Austin Area Urban League, Inc. (AAUL) is a corporation organized under the Nonprofit Corporation Act of the State of Texas as of June 1976. The organization exists to provide a variety of social services in the areas of employment, housing, and general welfare for low- and moderate-income individuals in Austin, Texas and the surrounding area. AAUL’s activities are primarily funding by contributions and government awards. The following is a description of AAUL’s programs for the year ended 31 December 2024: Health and Wellness - AAUL’s Project Wellness is designed around an authentic, culturally appropriate and relevant model, which forms the core platform from which program offerings can be tailored to provide educational awareness of chronic disease prevention and self-management strategies, improve health literacy, promote peer support services, establish strategic partnerships and build sustainable community-focused programs. The most unique feature of AAUL’s Project Wellness is the way that it intentionally encourages and supports participants as they take ownership of their health, lifestyle behaviors and health management leading to achievement of the empowerment goal. Home Repair -This program provides repairs to owner-occupied homes located in the City of Austin. The homeowners assisted by this program must reside in the City of Austin and their incomes may not exceed 80% of the Median Family Income (MFI) as determined by the U.S. Department of Housing and Urban Development (HUD). Services under this program include customer recruitment, screening and selection of eligible customers, and the supervision of repairs on homes owned by low-income residents. Workforce Development - This program provides computer training, employability skills classes, professional development and job placement assistance to unemployed and underemployed individuals. The goal of this program is to develop technological skills of participants in order to create marketable individuals for Austin’s high-tech job market. In addition, the Youth Opportunities Program provides training and employment programs for youth both in and out of school. This program is an umbrella for a variety of educational programs designed to educate and enhance the lives of youth, which include the Summer Enrichment Program, the Youth Diversion Program, and the Housing Authority of the City of Austin After School Program. Program services may include all authorized adult services, school-to-work transition services, and alternative high-school services. Education - AAUL’s Education and Youth Division works earnestly to develop innovative programs to support academic achievement, civic involvement, and the physical and emotional development of children and youth. The signature programs of AAUL’s Education and Youth Division, which include early childhood education, post-secondary success, and youth leadership, are designed to help achieve the National Urban League’s empowerment goal of assuring that every child will be ready for college, work, and life by 2025. Southbridge Shelter- This a shelter to provide housing for those who are living on the streets and in encampments. It is managed by AAUL through a grant from Austin Public Health.
CASH AAUL is required by a funding source to maintain a separate bank account for the Minor Home Repair program. ESTIMATES The preparation of financial statements in conformity with U.S. 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. FINANCIAL STATEMENT PRESENTATION The accompanying financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor- imposed restrictions. Accordingly, net assets of the organization 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 (or certain grantor) 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 that resources be maintained in perpetuity. Donor imposed restrictions are released when a restriction expires, that is when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. INCOME TAXES AAUL is an organization other than a private foundation exempt from Federal income taxes under IRS Code Section 501(c)(3). Therefore, no provision has been made for Federal income taxes in the accompanying financial statements. AAUL’s policy is to record interest and penalty expense related to income taxes as interest and other expense, respectively. CONTRIBUTIONS Unconditional grants and pledges are recorded as revenue and receivable at fair value on the date of the award. Contributions received (including unconditional promises to give) are recorded at fair value on the date of donation as with donor restrictions or without donor restrictions at fair value in the period received depending on the existence and/or nature of any donor imposed restrictions. FIXED ASSETS Fixed asset purchases of $3,000 and greater are recorded at cost. Contributions of fixed assets with estimated useful lives greater than one year are recorded as support at their estimated fair value. Depreciation on fixed assets is calculated using the straight-line method over the estimated useful lives of the respective assets, ranging from 3 to 10 years. Upon sale or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected as an increase or decrease in net assets without donor imposed restrictions. FEDERAL AND LOCAL AWARDS Government grants are recognized as revenue as services are performed as required by the contracts. RECEIVABLES All receivables on the statement of financial position are due within the next fiscal year. AAUL estimates allowances for doubtful accounts by evaluating the creditworthiness, the historical collections, and the aging of the accounts. Once an account is deemed uncollectible, it is written off. Receivables are considered delinquent based on how recently payments have been received. As of 31 December 2024 the allowance for doubtful accounts was $113,092. LEASES AAUL determines if an arrangement is or contains a lease at inception. Leases are included in right of use (ROU) assets and operating lease obligation in the statement of financial position. ROU assets and lease obligations reflect the present value of the future minimum lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. AAUL does not report ROU assets and leases obligations for its short-term leases (leases with a term of 12 months or less). Instead, the lease payments of those leases are reported as lease expense on a straight-line basis over the lease term. SPECIAL EVENTS AAUL’s special event sponsorship revenue is not considered to be an exchange transaction. These event sponsorships are treated as contributions and are recorded at fair value on the date donation. FUNCTIONAL ALLOCATION OF EXPENSES The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, some expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include payroll and related, rental assistance, professional fees, awards and ceremonies, IT, computer and telephone, supplies, repairs and maintenance, travel, insurance, meals and entertainment, fundraising, education job placement, equipment and equipment rental, and other, which are allocated based on estimates of time and effort by personnel, as well as rent, which is based on estimates of usage of space. SUBSEQUENT EVENTS AAUL has evaluated subsequent events for disclosure through the date of the Independent Auditor’s Report, the date the financial statements were available to be issued.
