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CHILD CARE RESOURCE CENTER, INC. NOTES TO FINANCIAL STATEMENTS
Note 2 – Summary of Significant Accounting Policies (continued)
Reclassification – Certain amounts from the prior year footnotes have been reclassified, in order to
conform to the current year presentation.
Note 3 – Concentration of Credit Risk
Financial instruments which potentially subject CCRC to concentrations of credit risk consist of cash and cash equivalents, investments, and government contracts receivable. Although cash and cash equivalent balances may from time to time exceed federally insured limits, management believes CCRC is not exposed to any significant credit risk with respect to those deposits.
CCRC invests in various investment securities. Investment securities are exposed to various risk factors such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect investment balances and the amounts reported in the statements of financial position.
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, $184,559,555 or 97.9% and $161,528,618 or 97.7% in 2016 and 2015, 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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