The Salvation Army, founded in 1865, is a not-for-profit international religious organization and charitable movement organized and operated on a quasi-military pattern, and is a branch of the Christian Church. Its membership includes officers (clergy); soldiers and adherents (laity); members of varied activity groups; and volunteers who serve as advisors, associates, and committed participants in its service functions. The Salvation Army, a California corporation (the “Territory”), is an organization exempt from income taxation under Section 501(a) as an entity described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and is exempt from state income taxes under related state provisions. The accompanying financial statements include all programs and operations of the Hawaiian and Pacific Islands Division (the “Division”), which is 1 of 10 divisions in the Territory. The Territory is incorporated in the state of California with corporate headquarters located in Long Beach, California. The Territory’s centers of operation include adult rehabilitation programs, divisional headquarters, institutions, corps community centers, and service extension units. Each center has been authorized by corporate authority to maintain accounting records on a standardized financial system and to issue such reports and financial statements, as may be appropriate, locally. Because ownership, control, and fiduciary responsibility are maintained at the corporate level, the statements of financial position of the Division exclude the costs of land and buildings and related depreciation, charitable remainder trusts, legacies, and bequests designated for the Division. The Division conducts the operations of The Salvation Army in the state of Hawaii, the Territory of Guam, the Republic of the Marshall Islands, and the Federated States of Micronesia. The Division operates a variety of programs, including corps community centers, that provide spiritual, educational, and recreational services; homeless and emergency shelters; children’s daycare centers; adult daycare; substance abuse centers; emergency disaster services; assistance for the poor, disabled, and retired; thrift stores; jail and hospital visitation; and camping activities.
The accompanying financial statements have been prepared in accordance with the national accounting policies of The Salvation Army. These policies are consistent with accounting principles generally accepted in the United States of America. The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of the Division. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Because the Schedule presents only a select portion of the operations of the Division, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Division.
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 allowable or are limited as to reimbursement.
The Division has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.