HomeMy WebLinkAboutShelter House - Audit Financial Review ReportSHELTER HOUSE COMMUNITY SHELTER
AND TRANSITION SERVICES
FINANCIAL STATEMENTS
DECEMBER 31, 2021 AND 2020
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
TABLE OF CONTENTS
Independent Auditor's Report 1
Financial Statements
Statements of Financial Position 4
Statements of Activities 5
Statements of Functional Expenses 7
Statements of Cash Flows 9
Notes to Financial Statements 10
Supplementary Information
Schedule of Expenditures of Federal Awards 27
Notes to Schedule of Expenditures of Federal Awards 28
Independent Auditor's Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 29
Independent Auditor's Report on Compliance for Each
Major Federal Program and on Internal Control over
Compliance Required by the Uniform Guidance 31
Schedule of Findings and Questioned Costs 34
1
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Shelter House Community Shelter and Transition Services
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Shelter House Community Shelter and Transition
Services, which comprise the statements of financial position as of December 31, 2021 and
2020, and the related statements of activities, functional expenses, and cash flows for the
years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the financial position of Shelter House Community Shelter and Transition Services as of
December 31, 2021 and 2020, and the changes in its net assets and its cash flows for the
years then ended in accordance with accounting principles generally accepted in the United
States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the
United States of America (GAAS)and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.Our
responsibilities under those standards are further described in the Auditor's Responsibilities for
the Audit of the Financial Statements section of our report. We are required to be independent
of Shelter House Community Shelter and Transition Services and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audits. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements
in accordance with accounting principles generally accepted in the United States of America,
and for the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about Shelter
House Community Shelter and Transition Services'ability to continue as a going concern for
one year after the date that the financial statements are issued.
2
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they
would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive
to those risks. Such procedures include examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 Shelter House Community Shelter
and Transition Services'internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the
overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about Shelter House Community Shelter and
Transition Services'ability to continue as a going concern for a reasonable period of
time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control–related matters that we identified during the audit.
3
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as
a whole. The accompanying schedule of expenditures of federal awards as required by Title 2
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance) is presented for
purposes of additional analysis,and is not a required part of the 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 financial statements.The
information has been subjected to the auditing procedures applied in the audit of the financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the schedule of expenditures of federal awards is fairly stated in all material
respects in relation to the financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
August 16, 2022,on ourconsideration of Shelter House Community Shelter and Transition
Services'internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
Shelter House Community Shelter and Transition Services'internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering Shelter House Community Shelter and
Transition Services'internal control over financial reporting and compliance.
Waterloo, Iowa
August 16, 2022
See notes to financial statements. 4
2021 2020
Assets
Current assets
Cash 568,610$ 847,828$
Cash equivalents, restricted 113,596 103,888
Contract and grant receivables 1,441,703 480,539
Insurance proceeds receivable -117,000
Other current assets 96,719 14,848
Total current assets 2,220,628 1,564,103
Beneficial interest in assets held by Community Foundation 1,853,141 1,633,722
Property and equipment, net 10,943,176 6,836,876
Total assets 15,016,945$ 10,034,701$
Liabilities and Net Assets
Current liabilities
Current maturities of long-term debt 350,091$ 296,030$
Accounts payable 1,240,432 45,397
Accrued expenses 136,280 113,830
Total current liabilities 1,726,803 455,257
Long-term debt 1,121,255 640,764
Net assets
Without donor restrictions
Designated by Board for operating reserve 13,683 54,818
Invested in property and equipment, net 2,697,571 1,775,361
Undesignated 740,106 1,166,188
Total without donor restrictions 3,451,360 2,996,367
With donor restrictions 8,717,527 5,942,313
Total net assets 12,168,887 8,938,680
Total liabilities and net assets 15,016,945$ 10,034,701$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2021 AND 2020
See notes to financial statements. 5
Without With
Donor Donor
Restrictions Restrictions Total
Revenue, gains and other support
Business and individual contributions 872,874$ 116,060$ 988,934$
United W ay 40,498 40,500 80,998
Johnson County 82,819 36,200 119,019
City of Iowa City 481,446 74,615 556,061
City of Coralville 10,371 -10,371
City of North Liberty 8,500 -8,500
Federal, state and other grants 2,257,327 2,526,357 4,783,684
In-kind donations 439,561 -439,561
Program service revenue 624,701 -624,701
Gross special events revenue, less cost
of direct benefit to donors 109,469 -109,469
Change in value of beneficial interest 83,662 135,757 219,419
Miscellaneous income 99,707 9,708 109,415
Net assets released from restrictions 163,983 (163,983) -
Total revenue, gains and other support 5,274,918 2,775,214 8,050,132
Expenses
Program 4,195,513 -4,195,513
Management and general 378,965 -378,965
Fundraising 245,447 -245,447
Total expenses 4,819,925 -4,819,925
Change in net assets 454,993 2,775,214 3,230,207
Net assets, beginning of year 2,996,367 5,942,313 8,938,680
Net assets, end of year 3,451,360$ 8,717,527$ 12,168,887$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2021
See notes to financial statements. 6
Without With
Donor Donor
Restrictions Restrictions Total
Revenue, gains and other support
Business and individual contributions 681,170$ -$681,170$
United W ay 40,252 40,250 80,502
Johnson County 106,952 36,200 143,152
City of Iowa City 100,383 57,990 158,373
City of Coralville 2,711 -2,711
City of North Liberty 5,000 -5,000
Federal, state and other grants 1,642,300 17,879 1,660,179
In-kind donations 345,833 -345,833
Program service revenue 473,219 -473,219
Gross special events revenue, less cost
of direct benefit to donors 400,880 -400,880
Change in value of beneficial interest 97,257 118,006 215,263
Miscellaneous income 17,011 -17,011
Net assets released from restrictions 154,567 (154,567) -
Total revenue, gains and other support 4,067,535 115,758 4,183,293
Expenses
