Project Hospitality, Inc. and Subsidiaries Independent Auditor’s Report and Consolidated Financial Statements June 30, 2019 and 2018
Project Hospitality, Inc. and Subsidiaries
Independent Auditor’s Report and Consolidated Financial Statements
June 30, 2019 and 2018
Project Hospitality, Inc. and Subsidiaries June 30, 2019 and 2018
Contents
Independent Auditor’s Report ............................................................................................. 1
Consolidated Financial Statements
Statements of Financial Position ........................................................................................................ 3
Statements of Activities ...................................................................................................................... 4
Statements of Functional Expenses .................................................................................................... 5
Statements of Cash Flows .................................................................................................................. 7
Notes to Financial Statements ............................................................................................................ 8
Supplementary Information
Consolidating Schedule – Statement of Financial Position Information .......................................... 25
Consolidating Schedule – Statement of Activities Information ....................................................... 26
Independent Auditor’s Report
Board of Directors
Project Hospitality, Inc. and Subsidiaries
Staten Island, New York
We have audited the accompanying consolidated financial statements of Project Hospitality, Inc. and
Subsidiaries, which comprise the consolidated statements of financial position as of June 30, 2019
and 2018, and the related consolidated statements of activities, functional expenses and cash flows for
the years then ended, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Board of Directors
Project Hospitality, Inc. and Subsidiaries
Page 2
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Project Hospitality, Inc. and Subsidiaries as of June
30, 2019 and 2018, and the changes in their net assets and their cash flows for the years then ended in
accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 2 to the financial statements, in 2019, Project Hospitality, Inc. and Subsidiaries
adopted ASU 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of
Not-for-Profit Entities. Our opinion is not modified with respect to this matter.
Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial
statements of Project Hospitality, Inc. and Subsidiaries as a whole. The supplementary information in
the Consolidating Schedule – Statement of Financial Position Information and Consolidating
Schedule – Statement of Activities Information is presented for purposes of additional analysis and is
not a required part of the consolidated financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the consolidated financial statements. The information has been subjected to the
auditing procedures applied in the audit of the consolidated financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the consolidated financial statements or to the
consolidated financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
information is fairly stated in all material respects in relation to the consolidated financial statements
as a whole.
New York, New York
July 13, 2020
See Notes to Consolidated Financial Statements 3
Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Financial Position
June 30, 2019 and 2018
2019 2018
Assets
Cash and cash equivalents 2,404,354$ 5,048,225$
Investments 2,102,513 2,029,670
Accounts receivable 299,434 110,067
Due from government agencies 11,728,960 7,015,252
Contributions receivable 333,800 505,600
Assets limited as to use 48,277 45,048
Prepaid expenses and other assets 395,150 121,609
Property and equipment, net 10,630,775 10,573,795
Total assets 27,943,263$ 25,449,266$
Liabilities and Net Assets
Liabilities
Accounts payable and accrued expenses 2,980,727$ 2,090,997$
Due to government agencies 22,839 43,293
Refundable advances 578,030 461,894
Long-term debt 3,503,315 1,773,083
Capital advance 3,275,765 3,160,653
Total liabilities 10,360,676 7,529,920
Net Assets
Without donor restrictions
Undesignated 14,740,602 14,915,638
Board designated 2,040,122 1,977,409
Total net assets without donor restrictions 16,780,724 16,893,047
With donor restrictions 801,863 1,026,299
Total net assets 17,582,587 17,919,346
Total liabilities and net assets 27,943,263$ 25,449,266$
See Notes to Consolidated Financial Statements 4
Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Activities
Years Ended June 30, 2019 and 2018
Without With Without With
Donor Donor Donor Donor
Restrictions Restrictions Total Restrictions Restrictions Total
Revenues, Gains and Other Support
Government grants 29,012,349$ -$ 29,012,349$ 26,608,713$ 26,000$ 26,634,713$
Medicaid and other program fees 5,702,545 - 5,702,545 5,045,640 - 5,045,640
Rental income 2,305,875 - 2,305,875 1,816,279 - 1,816,279
Contribution and grant 288,225 933,450 1,221,675 316,130 781,034 1,097,164
Special events 310,598 - 310,598 291,880 - 291,880
Less direct costs of special events (30,589) - (30,589) (11,420) - (11,420)
Investment return 88,755 - 88,755 65,045 - 65,045
In-kind contributions 292,987 - 292,987 171,516 - 171,516
Other income 93,823 - 93,823 3,528 - 3,528
Net assets released from restrictions 1,157,886 (1,157,886) - 1,488,611 (1,488,611) -
Total revenues, gains and other support 39,222,454 (224,436) 38,998,018 35,795,922 (681,577) 35,114,345
Expenses
Program services
Support and treatment services 9,085,869 - 9,085,869 8,621,920 - 8,621,920
Re-housing services 11,286,556 - 11,286,556 10,025,262 - 10,025,262
Homeless care and prevention services 13,942,088 - 13,942,088 12,481,495 - 12,481,495
Total program services 34,314,513 - 34,314,513 31,128,677 - 31,128,677
Supporting services
Management and general 4,685,638 - 4,685,638 4,833,245 - 4,833,245
Fundraising 334,626 - 334,626 352,167 - 352,167
Total supporting services 5,020,264 - 5,020,264 5,185,412 - 5,185,412
Total expenses 39,334,777 - 39,334,777 36,314,089 - 36,314,089
Change in Net Assets (112,323) (224,436) (336,759) (518,167) (681,577) (1,199,744)
