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CHILD CARE RESOURCE CENTER, INC. (A NONPROFIT ORGANIZATION)
NOTES TO FINANCIAL STATEMENTS June 30, 2015
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes (Continued)
CCRC’s state income tax returns remain subject to examination for all tax years ended on June 30, 2011, 2012, 2013 and 2014 with regard to all tax positions and the results reported. CCRC’s federal income tax returns remain subject to examination for all tax years ended on June 30, 2012, 2013 and 2014 with regard to all tax positions and the results reported.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 3 – CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject CCRC to concentrations of credit risk consist of cash and cash equivalents and government contracts receivable.
CCRC maintains its cash and cash equivalents with high-credit, quality financial institutions, which may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation (the “FDIC”). CCRC has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk with respect to its cash and cash equivalents. For the years ended June 30, 2015 and 2014, uninsured cash and cash equivalents amounted to $6,045,756 and $5,862,837, respectively.
Both governmental and private pay sources have instituted cost-containment measures designed to limit payments made to providers of child care services, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect reimbursement to CCRC. Furthermore, government reimbursement programs are subject to statutory and regulatory changes, retroactive rate adjustments, administrative rulings and government funding restrictions, all of which could materially decrease the services covered or the rates paid to CCRC for its services.
A majority of CCRC’s annual funding, $161,528,618 or 97.7% and $141,033,998 or 97.9% in 2015 and 2014, respectively, of total revenues and support is derived from grant agreements with federal and nonfederal agencies. CCRC has no reason to believe that relationships with these agencies will be discontinued in the foreseeable future. However, any interruption of these relationships (e.g., the failure to renew grant agreements, withholding of funds or significant decreases to funding) would adversely affect CCRC’s ability to finance its ongoing operations.
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