0

4,321 0 0

26 599

0 284

0 0 9,491

61 - 90 0.00 0.00 0.00 0

4,181 0 0

5,000 0 0

23,345 0 0

14,668 0 0 0 0 0 0 0

47,193

> 90 7,550.00

0.00 0.00

0 0 0 0 0 0 0 0 0 0 0 0 1,924 0 0 0 0 0 9,474

TOTAL 7,550.00

200.00 792.45

3,269 4,181

445 212 5,000 3,352 279 23,345 117 4,321 14,668 140 1,950 599 716 284 493 543 72,456

Page 1 of 1

REVENUE Contributions & Support Foundation Grants Corporate Grants Individuals Total Contributions & Support

Other Revenue Government Grants & Contracts Special Events Donated Goods & Services Revenue from Program Fees Interest & Revenue from Investments Other Revenue

Total Other Revenue

Total Revenue

EXPENSE Personnel and Related Expenses Salaries & Wages Payroll Taxes & Benefits Total Personnel Expense

Nonpersonnel Expenses Professional Services Supplies & Materials Telephone & Communications Postage & Delivery Printing & Copying Software, Technology & Website Mortgage Interest Utilities, Janitorial & Security Equipment Rental & Maintenance Travel Meals & Entertainment Conferences, Workshops & Meetings Insurance (non-employee related) Staff Development Depreciation Other Expenses

Total Nonpersonnel Expenses

Total Expense

Excess (or Deficiency) of Revenue over Expenses

Association for a Better Community, Inc.

Budget vs. Actual Revenues and Expenses

July 1, 2012 through May 31, 2013

Current Period Actual

Current Period Budget

Current Period Variance

YTD Actuals Jul 1 - May 31

YTD Budget

YTD Variance

FY13 Year-End Forecast

Total FY13 Budget

Variance

39,321 35,352

8,042 82,715

50,000 30,000

6,033 86,033

(10,679) 5,352 2,009 (3,318)

490,390 309,935

74,590 874,915

582,734 311,887

66,359 960,980

(92,344) (1,952) 8,231

(86,065)

531,256 335,763

80,806 947,825

635,710 340,240

72,392 1,048,342

(104,454) (4,477) 8,414

(100,517)

157,006 750

4,077 2,272

9 25 164,140

246,855

140,000 0

4,666 1,555

13 83 146,316

232,349

17,006 750 (588) 717 (3) (58)

17,824

14,506

1,425,022 115,945 58,490 22,564 89 340

1,622,450

2,497,365

1,520,677 151,699 51,321 17,103 138 917

1,741,855

2,702,835

(95,655) (35,754)

7,169 5,461

(49) (577) (119,405)

(205,470)

1,543,774 125,607 63,364 24,444 96 368

1,757,654

2,705,479

1,658,920 165,490 55,987 18,658 150 1,000

1,900,205

2,948,547

(115,146) (39,883) 7,377 5,786 (54) (632)

(142,551)

(243,068)

119,298 38,175

157,474

13,572 15,937

7,341 709

2,112 2,191 11,650 2,909 2,489 2,913

445 909 1,565 285 6,553 493 72,073

229,546

17,308

123,078 38,248

161,326

16,817 22,399

6,547 869

1,956 1,557 11,650 4,013 2,841 1,890

542 875 1,881 283 6,553 442 81,113

242,439

(10,090)

3,780 73

3,852

3,245 6,462

(794) 161 (156) (634)

0 1,104

352 (1,023)

96 (34) 316

(2) 0 (52) 9,041

12,893

27,399

1,312,280 419,930

1,732,210

160,187 239,753

73,908 8,796

18,763 22,481 128,150 42,783 29,673 24,879

5,340 9,430 22,398 2,587 70,345 4,470 863,943

2,596,152

(98,787)

1,353,855 420,729

1,774,584

184,986 246,391

72,013 9,561

21,511 17,123 128,150 44,144 31,246 20,789

5,958 9,625 20,689 3,117 72,078 4,858 892,240

2,666,824

36,010

41,575 799

42,375

24,799 6,638 (1,895) 765 2,748 (5,358) 0 1,361 1,573 (4,090) 618 195 (1,709) 530 1,733 389

28,298

70,672

(134,798)

1,421,637 454,924

1,876,560

173,536 259,732

80,067 9,529

20,327 24,354 138,829 46,348 32,146 26,952

5,785 10,216 24,265

2,803 76,207

4,842 935,938

2,812,498

(107,020)

