Navy-Marine Corps Relief Society Audited Financial …

1 Navy-Marine Corps Relief SocietyAudited Financial StatementsYears ended December 31, 2016 and 2015with Report of Independent AuditorsNavy-Marine Corps Relief SocietyAudited Financial StatementsYears ended December 31, 2016 and 2015 ContentsReport of Independent - 2 Audited Financial Statements Statements of Financial Position ..3 Statements of of Functional of Cash to Financial - 28 Report of Independent AuditorsBoard of DirectorsNavy-Marine Corps Relief SocietyArlington, VirginiaWe have Audited the accompanying Financial statements of the Navy-Marine Corps Relief Society (theSociety), which comprise the statements of Financial position as of December 31, 2016 and 2015 and therelated statements of activities, functional expenses and cash flows for the years then ended and therelated notes to the Financial statements.

2 Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these Financial statements inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of Financial statements that are free from material misstatement, whether due to fraud 's ResponsibilityOur responsibility is to express an opinion on these Financial statements based on our audits.

3 Weconducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audits to obtain reasonable assuranceabout whether the Financial statements are free from material audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe Financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the Financial statements, whether due to fraud orerror.

4 In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the Financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control over Financial reporting. Accordingly, we express no such opinion. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation ofthe Financial statements.

5 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion. OpinionIn our opinion, the Financial statements referred to above present fairly, in all material respects, thefinancial position of the Society as of December 31, 2016 and 2015 and its changes in net assets and cashflows for the years then ended in accordance with accounting principles generally accepted in the UnitedStates of , VirginiaApril 17, 20172 Navy-Marine Corps Relief Society Statements of Financial PositionDecember 31,20162015 AssetsCash and cash equivalents$642,703 $1,261,714 Investments97,420,73297,051,671 Prepaid expenses, inventory and other assets901,697964.

6 766 Contributions and pledges receivable4,799,2974,018,271 Loans receivable, net20,827,67521,078,901 Property and equipment, net1,919,3181,046,855 Total assets$126,511,422$125,422,178 Liabilities and net assetsLiabilities:Accounts payable and accrued expenses$1,079,985 $1,100,390 Accrued salary and leave1,460,0221,356,996 Lines of credit4,911,8271,507,703 Pension liability23,144,82624,438,591 Annuity payable337,459314,880 Total liabilities30,934,11928,718,560 Net assets:Unrestricted84,148,99086,460,331 Temporarily restricted7,717,0077,852,320 Permanently restricted3,711,3062,390,967 Total net assets95,577,30396,703,618 Total liabilities and net assets$126,511,422$125,422,178 See accompanying notes to the Financial Corps Relief Society Statements of ActivitiesYears ended December 31,20162015 UnrestrictedTemporarilyRestrictedPermane ntlyRestrictedTotalUnrestrictedTemporari lyRestrictedPermanentlyRestrictedTotalRe venues, gains and other supportContributions$14,758,106$4,688,45 7$506,403$19,952,966$14,255,496$3,683,74 2$-$17,939,238 Other revenues.

7 Thrift shop1,025,761--1,025,761950,919--950,919 Miscellaneous50,496--50,49651,670--51,67 0 Investments:Interest and dividends1,842,227--1,842,2272,316,883-- 2,316,883 Realized and unrealized gains (losses), net2,782,454301,214-3,083,668(2,769,574) (29,721)-(2,799,295)20,459,0444,989,6715 06,40325,955,11814,805,3943,654,021-18,4 59,415 Net assets released from restrictions:Satisfaction of program restrictions726,691(726,691)--985,000(98 5,000)--Expiration of time restrictions3,583,742(3,583,742)--3,572, 684(3,572,684)--Total net assets released from restrictions4,310,433(4,310,433)--4,557, 684(4,557,684)--Total revenues, gains and other support24,769,477679,238506,40325,955,11 819,363,078(903,663)

8 -18,459,415 ExpensesProgram services25,626,704--25,626,70425,727,823 --25,727,823 Management and general2,337,960--2,337,9602,171,966--2, 171,966 Fundraising1,611,102--1,611,1021,315,215 --1,315,215 Total Expenses29,575,766--29,575,76629,215,004 --29,215,004 Change in net assets from operations(4,806,289)679,238506,403(3,62 0,648)(9,851,926)(903,663)-(10,755,589)N on-operating activitiesReclassification of donor intentions-(814,551)814,551---- -Change in beneficial interest in trust held by third parties--(615)(615)--(55,382)(55,382)Pen sion related benefit (costs) other than net periodicpension cost2,494,948--2,494,948(6,534,979)--(6, 534,979)Change in net assets(2,311,341)(135,313)1,320,339(1,12 6,315)(16,386,905)(903,663)(55,382)(17,3 45,950)

9 Net assets, beginning of year86,460,3317,852,3202,390,96796,703,6 18102,847,2368,755,9832,446,349114,049,5 68 Net assets, end of year$84,148,990$7,717,007$3,711,306$95,5 77,303$86,460,331$7,852,320$2,390,967$96 ,703,618 See accompanying notes to the Financial Corps Relief Society Statements of Functional ExpensesYears ended December 31,20162015 ProgramServicesManagementand GeneralFundraisingTotalProgramServicesMa nagementand GeneralFundraisingTotalExpensesSalaries and benefits$ 17,328,360 $1,155,224 $770,149 $ 19,253,733 $ 16,237,122 $1,139,226 $620,905 $ 17,997,253 Grant expense2,508,320--2,508,3203,332,301--3, 332,301 Loans written off (net of recoveries)

10 792,719--792,719704,559--704,559 Loans converted to grants272,147--272,147312,886--312,886 Financial assistance fees19,333--19,33313,781--13,781 Non- Financial programs586,672--586,672676,845--676,845 Volunteer expenses677,474--677,474808,442--808,442 Human resources200,74513,38310,204224,332182,9 1212,8337,775203,520 Professional fees/bank charges-762,356326,4871,088,843-692,2012 16,004908,205 Office administration1,415,96594,398398,3091,90 8,6721,450,506101,770377,2901,929,566 Travel expense184,883129,01626,789340,688207,82 419,44913,679240,952 Training and conferences269,7898,9271,995280,71110,74 35,80828516,836 Depreciation and equipmentexpenses1,370,29791,35360,9021, 522,5521,789,902125,58368,4461,983,931 Miscellaneous administration-83,30316,26799,570-75,096 10,83185,927 Total expenses$ 25,626,704$2,337,960$1,611,102$ 29,575,766$ 25,727,823$2,171,966$1,315,215$ 29,215,004 See accompanying notes to the Financial Corps Relief Society Statements of Cash FlowsYears ended December 31,20162015 Cash flows from operating activitiesChange in net assets$(1,126,315) $(17,345,950)Adjustments to reconcile change in net assets to net cash usedin operating activities.