DRAFT FOR DISCUSSION ONLY
DRAFT FOR DISCUSSION ONLY
SEAWAY VALLEY COMMUNITY HEALTH CENTRE INC.
March 31, 2015CONTENTS
Page INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statement of Financial Position 2
Statement of Financial Activities and Changes in Net Assets 3
Statement of Cash Flows 4
DRAFT FOR DISCUSSION ONLY
To The Board of Directors ofSeaway Valley Community Health Centre Inc.
We have audited the accompanying financial statements of Seaway Valley Community Health Centre Inc., which comprise the statement of financial position as at March 31, 2015 and the statements of financial activities and changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of Seaway Valley Community Health Centre Inc. as at March 31, 2015 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.
Craig Keen Despatie Markell LLP
Cornwall, Ontario
Chartered Professional Accountants
June 24, 2015
Licensed Public Accountants
DRAFT FOR DISCUSSION ONLY
SEAWAY VALLEY COMMUNITY HEALTH CENTRE INC.
STATEMENT OF FINANCIAL POSITION
As at March 31, 2015 2015 2014 ASSETS CURRENT Cash $ 180,493 $ 193,606 Accounts receivable 82,840 84,285 Prepaid expenses 4,000 -267,333 277,891 CAPITAL (Note 2) 1,811,162 1,973,886 $ 2,078,495 $ 2,251,777 LIABILITIES CURRENT
Accounts payable (Note 3) $ 259,605 $ 278,377
Due to Ministry of Health, operating recovery (Note 4) 51,295 44,130
310,900 322,507
DEFERRED CAPITAL CONTRIBUTIONS (Note 5) 1,743,950 1,906,675
2,054,850 2,229,182
NET ASSETS
NET ASSETS 23,645 22,595
$ 2,078,495 $ 2,251,777
APPROVED ON BEHALF OF THE BOARD:
_____________________________ Director _____________________________ Director _____________________________ Date
See Accompanying Notes
DRAFT FOR DISCUSSION ONLY
STATEMENT OF FINANCIAL ACTIVITIES AND CHANGES IN NET ASSETS
For the year ended March 31, 2015 2015 2014
REVENUE
Ministry of Health
Base funding $ 2,506,103 $ 2,498,863 Base funding, one-time 98,412 124,855
Cardiac Rehab 28,333
Cardiac Rehab, one-time funding 13,325
2,646,173 2,623,718
Falls Prevention 47,874 70,042
Primary Care Outreach 129,276
-Respiratory Therapy 82,131
-Telemedicine 150,544 139,343
Interest and other 45,460 39,063
3,101,458 2,872,166
EXPENDITURES
Administration 3,343 2,948
Advertising 4,497 3,123
Bank charges and payroll fees 6,677 7,765
Contracted services 17,866 -Insurance 13,512 18,990 Maintenance - building 56,415 49,750 Maintenance - equipment 9,067 3,811 Medical supplies 10,029 24,593 Memberships 31,353 22,020 Minor equipment 43,710 73,496 Occupancy costs 253,133 252,873 Office supplies 128,252 81,929 Professional fees 35,290 43,248 Training 30,189 24,187
Transfer to deferred capital contributions 47,917 52,880
Travel 31,894 23,367
Wages and benefits 2,367,368 2,142,012
3,090,512 2,826,992
SURPLUS BEFORE OTHER ITEMS 10,946 45,174
OTHER ITEMS
Settlement, current year 9,896 41,399
Amortization of deferred capital contributions (210,642) (219,779) Amortization of capital assets 210,642 219,779
9,896 41,399
NET SURPLUS FOR THE YEAR 1,050 3,775
NET ASSETS, beginning of year 22,595 18,820
NET ASSETS, end of year $ 23,645 $ 22,595
See Accompanying Notes
DRAFT FOR DISCUSSION ONLY
SEAWAY VALLEY COMMUNITY HEALTH CENTRE INC.
STATEMENT OF CASH FLOWS
For the year ended March 31, 2015
2015 2014
CASH (USED IN) FROM OPERATING ACTIVITIES
Net surplus for the year $ 1,050 $ 3,775
Items not affecting working capital balances
Amortization of deferred capital contributions (210,642) (219,779)
Amortization of capital assets 210,642 219,779
Changes in non-cash working capital balances
Accounts receivable 1,445 (33,496)
Prepaid expenses (4,000)
-Accounts payable (18,772) 149,056
Due to Ministry of Health, operating recovery 7,164 3,851 Deferred contributions - community partners donation - (16,240)
(13,113) 106,946
CASH USED IN INVESTING ACTIVITIES
Purchase of equipment and leaseholds (47,917) (52,880)
CASH USED IN FINANCING ACTIVITIES
Increase in deferred capital contributions 47,917 52,880
(DECREASE) INCREASE IN CASH (13,113) 106,946
CASH, beginning of year 193,606 86,660
CASH, end of year $ 180,493 $ 193,606
REPRESENTED BY:
Cash $ 180,493 $ 193,606
See Accompanying Notes
DRAFT FOR DISCUSSION ONLY
NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2015
NATURE OF THE ORGANIZATION
The Centre's mandate is to provide, administer and maintain a health care facility for the residents of Cornwall and surrounding areas. The Centre is a registered charity and is exempt from income tax.
