2010 Annual Report
Independent Auditors' Report to the Board of Directors, Inter Pares
We have audited the accompanying financial statements of Inter Pares, which comprise the statement of financial position as at December 31, 2010, and the statements of changes in fund balances and revenue and expense for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 present fairly, in all material respects, the financial position of Inter Pares as at December 31, 2010, and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.
Ottawa, Ontario
March 04, 2011
Ouseley Hanvey Clipsham Deep LLP
Licensed Public Accountants
Statement of Financial Position as at December 31, 2010
| 2010 | 2009 | |
| ASSETS | ||
| CURRENT | ||
| Cash | $ 793,767 | $ 658,237 |
| Accounts receivable | 119,033 | 97,787 |
| Program advances (note 5) | 1,049,475 | 760,031 |
| Prepaid expenses | 19,340 | ---- |
| 1,981,615 | 1,516,055 | |
| INVESTMENTS (note 4) | 1,558,375 | 1,458,845 |
| CAPITAL ASSETS (note 3) | 677,783 | 691,782 |
| $ 4,217,773 | $ 3,666,682 | |
| LIABILITIES | ||
| CURRENT | ||
| Accounts payable and accrued liabilities | $ 48,361 | $ 100,794 |
| Deferred revenue (note 5) | 1,306,091 | 746,177 |
| 1,354,452 | 846,971 | |
| YEARS OF SERVICE BENEFITS PAYABLE (note 6) | 110,925 | 102,913 |
| 1,465,377 | 949,884 | |
| FUND BALANCES | ||
| Unrestricted | 64,654 | 56,076 |
| Invested in capital assets | 677,783 | 691,782 |
| Bequest Fund (note 7) | 970,507 | 901,868 |
| Reserve Fund (note 8) | 772,299 | 811,524 |
| Endowment Fund (note 9) | 267,153 | 255,548 |
| 2,752,396 | 2,716,798 | |
| $ 4,217,773 | $ 3,666,682 |
Statement of Changes in Fund Balances for the Year Ended December 31, 2010
| 2010 | 2009 | ||||||
| Unrestricted Net Assets | Invested in Capital Assets | Bequest Fund | Reserve Fund | Endowment Fund | Total | Total | |
| FUND BALANCES - BEGINNING OF YEAR | $56,076 | $ 691,782 | $ 901,868 | $ 811,524 | $ 255,548 | $ 2,716,798 | $ 2,553,206 |
| Net revenue (expense) for the year | (5,421) | ---- | 68,639 | (39,225) | 11,605 | 35,598 | 163,592 |
| Purchase of capital assets | (17,804) | 17,804 | ---- | ---- | ---- | ---- | ---- |
| Amortization of capital assets | 31,803 | (31,803) | ---- | ---- | ---- | ---- | ---- |
| FUND BALANCES - END OF YEAR | $ 64,654 | $ 677,783 | $ 970,507 | $ 772,299 | $ 267,153 | $ 2,752,396 | $ 2,716,798 |
Statement of Revenue And Expense for the Year Ended December 31, 2010
| 2010 | 2009 | |||||
| General Operations | Bequest Fund | Reserve Fund | Endowment Fund | Total | Total | |
| REVENUE | ||||||
| Donations | $ 1,400,345 | $ 42,058 | $ -- -- | $ 200 | $ 1,442,603 | $ 1,475,597 |
| CIDA-PCB | 427,359 | ---- | ---- | ---- | 427,359 | 1,718,694 |
| CIDA - other projects | 2,723,560 | ---- | ---- | ---- | 2,723,560 | 3,621,818 |
| Project generated grants | 39,212 | ---- | ---- | ---- | 39,212 | 199,286 |
| Interest and other | 75,323 | 26,581 | 35,775 | 11,405 | 149,084 | 146,854 |
| 4,665,799 | 68,639 | 35,775 | 11,605 | 4,781,818 | 7,162,249 | |
| EXPENSE | ||||||
| Program | ||||||
| Projects | 3,174,265 | ---- | 75,000 | ---- | 3,249,265 | 5,558,642 |
| Operations | 917,492 | ---- | ---- | ---- | 917,492 | 782,233 |
| 4,091,757 | ---- | 75,000 | ---- | 4,166,757 | 6,340,875 | |
| Administration | 236,632 | ---- | ---- | ---- | 236,632 | 260,957 |
| Fundraising | 342,831 | ---- | ---- | ---- | 342,831 | 396,825 |
| 4,671,220 | ---- | 75,000 | ---- | 4,746,220 | 6,998,657 | |
| NET REVENUE (EXPENSE) FOR THE YEAR | $ (5,421) | $ 68,639 | $ (39,225) | $ 11,605 | $ 35,598 | $ 163,592 |
Notes to Financial Statements December 31, 2010
1. SIGNIFICANT ACCOUNTING POLICIES
(a) Organization Inter Pares works overseas and in Canada in support of self-help development groups, and in the promotion of understanding about the causes, effects and solutions to under-development and poverty. Inter Pares was incorporated without share capital under Part II of the Canada Business Corporations Act. The Corporation is a registered charity under Section 149(1)(c) of the Income Tax Act and as a result is not subject to income taxes.
