September 1989
COMMISSION ON PRESERVATION AND ACCESS FINANCIAL STATEMENTS JUNE 30, 1989 1801 K Street N W Telephone 202 833 7932 Washington. DC 20006 Price-Waterhouse Report of Independent Accountants August 21, 1989 To the Board of Directors of Commission on Preservation and Access In our opinion, the accompanying balance sheet and the related statements of revenues, expenses and changes in fund balance, of cash flows and of functional expenses present fairly, in all material respects, the financial position of the Commission on Preservation and Access at June 3C, 1989, and the results of its operations, its functional expenses and its cash flows for the year in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Commission's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. [signed "Price Waterhouse"] COMMISSION ON PRESERVATION AND ACCESS BALANCE SHEET JUNE 30, 1989 ASSETS Cash and cash equivalents, including restricted amount of $1,364,148 $1,960,232 Grants receivable (Notes 1 and 2) 150,000 Prepaid expenses and deposits 4,488 Total assets $2,114,720 LIABILITIES AND FUND BALANCE Deferred revenue (Notes 1 and 2) Unrestricted $ 200,000 Restricted 1,309,023 Contracts payable (Note 2) Unrestricted 48,250 Restricted 55,125 Accounts payable and accrued employee benefits 58,712 Total liabilities 1,671,110 Fund balance 443,610 Total liabilities and fund balance $2,114,720 COMMISSION ON PRESERVATION AND ACCESS STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30. 1989 Total Unrestricted Restricted 1989 Revenues (Note 2) Grants $597,600 $160,505 $ 758,105 Contributions 240,075 240,075 Interest 97,983 97,983 ------- ------- ------- Total revenues 935,658 160,505 1,096,163 ------- ------- --------- Expenses (Notes 2, 3 and 4) Program National Preservation Program 441,189 441,189 International Project 71,059 71,059 Advisory Committees 55,837 55,837 Seminar on Scholarly Resources in Art History 19,528 19,528 Technology Assessment 14,081 14,081 ------- ------ ------ Total program 441,189 160,505 601,694 ------- ------- ------- Administration 50,859 50,859 ------ ------ Total expenses 492,048 160,505 652,553 ------- ------- ------- Excess of revenues over expenses 443,610 443,610 Fund balance, beginning of year - - - Fund balance, end of year $443.610 $ - $ 443.610 ======= ======= ======== COMMISSION ON PRESERVATION AND ACCESS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30. 1989 Cash flows from operating activities: Excess of revenues over expenses $ 443,610 ------- Adjustments to reconcile excess of revenue over expenses to net cash provided by operating activities: Increase in grants receivable (150,000) Increase in prepaid expenses and deposits (4,488) Increase in deferred revenue 1,509,023 Increase in contracts payable 103,375 Increase in accounts payable and accrued employee benefits 58,712 --------- Total adjustments 1,516,622 --------- Net cash provided by operating activities 1,960,232 Cash and cash equivalents, beginning of year - --------- Cash and cash equivalents, end of year $1.960.232 ========= COMMISSION ON PRESERVATION AND ACCESS STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 1989 Seminar on Scholarly Inter- Resources National national Advisory in Technology Total Admin- Total Preservation Project Committees Art Assessment Program istration Program History Unrestricted Contracts $141,650 $141.650 $141.650 Staff and travel 170,118 170,118 $27.608 197,726 Meetings 742 742 742 Board expenses 9,291 9,291 Communications 3,442 3,442 3,442 Support services 125,237 125,237 13,960 139,197 ------- ------ ------ ------ ------ ------ ------ ------- 441,189 441,189 50,859 492,048 ------- ------ ------ ------ ------ ------ ------ ------- Restricted Contracts $53.125 $ 2,000 55,125 55,125 Staff and travel 12,784 $ 534 13,318 13,318 Meetings 29,455 18,542 $ 3,223 51,220 51,220 Consultants 17,823 10,382 10,858 39,063 39,063 Support services 111 1,216 452 1,779 1,779 ------- ------ ------ ------ ------ ------ ------ ------- 71.059 55,837 19,528 14,081 160,505 160,505 ------- ------ ------ ------ ------ ------ ------ ------- Total expenses $441,189 $71.059 $55.837 $19.528 $14.081 $601.694 $50.859 $652.553 ======= ====== ====== ====== ====== ======= ====== ======= COMMISSION ON PRESERVATION AND ACCESS NOTES TO FINANCIAL STATEMENTS JUNE 30, 1989 NOTE 1 - ORGANIZATION The Commission on Preservation and Access (Commission) is a non-profit organization incorporated under the laws of the District of Columbia in 1988 for the purpose of fostering, developing, and supporting systematic and purposeful collaboration in order to ensure the preservation of the published and documentary record in all formats and provide equitable access to that information. The Commission is exempt from Federal income tax under Internal Revenue Code section 501(c)(3). During fiscal year 1989, the Commission received grants totalling approximately $2,267,000 from the Council on Library Resources (Council). Of these grants, $150,000 and $1,509,023 are recorded as a grant receivable and as deferred revenue, respectively, at June 30, 1989. The Commission's operations are also financed through contributions from academic and research institutions, and through general support grants and restricted grants from private foundations and other sources. Of the Council grants, $2,067,000 was the deferred balance of restricted grants and contributions for support of the preservation program received by the Council prior to the Commission's date of incorporation. The Commission conducts its work directly through committees and working groups as well as through contracts with other organizations and individuals. Certain members of the Commission's Board of Directors are also members of the Council's Board of Directors. However, as these members are in the minority and there are no other elements of managerial or financial control, these two entities have not been consolidated. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICES The Commission's financial statements have been prepared on the accrual basis of accounting except for the costs of office furniture and equipment which are consistently charged to expense when incurred. The Commission does not consider such expenditures to be material to warrant capitalization and depreciation. The significant accounting policies followed in the preparation of the financial statements are described below. Grants Grants are recorded as receivables and deferred revenue when the Commission is notified that it has been awarded the funds. Unrestricted grant revenue is recognized as income in accordance with the budgeted annual payments specified by the grantor. Restricted grant revenue is recognized when the related expenses are incurred. Contract expenses are recorded when the recipients are notified that they are to receive the funds. Current period expenses are reduced for contract refunds and overappropriations. Contributions Contributions for general support of the Commission are recognized as revenue when received. Cash and cash equivalents Cash and cash equivalents, which primarily consist of treasury bills and deposits in a money market fund, are recorded at cost which approximates market. Cash equivalents represent investments with original maturities of 90 days or less. Interest is not restricted by the related grants and accordingly is recognized as unrestricted revenue. Functional allocation of expenses Costs of providing the various programs of the Commission have been summarized on a functional basis in the accompanying financial statements. Certain indirect costs identified as support services costs have been allocated to Programs and administration on a systematic basis. These costs primarily include salary, benefits, rent and other expenses. NOTE 3 - RETIREMENT PLAN Commission staff members are employees of the Council and receive the same benefits as members of the Council. Employees are eligible for participation in a defined contribution retirement annuity program administered through the TIAA/CREF insurance companies. Individual contracts issued under the plan provide for full and immediate vesting of both the Commission's and employees' contributions. The Commission's contribution was approximately $26,000 for fiscal year 1989. NOTE 4 - COMMITMENTS The Commission entered into an agreement with the Council effective July 1, 1988 under which the Council provides office space, employee services, equipment, supplies and other overhead items to the Commission. The percentage of shared overhead costs charged to the Commission is negotiated annually. For fiscal year 1989, the Commission's share was 25%. Contract expenses are recorded when the recipients are notified that they are to receive the funds. Current period expenses are reduced for contract refunds and overappropriations. Contributions Contributions for general support of the Commission are recognized as revenue when received. Cash and cash equivalents Cash and cash equivalents, which primarily consist of treasury bills and deposits in a money market fund, are recorded at cost which approximates market. Cash equivalents represent investments with original maturities of 90 days or less. Interest is not restricted by the related grants and accordingly is recognized as unrestricted revenue. Functional allocation of expenses Costs of providing the various programs of the Commission have been summarized on a functional basis in the accompanying financial statements. Certain indirect costs identified as support services costs have been allocated to Programs and administration on a systematic basis. These costs primarily include salary, benefits, rent and other expenses. NOTE 3 - RETIREMENT PLAN Commission staff members are employees of the Council and receive the same benefits as members of the Council. Employees are eligible for participation in a defined contribution retirement annuity program administered through the TIAA/CREF insurance companies. Individual contracts issued under the plan provide for full and immediate vesting of both the Commission's and employees' contributions. The Commission's contribution was approximately $26,000 for fiscal year 1989. NOTE 4 - COMMITMENTS The Commission entered into an agreement with the Council effective July 1, 1988 under which the Council provides office space, employee services, equipment, supplies and other overhead items to the Commission. The percentage of shared overhead costs charged to the Commission is negotiated annually. For fiscal year 1989, the Commission's share was 25%.