The System Dynamics Society, Inc.

Review of Financial Statements

December 31, 1998 and 1997

 

Andrew F. Hall & Associates
391 Totten Pond Road
Waltham, Massachusetts 02451
Tel: (781) 890-2488
Fax: (781) 890-6581

Policy Council
System Dynamics Society, Inc.
Albany, New York

We have reviewed the accompanying statements of assets, liabilities, and net assets - cash basis of the System Dynamics Society, Inc., as of December 31, 1998 and 1997, 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 System 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.

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, as described in the Notes to Financial Statements.

Andrew F. Hall & Associates

May 19, 1999

 

 
THE SYSTEM DYNAMICS SOCIETY, INC.
STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS - CASH BASIS
12/31/1998 AND 1997
     
  1998 1997
     
ASSETS    
     
Cash $ 122,303.00 $ 76,200.00
Money Market Mutual Funds $ 52,927.00 $ 48,805.00
U.S. Treasury Notes $ 79,162.00 $ 76,829.00
     
Total $ 254,392.00 $ 201,834.00
     
Furniture and Equipment $ 2,411.00 $ 2,411.00
Less: Accumulated Depreciation $ (1,254.00) $ (482.00)
     
  $ 1,157.00 $ 1,929.00
     
Total Assets $ 255,549.00 $ 203,763.00
     
LIABILITIES AND NET ASSETS    
     
Due to Creative Learning Exchange $ - $ 533.00
     
Total Liabilities $ - $ 533.00
     
Net Assets    
     
Unrestricted - General Fund $ 255,549.00 $ 203,230.00
     
Total Net Assets $ 255,549.00 $ 203,230.00
     
Total Liabilities and Net Assets $ 255,549.00 $ 203,763.00

 

 
THE SYSTEM DYNAMICS SOCIETY, INC.
STATEMENTS OF REVENUES, EXPENSES, AND
CHANGES IN NET ASSETS - CASH BASIS
12/31/1998 AND 1997
     
  1998 1997
     
Changes in unrestricted net assets    
     
Revenues and gains    
     
Membership dues and subscriptions $ 25,058.00 $ 17,515.00
Conference $ 70,509.00 $ 35,883.00
Publications $ 14,613.00 $ 7,912.00
Bibliographies and teaching games $ 73,520.00 $ 41,716.00
Interest and dividends $ 6,745.00 $ 8,467.00
Donations $ 738.00 $ 568.00
Miscellaneous $ - $ 468.00
Gain on redemption $ 272.00 $ 108.00
     
Total unrestricted revenues and gains $ 191,455.00 $ 112,637.00
     
Expenses and losses    
     
Administration $ 92,542.00 $ 4,274.00
Bank fees $ 4,911.00 $ 425.00
Conference $ - $ 1,941.00
Depreciation $ 772.00 $ 482.00
Grant $ - $ 2,057.00
Membership mailings $ 4,824.00 $ 5,071.00
Office expenses $ - $ 870.00
Professional fees $ 4,132.00 $ 1,865.00
Publications $ 14,842.00 $ 16,877.00
Bibliographies and games $ 14,413.00 $ -
Travel $ 2,700.00 $ 3,412.00
     
Total expenses and losses $ 139,136.00 $ 37,274.00
     
INCREASE IN UNRESTRICTED NET ASSETS $ 52,319.00 $ 75,363.00
     
Changes in permanently restricted assets    
     
Interest and dividends $ - $ 21,482.00
Loss on redemption $ - $ (2,440.00)
Net assets released from restrictions $ - $ (304,690.00)
     
DECREASE IN PERMANENTLY RESTRICTED ASSETS $ - $ (285,648.00)
     
NET ASSETS - beginning of year $ 203,230.00 $ 413,515.00
     
NET ASSETS - end of year $ 255,549.00 $ 203,230.00

 

The System Dynamics Society

Notes to Financial Statements

December 31, 1998 and 1997

Organization

The System Dynamics Society, Inc., incorporated on November 7, 1985, as an international non-profit corporation, was organized to encourage the development and use of system dynamics in solving problems in such areas as environmental change, economic development, social unrest, urban decay, psychology, and physiology.

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 rather 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. Restricted Fund. In 1989, the Society set up the Gordon Brown Fund as a restricted fund. Both the principal of the Fund and income earned on its investments are to be used to fund grants to individuals or groups to develop and publish pre-college curriculum in the area of system dynamics. Total income of $19,042 was received during the year ended December 31, 1997.

    In 1997, the Policy Council voted to transfer the assets of the Gordon Brown Fund to the Creative Learning Exchange (CLE). Historically, CLE had been distributing system dynamics materials written by System Dynamics Society members. Transferring the Gordon Brown Fund to CLE means more of the Fund will be used toward this end.

     

  4. Property and Equipment 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.

     

  5. Use of Estimates. The preparation of financial statements requires management to make estimates and assumptions the affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

     

  6. 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.

     

  7. Administrative Expenses. The Society has a contract with the University of New York at Albany for administrative support services. In 1998 the Society paid $92,542 to the University for the necessary support service covering 1998 and 1997.