1,476,933 458,977

1,935,910

201,803 268,790

78,560 10,430 23,467 18,680 139,800 48,157 34,087 22,679

6,500 10,500 22,570

3,400 78,630

5,300 973,353

2,909,263

39,284

55,296 4,053

59,350

28,267 9,058 (1,507) 901 3,140 (5,674) 971 1,809 1,941 (4,273) 715 284 (1,695) 597 2,423 458

37,415

96,765

(146,304)

ABC After School Program

SAMPLE PROGRAM Budget vs. Actual Revenues and Expenses

July 1, 2012 through May 31, 2013

REVENUE Government Grants & Contracts Foundation Grants Individuals Revenue from Program Fees Donated Goods & Services

Total Revenue

YTD Actuals Jul 1 - May 31

281,450 83,370 1,500 11,790 8,450

386,560

YTD Budget

Variance ($)

304,333 90,292 1,833 9,607 8,708

414,773

(22,883) (6,922) (333) 2,183 (258)

(28,213)

Total FY13 Budget

332,000 98,500 2,000 10,480 9,500

452,480

EXPENSE Direct Program Expenses (Controllable) Salaries & Wages Payroll Taxes & Benefits Professional Services Supplies & Materials Staff Development Travel Conferences, Workshops & Meetings Meals & Entertainment Total Direct Expense

Shared Expenses (Non-Controllable) Supplies & Materials Telephone & Communications Postage & Delivery Printing & Copying Software, Technology & Website Rent Utilities, Janitorial & Security Equipment Rental & Maintenance Insurance (non-employee related) Fees & Interest Expense Depreciation Other Expenses

Total Shared Expenses

Total Expenses

Excess (or Deficiency) of Revenue over Expenses

268,932 80,680 27,500 46,391 550 4,278 2,190 998

377,112

7,290 2,592

439 879 2,648 5,126 1,840 1,498 946 1,702 2,762 175 27,897

405,009

(18,449)

270,771 81,231 28,580 49,278 623 4,157 1,925 1,192

380,581

9,855 2,880

382 860 685 5,126 1,766 1,249 827 1,683 2,883 194 28,390

408,972

5,802

(1,839) (552)

(1,080) (2,887)

(73) 121 265 (194) (3,470)

(2,565) (288) 57 19

1,963 0

75 249 119

19 (121)

(19) (493)

(3,963)

(24,250)

295,386 91,795 31,178 53,758 680 4,535 2,100 1,300

418,359

10,751 3,142 417 938 747 5,592 1,926 1,363 902 1,836 3,145 212

30,971

449,330

3,150

Remaining Budget

50,550 15,130

500 (1,310) 1,050 65,920

26,454 11,115

3,678 7,367

130 257 (90) 302 41,247

3,461 550 (22) 59

(1,901) 466 86 (135) (44) 134 383 37

3,074

44,321

21,599

Fiscal Year Begins (month)

Beginning Cash Balance

CASH RECEIPTS Contributions & Support

Foundations Corporations Individual contributions Government Grants and Contracts State/Local Other Revenue Special Events Revenue from Program Fees Interest & Revenue from Investments Other Revenue Prior Year Receivables Foundation grants receivable Collection of other receivables Total Cash Receipts CASH DISBURSEMENTS Personnel Salaries & wages Payroll taxes and benefits Other than Personnel Expenses Professional Services Supplies & Materials Telephone & Communications Postage & Delivery Printing & Copying Software, Technology & Website Rent Utilities, Janitorial & Security Equipment Rental & Maintenance Travel Meals & Entertainment Conferences, Workshops & Meetings Insurance (non-employee related) Staff Development Other Expenses Prior Year Accruals Miscellaneous invoices Total Cash Disbursements

Excess (Shortfall) from operations

CAPITAL AND FINANCING Cash Receipts

Cash received from loans/financing Cash received from credit line Transfers from savings/investments Cash Disbursements Capital purchases Repayment of loan principa Repayment of credit line principa Transfers to savings/investments

NET CASH EXCESS (SHORTFALL)

ROLLING CASH BALANCE

July $255,695

Prior Year Carryover

Current Yr Budgeted

Association for a Better Community, Inc.