Net Assets, Beginning of Year 16,893,047 1,026,299 17,919,346 17,411,214 1,707,876 19,119,090
Net Assets, End of Year 16,780,724$ 801,863$ 17,582,587$ 16,893,047$ 1,026,299$ 17,919,346$
2019 2018
See Notes to Consolidated Financial Statements 5
Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Functional Expenses
Years Ended June 30, 2019 and 2018
Support and Homeless Care Management
Treatment Re-housing and Prevention and
Services Services Services Total General Fundraising Total Total
Salaries 5,134,726$ 3,044,649$ 5,527,855$ 13,707,230$ 2,162,795$ 242,342$ 2,405,137$ 16,112,367$
Payroll taxes and employee benefits 1,404,968 833,768 1,485,652 3,724,388 567,239 41,530 608,769 4,333,157
Total salaries and
related expenses 6,539,694 3,878,417 7,013,507 17,431,618 2,730,034 283,872 3,013,906 20,445,524
Client expenses 290,707 5,798,001 2,677,304 8,766,012 - - - 8,766,012
Insurance 69,847 80,771 114,507 265,125 61,200 1,603 62,803 327,928
Rent 711,880 272,037 316,338 1,300,255 195,373 777 196,150 1,496,405
Auto 107,957 156,480 190,459 454,896 22,101 - 22,101 476,997
Equipment lease and purchase 47,190 46,449 159,088 252,727 20,190 1,974 22,164 274,891
Utilities 76,819 99,791 305,217 481,827 49,814 1,891 51,705 533,532
Repairs and maintenance 99,916 144,806 472,311 717,033 192,237 2,692 194,929 911,962
Telephone 154,193 106,647 112,844 373,684 64,458 2,197 66,655 440,339
Supplies 66,031 78,819 90,884 235,734 67,853 11,550 79,403 315,137
Contract services 134,668 164,804 1,999,144 2,298,616 111,881 2,136 114,017 2,412,633
Professional fees 367,073 38,895 59,552 465,520 406,269 5,325 411,594 877,114
Printing and postage 7,529 12,007 15,415 34,951 20,239 9,411 29,650 64,601
Community relations - 1,300 900 2,200 28,674 7,535 36,209 38,409
Staff recruitment 6,656 4,545 8,910 20,111 50,600 200 50,800 70,911
Per diem contractors 205,641 62,664 84,177 352,482 33,768 - 33,768 386,250
Staff related expenses 26,072 22,895 39,787 88,754 87,538 172 87,710 176,464
Real estate taxes 1,594 64,059 14,893 80,546 39,648 - 39,648 120,194
Food and entertainment - - - - 3,178 33,880 37,058 37,058
Depreciation and amortization 172,333 248,758 147,383 568,474 197,716 - 197,716 766,190
Interest expense - 2,638 113,214 115,852 7 - 7 115,859
Miscellaneous 69 1,773 6,254 8,096 302,860 - 302,860 310,956
Total expenses 9,085,869 11,286,556 13,942,088 34,314,513 4,685,638 365,215 5,050,853 39,365,366
Less:
Direct costs of special events - - - - - (30,589) (30,589) (30,589)
Total expenses reported
by function on the
statement of activities 9,085,869$ 11,286,556$ 13,942,088$ 34,314,513$ 4,685,638$ 334,626$ 5,020,264$ 39,334,777$
Program Services Supporting Services
2019
See Notes to Consolidated Financial Statements 6
Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Functional Expenses (Continued)
Years Ended June 30, 2019 and 2018
Support and Homeless Care Management
Treatment Re-housing and Prevention and
Services Services Services Total General Fundraising Total Total
Salaries 4,609,404$ 2,739,787$ 5,058,438$ 12,407,629$ 2,564,967$ 219,755$ 2,784,722$ 15,192,351$
Payroll taxes and employee benefits 1,369,167 801,030 1,448,601 3,618,798 826,442 70,322 896,764 4,515,562
Total salaries and
related expenses 5,978,571 3,540,817 6,507,039 16,026,427 3,391,409 290,077 3,681,486 19,707,913
Client expenses 322,540 4,874,092 2,254,520 7,451,152 - - - 7,451,152
Insurance 75,736 72,164 113,130 261,030 42,082 1,944 44,026 305,056
Rent 673,497 366,233 256,906 1,296,636 102,312 783 103,095 1,399,731
Auto 119,375 120,826 167,960 408,161 43,957 - 43,957 452,118
Equipment lease and purchase 54,144 91,878 121,035 267,057 - 1,751 1,751 268,808
Utilities 76,672 101,908 306,903 485,483 53,348 2,341 55,689 541,172
Repairs and maintenance 125,488 116,735 289,213 531,436 60,581 2,427 63,008 594,444
Telephone 172,173 93,603 128,242 394,018 67,131 858 67,989 462,007
Supplies 63,434 108,447 94,330 266,211 64,325 1,547 65,872 332,083
Contract services 115,949 144,449 1,688,171 1,948,569 64,996 5,654 70,650 2,019,219
Professional fees 379,270 15,090 115,669 510,029 421,275 2,559 423,834 933,863
Printing and postage 7,060 16,202 9,550 32,812 2,775 17,915 20,690 53,502
Community relations - - 3,076 3,076 55,454 23,781 79,235 82,311
Staff recruitment 5,136 3,796 5,396 14,328 2,226 530 2,756 17,084
Per diem contractors 153,489 79,800 94,545 327,834 99,512 - 99,512 427,346
Staff related expenses 21,426 39,007 44,653 105,086 96,300 - 96,300 201,386
Real estate taxes - 65,574 - 65,574 - - - 65,574
Food and entertainment - - - - - 11,420 11,420 11,420
Depreciation and amortization 212,960 167,186 154,800 534,946 209,162 - 209,162 744,108
Interest expense - 7,455 121,282 128,737 - - - 128,737
Miscellaneous 65,000 - 5,075 70,075 56,400 - 56,400 126,475
Total expenses 8,621,920 10,025,262 12,481,495 31,128,677 4,833,245 363,587 5,196,832 36,325,509
Less:
Direct costs of special events - - - - - (11,420) (11,420) (11,420)
Total expenses reported
by function on the
statement of activities 8,621,920$ 10,025,262$ 12,481,495$ 31,128,677$ 4,833,245$ 352,167$ 5,185,412$ 36,314,089$
Program Services Supporting Services
2018
See Notes to Consolidated Financial Statements 7
Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Cash Flows
Years Ended June 30, 2019 and 2018
2019 2018
Operating Activities
Change in net assets (336,759)$ (1,199,744)$
Items not requiring (providing) operating activities cash flows
Depreciation and amortization 766,190 744,108
Net realized and unrealized gains on investments (28,586) (24,899)
Noncash contributions, net of noncash expense (110,299) (102,232)
Changes in
Accounts receivable (189,367) (48,690)
Due from government agencies (4,713,708) 1,405,761
Contributions receivable 171,800 173,400
Prepaid expenses and other assets (273,541) 77,023
Accounts payable and accrued expenses 889,730 (694,209)
Due to government agencies (20,454) (247,413)
Refundable advances 116,136 (10,155)
Net cash (used in) provided by operating activities (3,728,858) 72,950
Investing Activities
Proceeds from sale of investments 672,045 3,014,793
Purchase of investments (716,302) (3,048,712)
Increase in assets limited as to use (3,229) (2,605)
Acquisitions of property and equipment (823,170) (1,874,580)
Net cash used in investing activities (870,656) (1,911,104)
