FORTUNA
BUSINESS IMPROVEMENT CORPORATION
FINANCIAL STATEMENTS
For the Six Years Ended June 30, 2021
DRAF
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Table of Contents
June 30, 2021, 2020, 2019, 2018, 2017 and 2016
INDEPENDENT AUDITORS' REPORT
BASIC FINANCIAL STATEMENTS
Statements of Financial Position Exhibit A
Statements of Activities Exhibit B
Statements of Functional Expenses Exhibit C
Statements of Cash Flows Exhibit D
Notes to Financial Statements Exhibit
AL ANDERSON, LUCAS, SOMERVILLE & BORGES, LLP
CPA- CERTIFIED PUBLIC ACCOUNTANTS
KEITH D. BORGES, CA 1338 MAIN STREET AMES M. ANDERSON (1964-2001 SB BARBARA J. GUEST, CPA FORTUNA, CALIFORNIA 95540 EUGENE B. LUCAS (1950-2013 RITA CHISM (707) 725-4483 & (707) 725-4442 DAVID A. SOMERVILLE, INACTIVE VANESSA ANDERSON, EA FAX: (707) 725-6340
Email: [email protected]
www.alsb.com
INDEPENDENT AUDITORS' REPORT
Board of Directors
Fortuna Business Improvement Corporation
Fortuna, California
Qualified Opinion
We have audited the accompanying financial statements of the Fortuna Business Improvement Corporation (a nonprofit organization), which comprises the statements of financial position as of June 30, 2016 through June 30, 2021, and the related statements of activities, functional expenses, and cash flows for the six years then ended, respectiyely, and the related notes to the financial statements.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the financial statements referred to above present fairly, in all material respects, the financial position of Fortuna Business Improvement Corporation as of June 30, 2021, 2020, 2019, 2018, 2017, and 2016, and the changes in its net assets and its cast flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Qualified Opinion
We did not obtain sufficient appropriate audit evidence about certain fundraising events because no accounting controls or documents over the cash collections were available. We are unable to obtain sufficient appropriate audit evidence about the cash collections and ticket sales by other auditing procedures.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Fortuna Business Improvement Corporation and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relatine to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
Board of Directors
Fortuna Business Improvement Corporation
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Fortuna Business Improvement corporation's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 Fortuna Business Improvement Corporation's internal control. Accordingly, no such opinion is expressed.. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Corporation's ability to continue as a going concern for a reasonable period of time.
Board of Directors
Fortuna Business Improvement Corporation
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
The financial statements of the Company as of June 30, 2015, were audited by another auditor whose report dated October 31, 2020, expressed an unqualified opinion on those statements.
ANDERSON, LUCAS, SOMERVILLE, & BORGES, LLP
December 21, 2021
Fortuna, California
BASIC FINANCIAL STATEMENTS
DRAFTI
Exhibit A
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Statements of Financial Position
June 30, 2021, 2020, 2019, 2018, 2017, 2016
ASSETS 2020 2019 2018 2017 2016
Current Assets
Cash and Cash Equivalents 19,127 1,520 4,897 12,601 12,331 9,478 Accounts Receivable, City of Fortuna 216 161 1,262 513
Accounts Receivable, Other 1,500 1,157 115 300
Due from Rotary 995 995 (77) 2,285 1,613
Employee Advance 7,120 2,400 5,100 3,450 3,225
Prepaid Health Stipend (500) (100) (200) (600) (400)
Prepaid Insurance 747 746 688 1,314 708
Deposits 296
Total Current Assets 21,832 10,282 7,927 20,808 18,895
15,733
Other Assets:
Restricted Cash ~ 57,000 36,238 67,081
Property and Equipment, Net 11.190. 3,236 4,506
5,775 7,403 9.652
Total Assets 33,326 70,518 12,433
GA 26,583 62,536 92,466
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts Payable 942 2,795 г 9.303 3,564 2,764
Accrued Payroll Taxes 2,203 184 1,930 2,112 1,640
Other Liabilities 25,000 834 600 600 600
Note Payable, Other 30,000
Gift Certificates Outstanding 3.50% 3,54i 4,141 3,891 4,601 3,45l Current Portion of Long-term debt 3,000 3,000
Total Current Liabilities 31,646 7,354 6,141 39,985 10,313 11,455 Long-term Liabilities
Note Payable, City of Fortuna 3,000
Total Liabilities 31,646 7,354 6,141 39,985 10,313 14,455 Net Assets:
With Donor Restrictions 57,000 36,238 67,081
Without Donor Restrictions 1,680 6,164 6202 (13.402) 15,985 10,930 Total Net Asscts 1,680 63,164 6,292 (13,402) 52,223 78,011 Total Liabilities and Net Assets 33,326 70,518 12,433 26,583 62,536 92,466 The accompanying notes are an integral part of these financial statements.
