swine palace productions - louisianaapp1.lla.la.gov/publicreports.nsf/7a7a1534eff663f...david j,...

Swine Palace Productions, Inc. (A Nonprofit Organization)

Baton Rouge, Louisiana June 30,2013

Table of Contents

Independent Auditor's Report Page 3

Financial Statements Statements of Financial Position Page 5 Statements of Activities Page 6 Statements of Cash Flows Page 7

Notes to Financial Statements Page 8

Independent Auditor's Report on Intemal Control Over Financial Reporting and on Compli^ice and Other Matters Based on an Audit of Financial Statements Performed m Accordance With Government Auditing Standards Page 15

Schedule of Findings and Responses Page 17

Schedule of Prior Year Fuidings and Responses Page 18

HAWTHORN, WAYMOUTH 6 CARROLL, L.L.P.

Loufs c. MCKNIGHT, HI, CP.A. CHARLES n, PEVEY, JR., CP.A. DAVID J, BROUSSARD, C.P.A, NEAL D. KING. CPA. KAffiN S, LEJEUWE, CPA. ALYCE S. SCHMITT, C.P.A.

CERTIFIED PUBLIC ACCOUNTANTS 8555 UNITED PLAZA BLVD., SUITE 200

BATON ROUGE, LOUISIANA 70809 1925) 923-3000 • FAX [225] 923-3008

December 18,2013

Independent Auditor's Report

Board of Directors Swine Palace Productions, Inc. Baton Rouge, Louisiana

Report on the Financial Statements

"We have audited the accompanying fmancial statements of Swine Palace Productions, Inc. (a nonprofit organization), which comprise the statements of financial position as of June 30, 2013 and 2012, and the related statements of activities, and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these fmancial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of intemal control relevant to the preparation and fair presentation of financial statements that are fi-ee from material misstatement, whether due to traud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfoim the audit to obtain reasonable assurance about whether the fmmicial statements are free of material misstatement.

An audit involves perfonning procedures to obtain audit evidence about the amounts and disclosures in the fmancial statements. The procedures selected depend on the auditor's judgment, including tlie assessment of the risks of material misstatement of the fmancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers iaternal control relevant to the entity's preparation and fair presentation of the fmancial 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 internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant 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 referred to above present fairly, in all material respects, the financial position of Swine Palace Productions, Inc., as of June 30,2013 and 2012, and the changes in its net assets and its cash flows for the years then ended in accordance with accountmg principles generally accepted in the United States of America.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2013, on our consideration of Swine Palace Productions, Uic. 's intemal control over finmicial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on intemal control over fmancial reportmg or on compliance. That report is an integral part of an audit perfonned in accordance with Government Auditing Standards in considering Swine Palace Productions, Inc. 's uitemal control over financial reporting and compliance.

Yours truly.

^ Z '


Statements of Financial Position June 30, 2013 and 2012

A s s e t s

Current Assets Cash and cash equivalents Investments, at fair value Accounts receivable Accounts receivable - related party Prepaid expenses

Total cunent assets

Total assets

2013

$113,112 3,309 3,616 2,087 3,604

125,728

$ 125,728

2012

$132,723 2,469 4,907

3,790

143,889

$143,889

L i a b i l i t i e s a n d N e t A s s e t s

Current Liabilities Accounts payable $ 2,410 $ 1,962 Unearned revenue - 3,911

Total current liabilities 2,410 5,873

Net Assets Unrestricted 123,318 138,016

Total liabilities and net assets $ 125,728 $143,889

The accompanying notes are an integral part of these financial statements.

5


Statements of Activities Years Ended June 30,2013 and 2012

Unrestricted 2013 2012 Revenue and Other Support

Admissions Investment income (loss) Contributions and sponsorships In-kind contributions Grants Other

Total revenue and other support

Expenses Production costs General and administrative Fund raising

Total expenses

Change in Net Assets (14,698) 29,731

Net Assets

Beginning of year 138,016 108,285

Net Assets End of year $123,318 $138,016

$107,360

840 55,718

397,486

26,249

5,515

593,168

429,890

167,296

10,680

607,866

$144,867

(191)

55,030

405,189

23,898

5,419

634,212

420,787

176,133

7,561

604,481

The accompanying notes are an integral p ^ of these financiai statements.