Cash Flow Projection for Fiscal Year 2013

Actual July

Actual Aug

Actual Sep

Actual Oct

Actual Nov

Actual Dec

Actual Jan

Actual Feb

Actual Mar

Actual Apr

Actual May

Projected Jun

Thereafter

TOTAL

150,000 20,000

$170,000

635,710 340,240

72,392

1,658,920

165,490 18,658 150 1,000

$2,892,560

50,000 5,000

140,578

2,094

150,000 8,750

$356,422

120,000 5,000

129,803 165,490

1,790 150

4,468 $426,701

87,500 20,000

5,000

115,003

20,000 40,000

120,943

59,000 40,000 22,392

134,900

1,490

2,490 500

2,461 200

1,390 $230,383

4,500 $188,433

$258,953

14,500 30,000 20,000

138,243

10,000 5,000

110,930

1,956

1,555 300

$204,699 $127,785

20,000 130,490

37,500 50,240

129,087

36,000 27,902 136,903

1,458

1,874

2,018

37,500 71,560

55,240

1,540

$151,948 $218,701 $202,823 $165,840

20,000

40,000 $ 60,000 $

$

532,000 331,800

90,294

44,760

38,243 $ 1,425,123

1,103

$ 165,490

$

21,829

$

150

$

1,000

$65,863

$ $ $138,243 $

150,000 19,108

2,736,794

45,000 $45,000

1,476,933 458,977

201,803 268,790

78,560 10,430 23,467 18,680 139,800 34,087 34,087 22,679

6,500 10,500 22,570

3,400 5,300

$2,816,563

111,843 35,757

10,000 21,088

6,547 543 163

1,870 11,650

2,841 2,841 2,010

549 950 1,881

0 320

23,400 $234,251

$122,171

125,574 40,024

5,500 18,790

6,547 850

2,977 1,869 11,650 3,570 2,589 5,500

420 759 1,881 980 493

3,520 $233,492

$193,209

119,229 38,052

5,500 16,803

6,547 432

1,450 1,893 11,650 3,651 2,456 2,490

450 1,050 1,881

0 398

4,890 $218,821

$11,562

112,212 35,871

5,500 20,983

6,547 1,080 8,600 1,760 11,650 3,420 2,485

542 590 690 1,881 550

0

122,111 38,948

11,500 19,308

6,547 99

998 1,804 11,650 4,582 2,379 6,450

439 768 1,881 450 590

$214,360 ($25,927)

$230,503 $28,450

113,413 36,245

11,500 22,399

6,547 350 102

1,795 11,650

3,420 2,563

985 542 753 1,881

0 380

$214,524

($9,825)

115,558 36,911

10,000 18,732

6,547 450 997

1,890 11,650

3,540 2,457 2,390

521 982 1,881 637 401

$215,543

($87,758)

124,994 39,843

12,894 17,893

6,547 2,160

503 6,943 11,650 3,269 2,486

99 510 620 1,881

0 379

$232,670

($80,722)

122,661 39,181

10,500 19,721

6,547 1,050

213 1,839 11,650 3,692 2,460 3,479

429 763 1,881

0 440

$226,505

($7,804)

119,340 38,086

11,390 18,982

6,547 540

1,005 1,557 11,650 2,841 2,399

489 448 720 1,881

0 302

$218,175

($15,352)

122,937 39,204

112,903 36,086

$ 1,422,771 $ 454,208

15,903 19,874

6,547 833 942

1,794 11,650

3,290 2,841

249 513 830 1,881

0 442

16,817 15,000

6,547 896

1,000 1,557 11,650 2,841 2,457

300 542 780 1,881

0 380

75,000 $ 7,399 $ $ $ $ $ $ $ $ $ $ $ $ $ $

202,004 236,972

78,560 9,283

18,950 26,570 139,800 40,956 30,412 24,983

5,952 9,665 22,570 2,617 4,525

$229,728 $211,635 ($63,888) ($145,772)

$

31,810

$82,399

$2,762,609

$55,844

($25,815)

36,442

2,983

$119,188 $374,883

2,993

$190,216 $565,098

3,002

$8,560 $573,658

3,012

3,022

($28,939) $544,719

$25,428 $570,147

3,032

($12,857) $557,290

3,042

($90,800) $466,490

3,051

($83,773) $382,717

3,061

($10,865) $371,852

3,071

($18,423) $353,428

$

-

$

-

$

-

3,081

3,092

($66,969) ($148,864) $286,459 $137,594

$ $ $ $

$55,844

36,442

-

($62,257)

? 2012 Fiscal Management Associates, LLC. All rights reserved.

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