Exhibit B
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Statements of Activities
For the Years Ended June 30, 2021, 2020, 2019, 2018, 2017, and 2016 CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS: 2020 2012 2018 2016 Revenues, Gains, and Other Support
Contributions
City Assessments 61,630 61,531 60,490 60,337
City Matching 61,630 62,823 54,947
61,531 60,490 60,337 62,823 54,947
City Donations 2,400 2,400 2,460
Program Fundraisers 3,109 2,400 2,400
1,100 2,713 4,461 16,437 1,000
People Mover 200
Ice Rink 172,513
Other Income 176,026 153,056
789 570
Interest and Dividends
Grant Income 53
11,577 3,000
Total Revenues, Gains, and Other
Support Without Restrictions 139,127 131,176 127,902 317,207 317,026 266,973 57:000 36.238 67,081 7.129
TOTAL NET ASSETS RELEASED FROM RESTRICTIONS -57,000 36,238 67,081 7,129
TOTAL REVENUES, GAINS, AND OTHER
SUPPORT WITHOUT DONOR RESTRICTIONS 196,127-1 131,176 127,902 353.445 384,107 274,102
EXPENSES
Program Services 98,362 60.334 44,458 71,922. 59,591 44,451 Management and General 42,971 32,428 32,582 33,312 30,487 29,357 Fundraising Events 59,278 38,542. 31,168 277,598 288.974 197,802 Total Expenses 200,611 131,304; S108.208 382,832 379.052 271.610
INCREASE IN NET ASSETS WITHOUT
DONOR RESTRICTIONS (4,484) (128) 19,694 (29.387) 5,055 2,492 CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS:
Contributions
Ice Rink Event
HLA Grant 57.000 36,238 67,081
Net assets released from restrictions:
Restriction satisfied by specific fundraiser (57,000) (36,238) (67,081) (7,129)
INCREASE (DECREASE IN NET ASSETS WITH
DONOR RESTRICTIONS (57,000) 57,000 (36,238) (30,843) 59,952 INCREASE (DECREASE) IN NET ASSETS (61.484) $6,872 19,694 (65,625) (25,788) 62.444
NET ASSETS
Beginning of Year 63,164 6,292 (13,102) 52,223 78.011 15,567 End of Year 1,680 63,164 78,011
52,223
The accompanying notes are an integral part of these financial statements.
Exhibit C
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Statements of Functional Expenses
For the Years Ended June 30, 2021, 2020, 2019, 2018, 2017, and 2016 2021
Management and
Program Services General Fundraising Total
Salaries Wages, & Benefits 27,567 27,567 55,134 110,268 Admin Expenses 814 814
Citywide Advertising :
-
Coordinator Expenses 1,575 3,150
Decorations/ Mural 675
Depreciation 855
Dues & Subscriptions 1,776
Education & Training : 855
Gift Certificates 862
Information Technologies 1,062
Event Insurance 1,043 1,043
Miscellaneous 350
Newsletter & Printing : 3,761
Occupancy 2,400
Office Expenses 1,526 6,103
Professional Services 2,521
Repairs & Maintenance 1,119
Storage Rent 1,320
Program Activities 2,217
Telephone 2,700
HLA Grant Expenses 43,990
Grants to Other Organizations 12,770
Total Expenses 98,362 42,971 59,278 $ 200,611
2020
Management and
Program Services General Fundraising Total
Salaries Wages, & Benefits ·7,113
17,413 34,826 69,652
Admin Expenses 1,287 1,287
Citywide Advertising 7,004
Coordinator Expenses 1,685 1,686 3,371
Decorations/ Mural : 300
Depreciation - 1,270
Dues & Subscriptions 2,619 2,619
Education & Training 95
Information Technologies 2,905 - 2,905
Event Insurance - 1,194 1,194
Miscellaneous - 1,261
Occupancy 2,400 : 2,400
Office Expenses 1,672 836 3,344
Professional Services 406 - 406
Storage Rent 1,320 - 1,320
Program Activities 10,483 - 10,483
Interest Expense - 48 - 48
Telephone 1,898 1,898 - 3,796
HLA Grant Expenses 3,175 - - 3,175
Grants to Other Organizations 15,374 - - 15,374
Total Expenses $ 60,334 32,428 $ 38,542 $ 131,304
Exhibit C
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Statements of Functional Expenses
For the Years Ended June 30, 2021, 2020, 2019, 2018, 2017, and 2016 2019
Management and
Program Services General Fundraising Total
Salaries Wages, & Benefits 13,526 13,526 27,051 54,103
Admin Expenses 1,263 1,263
Citywide Advertising 3,286 3,286
Coordinator Expenses 1,752 1,753 3,505
-
Depreciation 1,270 - 1,270
Dues & Subscriptions 1,362 : 1,362
