Title: Nature of Activities
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The Center is a nonprofit corporation providing avenues for its participants to pursue individualized recovery goals and to be engaged in their community through a peer-to-peer model of support. The Center also has programs that assist individuals with homelessness as well as individuals suffering from opiate use disorders
Title: Classification of Net Assets
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The Center records contributions for accounting and reporting purposes based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows: Net Assets Without Donor Restrictions- Net Assets available for use in general operations and not subject to donor (or certain grantor) restrictions. Net Assets With Donor Restrictions - Net assets subject to donor imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates those resources be maintained in perpetuity.
Title: Use of Estimates
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The process of preparing financial statements in conformity with US generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.
Title: Cash and Equivalents
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
For purposes of the statements of cash flows, the Center considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents.
Title: Credit Concentration
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Cash balances in banks as of June 30, 2024 and 2023, were $267,655 and $184,434 respectively. Federal depository insurance covers $250,000 per tax identification number. Uninsured balances at June 30, 2024 were $17,655
Title: Method of Estimating Allowances for Losses
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Accounts receivable are evaluated monthly for collectability based on past credit history with customers and their current financial condition. Management determines accounts to be writted off when deemed uncollectible.
Title: PROPERTY AND EQUIPMENT
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Property and equipment are carried at cost. Depreciation of property and equipment is provided utilizing the straight-line method over estimated useful lives of the assets. Depreciation expense charged to operations was $ 12,001 and $ 11,923 for the years ending June 30, 2024 and 2023. Expenditures for land, building, and equipment in excess of $1,000 with expected useful lives of more than one year are capitalized.
Title: ACCOUNTS RECEIVABLE
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
In 2024, Capital Recovery Center adopted ASU 2016-13, Measurement of Credit Losses on Financial
Instruments (Topic 326), the amendments of which replace the incurred loss Impairment methodology
under current U.S. GAAP with a methodology that reflects expected losses and requires
consideration of a broader range of reasonable and supportable information to inform credit loss
estimates. The Center adopted the ASU on July 1, 2023, without a significant impact on the financial
statements and disclosures. Receivables are stated at unpaid balances, less an allowance for credit losses. The Center provides
for losses on accounts receivable using the allowance method, The allowance is based on its review
of current outstanding balances, historical collections, current economic conditions, and reasonable
and supportable forecasts. Receivables are considered impaired if full principal payments are not
received in accordance with the contractual terms. It is the Center's policy to charge off uncollectible
accounts receivable when management determines the receivable will not be collected. As of June
30, 2024 and 2023, management has determined that no allowance for credit losses is considered
necessary.
Beginning accounts receivable for July 1, 2023, was $ 411,125.
Title: REVENUE RECOGNITION
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The Center uses ASU No. 2014-09, "Revenue from Contracts with Customers" and the related amendments ("ASC 606" or "the new revenue standard") using the modified retrospective method.
Revenue is recognized when control of the promised goods or services is transferred to the Agency's
customers, in an amount that reflects consideration we expect to be entitled to in exchange for those
good and services. The revenue is recognized net of discounts and refunds. Revenue is recognized
using a five-step approach required by Accounting Standards Codification (ASC) Topic 606: Revenue
from Contracts with Customers, as follows: • Identification of the contract with a customer.
• Identification of the performance obligations in the contract.
• Determination of transaction price to the performance obligations in the contract.
• Allocation of the transaction price to the performance obligations in the contract. Revenue from contracts with customers consists primarily of client fees and patient services. Client
fees and patient services are recognized in the period in which the services are provided. As of June
30, 2024 and 2023, contract assets were $ 450,893 and $ 388,730 respectively. Contributions/grants are recognized when the donor/grantor makes a promise to give to the Center,
that is, in substance, unconditional. Contributions that are restricted by the donor/grantor are reported
as increases in net assets without donor restrictions if the restrictions expire in the fiscal year in which
the contributions/grants are recognized. All other donor-restricted contributions/grants are reported
as increases in net assets with donor restrictions depending on the nature of the restrictions. When
a restriction expires, net assets with donor restrictions are reclassified to net assets without donor
restrictions. Donations of property and equipment are recorded as support at their estimated fair value. Such
donations are reported as net assets without donor restrictions unless the donor has restricted the
donated asset to a specific purpose or to be used for a specified period of time. Assets donated with
explicit restrictions regarding their use and contributions of cash that must be used to acquire property
and equipment are reported as restricted support. Absent donor stipulations regarding how long
those donated assets must be maintained the Center reports expirations of donor restrictions when
the donated or acquired assets are placed in service as instructed by the donor. The Center
reclassifies to net assets without donor restrictions at that time. Rental income is recognized when earned.
