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HomeMy WebLinkAboutSan Bernardino Symphony Final EvalSAN BERNARDINO FINE ARTS COMMISSION tfil�trlV��"��T�� CLERK GRANTS FINAL REPORT To Grantees: '1017 JUL 31 PN 4: 57 Your organization received a grant from the City of San Bernardino Fine Arts Commission to be used between July 1, 2016 and June 30, 2017. To help us monitor the effectiveness of our process of awarding grants to arts organizations in San Bernardino, please fill in the form below. Return by July 30, 2017 to: Fine Arts Commission Office of the City Clerk City of San Bernardino 290 N. "D" St., San Bernardino, CA 92401 Note: If this report is not returned by July 30, your organization will not be eligible for grant funding in the 2018-19 fiscal year. Schools which are not in session in June -July may delay the return of this until August 30, 2017. 1. Name of Organization: 5AN FEXNA4 K/-) In/o 2. Project/ Event Name:- 0,4T / •' r1US/G U5E 72,— C',461f- 7,yE.47-,eG 3. Date(s) of Project: o%' /14 — Q 4 /3O L/ 7 4. Total Numbers Attending: As Audience Anticipated 12,67-1- Actual /2 0 75'�� As participants Of these, how many were aged? Anticipated Actual Under 18 Over 18 eo 5. How much was your grant? 441 — 6. How much of your project was funded from other sources? Including ticket sales .34sc p pN s,��e/F'e 17-&AYS X10/V4ED 77 k00& H 'T141S G'4/4 x,/7, 7. How important was the grant from SB Fine Arts Commission to the success of your project? C- uTQ� ry�c� /wJi0012Ti4/0', WE Wou C.r7 ,Vo7-1-14 UE 73EE,Y t46 t -I& TD AFFO" 7D /q7— TME C /rcl �S F/ A/� 4)e T� V874JU 6 uJ/ -rHD u7- 774 E 6-�� A17-. C014CGA27— Y6-W�q = $ &9, 9/7.= 8. What impact (if any) has your project had locally? 9. Please fill in the items paid for and the expenditure figures for your project. Items Spent for this item N16AV STAB 7 -0a = 41jAliol! CRE&J R67&ZV1/'?GD FOR, 774lS V FN o F . TOTAL Y6, AeJv Note: Total expended should equal the amount of the grant. 10. Were the aims of your project achieved? What aspects went especially well, or not so well? Y,F.S . 11,51VU 6r Cv ffs v T1 G/ Z 4 D ASS'GJ fE �U L E3,0 AA -)Z) A L Lr JP4r-RF04A1R-1VCtS 4V&1R6: PROVID/_D 7V ouR 54/ve-?sE 4aD/.5-!A1c x o4se . 11. Were there barriers to fulfilling your goals/aims? //o apR R1 pRS. cv,< cvgRc!5- ,-A bq.-f of Ems I?LCe 4 7; -CD -725 6k,4lVr XSePUFS-7 �/-D A0P&1(2A-770ff/• &R19 !1 e�Al skovsul -77-AsS6 x'4'6 S. Please include the most recent financial report for your organization. Please send photographs, programs or copies of press releases relating to your project. If you submitted an interim report, it is not necessary to duplicate any of these materials. �yrvo: � r:�:� i� ��t���•�► -1 11 r -emu ORCHESTRA (A Nonprofit Corporation) FINANCIAL STATEMENTS AND INDEPENDENT ACCOUNTANTS' REVIEW REPORT FOR THE YEAR ENDED JUNE 30, 2016 9 coo Smith Marion & Company, LLP SAN BERNARDINO SYMPHONY ORCHESTRA FINANCIAL STATEMENTS AND INDEPENDENT ACCOUNTANTS' REVIEW REPORT FOR THE YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS FINANCIAL INFORMATION Independent Accountants' Review Report Statement of Financial Position Statement of Activities Page Statement of Cash Flows 4 Statement of Functional Expenses Notes to Financial Statements 6-10 FINANCIAL INFORMATION SNEO Smith Marion & Company, LLP • Certified Public Accountants Redlands Office • 1940 Orange Tree Lane, Suite 100 . Redlands, CA 92374 • (909) 307-2323 To the Board of Directors San Bernardino Symphony Orchestra San Bernardino, CA INDEPENDENT ACCOUNTANTS' REVIEW REPORT We have reviewed the accompanying statement of financial position of the San Bernardino Symphony Orchestra as of June 30, 2016 and the related statements of activities, cash flows, and functional expenses, for the year then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of company 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 the 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 the financial statements that are free from material misstatement whether due to fraud or error. Accountants' 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. Accountants' 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. November 7, 2016 www.SMCoCPA.com Brentwood, TN • Lake Arrowhead, CA - Murrieta, CA • Redlands, CA SAN BERNARDINO SYMPHONY ORCHESTRA STATEMENT OF FINANCIAL POSITION JUNE 30, 2016 ASSETS Current Assets Cash Restricted cash Subtotal cash Accounts receivable, net Prepaid expenses Total Current Assets Non -Current Assets Property and equipment (net) Investments Jones Trust Inventory Total non-current assets TOTAL ASSETS LIABILITIES AND NET ASSETS Current Liabilities Accounts payable Deferred revenue Total Current Liabilities Non -Current Liabilities Deferred Debt Total Non -Current Liabilities Total Liabilities NET ASSETS Unrestricted Temporarily restricted Permanently restricted Total Net Assets TOTAL LIABILITIES & NET ASSETS See accompanying notes and accountants' report 2 $ 56,145 4,970 61,115 18,317 10,247 89,679 4,537 704,601 129,962 371,958 1.211.058 $ 1,300,737 $ 37,756 94,064 131,820 135,542 135,542 267,362 778,436 54,939 200,000 1,033,375 $ 1,300,737 SAN BERNARDINO SYMPHONY ORCHESTRA STATEMENT OF ACTIVITIES FOR T14E YEAR ENDED JUNE 30, 2015 Temporarily Permanently Unrestricted Restricted Restricted Total OPERATING REVENUE Sales $ 88,774 $ - $ - $ 88,774 Contracted concerts 70,556 - - 70,556 Guthrie income 10,872 - - 10,872 Government Grants 35,000 - - 35,000 Total Operating Revenue 205,202 - - 205,202 OPERATING EXPENSES Production costs 528,843 - - 528,843 Supporting services 95,650 - - 95,650 Total Operating Expenses 624,493 - - 624,493 Income (Loss) from Operations (419,291) - - (419,291) OTHER INCOME Contributions 57,466 49,522 - 106,988 Foundation Grants 114,500 - - 114,500 Investment Return (36,295) 26,382 - (9,913) Special Events (net of direct expenses) 34,607 - - 34,607 Other Income 19,456 - - 19,456 In-kind Donations 45,000 - - 45,000 Total Other Income 234,734 75,904 - 310,638 Net Assets Released From Restrictions: Restrictions satisfied by payments 90,821 (90,821) - - (93,736) (14,917) - (108,653) Fundraising expenses 25,762 - - 25,762 Change in Net Assets (119,498) (14,917) - (134,415) Net Assets - Beginning 897,934 69,856 200,000 1,167,790 Net Assets - Ending $ 778,436 $ 54,939 $ 200,000 $ 1,033,375 See accompanying notes and accountants' report 3 SAN BERNARDINO SYMPHONY ORCHESTRA STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2015 NET CASH FLOWS FROM OPERATING ACTIVITIES Change in Net Assets $ (134,415) Adjustments to reconcile change in net assets to net cash provided by operations: Non-cash Items Net Unrealized (gain)/loss on trusts (13,640) Net Unrealized (gain)/loss on investments (17,654) (Increase) decrease in cash due to: Accounts receivable 29,393 Prepaid expenses (6,406) Increase (decrease) in cash due to: Accounts payable and accrued expenses (52,921) Deferred revenue 94,064 CASH (USED)/PROVIDED BY OPERATING ACTIVITIES (101,579 NET CASH FLOW FROM INVESTING ACTIVITIES Realized (gain) loss 55,780 Reinvestment of interest and dividends (30,714) Proceeds from sale of investments 117,399 CASH (USED)/PROVIDED BY INVESTING ACTIVITIES 142,465 NET CASH FLOW FROM FINANCING ACTIVITIES - CASH (USED)/PROVIDED BY FINANCING ACTIVITIES - Net Increase in Cash 40,886 Beginning cash and cash equivalents 20,229 Ending Cash and Cash Equivalents $ 61,115 SUPPLEMENTAL DATA: Interest paid $ - In-kind donations $ 45,000 Taxes paid $ - See accompanying notes and accountants' report 4 SAN BERNARDINO SYMPHONY ORCHESTRA STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2015 See accompanying notes and accountants' report 5 General and Production Cost Administrative Fundraising Total Accounting $ - $ 19,631 $ - $ 19,631 Advertising 40,986 - - 40,986 Archive CDs 600 - - 600 Artist 9,325 - - 9,325 Board expense - 5,419 - 5,419 Brochures/printing 7,058 - 3,321 10,379 Conductor 35,000 - - 35,000 Contract services 71,140 - - 71,140 Credit card fees - 240 - 240 Employee benefits - 2,862 - 2,862 Guthrie expense 10,894 1,923 - 12,817 Insurance - 4,102 - 4,102 License/fees - 3,019 - 3,019 Miscellaneous - 526 - 526 Occupancy - 17,117 - 17,117 Office salaries 26,929 14,747 22,441 64,116 Orchestra 206,097 - - 206,097 Other concert expense 99,061 - - 99,061 Payroll service fees - 1,221 - 1,221 Payroll taxes - 51113 - 5,113 Stage hands 18,753 - - 18,753 Stage manager 3,000 - - 3,000 Supplies - 6,816 - 6,816 Web site design - 12,173 - 