Title: CASH AND CASH EQUIVALENTS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
nstitution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2023, the Organization’s uninsured cash balances at one bank total $1,075,111. Management believes that, due to the strength of the financial institution, the Organization is not exposed to any significant credit risk on cash and cash equivalents.
Title: PLEDGES RECEIVABLE
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
The Organization has received promises to give which are included as restricted by donor. The pledges receivable is reported at the present value of the expected cash flows. As of September 30, 2023, these promises to give are due in the gross amount of $1,368,169 within five years, before a present value adjustment of $25,499 and an allowance for uncollectible pledges of $50,000, for a net of $1,292,670. As of September 30, 2022, these promises to give were due in the gross amount of $1,081,321 within five years, before a present value adjustment of $84,274 and an allowance for uncollectible pledges of $50,000, for a net of $947,047. The Organization has received no conditional promises to give as of September 30, 2023 and 2022.
Title: PROPERTY AND EQUIPMENT
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
Depreciation expense for the years ended September 30, 2023 and 2022, was $187,371 and $-0-, respectively.
During the year ended September 30, 2022, UWS commenced capital improvements on a leased building which houses the Rupert Huse Veteran Center. It had expended $1,386,996 on this capital project as of September 30, 2022, which was included as Construction in progress. During the year ended September 30, 2023, UWS transferred this investment in capital assets to UWSP as planned. During the year ended September 30, 2023, UWSP completed the project at a total cost of $1,938,663, including the costs as Leasehold improvements.
Subsequent to year-end, on April 24, 2024, UWS Properties, Inc. purchased the building it had previously been leasing for $6.5 million, financing the purchase with a $4,511,350 promissory note from SouthState Bank and a $1,000,000 note from CommunityWorks. These loans are due monthly over sixty months with a balloon payment due in April 2029.
Title: NOTES PAYABLE
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
During the year ended September 30, 2021, the Organization borrowed $144,542 through the Paycheck Protection Program Phase II under the Coronavirus Aid, Relief, and Economic Security Act. During the year ended September 30, 2022, the Organization met the requirements for total forgiveness of this loan, and the loan was legally forgiven. The amount forgiven is included in grant income on the Statements of Activities for the year ended September 30, 2022.
In December 2022, UWSP entered into a $400,000 unsecured promissory note agreement with a bank. This note requires monthly interest payments, with interest calculated at 7.50%, and one payment of the outstanding principal balance on December 22, 2023. UWSP borrowed $243,737 on this note during the year ended September 30,2023 and owed $243,737 as of that date. UWSP paid the loan balance in full in November 2023.
As discussed above, subsequent to year-end on April 24, 2024, UWS Properties, Inc. borrowed a total of$5,511,350 under two loans to facilitate the purchase of its building.
Title: LEASE OBLIGATIONS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
UWS is obligated under a non-cancelable operating lease for its Spartanburg location. The lease term is for five years. The initial rent is $38,000 for the first year, with annual rental increases of 3.0% per year beginning in the second year.
UWSP is obligated under a non-cancelable operating lease for approximately 33,678 square feet for its Greenville location, the Robert Huse Veteran Center. The lease term is for twelve and one-half years, with two five-year renewal options. The total initial rent is $134,148 for the first year, $497,520 for the second year,$735,816 for the third year, and increases of 2.0% per year thereafter. Total lease expense under these leases recorded for the fiscal year ended September 30, 2023, was $459,946, consisting of operating lease expense.
Operating leases are recorded as operating Right of Use assets and obligations under operating lease liabilities in the Statements of Financial Position. The Organization recognized Right of Use Assets – Buildings for$7,160,030. The assets are being reduced over the remaining term of the leases and had a balance of $6,870,047 as of September 30, 2023. The Organization also recognized operating lease liabilities of $7,160,030. The lease liabilities are being amortized over the remaining term of the leases and had a balance of $7,275,968 as of September 30, 2023.
As of June 30, 2023, the weighted-average remaining term for all operating leases is 11.51 years. The weighted-average discount rate associated with operating leases as of September 30, 2023, is 4.0%. UWSP sub-leases 22,581 square feet of the Robert Huse Veteran Center to UWS under a non-cancelable operating lease. The lease term is for five years. The total initial rent is $184,668 for the first year, $497,520 for the second year, and increases of 5.0% per year thereafter. Rental revenue for UWSP and rental expense for UWS have been eliminated for the consolidated financial statements. UWSP also sub-leases space to other organizations under short-term usage and lease arrangements. Based on existing terms, UWSP will receive rental income from these lease arrangements in the amounts of $450,969; $440,197; $439,893; $450,081; and $329,464 over the next five years, respectively, including the rental income from UWS.
