FW: CHELSEA ED 12/31/16 DRAFT

[Meagan Westcott]

Good Afternoon!

Please see the information below from our CPA – this is regarding the topic of our conversation last night on the approval of our audit.

 

Thanks,

Meagan

 

From: Paul [mailto:Pa...@bertcocpa.com]
Sent: Wednesday, March 29, 2017 3:41 PM
To: Meagan Westcott <mwes...@afsmith.com>
Cc: Ken Berthiaume <K...@bertcocpa.com>
Subject: RE: CHELSEA ED 12/31/16 DRAFT

 

Hi Meagan-

 

Happy to help, this does take a bit of explain because it’s not a very straight forward topic. Your endowment fund is made up of two separate pieces; the reciprocal transfer portion and third party portion.

 

The attached letter from the Community Foundation will help to illustrate this, but essentially funds that CEF contributed to the endowment directly are legally structured as what is called a reciprocal transfer. ($51,052 at 12/31/16) The significance of this is that these funds remain on your books and reported as your asset. On the other hand, funds that were contributed by third donors to the endowment fund for CEF’s benefit are legally considered assets of the Community Foundation. ($28,455 at 12/31/16) Therefore, because you have a beneficial interest in the funds, but do not legally own them, this portion is only shown in the footnotes and not on the face of your Statement of Financial Position. The total market value of the endowment fund at 12/31/16 was the combination of these, or $79,507.

 

You will also notice on your Statement of Activities, grants received from the third party portion ($1389) are treated in a similar manner as any other unrestricted contributions. The reciprocal transfer portion’s activity on the other hand has all activity reported (grants paid, fees, and changes in value, net amount $3,494) Then the grant portion ($2,565)that was actually disbursed is shown as being released from restriction.

 

As I mentioned, I think the schedules on the attached document will help immensely, but if you would like to discuss it further, perhaps over the phone would make it easier.

 

I hope that helps.

 

Thanks Meagan,

 

Paul Gaiser, CPA, CGMA

Berthiaume & Company CPA’s

60 Harrow Lane

Saginaw, MI 48638

(P) 989-791-1555 

(F) 989-791-1992

 

From: Meagan Westcott [mailto:mwes...@afsmith.com]
Sent: Wednesday, March 29, 2017 3:11 PM
To: Paul
Subject: FW: CHELSEA ED 12/31/16 DRAFT

 

Hi there!

We had a meeting last night and there are a few questions from the board that I am unable to answer.

On page 8 and page 9 – Can you explain the difference between Note 3 vs. Note 4?

 

Note 3: Distribution to CEF, unrestricted ; why is page 8 showing ($2,565.00) and page 9 Note 4: $1,389.00?

Note 3: Market value December 31, 2016: Total $51,052 ; Note 4 $28,455.00.

 

Can you please email me back the breakout of the difference so I can forward it onto the board?

 

Also – When does the draft have to be approved and my signature sent back?  I am just wondering if we should file an extension.

 

Thanks!
Meagan

 

From: Paul [mailto:Pa...@bertcocpa.com]
Sent: Tuesday, March 21, 2017 12:44 PM
To: Meagan Westcott <mwes...@afsmith.com>
Cc: Ken Berthiaume <K...@bertcocpa.com>
Subject: CHELSEA ED 12/31/16 DRAFT

 

Meagan-

 

Please find the following attached:

 

Audit Draft

Management Representation Letter

Audit Draft Approval

 

After your review, please sign and return the management rep letter (on your letterhead if available) and draft approval. Draft copies of your 990 and State of Michigan License to Solicit Renewal will follow after your approval.

 

If you have any questions, please don’t hesitate to get ahold of us.

 

Thank you for all of your help over these past few years Meagan!

 

Paul Gaiser, CPA, CGMA

Berthiaume & Company CPA’s

60 Harrow Lane

Saginaw, MI 48638

(P) 989-791-1555 

(F) 989-791-1992

 

[Susan Whitelaw]

Meagan - thanks so much.  That explanation is very helpful.  I appreciate it. Susan

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