12,173 Bad Debt - 742 - 742 Total $ 528,843 $ 95,650 $ 25,762 $ 650,255 See accompanying notes and accountants' report 5 SAN BERNARDINO SYMPHONY ORCHESTRA NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2016 1. THE ORGANIZATION The San Bernardino Symphony Orchestra was founded in 1929 by Maestro James K. Guthrie, an internationally renowned conductor and community leader. The Orchestra is one of the longest -running and most prestigious in the Inland Empire, having completed 86 successful seasons. It was also the first fully professional ensemble of musicians in the region, boasting an unparalleled standard of musical performance under the dynamic leadership if its conductor, Maestro Frank Fetta. The San Bernardino Symphony Orchestra holds its subscription concerts in the California Theatre of the Performing Arts, a National Registry of Historic Places site. The Theater's unique aesthetics and acoustic design highlight the Symphony's deep and rich sound giving audiences an unmatched concert -going experience. The Mission of San Bernardino Symphony Orchestra is to present and maintain high quality, professional symphonic and classical music in San Bernardino County and the surrounding regions, and to foster and active music education program in the schools and in the larger community. The Symphony also maintains Maestro Guthrie's 5,000 -piece music collection as a rental library used extensively by colleges and symphonies nation wide. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The Symphony maintains its books on the accrual basis in accordance with accounting principles generally accepted in the United States of America. Basis of Presentation The San Bernardino Symphony Orchestra 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. Revenue Sources Revenues are received primarily from: dues, contributions, and ticket sales. Cash and Cash Eouivalents For purposes of the statements of cash flows, the Symphony considers cash and all highly liquid investments available for current use with an initial maturity of three months or less to be cash. Contributions Contributions received are recorded as increases in unrestricted, temporarily restricted, or permanently restricted net assets, depending on the existence or nature of any donor restrictions. All donor -restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires (i.e. 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. Promises to Give Unconditional promises to give are recognized as contribution revenue in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Promises to give are recorded at net realizable values if expected to be collected in one year and at fair value if expected to be collected in more than one year. Conditional promises to give are recognized when the conditions on which they depend are substantially met. NOTES TO FINANCIAL STATEMENTS (Continued) Property and Euuil)ment Acquisitions of property and equipment in excess of $1,000 are capitalized. Donated equipment is recorded at fair value at the date of the donation. Purchased property and equipment is recorded at cost. Depreciation ofproperty and equipment is provided over the estimated useful lives, which range from seven to ten years, of the respective assets using the straight-line method. Donated Materials, Facilities. and Services Significant services, materials and facilities may be donated to the agency by various individuals and organizations. Donations are recorded at fair market value at the date of donation, and are included in revenue and expenses. The agency receives primarily donated advertising in the yellow pages and the local news paper. Other Assets Other assets consist of sheet music which was bequeathed to the Agency in 1994. Subsequent purchases have been added to the inventory. Other assets are recorded at fair value at the date of the original gift, and subsequent purchases are recorded at cost. Investments Investments consist of common stocks, corporate bonds, and government bonds. Investments are carried at fair value. Fair Value Measurement of Assets & Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Symphony also follows a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use ofunobservable inputs