ROTARY INTERNATIONAL DISTRICT 7090

Financial Statements June 30, 2014

ROTARY INTERNATIONAL DISTRICT 7090

Financial Statements June 30, 2014

Table of Contents

Page

Independent Auditors' Report	1-2
Statement of Financial Position	3
Statement of Restricted Funds	4
Statement of Operations and Fund Balances	5
Statement of Cash Flows	6
Notes to Financial Statements	7-10
Schedule of Expenses	11

INDEPENDENT AUDITORS' REPORT

To the Members of Rotary International District 7090

We have audited the accompanying financial statements of Rotary International District 7090, which comprise the financial position as at June 30, 2014, and the statements of operations and fund balances, restricted funds and cash flows 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 accounting standards for not-for-profit organizations, 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 auditors' 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 qualified audit opinion.

Basis for Qualified Opinion
In common with many charitable organizations, the organization derives revenue from its members in the form of dinner, training, and conference fees, the completeness of which is not susceptible of satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the organization and we were not able to determine whether any adjustments might be necessary to revenue, excess of revenue over expenditures for the year, and fund balances.

Rotary International District 7090 controls the operations of Rotary District 7090 Youth Exchange Inc. as disclosed in note 5. We were unable to obtain sufficient appropriate audit evidence about the activities of Rotary District 7090 Youth Exchange Inc. for the year ended June 30, 2014 because an audit was not conducted on their records. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.

Qualified Opinion
In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Rotary International District 7090 as at June 30, 2014, and the results of its operations and cash flows for the year then ended in accordance with Canadian accounting standards for not- for-profit organizations.

Niagara-on-the-Lake, Ontario	 October 17, 2014		CRAWFORD, SMITH AND SWALLOW
CHARTERED ACCOUNTANTS LLP LICENSED PUBLIC ACCOUNTANTS

June 30, 2014
(stated in U.S. $)

Assets	2014	2013	
	$	$	
Current Assets			
Cash	228,128	265,296	
Restricted cash	4,374	4,374	
Accounts receivable	15,737	11,515	
Prepaid expenses	3,833	16,421	
	252,072	297,606	
Liabilities and Fund Balances	

40,832	

42,097	
Current Liabilities			
Accounts payable and accrued liabilities			
Deferred revenue		1,142	
	40,832	43,239	
Fund Balances	
4,374	
4,374	
Restricted funds			
Unrestricted funds	206,866	249,993	
	211,240	254,367	
	252,072	297,606	

Signed on behalf of the board:
 		District Governor
 		District Treasurer

Balance, Beginning of Year	
District History
$
3,486		Manual of
Procedure
$
888		

2014
$
4,374	

2013
$
4,374	
Balance, End of Year	3,486		888		4,374	4,374	

Revenue	Unaudited		
2014	
2013	
	Budget				
	$		$	$	
					
Assistant Governors	1,400				
District Conference	47,500		45,331	43,478	
District Grants			62,687	24,900	
Foreign exchange gain			474		
Grant management seminar			4,445	4,380	
Insurance assessment revenue	34,100		30,148	32,794	
Interest and other	400		90	2,113	
Membership dues	93,000		87,438	78,850	
PETS and District Training Assembly	36,000		21,536	37,110	
Public relations and communication			15,000	11,515	
Rotary Foundation Dinner	14,000		9,930	10,660	
Rotary Leadership Institute	3,200		2,210	1,820	
RYLA	32,000		31,287	34,135	
Seminar training				371	
Slapshot	23,000		30,300	28,325	
	284,600		340,876	310,451	
Expenses	
28,300		
23,407	
23,113	
Administration - schedule 1					
Directors and committees - schedule 1	28,300		34,308	30,841	
District Conference	47,500		77,667	37,832	
District Grants			62,687	25,012	
Foreign exchange loss				1,127	
Grant management seminar			6,373	5,251	
PETS and District Training Assembly	36,000		35,713	34,791	
Rotary Foundation Dinner	14,000		8,645	10,400	
Rotary Leadership Institute	3,200		1,859	1,620	
RYLA	32,000		32,605	34,774	
Seminar training	500		351	692	
Slapshot	23,000		29,525	28,084	
Standing committees - schedule 1	39,100		37,012	37,824	
Training - schedule 1	36,300		33,851	35,006	
	288,200		384,003	306,367	
Excess (Deficiency) of Revenue over Expenses	
(3,600)		
(43,127)	
4,084	
for the Year					
Unrestricted Fund Balance, Beginning of Year	249,993		249,993	245,909	
Unrestricted Fund Balance, End of Year	246,393		206,866	249,993	