Information Technologies 3,761 3,761
Event Insurance : 1,135 1,135
Miscellaneous 1,250 1,250
Occupancy - 2,400 2,400
Office Expenses 1,228 2,457 1,229 4,914
Professional Services 3,438 3,438
Storage Rent 1,320 1,320
Program Activities 3,421 3,421
Interest Expense 486% 486
Telephone 2,137 • 2,137 4,274
Grants to Other Organizations 17,020 17,020
Total Expenses $ 44,458 32,582 31,168 $ 108,208
2018
Management and
Program satioss General Fundraising Total
Salaries Wages, & Benefits 19,852 19,853 39,706 79,411
Admin Expenses 741 741
Citywide Advertising 15,971 : 15,971
Coordinator Expenses 1,053 1,054 2,107
Depreciation 1,628 - 1,628
Dues & Subscriptions - 2,384 2,384
Gif Certificates 2,023 2,023
Information Technologies 1,804 1,804
Event Insurance 1.126 1,126
Miscellaneous 1,184 :
1,184
Occupancy 2,400 2,400
Office Expenses 1,266 2,533 1,266 5,065
Professional Services 340 340
Storage Rent 1,430 1,430
Fundraising Events : 234.446 234,446
Program Activities 7,279 7,279
Interest Expense 30 30
Telephone 2,173 2,174 4,347
Grants to Other Organizations 19,116 - - 19,116
Total Expenses 71.922 33,312 $ 277,598 $ 382,832
Exhibit C
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Statements of Functional Expenses
For the Years Ended June 30, 2021, 2020, 2019, 2018, 2017, and 2016 2017
Management and
Program Services General Fundraising Total
Salaries Wages, & Benefits 19,069 19,069 38,138 76,276
Admin Expenses - 980 980
Citywide Advertising 14,388 : : 14,388
Core area Expenses 1,000 1,000
Coordinator Expenses 1,226 1,226 2,452
Depreciation 2,249 2,249
Dues & Subscriptions : 625
Gift Certificates :
Information Technologies 1,992 1,992
Event Insurance 1,136 1,136
Miscellaneous 1,112 : 1,112
Newsletter & Printing - : -
Occupancy 2,400 2,400
Office Expenses 728 1,454 2,910
Professional Services 885 885
Storage Rent 1,320 1,320
Fundraising Events 247,746
Program Activities 5,844 5,844
Telephone 1,796 1,796 3,592
Interest Expense 60 60
Grants to Other Organizations 12,085 12,085
Total Expenses $ 59,591 30,487 288,974 379,052
2016
Management and
Program Services General Fundraising Total
Salaries Wages, & Benefits 15,170 30,940 61,879
15,469
Admin Expenses 1,281 1,281
Citywide Advertising 7,498 7,498
Core area Expenses 4,850 :
4,850
Coordinator Expenses - 821 1,642
Depreciation 1,817 1,817
Dues & Subscriptions 280
Gift Certificates (6,409) (6,409)
Information Technologies 3,827 3,827
Event Insurance 1,171 1,171
Miscellaneous 290 : 290
Newsletter & Printing - -
Occupancy 2,400 2,400
Office Expenses 615 1,230 615 2,460
Professional Services 2,735 2,735
Storage Rent 1,260 : 1,260
Fundraising Events - : 164,255 164,255
Program Activities 4,287 4,287
Telephone 1,224 1,224 2,448
Interest Expense 90 :
90 Grants to Other Organizations 13,549 13,549
Total Expenses 44,451 29,357 $ 197,802 $ 271,610
Exhibit D
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Statements of Cash Flows
For the Years Ended June 30, 2021, 2020, 2019, 2018, 2017, and 2016 CASH FLOWS FROM OPERATING ACTIVITIES 2020 2019 2018
2016
Change in Net Assets 5(61484 8 56,872 8 19694 s (65625) S 125,788) 8 62,442
Adjustments to Reconcile Change in Nets Assets
to Net Cash Provided (Used) by Operating Activities:
Depreciation Expense 856 1,270 1,270 1,627
2,249 1,817
(Increase) Decrease in:
Accounts Receivable (1,716) (911) 2,334 (618) 226
Employee Advances 7,520 (4,820) (1,395)
2,900 (1,650) (225) (2,919)
Prepaid Expenses : 253 (1) (58) 626 (606)
Deposit 296 26
Increase (Decrease) in:
Accounts Payable 23447 2,492 (3,261) 3,564
Accrued Payroll Taxes (2,764) 2,044
2,019. (779) (967) (182) 472 444
Gift Certificates Outstanding (40) (600) 250. (710) 1,150 (5,668)
Net Cash Provided (Used) by Operating Activities (29,445) 53,523 22,162 (62,968) S (24,990) 56,829
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment
Net Cash (Used) by Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proced of Short term Lot (30,000) (7,500)
