September 30, 2014:
Cash
and Cash
Equivalents
Short-Term
Investments
Total
Carrying
Value
Total Fair
Value
Demand Deposit
Account
$5,586,537
$—
$5,586,537
$5,586,537
Money Market
Accounts
9,526,058
—
9,526,058
9,526,058
Certificates of
Deposit
—
10,452,000
10,452,000
10,441,727
Less —
Outstanding
Checks
(2,983,296)
—
(2,983,296)
(2,983,296)
Totals for 2014
$12,129,999
$10,452,000
$22 ,581,299
$22,571,026
Cash
and Cash
Equivalents
Short-Term
Investments
Total
Carrying
Value
Total Fair
Value
Demand Deposit
Account
$4,366,288
$—
$4,366,288
$4,366,288
Money Market
Accounts
9,988,277
—
9,988,277
9,988,277
Certificates of
Deposit
—
6,969,002
6,969,002
6,963,363
(559,297)
—
(559,297)
(559,297)
$13,795,268
$6,969,002
$20,764,270
$20,758,631
September 30, 2013:
Less —
Outstanding
Checks
Totals for 2013
(5) UNRESTRICTED NET ASSETS
Unrestricted net assets represent amounts currently available
for the use in the Board’s operation in accordance with the Act
and those resources invested in fixed assets. Designated net asset
balances represent tentative plans of the Board for future use of
financial resources, as follows:
Designated for Future Expenses
This balance relates to unexpended program appropriations.
Designated – Board Reserve
On October 6, 2010, the Board has approved the establishment
of a reserve in the amount of $4,350,000 to be used, as the
Board may deem necessary, with the approval of the Secretary.
Undesignated
As of September 30, 2014 and 2013, $4,089,927 and
$2,943,910, respectively, of the net assets had not been
designated by the Board and is available for budgeting to the
various program areas. Of these amounts, $10,531 and $20,234
represent net assets invested in fixed assets as of September 30,
2014 and 2013, respectively.
(6) INCOME TAX STATUS
The Board has received a ruling from the Internal Revenue
Service stating that it is classified as a tax‐exempt entity that
engages in activities under the aegis of the United States
Department of Agriculture.
In accordance with the Board’s policy, the demand deposit
accounts, the money market accounts and the certificates
of deposit are insured by the Federal Deposit Insurance
Corporation and/or fully collateralized by U.S. Government
securities held at the Federal Reserve Bank in the Board’s name.
(7) PENSION PLAN
The Board provides a defined contribution plan for all of its
employees under which annual contributions are provided based
on a percentage of each employee’s salary. Contributions required
and funded by the Board were approximately $112,000 and
$111,000 in 2014 and 2013, respectively.
(4) ADMINISTRATION EXPENSE
The Act limits expenses for the administration of the program
to 5% or less of projected revenues. Projected revenues were
$39,000,000 for 2014 and $39,400,000 for 2013. Accordingly,
the administrative expenses incurred by the Board were limited
to $1,950,000 in 2014 and $1,970,000 in 2013. Administrative
expenses incurred by the Board on the accrual basis (versus
modified cash basis amounts reflected in the accompanying
statements of revenues, expenses and changes in unrestricted
net assets) were approximately $1,640,000 (4.2% of projected
revenues) in 2014 and $1,547,000 (3.9% of projected revenues)
in 2013. Expressed as a percentage of actual revenues, the Board’s
administrative expenses were 4.0% in 2014 and 3.9% in 2013.
(8) SUBSEQUENT EVENT
Management evaluated subsequent events through November
20, 2014, the date the audited financial statements were available
to be issued. Events or transactions occurring after September
30, 2014, but prior to November 20, 2014, that provided
additional evidence about conditions that existed at September
30, 2014 have been recognized in the financial statements for
the year ended September 30, 2014. Events or transactions
that provided evidence about conditions that did not exist at
September 30, 2014, but arose before the financial statements
were available to be issued, have not been recognized in the
financial statements for the year ended September 30, 2014.
The Board has entered into an Administrative Services
Agreement with NCBA whereby NCBA agreed to provide
certain administrative services to the Board in return for
reimbursement of all direct and indirect costs related to the
provided services. During 2014 and 2013, respectively, the
Board paid NCBA approximately $32,000 and $31,000 related
to this agreement.
The Board leases office facilities and equipment from outside
third‐parties under operating leases. Payments required under
the leases were approximately $93,000 during 2014 and
$92,000 during 2013. Future annual payments related to the
leases are approximately $95,000 in 2015, $96,000 in 2016,
$93,000 in 2017, $96,000 in 2018, $98,000 in 2019 and
$50,000 thereafter.
18
In October 2014, the Board and the Secretary approved
$2,977,573 of the September 30, 2014 net asset balance as
designated for expenditures in 2015.