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Here is a brief summary of the results of the organization’s 2021 audit:
For over twenty-five years now, Priests for Life has engaged various prestigious auditing firms to conduct annual independent audit examinations of our financial activities. The organization has received “unqualified” or “clean” reports from all its auditors over the entire course of its history. The organization has never once received an “unqualified” audit report. This is something that all of us at Priests for Life should be very proud of.
Last year, we reported to you that our auditors had completed the audit examinations for the years ended December 31, 2020, 2019, and 2018 and had issued excellent and unqualified opinions. The IRS had previously issued legal extensions for the due dates of these audits because of Covid and severe weather in Florida. Thus, all our audits have been filed “on time.”
The CFO of PFL—Danielle Malina Jones—initiated discussions with our new auditors— TSC Enterprises, a Washington DC based firm that had previously been called Brooks & Associates— to begin the 2021 audit immediately following the conclusion of the 2020 work, and I’m happy to report that this audit was completed satisfactorily in November of last year and that the 2022 audit is currently in process and should be completed no later than the end of March of this year. The 2023 audit will commence immediately thereafter.
Regarding the 2021 audit, Priests for Life’s Statement of Financial Position (our “Balance Sheet”) has continued to improve. Total assets increased by over 11% ($786,000) since 2020. Total Liabilities decreased by approximately $1.9 million over 2020. This significant reduction included the elimination of the outstanding building mortgage of $1.24 million, the forgiveness of the government’s PPP Loan of $443,837 and reduction in Accounts Payable of $170,372.
Priests for Life generated close to $12 million in revenue in 2021— $11,899,350 to be exact— an increase of $1,372,984 or 13.1% over 2020 levels. This increase in revenue was accompanied by a nominal increase in expenses of $421,190 or 4.7% over the previous year.
The bottom line is, as of the end of 2021, our financial statements were in excellent shape. And the strength of that financial position provided us with a very solid base, which has allowed the organization to continue to move forward with our projects and achieve our objectives despite the downturn in the US economy last year.
Priests for Life, Inc.
Comments on Results of Annual Audit Examination
For the Year Ended December 31, 2021
I. Internal Governance Process and Procedures
Each year, as part of the internal governance process and procedures that are utilized by the organization to ensure that a formal system of internal financial and management controls are in place, Priests for Life engages the services of an independent certified public accounting firm to conduct an extensive audit of the organization’s financial reporting system and the resulting financial statements. This examination provides a critical element in the evaluation of the controls that are in place and of the information that is generated by these systems. Priests for Life relies on the accuracy, timeliness and comparability of its financial information to make informed decisions that impact the availability and utilization of its resources, both in terms of financial and human capital.
Management is responsible for ensuring that the organization is utilizing a combination of ‘best practices’ and competent and professional personnel to protect and operate Priests for Life in the conduct of its operations and activities. The annual audit examination is a tool that will provide assurance that management is satisfying that important oversight requirement.
In addition, groups and individuals that support the organization whether through financial contributions or programmatic collaboration are entitled to have access to audited financial statements to better understand the capabilities and resources that Priests for Life is utilizing to execute its activities.
II. Preparation of Management and Financial Records
In order to ensure that the independent auditor and the organization have an appreciation of the respective roles and responsibilities of each party, Priests for Life’s Chief Financial Officer, Danielle Malina-Jones works closely with the audit partner and manager to provide a clear understanding of the initiatives important to the organization and the internal controls and processes used to ensure accuracy, consistency and accountability relating to all financial activities. This collaboration will provide the basis for the audit team’s understanding of the organization’s workflow and the creation of the firm’s permanent files and documentation used during future audit examinations. This planning phase of the engagement represents an investment in laying the foundation for the successful completion of the audit examination.
III. Focus and Process of Relating to 2021 Auditor’s Examination
The audit has become the cornerstone of a rigorous financial review that incorporates extensive detailed testing of the organization’s procedures and internal controls. This detailed testing includes selections of specific types of transactions that occur during the year to ensure that the internal control safeguards introduced by management are in place and are being properly adhered to. Once the auditors are certain that the processes and procedures are being properly implemented, their emphasis switches to review and analysis of individual balances on the Statement of Financial Position (Balance Sheet) and the Statement of Activities and Change in Net Assets (Profit and Loss Statement). This portion of the audit examination utilizes comparative analytics to identify amounts that appear to be unusual or not anticipated. The experience and expertise that the auditors have developed performing audit examinations for a broad spectrum of organizations, both for-profit and not-for-profit, provide the basis for this portion of the review. In addition, the auditors also receive independent verification of asset and liability balances as of year-end to ensure that all amounts are properly stated and are owned or the responsibility of Priests for Life.