Financing Activities
Principal payments on long-term debt (117,469) (10,692)
Proceeds from long-term debt 1,958,000 -
Proceeds from capital advance 115,112 564,800
Net cash provided by financing activities 1,955,643 554,108
Decrease in Cash and Cash Equivalents (2,643,871) (1,284,046)
Cash and Cash Equivalents, Beginning of Year 5,048,225 6,332,271
Cash and Cash Equivalents, End of Year 2,404,354$ 5,048,225$
Supplemental Cash Flows Information
Interest paid 5,560$ 26,505$
Contributed principal and interest on loan 223,538 223,538
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
8
Note 1: Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
The consolidated financial statements of Project Hospitality, Inc. and Subsidiaries include Project
Hospitality, Inc. (PHI), Watershed Associates Inc. (Watershed), New Vision Housing Development
Fund Corporation (New Vision), Project Hospitality 385 Housing Development Fund Corporation
(PH 385 HDFC), and Castleton Housing Development Fund Corporation (Castleton), collectively
referred to as the Organization. The Organization was organized to provide counseling, food and
shelter to homeless individuals.
PHI is a New York not-for-profit organization whose mission and principal activities are to reach
out to the community members who are hungry, homeless or otherwise in need in order to work
with them to achieve self-sufficiency. PHI advocates for those in need and establishes a
comprehensive continuum of care that begins with the provision of food, clothing, and shelter and
extends to other services which include health care, mental health services, alcohol and substance
abuse treatment, HIV care, education, vocational training, legal assistance and transitional and
permanent housing.
Watershed was incorporated under the Not-for-Profit Corporation law of New York State in March
2003. Watershed’s main purpose is to provide counseling, food and shelter to homeless individuals
living on Staten Island, New York. In fulfilling this purpose and objective, Watershed holds title to
real and personal property, collects rental income, and remits the entire amount thereof, less
expenses, to PHI.
New Vision was incorporated under the Not-for-Profit Corporation law of New York State in July
2010. New Vision’s main purpose is to acquire, develop and manage housing projects for persons
of low income.
PH 385 HDFC was incorporated under the Not-for-Profit Corporation law of New York State in
September 2000. PH 385 HDFC’s main purpose is to develop a housing project for persons of low
income.
Castleton was incorporated under the Not-for-Profit Corporation law of New York State in
September 2018. Castleton’s main purpose is to develop a housing project for persons of low
income.
PHI is the sole member of Watershed, New Vision, PH 385 HDFC, and Castleton.
In September 2018, PH Castleton, Inc., a New York corporation was formed and sold $100 shares
of stock to Castleton. In December 2018, Hudson Castleton LLC, a New York limited liability
company, and PH Castleton, Inc. entered into an operating agreement of 1546 Castleton Managing
Member LLC pursuant to which the Organization agreed to jointly develop a multifamily
affordable housing project on certain real property owned by Castleton. Castleton has a 51 percent
interest in PH Castleton, Inc. PH Castleton, Inc. and 1546 Castleton Managing Member LLC had
no activity for the year ended June 30, 2019. Subsequent to year end, on November 1, 2019, the
construction loan was closed (See Note 6) and 1546 Castleton Owner LLC was formed, in which,
1546 Castleton Managing Member LLC has 0.01 percent interest.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
9
The Organization’s programmatic activities are funded primarily by grants, fee for service
arrangements, rental income from governmental agencies and contributions.
Principles of Consolidation
All material intercompany transactions have been eliminated in consolidation.
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 consolidated financial statements and the reported amounts of revenues,
expenses, gains, losses and other changes in net assets during the reporting period. Actual results
could differ from those estimates.
Cash and Cash Equivalents
The Organization considers all liquid investments with original maturities of three months or less
to be cash equivalents. At June 30, 2019, cash equivalents consisted primarily of money market
accounts with a bank.
At June 30, 2019, the Organization’s cash accounts exceeded federally insured limits by
approximately $2 million.
Investments and Investment Return
Investments in equity securities, closed-end funds, mutual funds, and real estate investment trusts
having a readily determinable fair value are carried at fair value. Investment return includes
dividend and interest; realized and unrealized gains, less external investment fees.
Investment return is reflected in the statements of activities with or without donor restrictions based
upon the existence and nature of any donor or legally imposed restrictions.
Accounts Receivable, Due from Government Agencies, and Allowance for Doubtful Accounts
The Organization records receivables based on established rates or contracts for services provided.
Receivables are charged to bad debt expense when they are determined to be uncollectible based
upon a periodic review of the accounts by management. Factors used to determine whether an
allowance should be recorded include the age of the receivable and a review of payments
subsequent to year end. There was no allowance for doubtful accounts recorded as of June 30,
2019 and 2018. Interest income is not accrued or recorded on outstanding accounts receivable.
Assets Limited as to Use
Assets limited as to use are assets set aside under the terms of certain financing agreements to be
used for capital purposes or the pay down of the outstanding long-term debt.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
10
Property and Equipment
Property and equipment acquisitions over $5,000 are stated at cost, less accumulated depreciation
and amortization. Depreciation is charged to expense using the straight-line method over the
estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the
lease term or their respective estimated useful lives.
