Coopers & Lybrand certified public accountants Report of Independent Accountants To the Board of Directors Commission on Preservation and Access We have audited the accompanying balance sheet of Commission on Preservation and Access (the Commission) as of June 30, 1990, and the related statements of revenue, expenses and changes in fund balance, cash flows and functional expenses for the year then ended. 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. The financial statements of the Commission as of June 30, 1989, were audited by other auditors, whose report dated August 21, 1989, expressed an unqualified opinion on those statements, from which condensed statements are included for comparative purposes only. We also reviewed the adjustment described in Note 5 that was applied to restate the 1989 financial statements. In our opinion, such adjustment is appropriate and has been properly applied to the 1989 financial statements. We conducted our audit in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Commission on Preservation and Access as of June 30, 1990, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Cooper & Lybrand Washington, D.C. August 31, 1990 COMMISSION ON PRESERVATION AND ACCESS BALANCE SHEET June 30, 1990 (with comparative totals for 1989) ASSETS Totals 1990 1989 Cash and cash equivalents, including restricted amount of $2,429,982 in 1990 and $1,487,308 in 1989 $3,008,549 $1,960,232 Grants receivable (Notes 1, 2 and 4) 283,333 150,000 Prepaid expenses and other receivables 2,337 4,488 Total assets $3,294,219 $2,114,720 LIABILITIES AND FUND BALANCE Accounts payable and accrued expenses (Note 4) $ 40,112 $ 58,712 Contracts payable (Note 2): Unrestricted 39,525 48,250 Restricted 146,555 55,125 Deferred revenue (Notes 1, 2 and 5): Unrestricted 283,333 200,000 Restricted 2,283,427 1,432,183 Total liabilities 2,792,952 1,794,270 Fund balance - unrestricted (Note 5) 501,267 320,450 Total liabilities and fund balance $3,294,219 $2,114,720 The accompanying notes are an integral part of these financial statements. COMMISSION ON PRESERVATION AND ACCESS STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND BALANCE for the year ended June 30, 1990 (with comparative totals for 1989) Totals Totals Unrestricted Restricted 1990 1989 Revenue (Notes 2 and 5): Grant $216,667 $402,756 $ 619,423 $ 634,945 Contributions 325,500 - 325,500 240,075 Interest 54,573 155.180 209,753 97,983 Total revenues 596,740 557,936 1,154 676 973,003 Expenses (Notes 2 and 4): Program: National Preservation Program 281,993 - 281,993 441,189 Research and Publications 76,700 - 76,700 - International Project - 64,283 64,283 71,059 Advisory Committees - 62,769 62,769 55,837 Technology Assessment - 189,149 189,149 14,081 Seminar on Scholarly Resources in Art History - - - 19,528 Text and Image Project - 200,000 200,000 - Communications - 41,735 41,735 - Total program expenses 358,693 557,936 916,629 601,694 Administration 57,230 - 57,230 50,859 Total expenses 415,923 557,936 973,859 652,553 Excess of revenue over expenses 180,817 - 180,817 320,450 Fund balance, beginning of year 320,450 - 320,450 - Fund balance, end of year (Note 5) $501,267 $ - $ 501.267 $ 320,450 The accompanying notes are an integral part of these financial statements. COMMISSION ON PRESERVATION AND ACCESS STATEMENT OF CASH FLOWS for the year ended June 30, 1990 (with comparative totals for 1989) Totals 1990 1989 Cash flows from operating activities: Excess of revenue over expenses $ 180,817 $ 320,450 Adjustments to reconcile excess of revenue over expenses to net cash provided by operat- ing activities: Increase in grants receivable (133,333) (150,000) Decrease (increase) in prepaid expenses and other receivables 2,151 (4,488) Increase in deferred revenue 934,577 1,632,183 Increase in contracts payable 82,705 103,375 (Decrease) increase in accounts payable and accrued expenses (18,600) 58,712 Total adjustments 867,500 1,639,782 Net cash provided by operating activities 1,048,317 1,960,232 Cash and cash equivalents, beginning of year 1,960,232 Cash and cash equivalents, end of year $3,008,549 $1,960,232 The accompanying notes are an integral part of these financial statements. COMMISSION ON PRESERVATION AND ACCESS STATEMENT OF FUNCTIONAL EXPENSES for the year ended June 30, 1990 (with comparative totals for 1989) National Research and International Advisory Technology Text and Communini- Preservation Publications Project Committees Assessment Image Project cations Total Admini- Totals Totals Program (Hewlett) (Mellon) (Mellon) (Mellon) (Getty) (Mellon) Program stration 1990 1989 Unrestricted: Contracts $ - $71,700 $ - $ - $ - $ - $ - $ 71,700 $ - $ 71,700 $141,650 Staff and travel 180,912 - - - - - - 180,912 33,370 214,282 197,726 Meetings and consultants 1,264 5,000 - - - - - 6,264 - 6,264 742 Board expenses - - - - - - - - 12,803 12,803 9,291 Support services including office expenses 99,817 - - - - - - 99,817 11,057 