Program 3,242,272 -3,242,272
Management and general 330,847 -330,847
Fundraising 224,092 -224,092
Total expenses 3,797,211 -3,797,211
Change in net assets 270,324 115,758 386,082
Net assets, beginning of year 2,726,043 5,826,555 8,552,598
Net assets, end of year 2,996,367$ 5,942,313$ 8,938,680$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2020
See notes to financial statements. 7
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
STATEMENT OF FUNCTIONAL EXPENSES
YEAR ENDED DECEMBER 31, 2021
Emergency Housing Supported Total Management Total
Services Services Employment Program and General Fundraising Expenses
Salaries and wages 535,621$ 850,514$ 117,825$ 1,503,960$ 299,617$ 168,726$ 1,972,303$
Employee benefits 53,427 84,838 11,753 150,018 30,384 17,111 197,513
Payroll taxes 46,166 73,306 10,155 129,627 26,965 15,185 171,777
Total salaries and related expenses 635,214 1,008,658 139,733 1,783,605 356,966 201,022 2,341,593
Professional services and fees 16,804 26,682 3,696 47,182 3,302 3,302 53,786
Advertising 4,920 7,813 1,082 13,815 -21 13,836
Office 63,769 23,556 3,406 90,731 -18,073 108,804
Printing 1,744 --1,744 -8,733 10,477
Information technology 23,514 37,338 5,173 66,025 6,429 4,822 77,276
Occupancy 68,271 44,536 -112,807 2,503 1,878 117,188
Repairs and maintenance 37,869 52,081 -89,950 --89,950
Staff development 24,492 477 81 25,050 213 54 25,317
Interest -26,169 -26,169 --26,169
Insurance 23,433 28,038 1,036 52,507 4,424 3,318 60,249
Property taxes -7,573 -7,573 36 27 7,636
Miscellaneous 5,679 3,203 -8,882 -378 9,260
Special events -----4,974 4,974
Food for residents and catering 36,252 42 -36,294 --36,294
Participant assistance - rental and utilities 3,293 1,307,214 -1,310,507 --1,310,507
Participant assistance - clothing and furniture 64,930 --64,930 --64,930
Participant assistance - medical services 131,785 156 -131,941 --131,941
Participant assistance - COVID hoteling 42,587 --42,587 --42,587
Participant assistance - transportation 893 20,485 4,744 26,122 --26,122
Total expenses before depreciation 1,185,449 2,594,021 158,951 3,938,421 373,873 246,602 4,558,896
Depreciation 91,561 145,390 20,141 257,092 5,092 3,819 266,003
Total expenses by function 1,277,010 2,739,411 179,092 4,195,513 378,965 250,421 4,824,899
Less expenses included with revenues
on the statement of activities
Cost of direct benefits to donors -----(4,974)(4,974)
Total expenses included in the expense
section on the statement of activities 1,277,010$ 2,739,411$ 179,092$ 4,195,513$ 378,965$ 245,447$ 4,819,925$
Program Expenses
See notes to financial statements. 8
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
STATEMENT OF FUNCTIONAL EXPENSES
YEAR ENDED DECEMBER 31, 2020
Emergency Housing Supported Total Management Total
Services Services Employment Program and General Fundraising Expenses
Salaries and wages 362,948$ 858,743$ 121,993$ 1,343,684$ 259,261$ 149,141$ 1,752,086$
Employee benefits 30,401 71,930 10,218 112,549 22,293 12,824 147,666
Payroll taxes 30,047 71,090 10,099 111,236 24,442 14,060 149,738
Total salaries and related expenses 423,396 1,001,763 142,310 1,567,469 305,996 176,025 2,049,490
Professional services and fees 9,783 23,145 3,288 36,216 4,179 4,179 44,574
Advertising 1,572 3,719 528 5,819 -88 5,907
Office 44,405 13,133 2,198 59,736 120 14,492 74,348
Printing 1,358 42 -1,400 -8,526 9,926
Information technology 19,048 45,070 6,403 70,521 8,137 8,137 86,795
Occupancy 69,250 39,731 -108,981 2,151 2,151 113,283
Repairs and maintenance 33,966 29,652 114 63,732 --63,732
Staff development 4,440 2,008 460 6,908 134 113 7,155
Interest 1,508 16,400 -17,908 --17,908
Insurance 25,577 21,732 1,218 48,527 5,599 5,599 59,725
Property taxes -1,551 -1,551 31 31 1,613
Miscellaneous 5,514 9,290 -14,804 125 376 15,305
Special events -----7,619 7,619
Food for residents and catering 64,947 --64,947 --64,947
Participant assistance - rental and utilities 251 570,818 -571,069 --571,069
Participant assistance - clothing and furniture 102,918 --102,918 --102,918
Participant assistance - medical services 217,122 297 -217,419 --217,419
Participant assistance - COVID hoteling 25,542 --25,542 --25,542
Participant assistance - transportation -12,225 2,248 14,473 --14,473
Total expenses before depreciation 1,050,597 1,790,576 158,767 2,999,940 326,472 227,336 3,553,748
Depreciation 65,458 154,873 22,001 242,332 4,375 4,375 251,082
Total expenses by function 1,116,055 1,945,449 180,768 3,242,272 330,847 231,711 3,804,830
Less expenses included with revenues
on the statement of activities
Cost of direct benefits to donors -----(7,619)(7,619)
Total expenses included in the expense
section on the statement of activities 1,116,055$ 1,945,449$ 180,768$ 3,242,272$ 330,847$ 224,092$ 3,797,211$
Program Expenses
See notes to financial statements.9
2021 2020
Cash Flows - Operating Activities
Change in net assets 3,230,207$ 386,082$
Adjustments to reconcile change in net assets to
net cash flows - operating activities
Depreciation 266,003 251,082
Loan discounts (351,829)(8,733)
Noncash interest expense 26,169 17,909
Change in value of beneficial interest (219,419)(215,263)
Donated land (207,340)-
Grants and contributions restricted for long-term purposes (2,642,417)-
Changes in operating assets and liabilities
Contract and grant receivables (961,164)(193,012)
Insurance proceeds receivable 117,000 (117,000)
Other current assets (81,871)(5,402)
Accounts payable 1,195,035 10,404
Accrued expenses 22,450 (32,983)
Net cash flows - operating activities 392,824 93,084
Cash Flows - Investing Activities
Proceeds from sale of property and equipment -118,690
Purchases of property and equipment (3,235,237)(38,379)
Distributions received from beneficial interest -52,195
Net cash flows - investing activities (3,235,237) 132,506
Cash Flows - Financing Activities
Grants and contributions restricted for long-term purposes 2,642,417 -
Proceeds from long-term debt -321,300
Payments on long-term debt (69,514)(35,593)
Net cash flows - financing activities 2,572,903 285,707
Net change in cash and cash equivalents, unrestricted and restricted (269,510)511,297
Cash and Cash Equivalents, Unrestricted and Restricted
Beginning of year 951,716 440,419
End of year 682,206$ 951,716$
Cash and Cash Equivalents, Unrestricted and Restricted
Cash 568,610$ 847,828$
Cash equivalents, restricted 113,596 103,888
Total cash and cash equivalents, unrestricted and restricted 682,206$ 951,716$
Supplemental Schedule of Noncash Investing and Financing Activities
Financing of property and equipment 929,726$ 36,900$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2021 AND 2020
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
10
NOTE 1 –ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization and Description of Services
Shelter House Community Shelter and Transition Services (Shelter House) is a not-for-profit
corporation that provides safe shelter and helps people improve the quality of their lives as
they move beyond homelessness. Services are aligned with a Housing First approach and
based on the belief that housing is both a right and essential to health. Shelter House
envisions being a catalyst and voice for systemic change in the pursuit of ending
homelessness and enacts this vision through excellence in service, financial stewardship, and
development of strong community partnerships.