The estimated useful lives for each major depreciable classification of property and equipment are
as follows:
Buildings and improvements 5 - 40 years
Leasehold improvements 2 - 11 years
Furniture and equipment 3 - 7 years
Motor vehicles 4 - 5 years
Long-Lived Asset Impairment
The Organization evaluates the recoverability of the carrying value of long-lived assets whenever
events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset
is tested for recoverability and the undiscounted estimated future cash flows expected to result
from the use and eventual disposition of the asset is less than the carrying amount of the asset, the
asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the
carrying amount of a long-lived asset exceeds its fair value. No asset impairment was recognized
during the years ended June 30, 2019 and 2018.
Refundable Advances
Revenues from fees for programs are deferred and recognized over the periods to which the fees
relate.
Net Assets
Net assets, revenues, gains and losses are classified based on the existence or absence of donor or
grantor restrictions.
Net assets without donor restrictions are available for use in general operations and not subject to
donor or certain grantor restrictions. The governing board has designated, from net assets without
donor or certain grantor restrictions, net assets as a reserve for operating expenditures.
Net assets with donor restrictions are subject to donor or certain grantor restrictions. Some
restrictions are temporary in nature, such as those that will be met by the passage of time or other
events specified by the donor.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
11
Contributions
Contributions are provided to the Organization either with or without restrictions placed on the gift
by the donor. Revenues and net assets are separately reported to reflect the nature of those gifts –
with or without donor restrictions. The value recorded for each contribution is recognized as
follows:
Nature of the Gift Value Recognized
Conditional gifts, with or without restriction
Gifts that depend on the Organization overcoming
a donor-imposed barrier to be entitled to the funds
Not recognized until the gift becomes
unconditional, i.e., the donor-imposed
barrier is met
Unconditional gifts, with or without restriction
Received at date of gift – cash and other assets Fair value
Received at date of gift – property, equipment and
long-lived assets
Estimated fair value
Expected to be collected within one year Net realizable value
Collected in future years Initially reported at fair value determined
using the discounted present value of
estimated future cash flows technique
In addition to the amount initially recognized, revenue for unconditional gifts to be collected in
future years is also recognized each year as the present-value discount is amortized using the level-
yield method.
When a donor-stipulated time restriction ends or purpose restriction is accomplished, net assets
with donor restrictions are reclassified to net assets without donor restrictions and reported in the
consolidated statements of activities as net assets released from restrictions.
Gifts and investment income that are originally restricted by the donor and for which the restriction
is met in the same time period are recorded as revenue with donor restrictions and then released
from restriction.
In-kind Contributions
In addition to receiving cash contributions, the Organization receives in-kind contributions of
donated food from the Food Bank of New York City. The Organization records the estimated fair
value of certain in-kind donations as an expense in the consolidated financial statements, and
similarly increase contribution revenue. For the years ended June 30, 2019 and 2018, $292,987
($287,379 from Food Bank of New York City) and $171,516 from Food Bank of New York City
were received in in-kind contributions.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
12
Government Grants
Support funded by grants is recognized as the Organization performs the contracted services or
incurs outlays eligible for reimbursement under the grant agreements. Grant activities and outlays
are subject to audit and acceptance by the granting agency and, as a result of such audit,
adjustments could be required.
Revenue Recognition
Revenues are reported at the estimated net realizable amounts from residents, participants, third-
party payors and others for services rendered, including estimated retroactive adjustments under
reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an
estimated basis in the period the related services are rendered and adjusted in future periods as final
settlements are determined. Laws and regulations governing mental health programs are extremely
complex and subject to interpretation. As a result, there is at least a reasonable possibility that
recorded estimates will change by a material amount in the near term. Additionally,
noncompliance with such laws and regulations could result in fines, penalties and exclusion from
Medicaid and other programs. Rental income is recognized in the month that the units were
occupied.
Income Taxes
PHI and PH 385 HDFC are exempt from income taxes under Section 501(c)(3) of the Internal
Revenue Code and a similar provision of state law. Watershed is exempt from income taxes under
Section 501(c)(2) of the Internal Revenue Code and a similar provision of state law. New Vision
was incorporated to operate as a non-profit, exempt from income taxes under section 501 of the
Internal Revenue Code, and similar provisions of state law. PH Castleton, Inc. is a for-profit
organization subject to income taxes. Subsequent to year end, in November 2019, New Vision
received its IRS determination letter indicating that it is exempt from income taxes under Section
501(c)(4). Castleton is exempt from income taxes under Section 501(c)(4). The Organization is
subject to federal income tax on any unrelated business taxable income.
The Organization files tax returns in the U.S. federal jurisdiction.
Operating Leases
Rent expense has been recorded on the straight-line basis over the life of the lease. Deferred rent is
recorded when there are material differences between the fixed payments and the rent expense.
Functional Allocation of Expenses
The costs of supporting the various programs and other activities have been summarized on a
functional basis in the consolidated statements of functional expenses. Certain costs have been
allocated among the program, management and general and fundraising categories based on the
programmatic square footage, time studies, and other methods.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
13
Note 2: Change in Accounting Principle
In 2019, the Organization adopted Accounting Standards Update (ASU) 2016-14, Not-for-Profit
Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. A summary
of the changes is as follows:
Statement of Financial Position
• The statement of financial position distinguishes between two new classes of net assets – those
with donor-imposed restrictions and those without. This is a change from the previously
required three classes of net assets – unrestricted, temporarily restricted and permanently
restricted.
Statement of Activities
• Investment return is shown net of external investment expenses. There is no longer a
requirement to include a disclosure of those netted expenses.
Notes to the Financial Statements
• Enhanced quantitative and qualitative disclosures provide additional information useful in
assessing liquidity and cash flows available to meet operating expenses for one year from the
date of the statement of financial position.
This change had no impact on previously reported total change in net assets.