30,000 (3,000) (3,000)
Defered Peoplo over come (3,000)
(834) 100
Net Cash Provided (Used) by Financing Activities (834) (29,866) 27,000 (3,000) (10,400) Net Increase (Decrease) in Cash and Cash Equivalents (39,393) 53,623 (7,704) (35,968) (27,990) 43,400 Cash and Cash Equivalents, July 1 58,520 4,897 12,600 48,568 76,558 33,158 Cash and Cash Equivalents, June 30 19,127 58,520 4,897 12,600 S 48.568 76,558 The accompanying notes are an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
DRAFTI
Exhibit E
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Notes to Financial Statements
June 30, 2021
NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES A. Nature of Activities
The Fortuna Business Improvement Corporation ("FBIC) was formed on December 28, 1990 FBIC operates under a Board of Directors and was formed to promote retail and service businesses located within the City of Fortuna. The following is a summary of the more significant policies.
B. Reporting Entity
The Fortuna Business Improvement Corporation is a nonprofit public benefit corporation exempt from income tax under Section 501(c)(4) of the Internal Revenue Code. The Corporation was formed to promote tourism and to stimulate economic development within the City of Fortuna, California. Under said contract with the City of Fortuna, FBIC administers and implements the City's Business Improvement District.
The City levies special assessments on businesses within the City limits and contributes the benefit assessments and matching amounts to the Corporation. The contract with the City stipulates that the contributions shall be used solely for purposes specified in the contract in regard to the Fortuna Business Improvement District.
C. Basis of Accounting
The Corporation's financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Corporation uses the accrual basis of accounting. With this method, revenues are recorded when earned and expenses are recorded at the time the liabilities are incurred.
D. Cash and Cash Equivalents
For purposes of the statement of cash flows, cash and cash equivalents includes amounts in demand deposits as well as short-term investments with an original maturity date of three months or less from the date of purchase.
E. Property and Equipment, Net
Property and equipment are stated at cost at the date of purchase or, for donated assets, at fair market value at the date of donation, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the asset.
Exhibit E
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Notes to Financial Statements
June 30, 2021
NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (continued) F. Functional Expenses
The costs of providing program and other activities have been summarized on a functional basis in the Statements of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Such allocations are determined by management on an equitable basis.
G. Use of Estimates
The preparation of financial statements in conformity with 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.
H. Income Taxes
Fortuna Business Improvement Corporation is exempt from income tax under IRC section 501 (c)(4), as a nonpolitical entity committed to the strengthening of the City of Fortuna's business community.
Net Assets
Net assets without donor réstrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the organization.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors, and grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the organization or by the passage of time.
Donor restricted contributions are reported as increases in net assets with donor restrictions.
When a restriction expires, net assets are reclassified from net assets with donor restrictions to net assets without donor restrictions in the statements of activities.
In-kind Donations
The City of Fortuna provides in-kind donation of $2,400 to the Corporation to be applied to the Kids Movie activity in lieu of rent for office space.