• Recognition of revenue, when, or as, performance obligations are satisfied. Performance Obligations and Significant Judgements - A performance obligation is a promise in a
contract to transfer a distinct good or service to a customer. A contract's transaction price is allocated
to each performance obligation identified in the arrangement based on the relative standalone price
of each distinct good or service and recognized as revenue when, or as, the performance obligation
is satisfied. If a distinct good or service does not have an observable standalone selling price, then
the primary method used to estimate the standalone selling price is the adjusted market assessment
approach, under which we evaluate the market and estimate a price that a customer would be willing
to pay for the goods or services we provide.
Title: GIFTS IN KIND
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
In fiscal year 2023, Capital Clubhouse adopted ASU 2020-07, Presentation and Disclosure by Notfor-
Profit Entities for Contributed Nonflnancial Assets. The guidance requires nonprofit entities to
present contributed nonfinanclal assets as a separate line item in the statement of activities, apart
from contributions of cash or other financial assets. The standard also increased the disclosure
requirements around contributed nonfinancial assets, including disaggregating by category the types
of contributed financial assets a nonprofit entity has received. Adoption of this standard did not have
a material effect on the financial statements. Contributed Nonfinancial Assets
Clothing,
supplies
and food
Revenue Recognized
$ 152,382 in FY24
$ 0 in FY23
Utilization in
Programs/Activities
Program Use
Donor Restrictions
No associated donor
restrictions
Valuation
Techniques and
Inputs
Market Value of
items received.
12
Title: INCOME TAX STATUS
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The Center has qualified for tax exemption under Section 501(c)(3) of the Internal Revenue Code,
and accordingly, no provision for income taxes has been recorded in the accompanying financial
statements.
The Center follows the provisions of "Accounting for Income Taxes" which clarify the accounting for
uncertainty in income taxes recognized in an entity's financial statements. The provisions prescribe
certain criteria for the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. These provisions also provide guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. There
were no unrecognized tax benefits at June 30, 2024.
Title: FUNCTIONAL ALLOCATION OF EXPENSES
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Expenses are charged to the direct program services and supporting program services based on
actual time and expense and on estimates made by the Center's management. This allocation of
expenses has been summarized in the statement of activities and in the statement of functional
expenses. All expenses of the Center have been allocated on this basis
Title: RESTRICTIONS ON NET ASSETS
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Net assets with donor restrictions include grants received in which expenditures of the proceeds are
designated for specific purposes, which amounted to $20,397 at June 30, 2024 and $25,108 at June
30,2023
Title: LEASES
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Leases are required to recognize for all leases (with the exception of short-term leases) a lease liability,
which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted
basis and a right-of-use ("ROU") asset, which is an asset that represents the lessee's right to use, or
control the use of, a specified asset for the lease term. The Agency calculates operating and financing lease liabilities with a risk-free discount rate, using a
comparable period with a lease term. All lease and non-lease components are combined for all leases.
We include in the determination of the right-of-use assets and lease liabilities any renewal options
when the options are reasonably certain to be exercised. We have elected the short-term lease exemption for all leases with a term of 12 months or less for
both existing and ongoing operating leases to not recognize the asset and liability for these leases.
Lease payments for short-term leases are recognized on straight-line basis.
Title: OPERATING LEASES
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Under the terms of an agreement with 1000 Cherry Street, LLC, the Center entered an agreement to
lease office space located at 1000 Cherry Street SE, Olympia, WA. The lease commenced in August
2020 at a monthly rental rate of $ 6,700 per month, to increase by 3% annually. The lease term is for
60 months, ending July 2025. The center has the option to extend the lease for two 3-year renewal
periods.
Under the terms of an agreement with Kelly Connect, the Center entered an agreement to lease copy
equipment. The lease commenced in September 2020 at a monthly rental rate of $ 271 per month.