Note 3: Contributions Receivable
Contributions receivable of $333,800 and $505,600 at June 30, 2019 and 2018, respectively, are all
due within one year and are restricted for specific purposes.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
14
Note 4: Property and Equipment
Property and equipment at June 30, 2019 and 2018 consists of:
2019 2018
Land 2,488,085$ 1,625,987$
Buildings and improvements 7,698,947 10,538,103
Leasehold improvements 3,206,224 1,301,529
Furniture and fixtures 2,395,273 2,354,481
Motor vehicles 68,754 63,146
Construction in progress 731,569 -
16,588,852 15,883,246
Less accumulated depreciation and amortization (5,958,077) (5,309,451)
10,630,775$ 10,573,795$
PH 385 HDFC received funding from the NYC Department of Homeless Services (NYC DHS) and
the U.S. Department of Housing and Urban Development (HUD), and Federal Home Loan Bank of
New York (FHLB) for rehabilitation of the building located at 385 Jersey St., Staten Island, NY.
The property is authorized to be used for housing needs, to promote the development of
independent living and includes innovative approaches to assist homeless persons in their transition
from homelessness. PH 385 HDFC was also awarded the Affordable Housing Program Direct
subsidy from the FHLB in the amount of $543,501. The subsidy is for fifteen years at no interest,
with no schedule of payments, and will be forgiven at the end of the term which began on
March 10, 2008 (date of occupancy). Under the term of the agreement, the property must be used
to provide housing for income eligible households for fifteen years and may not be sold or
transferred without prior notification to FHLB. If the project does not comply with the terms of the
agreement, the amount provided will be considered to be in default and the amount of subsidy
provided plus interest will be recovered.
PH 385 HDFC has a contract with the NYC DHS and is required to operate the facility in
accordance with the terms of the agreement for a period of 20 years and nine months. The
residence was established to provide housing for 30 homeless adults and ancillary services. NYC
DHS makes the monthly mortgage payments directly to the Low Income Investment Fund (LIIF)
(Note 6), as reflected in the debt service line of the contract. For June 30, 2019 and 2018, total
payments made by NYC DHS amounted to $223,538 in each of the years and that amount is
recorded as part of the government contract revenue.
Note 5: Assets Limited as to Use
In accordance with the mortgage loan agreement, mortgage and maintenance reserve accounts are
required to be maintained by PH 385 HDFC. Deposits to the funds are held by LIIF (Lender).
PH 385 HDFC is required to make quarterly deposits into the maintenance reserve account in the
amount of $625. Deposits can be used upon approval from NYC DHS and the Lender, for major
and “non-ordinary” repairs of the premises. As of June 30, 2019 and 2018, the balance was
$48,277 and $45,048, respectively.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
15
Note 6: Long-Term Debt
2019 2018
(A) Northfield Bank -$ 117,469$
(B) Deutsche Bank 120,000 120,000
(C) LIIF 1,425,315 1,535,614
(D) Corporation for Supportive Housing 1,958,000 -
3,503,315$ 1,773,083$
(A) In July 2012, Watershed obtained a loan from Northfield Bank to finance a facility on
Castleton Avenue in Staten Island, NY. The mortgage is repaid in monthly installments of
$1,396. Interest is charged and withheld at a rate of 5.5 percent annually. The mortgage
matures on June 1, 2027 and is secured by the property. During 2019, the loan was paid off.
(B) In December 2016, PHI received a grant from Deutsche Bank with a recoverable portion of
$120,000. The recoverable portion bears no interest and is to be paid in annual installments
of $40,000 on November 30, 2019, 2020 and 2021.
(C) LIIF provided the Organization a twenty-year mortgage loan of $2,291,190 with an annual
interest of 7.62 percent. The loan requires monthly interest and principal payment of
$18,626. The loan payments commenced on April 1, 2008 and mature on March 1, 2028.
The loan payments are made by NYC DHS directly to LIIF (Note 4) and are secured by the
property.
(D) 1546 Castleton Managing Member LLC and Castleton entered into a predevelopment loan in
the amount not to exceed $2,540,000 with Corporation for Supportive Housing to finance the
acquisition and predevelopment costs of the multifamily affordable housing project. The
loan bore a fixed interest rate of 6 percent and was scheduled to mature on December 1,
2020. On November 4, 2019, the loan together with accrued interest in the amount of
$2,306,226 was paid off with the proceeds of the permanent financing.
The permanent financing obtained on November 1, 2019 was as follows:
• First Building loan with JPMorgan Chase for $10,600,571 with interest rate at prime and
maturity date of June 4, 2022, which could be extended until June 4, 2023.
• First project loan with JPMorgan Chase for $2,670,067 with interest at Eurodollar or
adjusted LIBOR rate plus applicable margin and maturity date of June 4, 2022, which
could be extended until June 4, 2023.
• Second mortgage loan with the City of NY acting by and through its Department of
Housing Preservation and Development for $7,942,000 with interest rate at 0.25 percent
from closing until conversion date and 4.2 percent from conversion date until maturity
date. Maturity date is 31 months after the closing or if the conversion date occurs on or
before the construction loan maturity date, the 60th anniversary of the conversion date.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
16
Future principal payments based on new permanent financing are as follows:
2019 - 2020 2,117,004$
2020 - 2021 168,396
2021 - 2022 13,449,166
2022 - 2023 149,461
2023 - 2024 161,256
Thereafter 8,670,670
Total 24,715,953$
Note 7: Capital Advances
In September 2016, New Vision entered into an agreement with New York State Housing and
Assistance Corporation Homeless Housing and Assistance Program (HHAP), with PHI as the
sponsor, to operate a project to provide housing for homeless people at a building located at 411
Vanderbilt Avenue, Staten Island, NY. The first phase of this project included a capital advance of
up to $3,292,123 to renovate and rehabilitate the property for occupancy. HHAP may recover the
funds in the event the project ceases to be used as a shelter for the homeless within 25 years.
Provided the project continues to operate in this capacity for 25 years, the capital advance balance
will be forgiven. The capital advance does not bear interest and has no required payments. At
June 30, 2019 and 2018, $3,275,765 and $3,160,653, respectively, had been drawn on the capital
advance.
In July 2007, Watershed entered into an agreement with New York State Housing and Assistance
Corporation Homeless Housing and Assistance Program to operate a project to provide housing for
homeless people at 157 Beechwood Avenue, Staten Island, NY. New Vision received a capital
advance of $510,700. HHAP may recover the funds in the event the project ceases to be used as a
shelter for the homeless within 25 years. Provided the project continues to operate in this capacity
for 25 years, the capital advance balance will be forgiven. The capital advance does not bear
interest and has no required payments. The maturity date is August 2032. This was recognized as
revenue in previous years as the Organization expects to meet the conditions for forgiveness.