Swine Palace Productions, Inc. (A Nonprofit Organization) Statements of Cash Flows

Years Ended June 30,2013 and 2012

2013 2012 Cash Flows From Operating Activities

Change in net assets $ (14,698) $ 29,731 Adjustments to reconcile change in net assets to net cash

provided by operating activities Depreciafion Unrealized (gain) loss on investments Changes in operating assets and liabilities

Accounts receivable Accounts receivable - related party Prepaid expenses Accounts payable Unearned revenue

Net cash provided by (used in) operating activities (19,611) 34,320

Net Increase (Decrease) in Cash and Cash Equivalents (19,611) 34,320

Cash and Cash Equivalents, beginnmg of year 132,723 98,403

Cash and Cash Equivalents, end of year $113,112 $ 132,723

—

(840)

1,291

(2,087)

186 448

(3,911)

2,059

191

(878)

-

1,470

(1,678)

3,425

The accompanying notes are an integral part of these financial statements.

7


Notes to Financial Statements June 30, 2013

Note 1-Summarj' of Significant Accounting Policies

A. Nature of Activities

Swine Palace Productions, Inc. ("the Organization") was established February 4, 1992. The mission of the Organization is the advancement of public knowledge of the art of theatre by establishing and maintammg a permanent theatre for the performing arts in the State of Louisiana, and the production and performance of plays of educational value before general audiences and those not normally accustomed to theatrical presentations. The Organization also assists in the development of new works, and conducts lectures and seminars on subjects relating to the performing arts.

The Organization earns revenues primarily through ticket sales for its theater productions. Donations are also received from the general public as well as granthig organizations. In-kind donations from Louisiana State University are a significant portion of revenues,

B. Basis of Presentation

The fmancial statements of the Organization have been prepared using the accrual basis of accounting, whereby revenues are recognized in the period in which they are earned and expenses are recognized in the period in which they are incurred.

Financial statement presentation follows the recommendations of the Presentation of Financial Statements Topic of the Financial Accounting Standards Board — Accounting Standards Codification (FASB-ASC). Under that topic, the Organization is required to report informafion regardmg its fmancial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Temporarily restricted net assets arc those whose use by the Organization has been limited by donors to a specific time, period, or purpose. Permanently restricted net assets have been resfricted by donors lo be maintained by the Organization in perpetuity. The Organization does not have any temporarily or permanently restricted net assets.

All donor-restricted support is reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Donor-restricted contributions whose restrictions are met within the same year as received are reported as unrestricted contributions in the accompanying financial statements.


Notes to Financial Statements June 30,2013

Note 1-Summarj' of Significant Accounting Policies (Continued)

C. Income Taxes

The Organization is exempt from federal mcome taxes under Section 501(c)(3) of the Intemal Revenue Code. The Organization is not a private foundation.

The Organization follows the provisions of FASB ASC 740, Income Taxes, relating to uncertain tax positions. These standards require management to perform an evaluation of all income tax positions taken or expected to be taken in the course of preparing the Organization's income tax returns to determine whether the income tax positions meet a "more likely than not" standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the statute of limitations for federal purposes.

The Organization is required to file federal income tax returns. Witli limited exceptions, the Organization is no longer subject to income tax examination for any tax years earlier than 2010. Management has performed its evaluation of all other income tax positions taken on all open income tax retums and has determined that there were no positions taken that do not meet tlie "more likely than nof standard. Accordingly, there are no provisions for income taxes, penahies or interest receivable or payable relafing to uncertain income tax positions in the accompanying fmancial statements.

From time to time, the Organization may be subject to interest and penalties assessed by various taxing authorities. These amounts are expensed when they occur.

D. Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents includes fimds on deposit with financial institutions and highly liquid investments with original maturities of tliree months or less not included in an investment portfolio.

E. Accounts Receivable

Accounts receivable are reported at billed amounts net of any allowance for doubtful accounts. The allowance for doubtful accounts is based on historical experience and an evaluation of the outstanding receivables at the end of the year. Accounts receivable are written off when deemed uncollectible by management. Bad debt recoveries are included in income as realized. As of June 30, 2013 and 2012, there was no allowance for doubtful accounts recorded.



Note 1-Summary of Significant Accounting Policies (Continued) .

F. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dale of the fmancial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

G. Investments

Investments in equity securities with readily determinable fair values are recorded at fair value based on quoted market prices. For those investments where quoted market prices are unavailable, management estunates fair value based on information provided by the fund managers. Dividend, interest, and other investment income is recorded as an increase in unrestricted, temporarily restricted, or permanently restricted net assets depending on donor stipulations.

H. Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the sfraight-line method over the estimated service lives of the assets.

Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Fxpenditures for maintenance and repairs are charged to expense as incurred.