For over twenty years, Priests for Life has received an unqualified audit opinion in each of its annual audit reports. In addition, there have been no significant management or internal control issues that required auditor letters at the conclusion of the audits. Priests for Life has continually demonstrated that it adheres to the processes and procedures that management insists be in place to provide the structure and controls to allow for the growth and success of the organization, both currently, and in the future.
IV. Discussion of 2021 Statement of Financial Position
Priests for Life’s Statement of Financial Position (Balance Sheet) has continued to improve year over year. Total assets increased by over 11% ($786,000) since 2020, the majority of which relate to an increase of $871,000 in its cash balance. Total Liabilities decreased by approximately $1.9 million over 2020. This significant reduction included the elimination of the outstanding building mortgage of $1.24 million, the forgiveness of the PPP Loan of $443,837 and reduction in Accounts Payable of $170,372.
This improvement in Priests for Life Balance Sheet over the previous year resulted in an improvement it the organization ‘quick ratio’ from 1.8 to 1 in 2020 to 20 to 1 in 2021. This increase in a key liquidity ratio indicates that Priests for Life is in the best position in its history to fund its current activities.
Priests for Life’s Net Assets, increased as of year-end by over $2,641,344 versus $1,689,550 in the prior year (a 56% increase year-over-year). Total reserves were $7,519,619, an increase of 54% over the prior year’s reserve balance.
The strength of the Statement of Financial Position provides a solid financial base to allow the organization to continue to deliver services to its constituents and achieve its goals and objectives in the coming years. In addition, the financial strength will provide protection against a downturn in the US economy and fundraising opportunities.
V. Evaluation of 2021 Statement of Activities and Change in Net Assets
Priests for Life generated $11,899,350 in revenue in 2021, an increase of $1,372,984 or 13.1% over 2020 levels. The fact that Priests for Life was able to maintain this significant level of contributions is a testimony to the strong financial support from the community that has been cultivated over the years. This increase in revenue was accompanied by a nominal increase in expenses of $421,190 or 4.7% over the previous year.
Like many other not-for-profit organizations since 2020, the impact of COVID-19 resulted in changes in the manner in which Priests for Life executed its programs and initiatives, as well as the ability of the public to participate in the delivery of its services. In spite of these changes to its delivery model due to restrictions imposed by the federal, state and local government agencies, Priests for Life continued to expend approximately $6.9 million or 74% of total expenses on its programs and initiatives. This amount was approximately the same amount expended in 2020, in the first year impacted by the arrival of COVID-19.
VI. Organizational Financial Overview
Priests for Life continues to demonstrate that it has the financial resources and internal competency to manage the activities and operations of the premier organization in the right-to-life arena. In the past 5 years, as part of management’s strategic planning to position the organization for its future endeavors, Priests for Life has (1) relocated its national headquarters from New York to Florida to take advantage of significantly lower operating costs, (2) purchased and renovated a multi-million-dollar property in Titusville to eliminate an expensive rental arrangement and (3) established a ‘rainy day fund’ of approximately $2.0 million to provide for investment and development of programs and initiatives that will continue to promote the organization’s goals and objectives, as well as provide resources in case of an emergency. In each of these instances, management identified the resources that the organization required to accomplish its stated mission and determined how best to create the operating environment for the future.
VII. Subsequent Events
As described in the 2021 Audit Report, there have been several significant events that occurred since the beginning of 2021. In each instance, these events provide additional confirmation of the positive financial condition and capability of the organization. These events include the following:
(1) Maintaining the programmatic and fiscal success of Priests for Life during the COVID-19 pandemic – Many not-for-profit organizations have not been able to continue to successfully operate during this difficult period; both on a programmatic and fiscal basis. The organization has been able to continue to thrive and achieve its mission.
(2) Forgiveness of a PPP Loan under the CARES Act - As part of the CARES Act of March 2020, the Paycheck Protection Program (PPP) was created to assist small businesses during the pandemic period. Management determined that Priests for Life was eligible to participate in the program and applied for and received a loan in the amount of $443,837. In accordance with the terms of this program, Priests for Life received notification in June 2021 that the total loan amount was forgiven during 2021.
(3) Eliminating the Mortgage Debt on the Headquarters Property – Included in the 2020 Audit Report is the mortgage liability in the amount of $1,240,500. In June 2021, the outstanding balance of $1,226,607 was paid in full to extinguish the outstanding debt.
After the elimination of the mortgage debt, Priests for Life has substantial equity in its headquarters property, without any encumbrances.
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