FINANCIAL STATEMENTS 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, 1991, and the related statements of revenue, expenses and changes in fund balance, cash flows and functional expenses for the year then ended. We previously audited and reported upon the financial statements of the Commission for the year ended June 30, 1990, which condensed statements are included for comparative purposes only. 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 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, 1991, 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. September 6, 1991 COMMISSION ON PRESERVATION AND ACCESS BALANCE SHEET June 30, 1991 (with comparative totals for 1990) ASSETS Totals 1991 1990 Cash and cash equivalents, including restricted amounts of $1,887,503 in 1991 and $2,429,982 in 1990 $2,613,613 $3,008,549 Grants receivable (Notes 1, 2 and 4) 66,667 283,333 Prepaid expenses and other receivables 4.457 2,337 Total assets $2,684,737 $3,294,219 LIABILITIES AND FUND BALANCE Accounts payable and accrued expenses (Note 4) $ 39,632 $ 40,112 Contracts payable (Note 2): Unrestricted 29,679 39,525 Restricted 323,696 146,555 Deferred revenue (Notes 1 and 2): Unrestricted 66,667 283,333 Restricted 1,563,807 2,283,427 Total liabilities 2,023,481 2,792,952 Fund balance 661,256 501,267 Total liabilities and fund balance $2,684,737 $3,294,219 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, 1991 (with comparative totals for 1990) Totals Totals Unrestricted Restricted 1991 1990 Revenue (Note 2): Grant $216,666 $719,620 $ 936,286 $ 619,423 Contributions 267,524 - 267,524 325,500 Interest 59,925 151,255 211,180 209,753 Total revenues 544,115 870 875 1,414,990 1,154,676 Expenses (Notes 2 and 4): Program: National Preservation Program 268,575 - 268,575 281,993 Research and Publications 63,666 - 63,666 76,700 International Project - 128,303 128,303 64,283 International Project II - 494,400 494,400 Advisory Committees - 71 763 71,763 62,769 Technology Assessment - 81 052 81,052 189,149 Text and Image Project - 22,758 22,758 200,000 Communications - 72,599 72,599 41,735 Total program expenses 332,241 870,875 1,203,116 916,629 Administration 51,885 - 51,885 57,230 Total expenses 384,126 870,875 1,255,001 973,859 Excess of revenue over expenses 159,989 - 159,989 180,817 Fund balance, beginning of year 501,267 - 501,267 320,450 Fund balance, end of year $661,256 $ - $ 661,256 $ 501,267 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, 1991 (with comparative totals for 1990) Totals Totals Unrestricted Restricted 1991 1990 Cash flows from operating activities: Excess of revenue over expenses $ 159,989 $ - $ 159,989 $ 180,817 Adjustments to reconcile excess of revenue over expenses to net cash (used in) provided by operating activities: Decrease (increase) in grants receivable 216,666 - 216,666 (133,333) (Increase) decrease in prepaid expenses and other receivables (2,120) - (2,120) 2,151 (Decrease) increase in deferred revenue (216,666) (719,620) (936,286) 934,577 (Decrease) increase in contracts payable (9,846) 177,141 167,295 82,705 Decrease in accounts payable and accrued expenses (480) - (480) (18.600) Total adjustments (12.446) (542,479) (554,925) 867.500 Net cash provided by (used in) operating activities 147,543 (542,479) (394,936) 1,048,317 Cash and cash equivalents, beginning of year 578.567 2,429,982 3,008,549 1,960,232 Cash and cash equivalents, end of year $ 726,110 $1,887,503 $2,613,613 $3,008,549 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, 1991 (with comparative totals for 1990) National Research and International International Advisory Technology Text and Preservation Publications Project Project 11 Committees Assessment Image Project Communications Total Totals Totals Program (Hewlett) (Mellon) (Mellon) (Mellon) (Mellon) (Getty) (Mellon) Program Administration 1991 1990 Unrestricted: Contracts $ - $30,179 $ - $ - $ - $ - $ - $ - $ 30,179 $ - $ 30,179 $ 71,700 Refunds and overappropriations (12,917) (5,580) - - - - - - (18,797) - (18,797) - staff and travel 178,042 223 - - - - - - 178,265 28,961 207,226 214,282 Meetings and consultants - 31,368 - - - - - - 31,368 - 31,368 6,264 Board expenses - 11,111 11,111 12,803 Support services including - - office expenses 103,450 7,776 - - - - - - 111,226 11,813 123,039 110,874 332,241 51,885 384,126 Restricted: Contracts - - - 494,400 - 16,000 - - 510,400 - 510,400 339,409 Refunds and overappropriations (9 985) - - (9,985) - (9,985) Staff and travel - - 23,479 - 13,548 23,447 26 36,339 96,869 - 96,869 72,405 Meetings 27,307 12,957 20,788 - 61,042 - 61,042 51,842 Consultants - - 102,067 - 29,834 37,783 1,941 750 172,375 - 172,375 63,376 Support services including office expenses - - 2,757 - 1,074 820 13 35,510 40,174 - 40,174 28,062 - - 128,303 494,400 71,763 81,052 22,758 72,599 870,875 - 870,875 557,936 Total expenses $268,575 $63,666 $128,303 $494,400 $71,763 $81,052 $22,758 $72,559 $l,203,116 $51,885 $1,255,001 $973,859 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 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'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 conducts 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: Basis of accounting The financial statements of the Commission have been prepared on the accrual basis. 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 recognized 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 payments specified by the grantor. Contributions Contributions for general support of the Commission are recognized as revenue when received. 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 approximates market. Cash equivalents represent investments with original maturities of 90 days or less. The Commission invests its excess cash in deposits with a major bank, treasury bills and in money market mutual funds. These securities typically mature within ninety days and, therefore, bear minimal risk. 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 directly 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) and under applicable regulations of the District of Columbia. 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, 1991 the Council owed $66,667 under the terms of the general support grant. The Commission entered into an agreement with the Council effective July 1, 1988 under whiCh the Council provides 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 1991, the Commission's share was 25%. For fiscal year 1991, direct expenses of $292, 200 and other overhead costs of $94,400 were charged to the Commission. At June 30, 1991, the Commission owed the Council $26, 739 under the terms of this agreement.