Land $335,980 Building 1,424,234 Furniture and equipment 256,685 Vehicles 133,455 Software 80,818 Other 5,000 Accumulated depreciation (381,858) $1,854,314
Funding received from one source accounted for 65% of AAUL’s total revenue for the year. At year end, 100% of AAUL’s local awards receivable were due from one source.
AAUL receives grants for specific purposes that are subject to grantor review. Such reviews could result in a request for reimbursement by the grantor if unallowable costs are identified. Management believes requests for reimbursement, if any, would not be significant.
AAUL evaluated current contracts to determine which met the criteria of a lease. The ROU assets represents AAUL’s right to use underlying assets for the lease term, and the lease obligation represents AAUL’s obligation to make lease payments arising from these leases. The ROU asset and lease obligation, all of which arise from operating leases, were calculated based on the present value of future lease payments over the lease terms. Weighted average discount rate 4.22% Weighted average remaining lease term 21 months AAUL’s operating leases consist of real estate leases for office space located Austin, Texas. For the year ended 31 December 2024, total operating lease cost, was approximately $272,000. Future maturities of lease liabilities are presented in the following table, for the years ending 31 December: 2025 $217,490 2026 149,200 2027 13,000 379,690 Less: present value discount (21,613) $358,077 As of 31 December 2024, ROU assets related to operating leases were as follows: Cost $596,073 Less: accumulated amortization (237,641) $358,432 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows from operating leases $263,395
Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investment in mutual funds $330,850 $330,850 N/A N/A
Satisfaction of purpose restrictions during the year: Health and Wellness Program $50,000 Workforce Development Program 24,000 $74,000 Balances of net assets with purpose restrictions at year end: Computer Club $40,163 First Time Home Buyer Program 23,416 Workforce Development Program 15,086 High School Redesign Program 17,064 Music and Arts Program 7,159 $102,888
On 1 October 1985, AAUL established a defined contribution benefit plan (the Plan) under section 403(b) of the Internal Revenue Code for employees that have attained one year of service. The Plan is administered by Mutual of America. At the inception of the Plan, AAUL was required to match 7% of eligible employees’ annual salary. During 2008, AAUL stopped making payments to the Plan. On 1 April 2010, the Plan was amended to discontinue employer contributions. At year end, $37,514 is payable to Mutual of America for employer matching contributions relating to the years 2008 through 2010.
A significant portion of AAUL’s revenue is derived from cost-reimbursement federal and local awards, which are conditioned upon the incurrence of allowable qualifying expenses. Amounts received are recognized as revenue when AAUL has incurred expenditures in compliance with specific contract provisions. Cash amounts received prior to incurring qualifying expenditures are reported as refundable advances in the statement of financial position. There were no refundable advances at year end. AAUL has been awarded cost reimbursable grants of $3,608,964 that have not been recognized as revenue at 31 December 2024 because qualifying expenditures have not been incurred.
