Texas Center for the Judiciary, Inc. (Center) is the primary provider of general and specialized judiciary education and training opportunities for the Texas appellate court, district court, and county court at law judges pursuant to Chapter 56 of the Texas government code. The Center provides specific training to improve safety and well-being outcomes for abused and neglected children in the child welfare system and brings together child-protection and criminal justice experts to improve the State of Texas’ response to cases of child abuse and neglect. Additionally, the Center provides training and technical assistance aimed at the handling of impaired driving cases, as well as relaying judges’ comments regarding the effectiveness of related legislation to policy makers. The Center’s support for these activities comes primarily from voluntary registration fees and grants from the State of Texas and the federal government.
BASIS OF ACCOUNTING The financial statements of the Center are prepared using the accrual basis of accounting whereby revenues and expenses are recognized in the period earned or incurred. FINANCIAL STATEMENT PRESENTATION Net assets, revenues, gains, and losses are classified based on the existence or absence of donor or grantor 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 (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 donor. Other donor imposed restrictions are perpetual in nature, where the donor stipulates that resources by 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. The Center had no net assets with donor restrictions at year-end. FIXED ASSETS Fixed assets with a useful life of more than one year and an original cost equal to or greater than $1,000 are recorded at cost or, if donated, recorded at fair market value on the date of donation. Maintenance and repairs which neither materially add to the value of the property nor appreciably prolong its life, are charged to expense as incurred. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the related lease term. Estimated useful lives are seven years for furniture and equipment and two to seventeen years for leasehold improvements. LEASES The Center determines if an arrangement is or contains a lease at inception. Leases are included in right of use (ROU) assets and operating lease obligations 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. The Center does not report ROU assets and lease liabilities 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 as rent payments are made. Non-lease components, such as common area maintenance charges and utilities are separated from lease components based on the terms of the related lease and are expensed as incurred within the rent expense account. GOVERNMENT GRANTS REVENUE, RECEIVABLES, AND UNEARNED GRANTS A portion of the Center’s revenue is derived from cost-reimbursable federal and state contracts and grants, which are conditioned upon certain performance requirements and/ or the incurrence of allowable qualifying expenses. Amounts received are recognized as revenue when the Center has incurred expenditures in compliance with specific contract or grant provisions. Amounts received prior to incurring qualifying expenditures are reported as unearned grants in the statement of financial position. The Center received cost-reimbursable grants of $80,982 that have not been recognized at 31 August 2023 because qualifying expenditures have not yet been incurred, with an advance payment of $42,956 recognized in the statement of financial position as unearned grant revenue. Government grants receivable are recorded at the amount the Center expects to receive from grantors. Management has determined that the government grants receivable balance is fully collectible; therefore, no allowance for uncollectible grants receivable was considered necessary as of year-end. PARTICIPANT REGISTRATION FEES AND PROGRAM INCOME Revenues from contracts with customers consist of program registration fees and program income for events held by the Center. In exchange for a fee, customers receive access to the events. The fee varies based on each event. Participant registration fees and program income are recognized at a point in time when the event is held, payment is due at the date of the event. Deferred revenue is recorded when cash is received prior to performance obligations being satisfied. Payment is typically received in advance or at the time of the event, and performance obligations are typically met at the time the event is held. CONTRIBUTIONS Contributions are recognized when cash, securities or other assets, or an unconditional promise to give is received. Conditional promises to give are not recognized until the conditions on which they depend have been substantially met. All contributions are recorded at their fair value and are considered to be available for operations unless specifically restricted by the donor. ESTIMATES The preparation of the financial statements in conformity with U.S. generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results could differ from those estimates. FUNCTIONAL EXPENSES The costs of providing various programs and other activities have been summarized on a functional basis in the statement of functional expense. Accordingly, certain costs have been allocated between the programs and supporting services benefitted. The Center allocated payroll and related expenses by estimating the percentage of personnel time spent on each area as estimated by management. Rent, professional fees, travel, office supplies, and other expense are allocated based on management’s analysis and review of individual account. The estimates are reviewed periodically and the allocated revised, if necessary, to reflect changes in the activities of the organization. INCOME TAX STATUS The Center is a nonprofit organization exempt from Federal income taxes under IRS Code Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision has been made for Federal income taxes in the accompanying financial statements. The Center’s policy is to record interest and penalties related to income taxes as interest and other expense, respectively. COMPENSATED ABSENCES Employees of the Center are entitled to paid vacation and paid sick days depending on the job classification, length of service, and other factors. The liability for compensated leave payable has been reported as accrued leave in the statement of financial position. SUBSEQUENT EVENTS Management of the Center 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.
As of year-end, cash in excess of FDIC insurance amounted to $449,755. Three grantors represented 86% of the Center’s total revenue for the year. Two grants make up 74% of total accounts receivables due at year-end.
The Center has a defined contribution salary deferral plan covering all employees. The Center makes contributions of 9.5% of the employee’s salary after one year of service. Voluntary employee contributions may also be made up to the applicable federal limits. The Center contributed $76,176 to the plan during the year.
The Center has evaluated current contracts to determine which met the criteria of a lease. The ROU asset represents the Center’s right to use the underlying asset for the lease term, and the lease obligation represents the Center’s obligation to make lease payments arising from the leases. The ROU asset and lease obligation, all of which arise from one operating lease, were calculated based on the present value of future lease payments over the lease terms. A discount rate of 3.54% was applied to the lease to calculate the lease obligation based on the risk-free rate. The Center leases one office space under an operating lease that expires in July 2025. The remaining term on this lease is 23 months. Future maturities of lease liabilities are presented in the following table, for the years ending 31 August: 2024 $282,903 2025 266,455 Less: present value discount (27,581) $521,777 As of 31 December 2024, the ROU asset related to the operating leases were as follows: Cost $769,202 Less: accumulated amortization (247,441) $521,761 Supplemental cash flow information related to leases: Cash paid for amounts included in the measurement of lease obligations: Operating cash flows from operating leases $274,654 Total rent expense: Operating lease cost $274,671 Proportionate share of operating costs 80,599 $355,270
Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the statement of financial position date, comprise the following: Cash $853,303 Grant and other receivables 194,380 $1,047,683 As part of the Center’s liquidity management plan, 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 revenue and expenditures are deposited in and deducted from the Center’s operating accounts.
The Center is funded by grants and contracts that are subject to financial and compliance audits by the grantor agencies. These grants and contracts have certain compliance requirements and, should audits by the grantor agencies disclose any areas of substantial noncompliance, the Center may be required to refund any disallowed costs. Management does not believe any instances of substantial noncompliance exist.
Fixed assets consist of the following as of 31 August 2023: Furniture and equipment $142,945 Leasehold improvements 34,171 177,116 Accumulated depreciation and amortization (121,517) $55,599
DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS The following table dissaggregates the Center’s revenue based on the timing of satisfaction of performance obligations: Performance obligations satisfied at a point in time $545,833 Contract revenue consists of revenue received from registration fees and program income. Revenue is recognized at a point in time as events are completed and are recorded in participant registration fees and in program income and other in the statement of activities. CONTRACT BALANCES Contract receivables relate to program income. The balance of contract receivables at 31 August 2023 and 2022 were $0 and $1,785 respectively. Contract liabilities relate to fees received for an event to be held at a future date. Balances of contract liabilities at 31 August 2023 and 2022 were $280,775 and $265,314, respectively. This amount is included in deferred revenue in the statement of financial position. The Center has elected the practical expedient not to disclose the allocation to remaining performance obligations because all obligations are expected to be satisfied within one year.