1. SIGNIFICANT ACCOUNTING POLICIES
These financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations, and include the following significant accounting policies:
(a) Use of estimates
The preparation of these financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the current period. These estimates are reviewed periodically and adjustments are made to income as appropriate in the year they become known. Significant items subject to such estimates and assumptions include the estimated useful lives of capital assets and the valuation of allowances for doubtful accounts receivable. Actual results could differ from those estimates.
(b) Revenue and expenditure recognition
The Centre follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenditures are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.
Expenditures are recorded when paid and operating payables are recorded using a modified accrual basis to match the revenues and expenditures.
(c) Cash and equivalents
Cash is comprised of cash on hand and cash on deposit. (d) Capital assets
Capital assets are recorded at cost. Amortization is calculated to write off the cost less estimated residual value over the estimated life of the asset. Residual values, where applicable, are reviewed annually for equivalently aged assets and amortization rates adjusted accordingly on a prospective basis. The following rates and methods have been used:
Leaseholds - 15 years straight-line
Equipment, information systems - 3 and 5 years straight-line Equipment, non-information systems - 5, 10 and 20 years straight-line
DRAFT FOR DISCUSSION ONLY
SEAWAY VALLEY COMMUNITY HEALTH CENTRE INC.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2015
2. CAPITAL
Accumulated Net Net
Cost Amortization 2015 2014
Leaseholds $ 1,943,005 $ 535,119 $ 1,407,886 $ 1,526,142
Equipment, information systems 163,953 110,724 53,229 48,026 Equipment, non-information systems 610,817 260,770 350,047 399,718
$ 2,717,775 $ 906,613 $ 1,811,162 $ 1,973,886 3. ACCOUNTS PAYABLE
Included in accounts payable are government remittances of $1,618 (2014 - $1,550).
4. DUE TO MINISTRY OF HEALTH
Operating recovery
The Ministry of Health requires that a year-end calculation be performed to establish whether there has been an overpayment or underpayment of grants based on actual costs and revenues. Based on the calculations, the balance recoverable by the Ministry of Health is as follows:
2015 2014
Due to Ministry of Health, 2015 settlement $ 9,896 $
-Due to Ministry of Health, 2014 settlement 41,399 41,399
Due to Ministry of Health, 2013 settlement - 2,731
Operating recovery, end of year $ 51,295 $ 44,130
5. DEFERRED CAPITAL CONTRIBUTIONS
Deferred capital contributions related to leasehold and equipment acquisitions represent the unamortized amount of grants and donations received for the purchase of these assets. The amortization of capital contributions is recorded as revenue in the statement of financial activities based on the life of the asset purchased, less the estimated residual value.
2015 2014
Balance, beginning of year $ 1,906,675 $ 2,073,574
Amortization (210,642) (219,779)
Transferred from operations 47,917 52,880
Balance, end of year $ 1,743,950 $ 1,906,675
DRAFT FOR DISCUSSION ONLY
NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2015
6. COMMITMENTS
The future minimum annual lease payments as of March 31, 2015 under operating leases are as follows:
2014 $154,580 2015 $156,270 2016 $156,270 2017 $156,270 2018 $156,270 7. ECONOMIC DEPENDENCE
The Centre is economically dependent on the continued funding from the Ministry of Health through the Champlain LHIN.
8. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform with the financial statements presentation adopted for the current year.
9. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Risks and concentrations
The Centre is exposed to various risks through its financial instruments. The following analysis provides a measure of the centre's risk exposure and concentrations at the balance sheet date.
Liquidity risk
Liquidity risk is the risk that the Centre will not be able to meet its obligations associated with financial liabilities. The Centre meets its liquidity requirements by preparing and monitoring detail forecast of cash flows from operations and holding assets that can be readily converted into cash.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Centre is exposed to credit risk in the event of non-performance by counterparties in connection with its accounts receivable. Accounts receivable arise primarily from amounts due from the LHIN and HST rebates. The maximum exposure to credit risk is the carrying value of accounts receivable on the balance sheet. Management believes concentrations of credit risk with respect to amounts receivable is limited due to the nature of the receivables.