Shelter House offers the following services:
Emergency Services: Shelter House provides emergency shelter for single adults and families
experiencing homelessness in Johnson County and is the designated Coordinated Entry lead
for Johnson and Washington Counties in Iowa. Through Coordinated Entry,people
experiencing a housing crisis in the service region are quickly identified, assessed for, referred,
and connected to housing assistance based on their strengths and needs.Shelter House
manages a 70-bed emergency shelter comprised of men and women’s dormitories for single
adults and a family wing of six family bedrooms. Emergency Shelter capacity is increased each
winter with overflow spaces made available in the shelter lobby and in partnership with
Johnson County through the use of a designated satellite location. Through these efforts
combined nightly shelter capacity is increased by an additional 60 beds.
Breakfast and dinner are offered daily for current guests of Shelter House’s emergency shelter.
Health services are offered onsite to guests by skilled volunteers from the University of Iowa
College of Nursing and University of Iowa Hospitals and Clinics Department of Psychiatry on a
weekly and bi-weekly basis. Drop-In services are available daily and include access to
showers, laundry, clothing and toiletries,phones, and service navigation. All services are
available to anyone from the public in need.
In the spring of 2021, Shelter House worked in partnership with the City of Iowa City to launch
Street Outreach services. Through Street Outreach, and in partnership with community
members and stakeholders, people living in unsheltered locations, such as in cars, parks,
abandoned buildings, encampments, and on the streets are engaged to ensure basic needs
are met (water, food, and supplies)while offering support toward housing stability and other
services as needed and desired.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
11
NOTE 1 –ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Nature of Organization and Description of Services (Continued)
Housing Services: Shelter House offers comprehensive housing services tailored to meet
individual clients needs. Shelter House Rapid Rehousing services intends to minimize the
amount of time an individual or family spends experiencing homelessness and rapidly helps
them stabilize in their own housing. Shelter House executes each of the three core
components of Rapid Rehousing utilizing a progressive engagement approach: (1) Housing
identification, (2) Financial assistance (security deposit, move-in assistance and rent
assistance for three to six months),and (3) Housing stability case management through which
people are connected to jobs, services and the support needed to successfully maintain their
housing. Stability services continue for up to six months after rent assistance ends to ensure a
sustained housing placement. For veterans experiencing homelessness, Shelter House
provides Bridge Housing services in combination with the full range of support made available
through all other programs including navigation and support to secure health care and benefits,
employment, and housing.
Shelter House offers Permanent Supportive Housing which combines permanent, affordable
housing (tenants have the legal right to remain in the unit as long as they wish, as defined by
the terms of a renewable lease agreement and pay no more than 30% of income for housing)
with flexible, voluntary support services designed to help tenants stay housed and address
health issues while building the necessary skills to live as independently as possible.
Permanent Supportive Housing is an evidence-based housing intervention prioritized for
individuals with complex health and behavioral health issues (higher needs than those typically
resolved through Rapid Rehousing and has been proven to significantly reduce returns to jail
and homelessness and reliance on emergency health services, while improving overall quality
of life.
Permanent Supportive Housing is provided through scattered site (Fairweather Lodge and
Mainstream Vouchers) and single site (Cross Park Place) approaches. The Fairweather Lodge
is a recovery focused, peer driven program for adults experiencing homelessness and
diagnosed with a serious persistent mental illness. Mental health services are embedded and
supported by both the University of Iowa Counseling Psychology Program and University of
Iowa Hospitals and Clinics Department of Psychiatry. The model is predicated on the
understanding that people who live and work together, and have significant control over their
lives, can overcome homelessness and recover from their mental illnesses. Mainstream
Vouchers were utilized in 2021 to expand Permanent Supportive Housing opportunities for
both families and single adults in collaboration with the Iowa City Housing Authority and local
landlords.
Cross Park Place offers 24 one-bedroom apartments with on-site psychiatric (University of
Iowa Hospitals and Clinics Department of Psychiatry) and primary health care (University of
Iowa College of Nursing)services available weekly and intensive case management and
supportive services available daily. The building is staffed 24/7. Housing opportunities are
exclusively targeted for chronically homeless adults, who categorically have a disabling
condition, and frequently demonstrate high cross-system service utilization.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
12
NOTE 1 –ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Nature of Organization and Description of Services (Continued)
Housing Services (Continued):Eviction Prevention and Diversion services continued to grow in
2021. Shelter House leveraged state and local public funds to provide emergency rent and
utility assistance for hundreds of households to ensure housing retention and prevent entry
into the homeless response system. In addition to financial support (rental and utility arrears
payments made directly to landlords and utility companies to prevent evictions and utility
disconnections), Shelter House staff provided outreach to landlords and tenants facing eviction
providing landlord/tenant mediation, advocacy, and tenant education.
Shelter House provides Supported Employment for tenants in our Permanent Supportive
Housing through Fresh Starts Janitorial Services (a social enterprise providing contract-based
reliable, professional janitorial services for area businesses and organizations). Supported
employment is predicated on the understanding that employment is both an outcome and a
core component of recovery and ensures all people who want to work are offered work.
Services are integrated with comprehensive mental health treatment,personalized benefits
counseling is provided to every client, and clients receive job supports for as long as required.
Supported Employment
Employment is a core component of the Fairweather Lodge and is offered to other Permanent
Supportive Housing clients. In order to guarantee employment for all Fairweather Lodge
participants, Shelter House initiated Fresh Starts, a social enterprise providing contract-based
reliable, professional janitorial services for area businesses and organizations.
Accounting 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 certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Restricted Cash Equivalents
Restricted cash equivalents include highly liquid investments, with original maturities of three
months or less, that are recorded at cost plus accrued interest, which approximates market.
Shelter House is required to maintain established amounts for capital expenditures and
operations of the Cross Park operations.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
13
NOTE 1 –ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentrations of Credit Risk
Financial instruments which potentially subject Shelter House to concentrations of credit risk
consist principally of cash, restricted cash equivalents and receivables. Shelter House places
its cash and restricted cash equivalents with high credit quality financial institutions.At times,
Shelter House's cash and restricted cash equivalents are in excess of the FDIC insurance limit.
Shelter House is subject to a degree of vulnerability due to concentrations of receivables and
revenue from major funding sources. Shelter House received approximately 52%and 34% of
its total revenue, gains and other support from the federal government for the years ended
December 31, 2021 and 2020, respectively. As of December 31, 2021,one payor accounted
for approximately 76%of contract and grant receivables. As of December 31,2020, two
payors accounted for approximately 72%of contract and grant receivables.