(b) Revenue recognition Inter Pares follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Funds received from CIDA for overseas programs are recorded as program advances when sent overseas, and are subsequently recorded as expense when amounts are spent by overseas partners. Donations are recorded as revenue when received.
(c) Financial instruments Investments are classified as held to maturity and are recorded at amortized cost. Other financial instruments are recorded at their initially recognized amounts less appropriate allowances.
(d) Capital assets Capital assets are recorded at cost. Amortization is provided on a straight line basis over 5 years for office equipment. Computer equipment is amortized 50% in the first year and 25% in the remaining 2 years. The building is amortized on a straight line basis over 40 years.
(e) Use of estimates The preparation of these financial statements in conformity with Canadian generally accepted accounting principles 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2. FINANCIAL INSTRUMENTS
The organization's financial instruments consist of cash, accounts receivable, investments, accounts payable and years of service benefits payable. Unless otherwise noted, it is management's opinion that the organization is not exposed to significant interest, currency, or credit risks arising from these financial instruments and the carrying value of the financial instruments approximates their fair value.
3. CAPITAL ASSETS
| 2010 | 2009 | |||
| Cost | Accumulated Amortization | Net | Net | |
| Land | $ 200,000 | $ ---- | $ 200,000 | $ 200,000 |
| Building | 582,230 | 125,500 | 456,730 | 471,480 |
| Computer and office equipment | 126,235 | 105,182 | 21,053 | 20,302 |
| $ 908,465 | $ 230,682 | $ 677,783 | $ 691,782 |
During the year, amortization of capital assets amounted to $31,803 (2009 - $26,353).
4. INVESTMENTS
Investments consist primarily of bonds earning interest at rates between 2.8% and 6.3% per year, with varying maturities from March 2011 to August 2016. The fair value of investments is $1,611,006 (2009 - $1,538,669).
5. PROGRAM ADVANCES AND DEFERRED REVENUE
Program advances can vary significantly from year to year depending on the timing of funds sent overseas and the reporting back by overseas counterparts. Deferred revenue consists mainly of amounts related to unspent overseas program advances.
6. YEARS OF SERVICE BENEFITS PAYABLE
Employees of Inter Pares accrue a years of service benefit at a rate of one week per year of service to a maximum of twelve weeks. Eligibility to receive the benefit vests when the employee has completed five years of service.
7. BEQUEST FUND
During 2004 a bequest fund was established. Bequests received are recorded as revenue in this fund.
8. RESERVE FUND
Inter Pares maintains an unrestricted operational reserve to assure that obligations are honoured in the event of unanticipated changes in external funding.
9. ENDOWMENT FUND
The Margaret Fleming McKay Endowment Fund receives gifts whose principal is invested and held for a minimum of ten years. In addition to such externally restricted gifts, the Endowment Fund contains transfers from Inter Pares which are subject to the same restrictions. As at the year end, the Endowment Fund includes $82,900 (2009 – $82,700) in externally restricted gifts.
10. CAPITAL DISCLOSURE
The organization defines its capital as its net assets, which are not subject to external requirements other than a portion of the Endowment Fund. Management's objective, when managing capital, is to safeguard the organization's ability to continue as a going concern, so that it can continue to provide services in accordance with its mission.
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