I. Designations of Net Assets

Designations are voluntar>' board-approved segregations of unrestricted net assets for specific purposes, projects, or investments. Designations may be reversed by the board of directors at any tune. No net assets have been designated by the Board.

J- Advertising

Advertising costs are expensed when incurred. Advertising expenses were $11,919 and $8,981 forthe years ended June 30,2013 and 2012, respectively,

K. Reclassifications

Certain accounts in the prior year financial statements have been reclassified for comparative purposes to confonn to the presentation in the current year fmancial statements. These reclassifications had no effect on net assets.

10



Note 2-Investmcnts

Investments as of June 30, 2013 and 2012 are summarized as follows:

Cost Fair Value June 30,2013

Money Market Funds $ 825 $ 881 Equity Securities 1,278 2.428

S2.I.Q3. $3.309 June 30, 2012

Money Market Funds Equity Securities

$ 825 1.278

$ 825 1,644

The following schedule summarizes the mvestment remrn and its classification in the statement of activities for the years ended June 30,2013 and 2012:

2013

Unrealized gain (loss)

Note 3-Fair Value Measurements

2012

mm

FASB ASC 820, Fair Value Measurements, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 Inputs to the valuation methodology include:

• quoted prices for similar assets or liabilities in active markets;

• quoted prices for identical or similar assets or liabilities in inactive markets;

• inputs other than quoted prices that are observable for the asset or liability; and

• inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

11



Note 3-Fair Value Measurements (Continued)

The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at June 30, 2013:

Money Marlcet Funds:

Equity Securities:

Valued using amortized cost, which approximates fair value.

Valued at the closing price reported in the active maiket in which the individual securities are traded.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain fmancial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the Organization's assets at fair value measurements as of June 30, 2013 and 2012:

Equity securities Money market funds

Equity securities Money market fiinds

Assets at Fair Value June 30, 2013

(Level 1)

$2,428 881

$3,309

(Level 2)

$ -

$ -

Assets at Fair Value June 30, 2012

(Level 1)

$1,644 825

$2,469

(Level 2^

$ -

$ "

as of

(Level 3>

$ -

$ -

as of

(Level 3>

$ -

$ -

Total

$2,428 881

$3,309

Total

$1,644 825

$2,469

12



Note 4-Property and Equipment

The following is a summary of property and equipment, at cost less accumulated depreciation;

2013 2012

Furniture and fixtures Equipment

$ 43,239 10.000 53,239 53.239

$ -

$ 43,239 10.000 53,239 53,239

i -

Less accumulated depreciation

Total property and equipment

There was no depreciation expense charged to operations for the year ended June 30, 2013. Depreciation expense charged to operations was $2,059 for the year ended June 30, 2012.

Note 5-Related Party Transactions

Swine Palace Productions, Inc. is affiliated with Louisiana State University (LSU). Members of the Organization's management serve as faculty for LSU, and Swine Place Productions, Inc. shares facilities and staff with LSU. The Organization also has an agreement with LSU to use the Reilly Theatre for its theatrical productions.

Services donated by Louisiana State University for the years ended June 30, 2013 and 2012, were $397,486 and $405,189, respectively. These donated services consist of specialized production personnel and facility operating costs with the values based on estimates by management. The expenses related to these m-kind confributions are included in the following categories:

June 30, 2013 Specialized production personnel Facility operating costs

June 30, 2012 Specialized production personnel Facility operating costs

Production Costs

$269,566 51.350

$320,916

$277,389 51,350

$328,739

General and Administrative

$56,927 12.350

$69,277

$56,819 12.350

$69,169

Fund Raisins

$ 5,993 1,300

$ 7.293

S 5,981 1.300

$_^7.28i

Total

$332,486 65,000

$397,486

$340,189 65,000

$405,189

Swine Place Productions, Inc. reimburses the development director's salary who also serves as a LSU faculty member. Total of these reimbursements were $55,590 and $60,300 for the years ended June 30, 2013 and 2012, respectively.

13



Note 5-ReIated Party Transactions (Continued)

The LSU Union Box Office sells performance tickets for a fee then remits the proceeds to Swuie Palace Productions, fric. Total fees charged by the LSU Union Box Office were $17,397 and $24,424 for the years ended June 30,2013 and 2012, respectively.

Louisiana State University owed Swine Palace Productions, Inc. $2,087 as of June 30,2013. The University did not owe any amount to Swine Palace as of June 30, 2012.

Note 6-Functional Allocation of Expenses

The costs of providing the various programs and activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefitted based on estimates by management.