Beneficial Interest in Assets Held by Community Foundation
Shelter House has accounts with the Community Foundation of Johnson County (the
Foundation),which are held in permanent designated agency endowment funds, for the benefit
of Shelter House. The transactions with the Foundation are deemed to be reciprocal, and
therefore,the fair value of the fund held by the Foundation is recognized as an asset by
Shelter House.
Property and Equipment
Property and equipment are carried at cost,or fair value if donated, with depreciation
computed primarily under the straight-line method over the economic useful lives of the assets.
All property and equipment in excess of $5,000 is capitalized.
Long-Lived Assets
Shelter House records impairment losses on long-lived assets used in operations when events
and circumstances indicate that the assets might be impaired and the undiscounted cash flows
estimated to be generated by those assets are less than the carrying amounts of those assets.
There were no impairment losses for the years ended December 31, 2021 and 2020.
Paycheck Protection Program Loan
Shelter House follows the Financial Accounting Standards Board's (FASB)Topic 470-Debt in
accounting for its Paycheck Protection Program (PPP)loan. The proceeds from the loan
remain as a liability until either (1) the loan is, in part or wholly, forgiven and Shelter House has
been legally released or (2) Shelter House pays off the loan to the creditor.Shelter House will
reduce the liability by the amount forgiven and record a gain on extinguishment.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
14
NOTE 1 –ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Assets
Net assets, revenues, gains, and other support are classified based on the existence or
absence of donor or grantor-imposed restrictions. Accordingly, net assets and changes therein
are classified and reported as follows:
Net Assets Without Donor Restrictions –Net assets available for use in general operations and
not subject to donor or grantor restrictions. The governing board has designated, from net
assets without donor restrictions, net assets for an operating reserve.
Net Assets With Donor Restrictions –Net assets subject to donor or grantor-imposed
restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will
be met by the passage of time or other events specified by the donor. Other donor-imposed
restrictions are perpetual in nature, where the donor stipulates that resources be maintained in
perpetuity. Contributions that are restricted by the donor are reported as increases in net
assets without donor restrictions if the restrictions expire (that is, when a stipulated time
restriction ends,or purpose restriction is accomplished) in the reporting period in which the
revenue is recognized. All other donor-restricted contributions are reported as increases in net
assets with donor restrictions. When a restriction expires, net assets with donor restrictions are
reclassified to net assets without donor restrictions and reported in the statement of activities
as net assets released from restrictions.
Revenue Recognition
Contribution and Grant Revenue
Shelter House recognizes contributions when cash, securities or other assets, an unconditional
promise to give, or notification of a beneficial interest is received. Conditional promises to give,
that is, those with a measurable performance or other barrier, and a right of return, are not
recognized until the conditions on which they depend have been substantially met. As of
December 31, 2021, Shelter House had a conditional promise to give of $1,848,764 for the
construction of a building and $2,560,785 for 2022 programs. No amounts were recognized in
2021 as the conditions had not yet been met.
A portion of Shelter House's revenue is derived from cost-reimbursable federal and state
contracts and grants, which are conditioned upon certain performance requirements and/ or
the incurrence of allowable qualifying expenses. Amounts received are recognized as revenue
when Shelter House has incurred expenditures in compliance with specific contract or grant
provisions.
Program Service Revenue
Contracted janitorial service revenue is recognized over time as Shelter House satisfies its
performance obligations.Contracts are generally for 12 months with an option for two
automatic renewals of two years unless a 90 day written notice of nonrenewal is received.
Termination of the contract requires 30 day notice. Under these contracts, Shelter House
provides services for a stated monthly fee. Monthly fees are billed within two weeks of the
service being provided.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
15
NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition (Continued)
Rental income is recognized over time as Shelter House satisfies its performance obligations.
Under Shelter House's rental agreements, which are generally based on 12 month contracts,
Shelter House provides housing for a stated monthly fee. Rent is paid by the tenant personally
or by housing subsidy held by the tenant and paid directly to Shelter House. Housing subsidies
are determined by the provider, such as the Public Housing Authority, which uses an income-
based calculation to determine the fees to be paid by the tenant and the fees to be paid
through subsidy.Rental fees that are owed by the tenant are not always collected and, as
such,Shelter House adjusts revenue based on historical experience, to reflect the estimated
transaction price. Shelter House generally receives payment at the beginning of each month
for services during the month.
In-kind contributions
Donated materials, rental activities, and contributed services are reflected as contributions in
the accompanying statements at their estimated values at date of receipt.
The value of donated materials, rental activities, and services included as contributions and
corresponding expenses,in the accompanying statements for the years ended December 31,
2021 and 2020, is as follows:
2021 2020
Materials 64,190$ 72,318$
Rental activities 36,281 25,915
Land 207,340 -
Services 131,750 247,600
Total in-kind contributions 439,561$ 345,833$
Functional Allocation of Expenses
The costs of program and supporting services activities have been summarized on a functional
basis in the statement of activities. The statement of functional expenses presents the natural
classification detail of expenses by function. The financial statements report certain categories
of expenses that are attributed to more than one program or supporting function. Therefore,
expenses require allocation on a reasonable basis that is consistently applied. The expenses
that are allocated include professional services, information technology, occupancy, insurance,
property taxes, and depreciation, which are allocated based on clients and employee numbers,
as well as salaries and wages, benefits, and payroll taxes, which are allocated on the basis of
estimates of time and effort.
Income Taxes
Shelter House is a not-for-profit corporation as described in Section 501(c)(3) of the Internal
Revenue Code (the Code)and is exempt from federal income taxes pursuant to Section
501(a) of the Code.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
16
NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recently Issued Accounting Pronouncement
In September 2020, the FASB issued Accounting Standards Update (ASU) No. 2020-07, Not-
for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for
Contributed Nonfinancial Assets, which is intended to improve transparency in the reporting of
contributed nonfinancial assets,also known as gifts-in-kind, for not-for-profit organizations. In
addition to enhanced disclosures for contributed nonfinancial assets, this ASU requires not-for-
profit organizations to present contributed nonfinancial assets as a separate line item in the
statement of activities, apart from contributions of cash or other financial assets. The
amendments in this ASU should be applied on a retrospective basis and are effective for
annual reporting periods beginning after June 15, 2021, with early adoption permitted. Shelter
House is currently evaluating the impact this standard will have on its financial statements.
Subsequent Events
Management has evaluated subsequent events through August 16, 2022, the date which the
financial statements were available for issue.