110,874 142,639 281,993 76,700 - - - - - 358,693 57,230 415,923 492,048 Restricted Contracts - - 8,854 5,000 125,555 200,000 - 339,409 - 339,409 55,125 Staff and travel - - 22,288 13,383 22,202 - 14,532 72,405 - 72,405 13,318 Meetings - - 11,543 23,851 16,290 - - 51,684 - 51,684 51,220 Consultants - - 21,504 19,770 25,102 - - 66,376 - 66,367 39,063 Support services including office expenses - - 94 765 - - 27,203 28,062 - 28,062 1,779 - - 64,283 62,769 189,149 200,000 41,735 557,936 - 557,936 160,505 Total expenses $281,993 $76,700 $64,283 $62,769 $189,149 $200,000 41,735 $916,629 $57,230 $973,859 $652,553 The accompanying notes are an integral part of these financial statements. COMMISSION ON PRESERVATION AND ACCESS NOTES TO FINANCIAL STATEMENTS 1. Organization The Commission on Preservation and Access (the 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 pur- poseful collaboration in order to ensure the preservation of the published and documentary record in all formats and pro- vide equitable access to that information. The Commission's operations are financed through contributions from academic and research institutions, and through general support grants and restricted grants from private foundations and other sources. The Commission con- ducts its work directly through committees and working groups as well as through contracts with other organizations and individuals. 2. Summary of significant accounting policies The significant accounting policies followed in the preparation of the financial statements are described below: Grant revenue Grants to the Commission are recorded in the balance sheet as grants receivable and as deferred grant revenues when awarded. Revenues and interest income earned on restricted grant funds are recog- nized only to the extent of expenditures that satisfy the restricted purpose of these grants. Unrestricted grant revenue is recognized as income in accordance with the budgeted annual pay- ments specified by the grantor. Contributions Contributions for general support of the Com- mission are recognized as revenue when received. COMMISSION ON PRESERVATION AND ACCESS NOTES TO FINANCIAL STATEMENTS Contracts payable Contracts made by the Commission are recorded in the balance sheet as contracts payable and as an expense at the time recipients are awarded the contracts. That normally occurs after the Board of Directors has approved the contracts, which are generally payable within one year. 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 approxi- mates market. Cash equivalents represent invest- ments with original maturities of 90 days or less. 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 serv- ices costs have been allocated to programs and administration on a systematic basis. These costs primarily include salary, benefits, rent and other expenses. 3. Income taxes The Commission is exempt from Federal income tax under Internal Revenue Code section 501(c)(3). 4. Council on Library Resources, Inc. During fiscal year 1989, the Commission received grants totaling approximately $2,267,000 from the Council on Library Resources, Inc. (the Council). Included in this amount was a general support grant from the Council totaling $200,000. The remaining $2,067,000 was the deferred balance of restricted grants and contributions for support of the Commission's preservation program received by the Council prior to the Commission's date of incorporation. At June 30, 1990 and 1989, the Council owed $133,333 and $150,000, respectively, under the terms of the general support grant. COMMISSION ON PRESERVATION AND ACCESS NOTES TO FINANCIAL STATEMENTS The Commission entered into an agreement with the Council effective July 1, 1988 under which the Council pro- vides office space, employee services including benefits, 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 1990, the Commission's share was 25%. The total amount of expenses and other overhead costs charged to the Commission for fiscal year 1990 amounted to $356,400. At June 30, 1990 and 1989, the Commission owed the Council $30,173 and $54,124, respectively, under the terms of this agreement. 5. Prior period adjustment All of the Commission's current restricted grants require that any interest earned on the unspent grant awards held by the Commission be expended for the purposes described in the grant awards. During fiscal year 1989, the Commission had earned interest income on one of the undisbursed re- stricted grant awards and had recorded this interest as unrestricted interest income. In order to properly reflect restricted grant revenue for 1989, the following amounts at June 30, 1989, which are included in this report for compara- tive purposes only, have been restated: As Previously Reported As Restated Grant revenue - restricted $ 160,505 $ 37,345 Deferred revenue - restricted 1,309,023 1,432,183 Excess of revenue over expenses 443,610 320,450 Fund balance 443,610 320,450