Cash $2,112,472 Restricted cash 1,500,000 Cash and restricted cash reported on statement of cash flows $3,612,472
In October 2020, AAUL entered into a loan agreement with a financial institution with an original balance of $25,122 and an interest rate of 7.69%. The loan is due in monthly installments of $438 over 6 years and matures September 2026. This loan is secured by a vehicle. $8,149In December 2020, AAUL entered into a loan agreement with a financial institution with an original balance of $34,568 and an interest rate of 6.89%. The loan is due in monthly installments of $589 over 6 years and matures November 2026. This loan is secured by a vehicle. 12,626 In November 2021, AAUL entered into a loan agreement with a financial institution with an original balance of $41,765 and an interest rate of 4.59%. The loan is due in monthly installments of $668 over 6 years and matures November 2027. This loan is secured by a vehicle. 21,686 In August 2023, AAUL entered into a loan agreement with a financial institution with an original balance of $1,150,000 and a variable interest rate, which was 6.95% at year end. The loan is due in monthly installments of $8,166 over 10 years and matures August 2033. This loan is secured by property at 7308 Cameron Road, Austin, TX 78752 and a certificate of deposit with the lender in the amount of $500,000. The loan contains a liquidity maintenance covenant which requires AAUL to maintain a minimum of $1,000,000 in cash accounts at all times. 1,114,945 $1,157,406 Future maturities on the loans are as follows: 2025 $38,737 2026 39,460 2027 30,568 2028 25,195 2029 27,003 Thereafter 996,443 $1,157,406
AAUL has created a subsidiary, The Urban Empowerment Zone I, LLC (UEZ I,LLC), which has entered into an agreement with Travis County and City of Austin for a project to build a new construction 80-unit, four story building for AAUL at an estimated cost of $19,953,400. The project will provide long-term, permanent supportive housing for Austin residents experiencing or at-risk of homelessness. The development will offer amenities including free WIFI, multi-purpose rooms and elevators. UEZI, LLC entered into a 40-year lease-to-own agreement with the City of Austin for the land where the building will be constructed (exempt from any monthly payments). Travis County has committed $11,503,016 and the City of Austin has committed $8,001,385 toward the completion of this project. AAUL intends to obtain the remaining funding for the project from donations and lending.
Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year from the statement of financial position date, comprise the following: Cash $2,112,472 Federal awards receivable 248,807 Local awards receivable, net 636,795 2,998,074 Less: amounts unavailable due to donor imposed restrictions (102,888) $2,895,186 As a part of AAUL’s liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. The policy is that monthly revenues are to cover monthly expenses. Monthly revenues and expenditures are deposited in and deducted from AAUL’s operating accounts. See Note 8 for additional information on net assets with donor restrictions and Note 12 for additional information on debt.
AAUL recognized revenue from contributed nonfinancial assets which were received without donor imposed restrictions. House $560,000 Professional services 22,500 $582,500 AAUL received a donated house that has not yet been utilized or monetized. The house was valued based on the price of similar sized houses in a similar area. Contributed professional services are valued at the current rates for similar services.
Heath and Wellness Home Repair Workforce Development Southbridge Shelter Education Total Program Administrative Fundraising Total Payroll and related $594,333 $242,250 $521,047 $1,113,254 $180,188 $2,651,072 $736,393 $0 $3,387,465 Rental assistance 1,571,511 0 11,770 2,725 0 1,586,006 151,632 0 1,737,638 Professional fees 48,792 4,083 61,323 702,953 99,526 916,677 337,702 40,456 1,294,835 Meals and entertainment 31,751 0 276 454,184 26,837 513,048 105,256 32,356 650,660 GoBond home repair contractors 0 436,343 0 0 0 436,343 0 0 436,343 Repairs and maintenance 3,228 16,025 0 64,235 0 83,488 292,162 0 375,650 Rent 69,494 57,569 23,005 11,520 5,511 167,099 103,435 1,461 271,995 Supplies 9,263 114 6,723 89,246 2,775 108,121 110,505 5,417 224,043 Minor home repair contractors 0 214,100 0 0 0 214,100 0 0 214,100 Insurance 9,421 3,789 6,862 8,321 647 29,040 159,431 1,406 189,877 Equipment and equipment rental 570 0 712 107,575 31,000 139,857 18,655 7,966 166,478 IT, computer, and telephone 17,359 3,790 12,604 39,135 6,895 79,783 78,632 0 158,415 Fundraising 0 0 0 0 81,761 81,761 13,776 35,085 130,622 Travel 918 6,760 12,787 1,101 1,865 23,431 63,489 9,926 96,846 Awards and ceremonies 0 0 0 0 2,164 2,164 4,912 63,341 70,417 Education job placement 0 0 6,270 0 0 6,270 9,143 0 15,413 Other 2,592 12,588 32,172 12,738 31,739 91,829 278,984 38,012 408,825 $2,359,232 $997,411 $695,551 $2,606,987 $470,908 $7,130,089 $2,464,107 $235,426 $9,829,622