In December 2008, Watershed entered into an agreement with New York State Housing and
Assistance Corporation Homeless Housing and Assistance Program to operate a project to provide
housing for homeless people at 355 and 365 Van Pelt Avenue, Staten Island, NY. New Vision
received a capital advance of $945,082. HHAP may recover the funds in the event the project
ceases to be used as a shelter for the homeless within 25 years. Provided the project continues to
operate in this capacity for 25 years, the capital advance balance will be forgiven. The capital
advance does not bear interest and has no required payments. The maturity date is December 2035.
This was recognized as revenue in previous years as the Organization expects to meet the
conditions for forgiveness.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
17
Note 8: Operating Leases
PHI has several noncancelable operating leases for residential and administrative space, which
expire through December 1, 2028.
In addition, the Organization leases certain vehicles under various noncancelable operating lease
agreements that expire through April 1, 2022.
Future minimum lease payments under operating lease are:
Space Rental Vehicle Rental Total
2019 - 2020 4,369,173$ 43,972$ 4,413,145$
2020 - 2021 1,762,303 22,914 1,785,217
2021 - 2022 1,014,129 6,141 1,020,270
2022 - 2023 770,368 - 770,368
2023 - 2024 763,582 - 763,582
Thereafter 1,205,731 - 1,205,731
Total minimum
lease payments 9,885,286$ 73,027$ 9,958,313$
Note 9: Pension Plan and Deferred Compensation Plan
The Organization has a 403(b) defined contribution pension plan covering substantially all
employees who have completed two years of service as of December 31 of the plan year. The
Board of Directors annually determines the amount, if any, of the Organization’s discretionary
contributions to the plan. Pension expense was $168,925 and $159,412 for the years ended June
30, 2019 and 2018, respectively.
Note 10: Disclosures About Fair Value of Assets
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Fair value measurements
must maximize the use of observable inputs and minimize the use of unobservable inputs. There is
a hierarchy of three levels of inputs that may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data for substantially the
full term of the assets or liabilities
Level 3 Unobservable inputs supported by little or no market activity and are significant to
the fair value of the assets or liabilities
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
18
Recurring Measurements
The following table presents the fair value measurements of assets recognized in the accompanying
statement of financial position measured at fair value on a recurring basis and the level within the
fair value hierarchy in which the fair value measurements fall at June 30, 2019 and 2018:
Fair Value
Measurements Using
Quoted Prices in
Active Markets
for Identical
Total Assets (Level 1)
Equity securities
Energy 15,482$ 15,482$
Materials 22,838 22,838
Industrials 54,971 54,971
Consumer discretionary 49,417 49,417
Consumer staples 11,291 11,291
Health care 56,610 56,610
Financials 40,234 40,234
Information technology 95,531 95,531
Telecommunication services 19,397 19,397
Utilities 4,329 4,329
Real estate 1,856 1,856
Closed-end funds 149,321 149,321
Mutual funds
Bond funds 1,019,678 1,019,678
Equity funds 464,885 464,885
Real estate investment trusts 11,872 11,872
Total 2,017,712 2,017,712$
Cash equivalents 84,801
Total 2,102,513$
2019
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
19
Fair Value
Measurements Using
Quoted Prices in
Active Markets
for Identical
Total Assets (Level 1)
Equity securities
Energy 24,482$ 24,482$
Materials 22,404 22,404
Industrials 70,545 70,545
Consumer discretionary 56,059 56,059
Consumer staples 17,471 17,471
Health care 52,688 52,688
Financials 48,617 48,617
Information technology 93,169 93,169
Telecommunication services 32,806 32,806
Utilities 2,286 2,286
Real estate 3,738 3,738
Closed-end funds 128,737 128,737
Mutual funds
Bond funds 944,518 944,518
Equity funds 436,983 436,983
Total 1,934,503 1,934,503$
Cash equivalents 95,167
Total 2,029,670$
2018
Investments
Where quoted market prices are available in an active market, securities are classified within
Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are
estimated by using quoted prices of securities with similar characteristics or independent asset
pricing services and pricing models, the inputs of which are market-based or independently sourced
market parameters, including, but not limited to, yield curves, interest rates, volatilities,
prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in
Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not
available, securities are classified within Level 3 of the hierarchy.
The methods described above may produce a fair value calculation that may not be indicative of
net realizable value or reflective of future fair values. Furthermore, while the Organization
believes its valuation methods are appropriate and consistent with other market participants, the use
of difference methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
20
Note 11: Net Assets with Donor Restrictions
Net assets with donor restrictions at June 30, 2019 and 2018 are available for the following
purposes:
2019 2018
Housing, food and legal 474,059$ 663,249$
Hurricane Sandy relief 327,804 355,630
IT and capacity building - 7,420
801,863$ 1,026,299$
Net Assets Released from Restrictions
Net assets were released from donor restrictions by incurring expenses satisfying the restricted
purposes or by occurrence of other events specified by donors.
2019 2018
Housing, food and legal 1,122,640$ 899,918$
Hurricane Sandy relief 27,826 126,116
IT and capacity building 7,420 462,577
1,157,886$ 1,488,611$
Note 12: Significant Estimates and Concentrations
Accounting principles generally accepted in the United States of America require disclosure of
certain significant estimates and current vulnerabilities due to certain concentrations. Those
matters include the following:
As of June 30, 2019 and 2018, 38 percent and 41 percent, respectively, of receivables was due from
Public Health Solutions, NYC DHS and NYC Department of Health and Mental Hygiene (NYC
DOHMH). In 2019 and 2018, 37 percent and 50 percent, respectively, of revenue was due from
HUD and NYC DHS. This represents a concentration of credit risk to the Organization.