Operating Activities	2014	2013	
	$	$	
			
Excess (deficiency) of revenue over expenses for the year	(43,127)	4,084	
Changes in working capital components	
(4,222)	
4,338	
Accounts receivable			
Prepaid expenses	12,588	(5,481)	
Accounts payable and accrued liabilities	(1,265)	3,113	
Deferred revenue	(1,142)	1,142	
	5,959	3,112	
Funds provided (used) by operating activities	(37,168)	7,196	
Increase (Decrease) in Cash Position	(37,168)	7,196	
Cash Position, Beginning of Year	269,670	262,474	
Cash Position, End of Year	232,502	269,670	

Cash Position	

228,128	

265,296	
Cash			
Restricted cash	4,374	4,374	
	232,502	269,670	

Organization
Rotary International District 7090 (the District) is comprised of Rotary Clubs located in Western New York, U.S.A. and Southern Ontario, Canada. The purpose of the District is as follows:
General
Collection of monies from local clubs to be used by the District Governor in order to provide leadership advice and assistance to the various clubs.
District Conference
Host an annual event attended by Rotarians, spouses and guests at which the attendees share fellowship and learn about various Rotary activities.
RYLA
Rotary Youth Leadership Awards (RYLA) is an annual session at which young adults ages 19 - 25 are provided with a week of leadership training.
District Training Assembly
District Training Assembly is a program to train and inform club officers of the various Rotary Clubs in the District.
PETS
President Elect Training Sessions (PETS) is a program to train and inform club presidents-elect of the Rotary Clubs in the District.
Rotaract and Interact
The purpose of this program is to assist Clubs to establish and maintain Rotaract and Interact clubs in colleges and high schools, respectively. These clubs provide an opportunity for students to become involved in community and international activities in association with Rotary.
Slapshot
Student Leadership Award Program for Students High on Training (SLAPSHOT) is an annual session at which young adults ages 16 - 18 are provided with a week of leadership training.
Rotary Leadership Institute
The Rotary Leadership Institute was founded to assist in improving the Rotary knowledge and leadership skills of the future leaders of the Rotary clubs.
District Grants
District Grants are a tool for Rotary districts to support short-term, humanitarian projects that benefit a community. Districts request a portion of their District Designated Fund for a grant to support one or multiple projects locally or internationally.

1.	Significant Accounting Policies
The financial statements of the organization are the representations of management prepared in accordance with Canadian accounting standards for not-for-profit organizations, consistently applied. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of periodic financial statements necessarily involves the use of estimates and approximations. These have been made using careful judgement in the light of available information. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below:
Revenue recognition
Revenue is recognized in the fiscal year to which it applies. Accordingly, receivables are recorded for dues or fees uncollected as of the end of the fiscal year. Revenue applicable to a future period is recognized when earned.
The work of the organization is dependent on the voluntary service of many members. Since these services are not normally purchased by the organization and because of the difficulty of determining their value, contributed services are not recognized in these financial statements.
Foreign currency translation
These financial statements are presented in U.S. dollars. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates in effect at the year- end date. Gains and losses on translation are reflected in net earnings of the period.
Financial instruments
The organization's financial instruments consist of cash, accounts receivable and accounts payable. Cash is measured at fair value. Accounts receivable and accounts payable are initially measured at fair value on acquisition and are subsequently measured at amortized cost.
Tax status
The District is a subordinate unit of Rotary International and is covered by a blanket exemption from U.S. federal income tax under Section 501(c)(4) of the Internal Revenue Code as a social welfare organization. The letter of determination from the IRS was dated May 13, 1958, and that status still remains.
Fund accounting
The organization uses the restricted fund method to account for revenues and expenses. The Board of Directors has internally restricted resources for the purposes of updating and publishing a triennial District 7090 history and publishing the District's Manual of Procedure every fifth year. The District also operates a general fund for all other activities.