when measuring fair value. Income Taxes The Symphony is exempt from federal income tax under Internal Revenue Code Section 501(c)(3) and from state franchise tax under Revenue and Taxation Code Section 23701d. The Symphony is classified as other than a private foundation by the Internal Revenue Service. In accordance with accounting standards, which provides accounting and disclosure guidance about uncertain tax positions taken by an organization, management believes that all of the positions taken by the Symphony in its federal and state income tax returns are more likely than not to be sustained upon examination. The Symphony files returns in the US Federal jurisdiction and the State of California. The Symphony's federal income tax returns for the prior three years remain subject to examination by the Internal Revenue Service. The Organization's California income tax return for the prior four years remain subject to examination by the Franchise Tax Board. 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. Concentration of Credit Risk The Symphony maintains cash deposited in financial institutions which are insured by the FDIC up to $250,000. Ticket Sales Ticket Sales received prior to the fiscal year to which they apply are not recognized as revenues until the year earned. Such sales are recorded as deferred revenue until recognized as revenue. NOTES TO FINANCIAL STATEMENTS (Continued) 3. 4. 5. PROPERTY AND EQUIPMENT The composition of property and equipment and related accumulated depreciation as of year-end is shown below. Equipment (Shell) $ 53,476 Office Equipment 1,962 55,438 Accumulated Depreciation (50,9011 Net Property and Equipment: $ 4,537 Depreciation expense for the year amounted to: $ - FAIR VALUE Fair value of investments at June 30, 2016, is comprised of the following: INVESTMENTS Investments as of June 30, 2016 are comprised of the following: Quoted Prices in Net Appreciation/ Investments: Cost Active Markets Significant Other Significant $ 813,056 $ 698,571 for Identical Observable Unobservable 6,030 Assets Inputs Inputs (114,485) Investments: (Level 1) (_Level 2) (Level 3) 6/30/2016 Mutual funds $ 698,571 $ - $ - $ 698,571 Money Market funds 6,030 - - 6,030 Total Investments 704,601 - - 704,601 Jones Trust 129,962 - - 129,962 $ 834,563 $ - $ - $ 834,563 INVESTMENTS Investments as of June 30, 2016 are comprised of the following: Net Appreciation/ Investments: Cost Fair Value Depreciation Mutual funds $ 813,056 $ 698,571 $ (114,485) Money Market funds 6,030 6,030 Total Investments 819,086 704,601 (114,485) Jones Trust 96,167 129,962 33,795 $ 915,253 $ 834,563 $ (80,690) Investment Return: Interest & dividends $ 30,714 Unrealized gain/(loss) 17,654 Realized gain/(loss) (55,780) Investment fees (2,501) Total Investment Return $ (9,913) NOTES TO FINANCIAL STATEMENTS (Continued) 6. ENDOWMENTS San Bernardino Symphony Orchestra interprets prudence laws to state that in lieu or donor stipulations it may use any and all funds in a prudent matter to achieve optimal return while adhering to mid and or low risk parameters such as general economic conditions. As of June 30, 2016, the Symphony was required to designate the Jones Trust and Evelyn Magnuson Trust as permanently restricted endowments. The Jones Trust is required to be held indefinitely in an investment account with all amounts over $100,000 to be used as support for the Symphony. The Evelyn Magnuson Trust is required to be held in an investment accounts with the interest income to be used to support Mozart concert to be performed by the Symphony. The value of the accounts is constantly monitored by the Symphony's management to ensure that the accounts are prudently maintained and planned strategies are achieved. Permanently restricted net assets are donor restricted and are compromised as follows: Temporarily Restricted: Permanently Restricted 7/1/2015 Appreciation(Net) Distributions 6/30/2016 Jones Trust (19 84) $ 100,000 $ - $ - $ 100,000 Evelyn Magnuson Check 100,000 - - 100,000 Total $ 200,000 $ - $ - $ 200,000 ��aWMyOkV Office Snace The Symphony entered into a month to month lease effective April 1, 2012. The monthly rent is $1,000. The administrative offices are located at 198 N Arrowhead