1. Nature of operations
The Huron County Development Council (the Council) was organized as a community improvement corporation in the State of Ohio and is exempt from federal taxation under Internal Revenue Code Section 501(c)(3) effective May 23, 2016 and prior to this the Council was exempt from federal taxation under Internal Revenue Code Section 501(c)(4). A portion of the Council's revenue is generated from grant administration.
2. Summary of significant accounting policies
Property and equipment that has a useful life greater than one year is recorded at cost if purchased and fair value if donated. Routine maintenance, repairs, and renewals are expensed when incurred. Depreciation is computed using the straight-line method with lives of three to five years. When property is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is reflected in other income or expense.
The Council follows the recommendations of the Financial Accounting Standards Board in its presentation of the financial statements. Under FASB ASC 958-205, the Council is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
Unrestricted net assets are assets not subject to donor imposed restrictions.
Temporarily restricted net assets are assets with a donor-imposed restriction that allows the Council to use the assets as specified either upon the passage of time or by actions of the Council. When a restriction expires temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Restricted contributions whose restrictions are met in the same reporting period are reflected as unrestricted contributions. There were no temporarily restricted net assets held in 2016 or 2015.
Permanently restricted net assets are subject to donor-imposed stipulations that they be maintained permanently. The donors of these assets may permit the Council to use a specified portion of these assets for general purposes. There were not permanently restricted net assets held in 2016 and 2015.
Dues are recognized as income during the calendar year that the first month of the membership period falls, rather than ratably over the membership period.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash and cash equivalents
The Council considers cash equivalents to be all highly liquid instruments purchase with a maturity of three months or less.
Advertising is expensed in the period in which it is incurred.
Open tax years
The Organization files its Form 990, Return of Organization Exempt from Income Tax, in the U.S. federal jurisdiction. The Organization is generally no longer subject to examination by the authorities for years before 2013.
Management has evaluated subsequent events through January 31, 2017, the date the financial statements were available to be issued.
The Huron County Commissioners provided $42,000 in 2016 and $37,000 in 2015 as dues and support for the Council.
4. Administrative contract
On May 2, 1994, the Council entered into an annual agreement with The Ohio State University to administer the economic development activities of the Council. This agreement is self-renewing until terminated by either party.
Beginning in 2009, the Executive Director is now a paid position of the Council. The agreement with The Ohio State University now includes only bookkeeping and related duties.
5. Functional classification of expenses