Investments
The Organization invests in various investment securities. Investment securities are exposed to
various risks 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 values of
investment securities will occur in the near term and that such change could materially affect the
amounts reported in the accompanying consolidated statements of financial position.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
21
Note 13: Commitments and Contingencies
The Organization receives substantially all its revenues for services provided for approved
participants from third-party reimbursement agencies, including Medicaid. These revenues are
based on predetermined rates based on cost reimbursement principles and are subject to audit and
retroactive adjustment by the respective third-party fiscal intermediary. As of June 30, 2019 and
2018, management has estimated no need for a reserve for potential rate adjustments.
The Organization is responsible for reporting to various third parties. These agencies, as well as
the New York State Office of the Attorney General, the Internal Revenue Service, the New York
State Office of the Medicaid Inspector General, the New York State Department of Health, the
New York State Charities Bureau, and others have the right to audit the Organization.
Litigation
The Organization is subject to claims and lawsuits that arose primarily in the ordinary course of its
activities. It is the opinion of management that the disposition or ultimate resolution of such claims
and lawsuits will not have a material adverse effect on the financial position, change in net assets
and cash flows of the Organization. Events could occur that would change this estimate materially
in the near term.
Note 14: Subsequent Events
As a result of the spread of the COVID-19 coronavirus, economic uncertainties have arisen which
may negatively affect the financial position, changes in net assets and cash flows of the
Organization. The duration of these uncertainties and the ultimate financial effects cannot be
reasonably estimated at this time.
Additionally, there has been significant volatility in the investment markets both nationally and
globally since June 30, 2019.
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic
Security Act. On May 5, 2020, the Organization received a loan in the amount of $3,512,875
pursuant to the Paycheck Protection Program. The loan is due in two years, which can be extended
to five years if agreeable with the lender, from the date of the first disbursement under the loan and
has a fixed interest rate of 1 percent per year. A portion of the loan may be forgiven; however, as
of the date of this report any amount of forgiveness is unable to be determined.
Subsequent events have been evaluated through July 13, 2020, which is the date the consolidated
financial statements were available to be issued.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
22
Note 15: Liquidity and Availability
The Organization’s financial assets available within one year of the balance sheet date for general
expenditures at June 30, 2019 are:
Financial assets
Cash and cash equivalents 2,404,354$
Investments 2,102,513
Accounts receivable 299,434
Due from government agencies 11,728,960
Contributions receivable 333,800
Total financial assets 16,869,061
Internal designations
Board-designated (2,040,122)
Donor-imposed restrictions
Restricted funds (801,863)
Financial assets available to meet cash needs
for general expenditures within one year 14,027,076$
The Organization does not intend to spend from the board-designated funds of $2,040,122, other
than amounts that may be appropriated for general expenditures as part of the Board’s annual
budget approval and appropriation. To help manage unanticipated liquidity needs, subsequent to
year end in July 2019, the Organization obtained a $2 million line of credit that it could draw upon.
The line of credit matures in August 2020. The line of credit bears interest of 5.5 percent per
annum and is secured by the assets of the Organization.
The Organization manages its liquidity and reserves following three guiding principles: operating
within a prudent range of financial soundness and stability, maintaining adequate liquid assets to
fund near-term operating needs and maintaining sufficient reserves to provide reasonable assurance
that long term obligations will be discharged. The level of liquidity reserves was managed within
the policy.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
23
Note 16: Future Changes in Accounting Principles
Revenue Recognition
The Financial Accounting Standards Board (FASB) amended its standards related to revenue
recognition. This amendment replaces all existing revenue recognition guidance and provides a
single, comprehensive revenue recognition model for all contracts with customers. The guidance
provides a five-step analysis of transactions to determine when and how revenue is recognized.
Other major provisions include capitalization of certain contract costs, consideration of the time
value of money in the transaction price and allowing estimates of variable consideration to be
recognized before contingencies are resolved in certain circumstances. The amendment also
requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash
flows arising from customer contracts, including significant judgments and changes in those
judgments and assets recognized from costs incurred to fulfill a contract. The standard allows
either full or modified retrospective adoption effective for annual periods beginning after
December 15, 2019 for nonpublic entities and any interim periods within annual reporting periods
that begin after December 15, 2020 for nonpublic entities. The Organization is in the process of
evaluating the impact the amendment will have on the financial statements.
ASU 2018-08 Grants and Contributions
On June 21, 2018, FASB issued ASU 2018-08. This standard clarifies existing guidance on
determining whether a transaction with a resource provider, e.g., the receipt of funds under a
government grant or contract, is a contribution or an exchange transaction. The guidance requires
all organizations to evaluate whether the resource provider is receiving commensurate value in a
transfer of assets transaction, and whether contributions are conditional or unconditional.
If commensurate value is received by the resource provider, the transaction would be accounted for
as an exchange transaction by applying Topic 606, Revenue from Contracts with Customers, or
other topics. The standard clarifies that a resource provider is not synonymous with the general
public. Indirect benefit received by the public as a result of the assets transferred is not equivalent
to commensurate value received by the resource provider. If commensurate value is not received
by the resource provider, i.e., the transaction is nonexchange, the recipient organization would
record the transaction as a contribution under Topic 958 and determine whether the contribution is
conditional or unconditional.
FASB expects that the new standard could result in more grants and contracts being accounted for
as contributions (often conditional contributions) than under current generally accepted accounting
principles. Because of this, it believes the clarifying guidance about whether a contribution is
conditional or unconditional, which affects the timing of revenue recognition, is important. Both
the recipient and resource provider would equally apply the guidance.
The standard is effective for reporting periods beginning on or after December 15, 2018.
Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements
June 30, 2019 and 2018
24
Accounting for Leases
FASB amended its standard related to the accounting for leases. Under the new standard, lessees
will now be required to recognize substantially all leases on the statement of financial position as
both a right-of-use asset and a liability. The standard has two types of leases for statement of
activities recognition purposes: operating leases and finance leases. Operating leases will result in
the recognition of a single lease expense on a straight-line basis over the lease term similar to the
treatment for operating leases under existing standards. Finance leases will result in an accelerated
expense similar to the accounting for capital leases under existing standards. The determination of
lease classification as operating or finance will be done in a manner similar to existing standards.
The new standard also contains amended guidance regarding the identification of embedded leases
in service contracts and the identification of lease and nonlease components in an arrangement.