As discussed above, subsequent to year-end on April 24, 2024, UWS Properties, Inc. purchased the building housing the Robert Huse Veteran Center it had been leasing under this long-term lease agreement.
Title: NET ASSET DESIGNATIONS AND RESTRICTIONS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
Substantially all of the restrictions on the net assets at September 30, 2023 and 2022, were related to funds raised for ongoing efforts to help prepare the Organization for future needs and service to the community. Net assets are released from restrictions by incurring expenses satisfying the restricted purposes, by the occurrence of other events specified by donors, or by being released from restrictions by the donors. Net assets with donor restrictions of $4,497,445 and $2,269,454 were released from restrictions for the years ended September 30, 2023 and 2022, respectively.
During the previous fiscal year, the Organization initiated a capital campaign to raise restricted funds for the development of a Veteran Resource Center to serve the local community. These funds were donor restricted for project construction, future lease payments, and facility operations. In January 2023, the Organization transferred the remaining restricted funds, the construction in progress expended, and customer rental deposits to UWS Properties, Inc., a new wholly owned subsidiary of the Organization. The amount transferred totaled $1,923,444.
Title: RETIREMENT PLAN
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
he Organization sponsors a defined contribution retirement savings plan (“the Plan”) in compliance with Section 401(k) of the Internal Revenue Code. The Plan covers all employees who work at least twenty hours per week and have been employed for at least one year. Participants may make contributions to the Plan, subject to IRS limitations. The Organization may make a matching contribution, at its discretion. For the year ended September 30, 2023, the retirement plan expense for the Organization totaled $16,671.
Title: IN-KIND DONATIONS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
During the years ended September 30, 2023 and 2022, the Organization recorded in-kind contributions of$43,117 and $61,322, respectively. Donated items for outreach programs, events, and training are recorded at estimated fair market value as determined by management using available market information. As donated items are used in various operations of the Organization, they are reflected in the expenses of that operation.
Title: FAIR VALUES OF FINANCIAL INSTRUMENTS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
The Organization has adopted the provisions of the Fair Value Measurement and Disclosures topic of FASB ASC. This guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. Level 1 inputs represent fair values obtained using quoted prices in active markets. Level 2 inputs represent fair values obtained from observable market data but not from quoted market prices. Level 3 inputs represent unobservable inputs that are supported by little or no market activity and are generally based on the entity’s own assumptions.
The following methods and assumptions are used to estimate the fair value of each financial instrument: Cash and cash equivalents, investments, accounts payable, accrued expenses, other liabilities - the carrying values approximate fair value due to their short maturities.
Investments – investments are categorized as Level 1, with no valuation adjustments applied.
Contributions, Other, and Grants Receivable - the carrying values approximate fair value due to their short maturities.
Title: LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
The following table reflects the Organization’s financial assets as of September 30, 2023, reduced by amounts not available for general expenditure within one year. Financial assets are considered unavailable, because certain net assets are donor restricted (see Footnote 3). The Organization has the following financial assets that could readily be made available within one year of the Statements of Financial Position date to fund expenses without limitations: The Organization has a policy to structure its financial assets to be available as its general expenses, liabilities, and other obligations come due. The Organization monitors its liquidity so that it is able to meet its operating needs and other contractual commitments while maximizing the investment of its excess operating cash.
Title: REVENUE RECOGNITION
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
The Organization has adopted the provisions of the Revenue from Contracts with Customers topic of FASB ASC. This guidance replaces most existing revenue recognition in U. S. GAAP and requires expanded disclosure relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying five steps listed in the guidance.
The Organization recognizes revenue through both restricted and unrestricted contributions and grants. Management has determined that these contributions are non-reciprocal transactions and, therefore, fall under the scope of the Contributions Received topic of ASC.
The Organization’s other revenue streams include interest income, dividend income, rent income, and other income which are not included within the scope of this ASC.
Title: SUBSEQUENT EVENTS
Accounting Policies: Nature of Organization; Basis of Accounting; Financial Statement Presentation; Contributions and Revenue; Cash and Cash Equivalents; Investments; Account, Grants, and Pledge Receivable; Land Held for Sale; Property and Equipment; Leases; Donated Services and Goods; Income Taxes; Use of Estimates; Statements of Financial Position Presentation; Functional Allocation of Expenses
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
In preparing these financial statements, the Organization has evaluated events and transactions for potential recognition or disclosure through May 31, 2024, the date the financial statements were available to be issued. There were no such events requiring recording or disclosure for the year ended September 30, 2023.