Hall, Vasil & Dowd
Certified Public Accountants
30 Church Street – Suite 310 – Belmont, MA 02478-1384
Tel. (617) 484-0000 Fax (617) 489-0521
Policy Council
The Systems Dynamics Society, Inc.
Albany, New York
We have reviewed the accompanying statements of assets, liabilities, and net assets – cash basis of The Systems Dynamics Society, Inc., as of December 31, 1999 and 1998 and the related statements of revenues, expenses, and changes in net assets – cash basis for the years then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of The Systems Dynamics Society, Inc.
A review consists principally of inquiries of Society personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Base upon our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the cash basis of accounting, as described in Note B.
Our review was made for the purpose of expressing limited assurance. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the cash basis of accounting.
Hall, Vasil + Dowd
Certified Public Accountants
June 20, 2000
THE SYSTEMS DYNAMICS SOCIETY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
A. Organization
The Systems Dynamics Society, Inc., incorporated on November 7, 1985, as an international non-profit corporation, was organized to encourage the development and use of systems dynamics in solving problems in such areas as environmental change, economic development, social unrest, urban decay, psychology, and physiology.
B. Significant Accounting Policies.
1. Basis of accounting – The accompanying financial statements have been prepared on the cash receipts and disbursements basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. All transactions are recognized as either cash receipts or disbursements. Non-cash transactions are recognized in the financial statements.
The cash basis differs from generally accepted accounting principles primarily due to the effects of accounts receivable and accounts payable not being reflected in the accompanying financial statements.
2. Income taxes – The Society qualifies under IRS Section 501(c)(3) as an organization exempt from federal taxation on income related to its stated purpose.
3. Property and equipment and depreciation – Property and equipment are recorded at cost. Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the assets.
4. Use of Estimates – the preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
5. Basis of presentation – In 1995, the Organization adopted Statement of Financial Accounting Standards No. 116, “Accounting for Contributions Received and Contributions Made” and statement of Financial Accounting Standards No. 117, “Financial Statements for Not-for-Profit Organizations.” Under these standards, net assets and revenues and expenses are classified on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of the Organization and changes therein are all classified and reported according to the level of restriction imposed by donors into either “unrestricted” or “permanently restricted” categories.
6. Administrative expenses – The Society has a contract with the University of New York at Albany for administrative support services. In 1999 the Society paid $86,772 and $92,542 to the University for the necessary support service covering 1999 and 1998, respectively.