The lease term is for 60 months, ending August 2025. Under the terms of an agreement with DM Belfair Investments, LLC, the Center entered an agreement
to lease office space located at McLendon Place, 23554 State Route 3, Belfair, WA 98528. The lease
commenced in February 2023 at a rental rate of $ 15/sf per year, to increase by 4% annually. The
lease term is for 36 months, expiring January 2026. The center has the option to extend the lease for
two 3-year renewal periods. Under the terms of an agreement with Miller Munroe Properties, LLC, the Center entered an
agreement to lease commercial real estate located at 1011 10th Ave SE, Olympia, WA. The lease
commenced in July 2020 at a monthly rental rate $ 6,592, to increase by 2.5% annually. The lease
term was for 36 months, expiring June 2023. The Center exercised the option to renew the lease for
a term of 36 months. Rent expense for the year ended June 30, 2024 and 2023, was $ 210,511 and $ 222,432. Minimum future rental payments under non-cancelable operating leases have remaining terms in
excess of one year as of June 30, 2024, for each of the next five years and in the aggregate are: Year ended June 30,
2025
2026
2027
2028
2029 and thereafter
Total minimum future rental payments
Less interest
Present value of lease payments
$ 196,639
109,220
305,859
(19,603)
286.256
Title: OPERATING LEASES ROLLFORWARDS
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
ROU Asset Roll forwards
Balance at beginning of year
Lease expense amortization
Additions
Balance at end of year
ROU Liability Roll forwards
Balance at beginning of year
Lease expense interest
Payments
Additions
Balance at end of year
$ 449,548
(163,292)
$ 449,548
28,755
(192,047)
14
Title: FINANCING LEASES
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Under the terms of an agreement with Kelly Connect, the Center entered an agreement to lease
additional copy equipment. The lease commenced in December 2019 at a monthly rental rate of
$ 446 per month. The lease term is for 60 months, expiring September 2025. The Center retains the
right to purchase the copy equipment at fair value at lease expiration.
Under the terms of an agreement with Kelly Connect, the Center entered an agreement to lease
additional copy equipment. The lease commenced in November 2023 at a monthly rental rate of
$ 1,034 per month. The lease term is for 60 months, expiring October 2028. The Center retains the
right to purchase the copy equipment at fair value at lease expiration.
Minimum future lease payments under non-cancellable financing leases with remaining terms in
excess of one year as of June 30, 2024 for each of the next five years and in the aggregate are:
Title: SUBLEASE AGREEMENTS
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The Center subleases approximately 1,200 square feet of the office space located at 1000 Cherry
Street SE, Olympia, WA, as outlined in the terms of their lease agreement with 100 Cherry Street,
LLC. The Center subleases this space at a monthly rental rate of $ 3,680 per month with lease terms
that do not extend in excess of one year from the balance sheet date. The Center is currently engaged
in a lease agreement with Thurston County, a municipal corporation, beginning September 2024 and
ending February 2025.
Title: LIQUIDITY AND AVAILABILITY
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
The below reflects the Center's financial assets as of June 30, 2024 available for general expenditure,
reduced by amounts that are not available for general use due to contractual or donor-imposed
restrictions within one year of the statement of financial position date. Total available financial assets
without donor or other restrictions limiting their use, within one year of the balance sheet date,
comprise the following:
Cash $ 244,464
Accounts Receivable 450,893
Total financial assets 695,357
Less those unavailable for general In addition to financial assets available to meet general expenditures over the next 12 months, the
Agency operates with a balanced budget and anticipates collecting sufficient revenue to cover general
expenditures. The Agency's primary funding sources are grants. As a result, the expenditures are
budgeted based on funds available from grants.
expenditures within one year, due to:
Restricted by donor-imposed restrictions (20,397)
(20,397)
Total available financial assets $ 674,960
Title: SUBSEQUENT EVENTS
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
Management has evaluated subsequent events through July 16, 2025, which is the date in which the
financial statements were available to be issued and noted the following:
Title: RESTATEMENT
Accounting Policies: 1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited to reimbursement. 2. Pass-through entity indentifying numbers are presented where available. 3. The Center has not elected to use the 10% de minimus cost rate.
De Minimis Rate Used: N
Rate Explanation: Auditee used a lower indirect cost rate.
During our audit, we discovered an error in the financial statements of Capital Recovery Center that
was reported previously as of June 30, 2023, which was corrected and restated. In fiscal year 2023,
the calculation of one of the operating right of use assets and liabilities incorrectly included the price
per square foot for the entire building rather than the actual square footage the Center leased. This
resulted in the net right of use asset and the right of use liability both being overstated by
approximately $ 245,000 and the net loss being overstated by approximately $ 17,000. This has been
corrected and the comparative 2023 statements.