NOTE 2 –LIQUIDITY AND AVAILABILITY
Financial assets available for general expenditure, that is,without donor or other restrictions
limiting their use, within one year of the statement of financial position date, comprise the
following as of December 31,2021 and 2020:
2021 2020
Cash 568,610$ 847,828$
Contract and grant receivables 1,441,703 480,539
Insurance proceeds receivable -117,000
Total financial assets available 2,010,313 1,445,367
Less donor-imposed restrictions on
financial assets 732,306 134,440
Less board restricted endowment 13,683 54,818
Financial assets available within one year 1,264,324$ 1,256,109$
Shelter House has funds available at the Community Foundation of Johnson County which are
not included in the table above. These funds are invested for long-term appreciation but are
available at the discretion of the Foundation.
To help manage unanticipated liquidity needs, Shelter House has a committed line of credit in
the amount of $125,000 which it could draw upon.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
17
NOTE 3 –CONTRACT AND GRANT RECEIVABLES
Contract and grant receivables as of December 31,2021 and 2020,follows:
2021 2020
Federal 137,231$ 3,893$
State 1,091,947 245,672
Local government 156,335 152,448
United W ay 40,500 40,250
Other 15,690 38,276
Total contract and grant receivables 1,441,703$ 480,539$
NOTE 4 –FUNDS HELD AT COMMUNITY FOUNDATON
Beneficial Interest in Assets Held by Community Foundation
Shelter House has agency funds available at the Foundation. Shelter House has a beneficial
interest in these assets held by the Foundation in the amount of $1,853,141 and $1,633,722 as
of December 31, 2021 and 2020, respectively, which represents funds previously transferred
to the Foundation by the Shelter House and the earnings thereon. These funds are invested
for long-term appreciation but are available at the discretion of the Shelter House's Board of
Directors. The Shelter House has granted variance power to the Foundation in the event the
Shelter House terminates or ceases to exist as a legal entity.
Amounts Held on Behalf of the Organization
The Foundation holds third-party contributions to the Foundation on behalf of the Shelter
House in designated funds.Income from these funds is available to support the Shelter
House's operations at the discretion of the Foundation, with a current distribution rate of 4.5%,
calculated using a 12-quarter trailing average.The Foundation is considered the owner of
these funds and therefore not recorded on the statement of financial position of Shelter House.
The Shelter House had a total of $677,556 and $584,482 in designated Funds held by the
Foundation as of December 31, 2021 and 2020, respectively.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
18
NOTE 5 –PROPERTY AND EQUIPMENT
Property and equipment consists of the following as of December 31, 2021 and 2020:
2021 2020
Buildings 7,463,839$ 7,361,234$
Furniture 692,963 551,301
Construction in progress 3,709,148 -
Land 913,668 508,828
12,779,618 8,421,363
Less accumulated depreciation 1,836,442 1,584,487
Property and equipment, net 10,943,176$ 6,836,876$
NOTE 6 –LINE OF CREDIT
Shelter House has available a $125,000 variable rate (5% as of December 31, 2021) revolving
bank line of credit which expires December 3, 2022.Outstanding balances are secured by
substantially all assets of Shelter House.As of December 31, 2021 and 2020, there were no
amounts outstanding under this line of credit.
NOTE 7 –LONG-TERM DEBT
2021 2020
0% note payable to City of Iowa City, Iowa, dated
September 17, 2010, due July 1, 2041, secured
by property located at 1323 and 1325 Ashley
Drive, Iowa City, Iowa, payable $278 per month
beginning July 1, 2016.81,652$ 84,716$
0% note payable to Housing Trust Fund of
Johnson County, dated December 16, 2010, due
December 1, 2040, secured by real property at
1323 and 1325 Ashley Drive, Iowa City, Iowa,
payable $198 per month beginning January 1,
2014.44,992 47,170
0% note payable to Housing Trust Fund of
Johnson County, dated August 15, 2011, due
September 1, 2041, secured by real property at
135 Amhurst Street, Iowa City, Iowa, payable
$509 per month beginning September 1, 2014.120,208 125,807
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
19
NOTE 7 –LONG-TERM DEBT (CONTINUED)
2021 2020
0% note payable to Housing Trust Fund of
Johnson County, dated February 18, 2019, due
June 1, 2040, secured by real property at 820
Cross Park Ave., Iowa City, Iowa, payable
$1,771 per month beginning July 1, 2020.393,125 412,604
0% note payable to Housing Trust Fund of
Johnson County, dated January 25, 2019, due
December 31, 2039, secured by real property at
15 Wakefield Ct., Iowa City, Iowa, payable $729
per month beginning January 1, 2020.140,496 146,516
0% note payable to Housing Trust Fund of
Johnson County, dated October 25, 2019, due
October 31, 2030, unsecured, payable $308 per
month beginning October 1, 2020.32,287 35,670
Paycheck Protection Program (PPP) loan
forgiven February 2022 (A).285,136 321,300
0% note payable to City of Iowa City, Iowa, dated
September 3, 2019, due June 1, 2030, secured
by real property at 15 Wakefield Ct., Iowa City,
Iowa, payable $200 per month beginning July 1,
2020.20,400 22,600
0% note payable to Housing Trust Fund of
Johnson County, dated August 2, 2021, due
April 30, 2052, secured by real property at 135
Amhurst Street, Iowa City, Iowa, payable $524
per month beginning April 1, 2022.296,515 -
0% note payable to Housing Trust Fund of
Johnson County, dated July 23, 2021, due July
31, 2052, secured by real property at 501
Southgate Avenue, Iowa City, Iowa, payable
$1,772 per month beginning August 1, 2022.633,211 -
Total debt 2,048,022$ 1,196,383$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
20
NOTE 7 –LONG-TERM DEBT (CONTINUED)
2021 2020
Total debt 2,048,022 1,196,383
Less imputed interest 576,676 259,589
Less current maturities 350,091 296,030
Total long-term debt 1,121,255$ 640,764$
Maturities of long-term debt are as follows:
Year Ending December 31
2022 350,091$
2023 78,059
2024 78,059
2025 78,059
2026 78,059
Thereafter 1,385,695
2,048,022$
(A)Shelter House applied for and obtained a $321,300 Paycheck Protection Program
(PPP) loan, administered by the U.S. Small Business Administration, established under
the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Under the terms
of the loan,which was unsecured,Shelter House could apply for and be granted
forgiveness for a portion or all of the loan if funds were used in accordance with
program guidance. During the year ended December 31, 2021, Shelter House made
principal payments of $36,164, reducing the loan balance to $285,136.The loan was
forgiven by the SBA in February 2022, at which time the SBA refunded the $36,164 that
had been paid in 2021.Shelter House must maintain all records relating to the loan for
six years from the date of forgiveness and must permit authorized representatives of the
SBA, including representatives of its Office of Inspector General, to access such files
upon request.
