Priests for Life, Inc.
Summary - December 31, 2017 Audited Financial Statements
Historically, Priests for Life (PFL) has an excellent track record with respect to its annual audits, the unqualified opinion in each report and the absence of critical management letters relating to lack of adequate controls or procedures, improper accounting or estimates or other shortcomings. Many not-for-profit organizations (NFPs) do not recognize the importance of establishing systems and processes that will support the organization’s missions and create an environment that promotes growth and accomplishment. Part of PFL’s track record of success is a testimony to its strong contributor base, organizational structure and discipline.
One of the key elements to having a comprehensive and successful audit is maintaining a collaborative relationship with the auditor’s partner and staff. In advance of the annual audit, PFL’s Director of Finance reviews the expectations for the audit, i.e. timing, changes in procedures or staff, significant events that might impact the financial activities of the organization, fees, etc., with the audit team. This will avoid delays, misunderstandings, additional time requirements and increased fees. No one appreciates surprises – not PFL and not the auditors.
An audit report with an ‘unmodified’ opinion should be the norm. If an organization receives a ‘modified’ opinion, it means that the financial statements or their accounting practices are not aligned with the generally accepted accounting principles (GAAP) in use in the US. Depending on the resulting materiality of the non-conformance, the modified opinion can result in an ‘exception to GAAP’ (mild) or an inability to render an opinion (serious). Another important positive factor is the absence of an ‘auditor letter’ to the Board that describes any significant lack of controls or procedures, auditor/client disagreements or suggests that staff may need to be ungraded. There has never been any such commentary with PFL’s auditors.
Both the Statement of Financial Position (Balance Sheet) and the Statement of Activities (P&L) for the year ended December 31, 2017 have improved over the previous year. The balance sheet is a snapshot in time. Compared to the 2016 Balance Sheet, the current ratio (Current Assets/Current Liabilities) has improved from 2.2:1 to 2.8:1; liabilities have decreased by over $385,000 and the organization’s Net Assets have increased by over $1.0 million; all positive indicators.
The 2017 P&L includes revenue (contributions) at approximately the same level in 2016: $13.2 million. Expenses were approximately $600,000 less than in 2016; Management down by $300,000 – approximately $130,000 in Occupancy costs and Membership up by $100,000. In general, cost reductions are a good thing; implementing cost controls; corporate culture/belt tightening; move to Florida included cost review associated with NY expenditures; one of the reasons for establishing PFL international HQ in Florida was anticipated lower costs; transitioned in 2017: (NOTE: cost reductions are almost never associated with programmatic activities.)
In some respects, 2017 marked a ‘transitional year’ for PFL. Fr. Frank and the Executive Team had been working on the relocation to Florida – primarily to establish the HQ, but also to take advantage of a lower operating-cost environment. For any organization, relocating from current space to new space is a major undertaking; let alone moving from NY to Florida and assuming all of the responsibilities of owning, renovating and managing your own property. The organization and its programs didn’t miss a beat during the process; again, an example of good organizational planning and management oversight. The 2017 audit and financial statements also tell a positive story; describe an organization that’s headed in the right direction financially and appears to be fiscally conservation; no red flags; no disturbing trends.
Click here for the 2017 Audit.