Note 7-Defined Contribution Plan

The Organization participates in a defmed contribution plan and makes weekly confributions in an amount equal to 8% of all gross payments made to the actors. Pension expense was $2,576 and $2,621 for the years ended June 30,2013 and 2012, respectively.

Note 8-Concentration Risk- Major Contributors

Approximately 65% of the Organization's revenue consists of donated services of specialized production personnel and facility operating costs from Louisiana State University. Any significant changes in the donations provided by the University could adversely impact the financial position of the Organization.

Note 9-LSU Foundation

Donors have confributed funds to the LSU Foundation for use by the Organization. The Organization reserves the right to request the LSU Foundation pay the designated funds m accordance with donor wishes. As of June 30,2013 and 2012, these funds were $46,124 and $32,979, respectively. These fimds are not reflected in the accompanyuig financial statements.

Note 10-Subsequent Events

Management has evaluated all subsequent events through December 18,2013. As a result, the Organization noted no subsequent events that requfred adjustment to, or disclosure in, these fmancial statements.

14

HAWTHORN, WAYMOUTH & CARROLL, L.L.P.

LOUIS c, MCKNIGHT, IH, C . R A .

CHARLES R. PEVEY. JR., C.RA, DAVID J. BROUSSARD, C.RA, NEAL D. KING, C.RA-KARIN S. LEJEUNE, C.P.A. ALYCE S. SCHMITT, C.RA.

CERTIFI TANTS 8555 UNITED PLAZA BLVD., SUITE 2DD

BATON ROUGE, LOUISIANA 70809 {225) 923-3000 • FAX (225) 923-3008

December 18,2013

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an

Audit of Financial Statements Performed in Accordance With Government Auditing Standards

Board of Directors Swine Palace Productions, bic. Baton Rouge, Louisiana

We have audited, in accordance with the auditing stand^ds generally accepted in the United States of America and the standards applicable to fmancial audits contamed in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Swine Palace Productions, Inc. (a nonprofit organization) which comprise the statements of financial position as of June 30, 2013, and the related statements of activities, and cash flows for the year then ended, and the related notes to the fmancial statements, and have issued our report thereon dated December 18, 2013.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Swine Palace Productions, Inc.' s intemal control over fmancial reporting (intemal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressuig our opinion on the fmancial statements, but not for the purpose of expressing an opinion on the effectiveness of Swine Palace Productions, Inc.'s intemal control. Accordingly, we do not express an opinion on the effectiveness of the organization's intemal control.

Our consideration of intemal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in intemal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and responses, we identified a certain deficiency in internal control that we consider to be a material weakness and a significant deficiency.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, m the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in intemal control, such that tliere is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying schedule of findings and responses as 2013-01 to be a material weakness.

15

A significant deficiency is a deficiency, or a combination of deficiencies, in intemal control that is less severe than a material weakness, yet unportant enough to merit attention by those charged with govemance. With the exception of the deficiency noted in the preceding paragraph, we did not identify any other deficiencies that we consider significant deficiencies.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Swine Palace Productions, Inc.'s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determmation of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Swine Palace Productions, Inc's Response to Findings

Swine Palace Productions, Inc.'s response to the finding identified in our audit is described in the accompanying schedule of findings and responses. Swine Palace Productions, Inc. 's response was not subjected to the auditing procedures applied in the audit of the fmancial statements and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considerhig the organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Yours truly,

16

Swine Palace Productions, Inc. Schedule of Findings and Responses

Year Ended June 30, 2013

Findings - Financial Statement Audit

2013-01 Reconciliation of Casii Accounts

Condition: Cash accounts were not properly reconciled to the general ledger.

Criteria: As a basic intemal control, bank statements for all cash accounts should be reconciled to the general ledger on a monthly basis after all transactions for the month have been recorded.

Cause: Some cash transactions were recorded to the general ledger after the bank reconciliation for those months had been prepared. As a result, bank reconciliations did not agree to the general ledger.

Effect: There is an increased risk that unauthorized transactions in the organization's cash accounts could go undetected.

Recommendation: The organization should ensure that all cash transactions for the month have been recorded prior to the preparation of the monthly bank reconciliation. Once prepared, the bank reconciliation should be checked to ensure that it agrees to the general ledger.

Management's Response: Due to several errors over the course of the year, several adjustments were made afier a bank account had been reconciled. The organization will make every effort to avoid such adjustments in the future.

17

Swine Palace Productions, Inc. Schedule of Prior Year Findings and Responses

Year Ended June 30, 2013

Findings - Financial Statement Audit

None.

18

swine palace productions - louisianaapp1.lla.la.gov/publicreports.nsf/7a7a1534eff663f...david j,...

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