NOTE 8 –CONTINGENCIES
Shelter House is contingently liable under several contingent forgivable loans and grant
agreements. These contingent forgivable loans and grant agreements have not been recorded
as liabilities on the statement of financial position as repayment is not required as long as
Shelter House continues to own the properties which secure the notes and complies with the
provisions of the respective loans, grants and regulatory agreements, which Shelter House
fully intends to do. The contingent forgivable loans and grant agreements were recognized as
revenues when qualifying construction or property purchases were incurred and are reflected
as net assets with donor restrictions.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
21
NOTE 8 –CONTINGENCIES (CONTINUED)
429 Southgate Avenue
During the year ended December 31,2004, the City of Iowa City provided Shelter House with
$230,000 of Community Development Block Grant (CDBG) funds to purchase property for a
new shelter and improvements to the site. As of December 31, 2008,all of the CDBG funds
had been used to purchase the property and pay for closing costs and for site improvements.
Under the terms of the CDBG grant, Shelter House is prohibited from selling, assigning, or
transferring its interest in the property prior to June 30, 2103, without written concurrence of
the City.If Shelter House fully complies with the obligations of the grant through and including
June 30, 2103, then the lien against the property will be released by the City.
During the year ended December 31, 2009,the City of Iowa City provided Shelter House with
$116,785 of Community Development Block Grant ARRA (CDBG-R) funds and $194,443 of
CDBG funds to pay for a portion of the construction costs of the new shelter. As of December
31, 2013, all CDBG-R funds and CDBG funds had been used for construction costs.Under the
terms of the grants, Shelter House is prohibited from selling, assigning, or transferring its
interest in the property prior to June 30, 2073, without written concurrence of the City.If
Shelter House fully complies with the obligations of the grant through and including June 30,
2073, then the lien against the property will be released by the City.
1323 and 1325 Ashley Drive
During the year ended December 31,2010, the City of Iowa City provided Shelter House with
$200,000 of HOME Investment Partnership funds for the purchase and rehabilitation of two
homes in Iowa City for the affordable permanent supportive rental housing for low income
households.As of December 31,2010, all HOME funds had been received and used for
purchase of 1323 and 1325 Ashley Drive, Iowa City, Iowa. Under the terms of the HOME
grant, Shelter House's period of affordability is 20 years from the date all units are leased.
Shelter House received a $100,000 grant and a $100,000 loan with a 25-year amortization with
monthly payments of $278 beginning July 1, 2016 and ending July 1,2041.Under the terms of
the agreement, Shelter House is prohibited from selling, assigning, or transferring its interest in
the property prior to July 1, 2041, without written concurrence of the City.If Shelter House fully
complies with the obligations of the grant and the loan through and including July 1, 2041, then
the lien against the property will be released by the City.
During the year ended December 31, 2011,the City of Iowa City provided Shelter House with
$75,000 of CDBG HOME funds to rehabilitate the property purchased at 1323 Ashley Drive,
Iowa City Iowa.As of December 31, 2011, all CDBG funds had been used for the
rehabilitation. Under the terms of the agreement, Shelter House must provide affordable
housing through October 1,2031.If Shelter House fully complies with the agreement, there
shall be no loan payments and the City will release the agreement and mortgage.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
22
NOTE 8 –CONTINGENCIES (CONTINUED)
820 Cross Park Avenue
During the year ended December 31, 2016,the City of Iowa City provided Shelter House with
$25,000 of CDBG funds to pay for a portion of the purchase price to acquire land for a new
shelter. As of December 31, 2016, all CDBG funds had been used for the land purchase.
Under the terms of the grant,Shelter House is prohibited from selling, assigning, or
transferring its interest in the property through December 28, 2023 (the compliance period),
without written concurrence of the City.If Shelter House fully complies with the agreement,
there shall be no loan payments and the City will release the agreement and mortgage.
During the year ended December 31,2017,the Iowa Finance Authority (IFA) and Shelter
House entered into an agreement whereas IFA awarded $2,700,000 of National Housing Trust
Fund (NHTF) monies for Shelter House to construct,develop, own,operate, lease and
otherwise deal with a nonluxury residential housing project with suitable amenities to be
located in Iowa City, IA, known as FUSE –Housing First.As of December 31, 2019,all funds
had been used for construction costs.Under the terms of the grant,Shelter House must
provide affordable housing for a period of thirty-two years from the date the Certificate of
Occupancy (December 28, 2018)is issued for all units in the property (the compliance period).
If Shelter House fully complies with the obligations of the grant through and including
December 28, 2050, then the lien against the property will be released by the IFA.
During the year ended December 31,2018, the Housing Trust Fund of Johnson County
(HTFJC)and Shelter House entered into an agreement whereas HTFJC awarded $463,204 to
assist Shelter House with the nonluxury residential housing project known as FUSE –Housing
First.As of December 31, 2018, all funds had been used for construction costs.Under the
terms of the grant, Shelter House must provide affordable housing through January 31, 2049
(the compliance period).If Shelter House fully complies with the agreement, there shall be no
loan payments and the City will release the agreement and mortgage.If Shelter House fully
complies with the obligations of the grant through and including December 28, 2048,then the
lien against the property will be released by the HTFJC.
1447 Valley View Drive
During the year ended December 31, 2014, U.S.Department of Housing and Urban
Development (HUD) provided Shelter House with $212,000 of Continuum of Care funds to
purchase property in Coralville for affordable permanent housing. As of December 31, 2014,all
Continuum of Care funds had been received and used for the purchase of 1447 Valley View
Drive, Coralville, Iowa.Under the terms of the agreement,Shelter House is prohibited from
selling,assigning, or transferring its interest in the property prior to July 15,2030,without
written concurrence of HUD.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
23
NOTE 8 –CONTINGENCIES (CONTINUED)
15 Wakefield Court
During the year ended December 31, 2019,the City of Iowa City provided Shelter House with
$94,000 of HOME Investment Partnership funds for the purchase of a home in Iowa City for
the affordable permanent supportive rental housing for low income households. As of
December 31,2019, all HOME funds had been received and used for purchase of 15
Wakefield Court, Iowa City, Iowa. Under the terms of the HOME grant,Shelter House's period
of affordability is 10 years from the date all units are leased. Shelter House received a $70,000
grant and a $24,000 loan with a 10-year amortization with monthly payments of $200
beginning July 1, 2020 and ending June 1,2030.Under the terms of the agreement, Shelter
House is prohibited from selling, assigning, or transferring its interest in the property prior to
July 1, 2030,without written concurrence of the City.If Shelter House fully complies with the
obligations of the grant and the loan through and including July 1, 2030, then the lien against
the property will be released by the City.
