Title: NATURE OF ACTIVITIES & SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Nature of Activities: ITAVTFOC, Inc. is a non-profit corporation that is organized to assist in the care and feeding of underprivileged children. ITAVTFOC, Inc., a Child and Adult Care Food Program Sponsoring Organization of Unaffiliated Childcare Sites, receives grant funds from the United States Department of Agriculture through the State of Pennsylvania Department of Education. These funds are used to provide meals and snacks to childcare centers throughout the Pennsylvania area to whose children who meet eligibility requirements for free or reduced-price meals based on the regulations and guidelines of the United Stated Department of Agriculture and the standards and policies set by the Pennsylvania Department of Education.
Basis of Accounting: The financial statements have been prepared on the cash basis of accounting in accordance with generally accepted accounting principles.
Revenue Recognition: ITAVTFOC, Inc. receives its entire grant and contract revenues from Pennsylvania Department of Education. Revenue recognition depends on the contract. Pennsylvania Department of Education may, at its discretion request reimbursement for expenses or return of funds, or both, as a result of non-compliance by It ITAVTFOC, Inc. with the terms of the grants/contracts.
Income Taxes: ITAVTFOC, Inc.is exempt from federal income taxes under Section 501c(3) of the Internal Revenue Code and did not conduct unrelated business activities. Therefore, ITAVTFOC, Inc. has not made any provision for federal income taxes in the accompanying financial statements. In addition, ITAVTFOC, Inc. has been determined by the Internal Revenue Service not to be a “private foundation” within the meaning of Section 509(a) of the Internal Revenue Code.
Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. For example, ITAVTFOC, Inc. should use the accrual basis of accounting, rather than the cash basis. An accrual basis of accounting method in which payments and expenses are credited and debited when earned or incurred rather than when received or paid, which would help the management understand the cycle of expense and be prepared for higher expenses in certain periods of the year, match expense with the related period, and be ready for it.
It Takes a Village to Feed One Child, Inc.
Notes to the Financial Statements
Payments to Providers: ITAVTFOC Inc., contracts with a State Registered Food Service Management Company in Pennsylvania, Chef Chipper dba AAA Catering, to handle the procurement, preparation, and delivery of meals and snacks. These services are provided based on awarded meal and snack bid rates and in accordance with procurement guidelines established by the Pennsylvania Department of Education. Childcare providers and the Food Service Management Company receive funding following reimbursement procedures outlined by ITAVTFOC and directed by the Pennsylvania Department of Education. ITAVTFOC, Inc. requests funds by submitting claims to the Pennsylvania Department of Education based on approved United States Department of Agriculture meal and snack rates. ITAVTFOC, Inc. then uses these funds to pay the Contracted Food Service Management Company for procuring, preparing, and delivering meals and snacks, as well as to compensate childcare providers for their role in serving, monitoring, documenting, and adhering to ITAVTFOC's instructions and training.
Financial Statement Presentation: Financial Statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. The Organization has adopted the FASB’s Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Non-for-Profit Entities. A description of the net asset categories is as follows:
Net Assets without Donor Restrictions have no donor-imposed restrictions.
Net Assets with Donor Restrictions have donor-imposed restrictions that will expire in the future. If the donor-imposed restrictions expire in the same period as the contribution, the contribution may be included in unrestricted net assets. There were no Net Assets with Donor Restrictions.
Title: PROVIDER
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
TAVTFOC, Inc. establishes Sponsor Center Food Agreements with childcare providers in nearby communities and contracts with Chef Chipper, operating as AAA Catering, to handle food procurement, preparation, and daily meal delivery in compliance with Pennsylvania Department of Education guidelines and policies. Additionally, ITAVTFOC, Inc. serves as a clearinghouse for billing the Pennsylvania Department of Education and distributing reimbursements to program participants. This process includes contract invoicing, on-site meal service and distribution, record verification, and annual training programs for providers.
Title: METHODS USED FOR ALLOCATION OF EXPENSES
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The financial statements present specific expense categories that apply to one or more of the Organization's programs or supporting functions. These expenses may be allocated based on estimated time and effort or the nature of the expense, and wither demonstrative or operational. The daily operation created the need to hire additional employees to visit the food centers and provide the services necessary to run a smooth, effective, and efficient operation, on a daily basis.
Title: CASH MANAGEMENT
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Organization has $362,594 of financial assets available within 1 year of the balance sheet date to meet cash needs for general expenditure consisting of cash in Citizens Bank Account ending in 4812, of $299,913 and Citizens Bank account ending with XX2541 of $62,681. None of the financial assets are subject to donor or other contractual restrictions that make them unavailable for general expenditure within one year of the balance sheet date. The Organization has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations when they become due.
Title: EIDL Loan
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
On May 22, 2020, the Company received loan proceeds in the amount of $66,300 under the Economic Injury Disaster Loan Emergency program (“EIDL”) at a rate of 2.75 percent payable over up to 30 years. The first payment of $284 is due on May 22, 2021. On June 16, 2021 the organization received additional loan proceeds in the amount of $433,700. With the first payment of $2,033 due on June 16, 2022 Future annual maturities are as follows:
Year Ended Principal Interest Total
2024 $12,729 $13,635 $26,364
2025 $13,083 $13,281 $26,364
2026 $13,447 $12,917 $26,364
2027 $13,822 $12,542 $26,364
2028 $14,207 $12,157 $26,364
2029-2033 $77,194 $54,626 $131,820
2034-2038 $88,559 $43,261 $131,820
2039-2043 $101,597 $30,223 $131,820
2044-2048 $116,554 $15,266 $131,820
2049-2053 $50,445 $1,436 $51,880
Totals $501,637 $209,344 $710,980
Title: LEASING ACTIVITIES
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Organization has an operating lease for corporate offices. The following summarizes the line items in the statements of financial position which includes amounts for operating leases:
The new lease signed on 05/10/2023
Terms 2 years
Minimum rent is $28,500 per year/ $2,375 per month.
3% increase for the second year
Rent for the second year is $29,355
The following summarizes the line items in the statements of activities which include the components of lease expense:
Total operating lease costs for per year in the two years lease term is about $28,860
The lease has a remaining lease term of one years, inclusive of an option to extend for up to 2 years, which the organization currently expects to extend, and has applied a discount rate at an estimated risk-free borrowing rate of 5%.
Title: SUBSEQUENT EVENTS
Accounting Policies: Cash Basis and Orginzation, Policies acceptable by GAAP
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Organization has evaluated subsequent events through the date of this report. As of this date, there are no material subsequent events requiring adjustment to or disclosure in the financial statements for the year ended September 30, 2024.