2.	Financial Instruments
The organization is exposed to the following risk: Price risk and cash flow risk
The organization has assets and liabilities denominated in both U.S. and Canadian currency that fluctuate in value as current exchange rates change. Accordingly, the organization is exposed to price risk as exchange rates fluctuate.
3.	District Designated Funds
In addition to District Grants included in revenue, Rotary International disbursed  District Designated Funds on behalf of District 7090 as follows:

Matching Grants	2014	2013	
	$	$	
		31,458	
Ambassadorial Scholarship		27,000	
Polio Plus Fund	35,000	25,325	
Global Grants	26,000		
Rotary Centres for International Studies		25,000	
Other		5,000	
	61,000	113,783	

4.	District Governor
The Rotary International District Governor allotment is paid directly to the District Governor. The District Governor may elect to have the District administer these funds on his or her behalf by transferring the funds to the District. The 2013/2014 District Governor elected to receive and disburse these funds personally.

5.	Controlled Entities
The Board of Directors of Rotary District 7090 Youth Exchange Program Inc. has members in common with District Council of Rotary District 7090. Since the financial statements have not been consolidated, the financial summaries of Rotary District 7090 Youth Exchange Program Inc., as at June 30, are as follows:
Financial Position

Total Assets	
Unaudited 2014
$
24,462	
Unaudited 2013
$
21,032	
Total Liabilities Net Assets	
24,462	
21,032	
	24,462	21,032	

Results of Operations	
Unaudited	
Unaudited	
			
	2014	2013	
	$	$	
Total revenues	59,932	47,932	
Total expenses	56,503	43,960	
Excess of Revenues over Expenses	3,429	3,972	

Results of Cash Flows

Fund provided by operations	
Unaudited 2014
$
3,253	
Unaudited 2013
$
9,775	

Rotary District 7090 Youth Exchange Program Inc. was incorporated in New York State in 2008 and is exempt from U.S. federal income tax under Section 501(3)(c) of the Internal Revenue Code.
The purpose of Youth Exchange is to give high school aged students the opportunity to live in a foreign country for one year. At the same time, foreign students spend one year with local families approved by Rotary District 7090 Youth Exchange Program Inc.

SCHEDULE OF EXPENSES
for the year ended June 30, 2014 (stated in U.S. $)

Schedule 1

Administration Assistant Governors District Council
Office, website maintenance and other	Unaudited Budget
$

1,400
2,000
24,900		
2014
$

2,162
21,245	
2013
$

2,547
20,566	
	28,300		23,407	23,113	

Directors and Committees	

750		

380	

1,417	
Group Study Exchange					
Other	5,800		1,684	2,055	
Public relations and communication	15,500		30,209	26,289	
Rotary Foundation	5,500		1,998	1,080	
Scholarships	750				
World Community Service			37		
	28,300		34,308	30,841	

Standing Committees	

5,000		

5,000	

569	
Council on Legislation					
Finance and audit				5,000	
Insurance	34,100		32,012	32,255	
	39,100		37,012	37,824	

Training	

3,000		

3,246	

4,389	
Awards and recognition					
CRCID	800				
District Governor	11,000		12,143	10,526	
District Governor Elect	11,000		8,809	8,995	
District Governor Nominee	3,000		1,770	3,803	
District training	7,500		7,883	7,293	
	36,300		33,851	35,006	

See accompanying notes