Ave Suite 2-B, San Bernardino, CA 92408. The rent expense for the year was $12,000 of which $1,200 was allocated to the Guthrie Music Library expenses. Theater Rent The Symphony uses the California Theatre of Performing Arts for its performances. Each performance is under a license agreement. License agreements for each season are negotiated prior to the start of the season. As of June 30, 2016 all license agreements for the 2015-2016 Season were satisfactorily concluded. S. DEFERRED DEBT The Symphony currently has a promissory note with the City of San Bernardino for amounts due to the City which will be forgiven April 1, 2018. As of June 30, 2016, the balance of this loan was $135,542. 9. INVENTORY The Symphony currently maintains a large collection of historical music sheets in its Guthrie library. The rarity of the items allows the Symphony to account for the inventory using the specific identification method of inventory valuation. As of June 30, 2016, these items were valued at $371,958. 7/1/2015 Appreciation(Net) Distributions 6/30/2016 Guild $ 6,318 $ 49,522 $ (50,870) $ 4,970 Jones Trust (1984) - 29,962 (29,962) - Evelyn Magnuson 63,538 (3,580) (9,989) 49,969 Total $ 69,856 $ 75,904 $ (90,821) $ 54,939 Permanently Restricted 7/1/2015 Appreciation(Net) Distributions 6/30/2016 Jones Trust (19 84) $ 100,000 $ - $ - $ 100,000 Evelyn Magnuson Check 100,000 - - 100,000 Total $ 200,000 $ - $ - $ 200,000 ��aWMyOkV Office Snace The Symphony entered into a month to month lease effective April 1, 2012. The monthly rent is $1,000. The administrative offices are located at 198 N Arrowhead Ave Suite 2-B, San Bernardino, CA 92408. The rent expense for the year was $12,000 of which $1,200 was allocated to the Guthrie Music Library expenses. Theater Rent The Symphony uses the California Theatre of Performing Arts for its performances. Each performance is under a license agreement. License agreements for each season are negotiated prior to the start of the season. As of June 30, 2016 all license agreements for the 2015-2016 Season were satisfactorily concluded. S. DEFERRED DEBT The Symphony currently has a promissory note with the City of San Bernardino for amounts due to the City which will be forgiven April 1, 2018. As of June 30, 2016, the balance of this loan was $135,542. 9. INVENTORY The Symphony currently maintains a large collection of historical music sheets in its Guthrie library. The rarity of the items allows the Symphony to account for the inventory using the specific identification method of inventory valuation. As of June 30, 2016, these items were valued at $371,958. NOTES TO FINANCIAL STATEMENTS ( Continued f 10. SPECIAL EVENTS The Symphony fundraising activities for the year are as follows: Direct Special Revenue Expenses Events Net Guild Fundraising $ 48,644 $ 14,037 $ 34,65-7- 11. ACCOUNTS RECEIVABLE The Symphony's accounts receivable consist of the following: Accounts receivable Accounts receivable $ 1,142 Accounts receivable - Guthrie 1,889 Barter receivable 16,028 19,059 Less: Allowance for uncollectable receivables (742) Total accounts receivable $ 18,317 12. IN-KIND The Symphony receives free from local media outlets for the promotions of its performances. As of June 30, 2016, the value of the advertising was estimated at $40,000. The Symphony also receives free meeting space six times during the year. The value of the meeting space was estimated at $5,000. 13. DEFERRED REVENUE The Symphony currently has deferred revenue designated for the upcoming season: Deferred Season Deferred Grant Funds Total Deferred Revenue 14. SUBSEQUENT EVENTS $ 39,500 55,236 $ 94,064 Accounting standards require that San Bernardino Symphony Orchestra assess and disclose the date and the basis for that date through which potential subsequent events have been evaluated. The date represents the date the financial statements were issued or were available to be issued. The Symphony evaluated all potential subsequent events as of November 7, 2016 when the financial statements were authorized and available to be issued. No subsequent events or transactions were identified after the balance sheet date or as of November 7, 2016 that require disclosure in the financial statements. 10