Exhibit E
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Notes to Financial Statements
June 30, 2021
NOTE 2 - CASH AND CASH EQUIVALENTS
The following represents FBIC's financial assets on June 30, 2016 to June 30, 2021:
2021 2020 2019 2018 2017 2016
Umpqua Bank $ 12,290 $ 56,571 $ 3,349 $ 5,302 $ 11,823 $ 2,620 RCB Ice Rink 36,238 67,081
Gift Certificate 6,837 1,949 1,548 7,299 508 6,858
Total Cash & Cash Equivalents $ 19,127 $ 58,520 $ 4,897 $ 12,601 $ 48,569 $ 76,559 Total Restricted Cash RCB $ 36,238 $ 67,081
Total Restricted Cash Umpqua $ 57,000
Temporarily restricted cash for the Ice Rink event were held in a separate bank account from the Corporation's operating funds. The events were held during 20Ï6, 2017, and 2018.
The Corporation received $60,000 in June 2020 for an advertising campaign. These funds were restricted specifically for the promotion and advertising campaign.
NOTE 3 - PROPERTY AND EQUIPMENT
Fixed assets consisted of the following at June 30, 2016 to 2021:
Balance Balance Balance Balance Balance Balance
6/30/21 6/30/20 6/30/19 6/30/18 6/30/17 6/30/16
Computers and Printer $ - S 1,683 $ 1,683 S 1,683 $ 1,683 $ 1,683 Software Eevelopment - Website 9,114 9,114 9,114 9,114 9,114 Trailer - People Mover 9,207 9,207 9,207 9,207 9,207 9,207 Laptop and Desktop Computer 3,029 3,029 3,029 3,029 3,029 3,029 Computer, Desk and Telephone 1,033 1,991 1,991 1,991 1,991 1,991 56 Banners 2,114
Subtotal 22,383 25,024 25,024 25,024 25,024 25,024
Reverse Ice Rink Depreciation 1,542
Less: Accumulated Depreciation (10,888) (21,788) (20,518) (19,248) (17,621) (15,372) Net Fixed Assets 11,495 $ 4,778 $ 4,506 $ 5,776 S 7,403 $ 9,652 Exhibit E
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Notes to Financial Statements
June 30, 2021
NOTE 4 - RISK MANAGEMENT
The Corporation purchases event insurance coverage for general liability, business personal property, Insurance Company.
NOTE 5 - LONG-TERM DEBT
was secured by annual assessment revenues imposed by the City.
NOTE 6 - SHORT-TERM LOANS
During July 2017, and April and May 2018, a Board member provided short-term loans to the Corporation to meet cash flow needs. These notes were paid back as soon as the Corporation received the assessment from the City each year.
NOTE 7 - HUMBOLDT LODGING ALLIANCE GRANT
The Humboldt Lodging Alliance provides community businesses and organizations funds for projects that promote tourism in Humboldt County. In June 2020, the Corporation received $60,000 to promote tourısm in fortuna. Because of the pandemic, this advertising campaign was delayed until December 2020 to April 2021. This ad campaign was focused on San Francisco, Oregon, and Red Bluff areas.
The tourism recruitment program included "Visit Fortuna California", " Stay in the Redwoods", 'Escape the City", and "Family getaway on the Redwood Coast" which was designed to promote the City of Fortuna.
NOTE 8 - NEW PRONOUNCEMENTS
Effective for annual periods beginning after December 15, 2017, ASU 2016-14, Not-for-Profit Entities:
Presentation of Financial Statements of Not-for-Profit Entities was issued to improve the financial reporting model for nonprofit organization. Management has elected to adopt this early for comparative reasons. The new guidance reduces the required classes of net assets from three to two, requires all organizations to provide information about expenses by both nature and function, and changes presentation and disclosure requirements.
Exhibit E
FORTUNA BUSINESS IMPROVEMENT CORPORATION
Notes to Financial Statements
June 30, 2021
NOTE 9- SUBSEQUENT EVENTS
Management has evaluated subsequent events through December 21, 2021, which is the date the financial statements were available to be issued
The Corporation may be affected by the Covid 19 disease which was declared a pandemic by the World Health Organization in March 2020. The extent to which the virus impacts the Organization's operations will depend on future developments, which are highly uncertain, including the duration and severity of the outbreak. While management expects this matter to negatively impact its results of operations, cash flows, and financial position, the related impact cannot be reasonably estimated at this time.
During fiscal year 2021, several small grants were available through the CARES Act, such as Humboldt County restart and recovery grant. The corporation received grants to notify businesses of the County regulations required to reopen which included sending postcards out to the affected businesses. FBID also received assistance to help supply safety equipment and masks to the business community. These small grants amounted to approximately $10,000 total,
In connection with the current audit engagement, the City of Fortuna has provided a $25,000 loan to the Corporation to be paid back over a four-year period by reducing the matching assessment.