501 Southgate Ave
During the year ended December 31,2021,the IFA and Shelter House entered into an
agreement whereas IFA awarded $2,700,000 of National Housing Trust Fund (NHTF) monies
for Shelter House to construct,develop,own,operate, lease and otherwise deal with a
nonluxury residential housing project with suitable amenities to be located in Iowa City, IA,
known as FUSE –Housing First 2.0.As of December 31, 2021, $1,780,227 have been used
for construction costs. Under the terms of the grant, Shelter House must provide affordable
housing for a period of thirty-five years from the date the Certificate of Occupancy (May 11,
2021) is issued for all units in the property (the compliance period).If Shelter House fully
complies with the obligations of the grant,then the lien against the property will be released by
the IFA.
NOTE 9 –NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions as of December 31, 2021 and 2020,are available for the
following purposes or periods:
2021 2020
Beneficial interest in assets held by Foundation
Operations 245,719$ 245,719$
Employment assistance 1,147,502 1,011,745
Imputed interest on long-term debt 576,676 260,089
Subsequent year's operations 151,315 134,440
Reserve funds 113,596 103,888
501 Southgate Ave. construction 2,296,287 -
Property and equipment subject to
continuing compliance contingencies 4,186,432 4,186,432
8,717,527$ 5,942,313$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
24
NOTE 10 –DISSAGREGATION OF PROGRAM SERVICE REVENUE
The following table disaggregates Shelter House's program service revenue based on the
timing of satisfaction of performance obligations:
2021 2020
Performance obligations recognized:
At a point in time 26,719$ 75,045$
Over time 597,982 398,174
624,701$ 473,219$
NOTE 11 –RETIREMENT PLAN
Shelter House maintains a SIMPLE IRA plan which covers employees who meet certain
eligibility requirements.Shelter House makes matching contributions to the plan for those
eligible employees who defer a portion of their compensation. The maximum matching amount
per eligible employee is 3%.For the years ended December 31, 2021 and 2020, Shelter
House contributed $20,579 and $15,006, respectively, in matching funds.
NOTE 12 –FAIR VALUE MEASUREMENTS
The fair value measurement accounting literature establishes a valuation hierarchy for
disclosure of the inputs to valuation used to measure fair value.This hierarchy prioritizes the
inputs into three broad levels as follows:
Level 1:Inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2:Inputs are quoted prices for similar assets and liabilities in active markets or inputs
that are observable,either directly or indirectly through market corroboration,for
substantially the full term of the financial instrument.
Level 3:Inputs are unobservable inputs based on Shelter House's own assumptions used to
measure assets and liabilities at fair value.
A financial asset or liability's classification within the hierarchy is determined based on the
lowest level input that is significant to the fair value measurement.
The beneficial interest in assets held by the Community Foundation is valued at the estimated
pro rata share of the Foundation's investment pool. The assets held by the Foundation include
money market funds, bonds and fixed income funds, and mutual funds. The Foundation is
organized and operated as a permanent collection of endowed funds for the benefit of many
organizations. Shelter House holds only a portion of the assets held by the Foundation,
therefore,Shelter House reports its beneficial interest as a Level 3 asset.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO FINANCIAL STATEMENTS
25
NOTE 12 –FAIR VALUE MEASUREMENTS (CONTINUED)
The following is a summary of changes in the fair value of Shelter House's Level 3 asset for
the years ended December 31, 2021 and 2020:
2021 2020
Balance - beginning of year 1,633,722$ 1,470,654$
Distribution -(27,101)
Net earnings 219,419 190,169
Balance - end of year 1,853,141$ 1,633,722$
NOTE 13 – PURCHASE COMMITMENTS
As of December 31, 2021, Shelter House had two purchase commitments outstanding.Under
the construction contract for the 501 Southgate Ave.(Southgate) project, Shelter House had
incurred costs of approximately $4,324,000 as of December 31,2021. The Southgate project
is expected to cost approximately $7,850,000 and be completed June 10, 2022.Shelter House
has secured grant funding of approximately $3,565,000 towards the construction costs.
Shelter House has continued a construction contract to rebuild the Amhurst Fairweather Lodge
that is expected to cost $610,400 and be completed by July 31, 2022.Under the construction
contract for the Amhurst Fairweather Lodge project, Shelter House had incurred costs of
approximately $565,000 as of December 31,2021. Shelter House was required to apply
certain insurance proceeds towards the construction costs.
NOTE 14 –RECLASSIFICATIONS
Certain reclassifications have been made to the prior year’s financial statements, as previously
reported, in order to conform them to the current year's presentation.
26
SUPPLEMENTARY INFORMATION
See notes to schedule of expenditures of federal awards. 27
Assistance Pass-Through
Listing Entity Identifying
Federal Grantor/Pass-Through Grantor/Program Title Number Number
U.S. Department of Housing and Urban Development
Passed through City of Iowa City, Iowa
HOME Investment Partnerships Program 14.239 N/A 170,000$
Direct
Continuum of Care (CoC) Program 14.267 1,189,619
Passed through Iowa Finance Authority
Emergency Solutions Grants Program 14.231 52003-21 77,454
COVID-19 - Emergency Solutions Grants Program 14.231 CV-52003-20 330,636
COVID-19 - Emergency Solutions Grants Program 14.231 CV2-52003-20 568,698
National Housing Trust Fund Program 14.275 17-NHTF-1285 2,700,000
National Housing Trust Fund Program 14.275 20-NHTF-1071 1,780,227
Passed through City of Iowa City, Iowa
Community Development Block Grant ARRA (CDBG-R)14.253 N/A 116,785
CDBG-Entitlement Grants Cluster
Passed through City of Iowa City, Iowa
CDBG-Entitlement Cluster 14.218 N/A 552,105
COVID-19 - CDBG-Entitlement Cluster 14.218 N/A 377,358
Total CDBG-Entitlement Grants Cluster 929,463
Total U.S Department of Housing and Urban Development 7,862,882
U.S Department of Homeland Security
Direct
Emergency Food and Shelter National Board Program 97.024 16,994
U.S. Department of Health and Human Services
Direct
COVID-19 - CDC COVID-19 Vaccination Implementation
and Planning 93.268 1,643
U.S. Department of Veterans Affairs
Direct
VA Homeless Providers Grant and Per Diem Program 64.024 72,270
Total Expenditures of Federal Awards 7,953,789$
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED DECEMBER 31, 2021
Federal
Expenditures
28
NOTE 1 - BASIS OF PRESENTATION
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 3 - INDIRECT COST RATE
NOTE 4 - LOANS WITH CONTINUING COMPLIANCE REQUIREMENTS
Maturity Outstanding
Program / Property CFDA #Date Balance
CDBG - 429 Southgate Avenue 14.218 6/30/2103 230,000$
CDBG - 429 Southgate Avenue 14.218 6/30/2073 194,443
CDBG - 1323 Ashley Drive 14.218 10/1/2031 75,000
CDBG - 820 Cross Park Avenue 14.218 12/28/2023 25,000
HOME Investment Partnership - 1323 Ashley Drive 14.239 7/1/2041 100,000
CDBG - 429 Southgate Avenue 14.253 6/30/2073 116,785
Continuum of Care - 1447 Valley View Drive 14.267 7/15/2030 212,000
National Housing Trust Fund - 820 Cross Park Avenue 12.275 12/28/2053 2,700,000
HOME Investment Partnership - 15 Wakefield Ct.14.239 12/31/2050 70,000
National Housing Trust Fund - 501 Southgate Avenue 14.275 Undetermined 1,780,227
Total loans with federal continuing compliance requirements 5,503,455$
Shelter House Community Shelter and Transition Services received the following funding from the U.S.
