National Nurses United

Audit + Index_FINAL 12/30/09 2:16 PM Page 16 CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 1 - Summary of Organization and Significant Accounting Policies (Continued) Note 1 - Summary of Organization and Significant Accounting Policies (Continued) Contributions Fixed Assets Contributions and grants are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/ or nature of any donor restrictions. CNA has received no contributions with donor-imposed restrictions that would result in permanently restricted net assets. Fixed assets consisting of both real property including land, building and improvements, and personal property consisting of equipment, furniture, computers and software are recorded at cost. External consulting costs related to the development of internal use computer software are capitalized to the extent the costs benefit future years. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, normally 39.5 years for buildings and improvements and 5 to 7 years for personal property. Repairs and maintenance are charged to expense and included in the Statement of Activities when incurred. Basis of Presentation CNA reports information regarding its financial position and activities according to three classes of net assets based on the existence or absence of donor-imposed restrictions. Net assets are classified and reported as follows: Unrestricted net assets—Net assets that are not subject to donor-imposed restrictions including net assets that are designated by the Board, CNA's bylaws, or its constitution are considered unrestricted net assets. Assets with donor-imposed restrictions which are fulfilled in the year of receipt are considered and reported as unrestricted net assets in that year. Temporarily restricted net assets—Net assets subject to donor-imposed stipulations that may or will be met, either by actions of CNA and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported as net assets released from restrictions. Permanently restricted net assets—Net assets subject to donor-imposed stipulations that neither expire by the passage of time nor can be fulfilled or otherwise removed by actions of CNA. Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements. Investments Investments comprised of equity securities, corporate debt, and U. S. government obligations are valued at fair value. Realized and unrealized gains and losses are reflected in the Statement of Activities. The Board has decided that the overall portfolio will be held for long-term purposes. The fair value of the investments is based on quoted market prices. Revenues The principal source of revenue for CNA is membership dues or an equivalent fee required to be paid by non-members. Under CNA bylaws passed at the September 2003 House of Delegates and ratified later that year by a vote of the general membership effective April 1, 2004 monthly dues are set at 2.2 times a member's hourly wage rate with dues capped at an original maximum of $80.00 per month. The monthly dues rate is reduced and set at a flat $40.00 for those members who meet certain criteria as set out in the bylaws. The $80.00 cap and $40.00 reduced rate increase annually based on the weighted average increase in members' hourly wage rate at certain CNA represented facilities. During the years ended June 30, 2008 and 2007 the cap was $95.77 and $89.52, respectively. The reduced rate was $47.88 and $44.76, respectively. Effective July 1, 2009 and 2008, the full rate was changed to $106.63 and $100.56, and the reduced rate was changed to $53.31 and $50.27 respectively. The bylaws require that a portion of each member's dues be designated for various specific purposes or programs. Dues designated for specific programs by the CNA constitution, bylaws, or by the Board are considered and treated as unrestricted net assets. Income Taxes CNA is exempt from Federal income taxes under Section 501(c)(5) of the Internal Revenue Code and the related applicable California Revenue and Taxation Code sections. CNA has no federal or state tax liability for unrelated business taxable income (UBTI). Accordingly, no provision for income taxes has been provided herein. Loan Costs and Fees Loan costs and fees in connection with the mortgage are capitalized and included in prepaid expenses and other assets on the Statement of Financial Position. Amortization is computed using the straight-line method over the term of the mortgage. -7- -8- CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) CALIFORNIA NURSES ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 1 - Summary of Organization and Significant Accounting Policies (Continued) Note 3 - Related Parties (Continued) Cash and Cash Equivalents California Nurses Foundation All highly liquid investments, with a maturity of three months or less when purchased, are considered to be cash equivalents. Similar investments that have been designated for specific programs are not considered to be cash equivalents. Members of the CNA Board are the members and serve as the official voting body of the California Nurses Foundation (CNF), a charitable Organization under Internal Revenue Code Section 501(c)(3) and exempt from federal and state income and franchise taxes. The members of the CNA Executive Committee comprise the members of the CNF Board of Trustees who are responsible for conducting and managing the business affairs of the Organization. Certain CNF programs and activities are staffed and coordinated by CNA employees. Note 2 - Concentrations CNA maintains cash balances in excess of federally insured amounts. These balances vary throughout the year and the uninsured amounts were $34,542,252 and $22,575,766 at June 30, 2008 and 2007, respectively. CNF owed CNA $2,800 for the lease deposit on CNF's office space, at June 30, 2008 and 2007, plus an additional $121,000 for advances on Region 11 Scholarship funds at June 30, 2008. CNA owed CNF $30,000 for Foundation Scholarship at June 30, 2008. Undesignated investments in stocks and bonds issued by publicly held companies and bonds issued by the United States government totaled $960,246 and $1,059,181 at June 30, 2008, and 2007, respectively. A loan to another non-profit or tax-exempt organization totaled $178,843 and $192,843 at June 30, 2008, and 2007, respectively. Concentrations of credit risk with respect to dues and fees receivable is limited due to the large number of payers comprising CNA's receivable base. CNA has a collective bargaining agreement with Staff Professional and Clerical Association that represents non-management staff. The current Agreement was ratified in March 2008 and expires April 30, 2012. Note 3 - Related Parties Center for Caregiver and Patient Advocacy (CCPA) Incorporated in September 1999 under the Laws of the State of California, The Center For Caregiver and Patient Advocacy (CCPA), is a charitable organization exempt from federal and state income and franchise taxes. CCPA's purpose is to act as an advocate for both the provider and consumer in the health care industry. To help further these goals CNA, which helped found the CCPA, transferred to that Organization the name and publishing rights to Revolution, a small local periodical of interest to registered nurses and others interested in the health care system. -9- 16 REGISTERED NURSE -10- W W W. C A L N U R S E S . O R G NOVEMBER | DECEMBER 2009

• Cover