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Child Care Resource Center, Inc. Notes to Financial Statements
Note 2 – Summary of Significant Accounting Policies
Basis of presentation – The financial statements of CCRC have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and accordingly reflect all significant receivables, payables, and other liabilities. The significant accounting policies followed by CCRC are described below to enhance the usefulness of the financial statements to the reader.
Comparative financial statements – The financial statements include certain prior-year summarized comparative information in total, but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with CCRC’s financial statements for the year ended June 30, 2017, from which the summarized information was derived.
Cash and cash equivalents and cash held in reserve and reserve funds – For the purpose of the statement of cash flows, CCRC considers all temporary, short-term, highly liquid investments purchased with original maturities of three months or less to be cash and cash equivalents.
The following table provides a reconciliation of cash, cash equivalents, and cash held in reserve reported within the statements of financial position that sum to the total of the same such amounts shown in the statements of cash flows:
Cash and cash equivalents Cash held in reserve
Total cash, cash equivalents and cash held in reserve as presented on the statements of cash flows
June 30,
2018 2017
$ 10,247,528 $ 3,943,251 1,413,925 512,915
$ 11,661,453 $ 4,456,166
Cash held in reserve and reserve funds relates to deposits required to be separately held to satisfy certain terms of CCRC’s mortgage loan payable and to satisfy the requirements of certain grant contracts with the California Department of Education (“CDE”).
Cash held in reserve related to the mortgage loan payable at June 30, 2018, was $900,417 which exceeded the amount required by the loan. No reserves were held at June 30, 2017.
Cash held in reserve related to contracts with the CDE at June 30, 2018 and 2017, was $513,508 and $512,915, respectively. The amount with CDE represents cash received but not earned by CCRC. Under CDE's rules, the reserve amount may be used for operations in certain cases. Any unused reserve funds must be returned to CDE upon termination of services under the child development contracts. The reserve balance is reviewed and re-calculated by CDE on an annual basis. The amount in excess of the required reserve balance must be repaid to CDE.
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