The new standard is effective for annual periods beginning after December 15, 2021 and any
interim periods within annual reporting periods that begin after December 15, 2022. The
Organization is evaluating the effect the standard will have on the financial statements; however,
the standard is expected to have a material effect on the financial statements due to the recognition
of additional assets and liabilities for operating leases.
Accounting for Financial Instruments – Credit Losses
FASB amended its standards related to the accounting for credit losses on financial instruments.
This amendment introduces new guidance for accounting for credit losses on instruments including
trade receivables and finance receivables. The new standard is effective for fiscal years beginning
after December 15, 2022, including interim periods within those years. The Organization is in the
process of evaluating the effect the amendment will have on the consolidated financial statements.
Supplementary Information
25
Project Hospitality, Inc. and Subsidiaries Consolidating Schedule – Statement of Financial Position Information
June 30, 2019
Project New PH 385
Hospitality Watershed Vision HDFC Castleton Eliminations Total
Assets
Cash and cash equivalents 1,887,197$ 6,979$ 189,866$ 260,733$ 59,579$ -$ 2,404,354$
Investments 2,102,513 - - - - - 2,102,513
Accounts receivable 299,434 - - - - - 299,434
Due from government agencies 11,589,227 - - 139,733 - - 11,728,960
Due from affiliated entities 1,957,909 1,141,078 4,000 7,498 - (3,110,485) -
Contributions receivable 333,800 - - - - - 333,800
Assets limited as to use - - - 48,277 - - 48,277
Prepaid expenses and other assets 369,586 1,998 2,218 8,848 12,500 - 395,150
Notes receivable - 799,740 - - - (799,740) -
Property and equipment, net 1,258,969 269,718 3,997,550 3,336,291 1,768,247 - 10,630,775
Total assets 19,798,635$ 2,219,513$ 4,193,634$ 3,801,380$ 1,840,326$ (3,910,225)$ 27,943,263$
Liabilities and Net Assets
Liabilities
Accounts payable and accrued expenses 2,836,391$ 10,375$ 19,468$ 68,585$ 45,908$ -$ 2,980,727$
Due to government agencies 22,839 - - - - - 22,839
Refundable advances 578,030 - - - - - 578,030
Long-term debt 120,000 - - 1,425,315 2,757,740 (799,740) 3,503,315
Capital advance - - 3,275,765 - - - 3,275,765
Due to affiliated entities 1,202,722 1,095,661 194,231 617,871 - (3,110,485) -
Total liabilities 4,759,982 1,106,036 3,489,464 2,111,771 2,803,648 (3,910,225) 10,360,676
Net Assets (Deficit)
Without donor restrictions
Undesignated 12,196,668 1,113,477 704,170 1,689,609 (963,322) - 14,740,602
Board designated 2,040,122 - - - - - 2,040,122
Total without donor restrictions 14,236,790 1,113,477 704,170 1,689,609 (963,322) - 16,780,724
With donor restrictions 801,863 - - - - - 801,863
Total net assets (deficit) 15,038,653 1,113,477 704,170 1,689,609 (963,322) - 17,582,587
Total liabilities and net assets 19,798,635$ 2,219,513$ 4,193,634$ 3,801,380$ 1,840,326$ (3,910,225)$ 27,943,263$
26
Project Hospitality, Inc. and Subsidiaries Consolidating Schedule – Statement of Activities Information
Year Ended June 30, 2019
New PH 385
Watershed Vision HDFC Castleton
Without Without Without Without Without
Donor With Donor Donor Donor Donor Donor
Restrictions Restrictions Total Restrictions Restrictions Restrictions Restrictions Eliminations Total
Revenues, Gains and Other Support
Government grants 27,335,732$ -$ 27,335,732$ -$ -$ 1,676,617$ -$ -$ 29,012,349$
Medicaid and other program fees 5,731,345 - 5,731,345 - - - - (28,800) 5,702,545
Rental income 1,923,764 - 1,923,764 82,000 310,111 - - (10,000) 2,305,875
Contribution and grant 288,225 933,450 1,221,675 - - - - - 1,221,675
Special events - net 280,009 - 280,009 - - - - - 280,009
Investment return 86,208 - 86,208 64 424 2,059 - 88,755
In-kind contributions 292,987 - 292,987 - - - - - 292,987
Other income 93,823 - 93,823 - - - - - 93,823
Net assets released from restrictions 1,157,886 (1,157,886) - - - - - - -
Total revenues, gains and other support 37,189,979 (224,436) 36,965,543 82,064 310,535 1,678,676 - (38,800) 38,998,018
Expenses
Program services
Support and treatment services 9,085,869 - 9,085,869 - - - - - 9,085,869
Re-housing services 10,789,069 - 10,789,069 65,590 441,897 - - (10,000) 11,286,556
Homeless care and prevention services 12,555,698 - 12,555,698 - - 1,386,390 - - 13,942,088
Total program services 32,430,636 - 32,430,636 65,590 441,897 1,386,390 - (10,000) 34,314,513
Supporting services
Management and general 4,440,483 - 4,440,483 7,009 22,611 244,335 - (28,800) 4,685,638
Fundraising 334,626 - 334,626 - - - - 334,626
Total supporting services 4,775,109 - 4,775,109 7,009 22,611 244,335 - (28,800) 5,020,264
Total expenses 37,205,745 - 37,205,745 72,599 464,508 1,630,725 - (38,800) 39,334,777
Change in Net Assets Before Equity Transfer (15,766) (224,436) (240,202) 9,465 (153,973) 47,951 - - (336,759)
Equity transfer - - - 963,322 - - (963,322) - -
Change in Net Assets (15,766) (224,436) (240,202) 972,787 (153,973) 47,951 (963,322) - (336,759)
Net Assets, Beginning of Year 14,252,556 1,026,299 15,278,855 140,690 858,143 1,641,658 - - 17,919,346
Net Assets, End of Year 14,236,790$ 801,863$ 15,038,653$ 1,113,477$ 704,170$ 1,689,609$ (963,322)$ -$ 17,582,587$
Project Hospitality