Department of Housing and Urban Development. Loan documents require compliance with program
regulations until the maturity date of the loan or the period of affordability expires. Loans outstanding as of
the beginning of the year and loans received during the year are included in the federal expenditures
presented in the Schedule, with balances outstanding as of December 31, 2021, as follows:
Shelter House Community Shelter and Transition Services has elected to use the 10-percent de minimis
indirect cost rate as allowed under the Uniform Guidance.
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED DECEMBER 31, 2021
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award
activity of Shelter House Community Shelter and Transition Services under programs of the federal
government for the year ended December 31, 2021. The information in this Schedule is presented in
accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Because the Schedule presents only a selected portion of the operations of Shelter House
Community Shelter and Transition Services, it is not intended to and does not present the financial position,
changes in net assets, or cash flows of Shelter House Community Shelter and Transition Services.
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures
are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of
expenditures are not allowable or are limited to reimbursement.
29
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Directors
Shelter House Community Shelter and Transition Services
We have audited, in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards,issued by the Comptroller General of the United States, the financial
statements of Shelter House Community Shelter and Transition Services (Shelter House),
which comprise the statement of financial position as of December 31, 2021, and the related
statements of activities, functional expenses,and cash flows for the year then ended, and the
related notes to the financial statements, and have issued our report thereon dated
August 16, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Shelter
House's internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of Shelter House's internal control.Accordingly, we do not express an opinion on
the effectiveness of Shelter House's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions,to
prevent,or detect and correct, misstatements on a timely basis.A material weakness is a
deficiency,or a combination of deficiencies,in internal control,such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented
or detected and corrected,on a timely basis.A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies.Given these limitations, during
our audit, we did not identify any deficiencies in internal control that we consider to be material
weaknesses.However, material weaknesses may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether Shelter House's financial statements
are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations,contracts,and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit and,accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing,and not to provide an opinion on the effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance.Accordingly, this communication is not suitable for any other
purpose.
Waterloo, Iowa
August 16, 2022
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INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR
EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL
OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
Board of Directors
Shelter House Community Shelter and Transition Services
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited Shelter House Community Shelter and Transition Services' (Shelter House)
compliance with the types of compliance requirements described in the OMB Compliance
Supplement that could have a direct and material effect on Shelter House's major federal
programs for the year ended December 31, 2021.Shelter House's major federal programs are
identified in the summary of auditor's results section of the accompanying schedule of findings
and questioned costs.
In our opinion,Shelter House complied, in all material respects, with the compliance
requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended December 31, 2021.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally
accepted in the United States of America (GAAS); the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of the United
States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those
standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for
the Audit of Compliance section of our report.
We are required to be independent of Shelter House and to meet our other ethical
responsibilities, in accordance with relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion on compliance for each major federal program. Our audit does not
provide a legal determination of Shelter House's compliance with the compliance requirements
referred to above.
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Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes,regulations, rules and provisions of contracts or grant
agreements applicable to Shelter House's federal programs.
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with
the compliance requirements referred to above occurred, whether due to fraud or error, and
express an opinion on Shelter House's compliance based on our audit. Reasonable assurance
is a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with GAAS, Government Auditing Standards, and the
Uniform Guidance will always detect material noncompliance when it exists. The risk of not
detecting material noncompliance resulting from fraud is higher than for that resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,or the
override of internal control. Noncompliance with the compliance requirements referred to
above is considered material, if there is a substantial likelihood that, individually or in the
aggregate, it would influence the judgment made by a reasonable user of the report on
compliance about Shelter House's compliance with the requirements of each major federal
program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the
Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis,evidence regarding Shelter House's compliance with
the compliance requirements referred to above and performing such other procedures
as we considered necessary in the circumstances.
Obtain an understanding of Shelter House's internal control over compliance relevant to
the audit in order to design audit procedures that are appropriate in the circumstances
and to test and report on internal control over compliance in accordance with the
Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of Shelter House's internal control over compliance.Accordingly, no such
opinion is expressed.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and
material weaknesses in internal control over compliance that we identified during the audit.
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Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a
control over compliance does not allow management or employees, in the normal course of
performing their assigned functions, to prevent, or detect and correct, noncompliance with a
type of compliance requirement of a federal program on a timely basis. A material weakness in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control
over compliance with a type of compliance requirement of a federal program that is less severe
than a material weakness in internal control over compliance, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in
the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed
to identify all deficiencies in internal control over compliance that might be material
weaknesses or significant deficiencies in internal control over compliance. Given these
limitations, during our audit we did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses,as defined above. However,material
weaknesses or significant deficiencies in internal control over compliance may exist that were
not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance.Accordingly, this report is not suitable for any other
purpose.
Waterloo, Iowa
August 16, 2022
34
SHELTER HOUSE COMMUNITY SHELTER AND TRANSITION SERVICES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED DECEMBER 31, 2021
SECTION I – SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued Unmodified
Internal control over financial reporting
Material weakness(es)identified?No
Significant deficiency(ies) identified?None reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major programs
Material weakness(es) identified?No
Significant deficiency(ies) identified?None reported
Type of auditor's report issued on compliance for major programs Unmodified
Any audit findings disclosed that are required to be
reported in accordance with 2 CFR 200.516(a)?No
Identification of Major Program(s)
Assistance Listing Numbers(s)14.231
14.218
Name of Federal Program(s) or Cluster(s)Emergency Solutions
Grants Program
Community Development
Block Grants
Dollar threshold used to distinguish between type A and
type B programs $750,000
Auditee qualified as a low-risk auditee? Yes
SECTION II – FINDINGS RELATED TO THE FINANCIAL STATEMENTS
None for current year.
SECTION III –FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
None for current year.