12-Non-profit agencies requesting funding

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EAST TEXAS COUNCIL ON ALCOHOLISM AND DRUG ABUSE NOTES TO FINANCIAL STATEMENTS August 31, 2008 NOTE 5 - LEASES The Council leases office facilities under a noncancelable operating lease. Rent expense under this lease was $ 126,420 for the year ended August 31, 2008. The future minimum obligation under the lease is as follows: Year Ending August 31 Amount 2009 $120,445 2010 38,440 $158,885 NOTE 6 - FINANCIAL INSTRUMENTS At August 31, 2008, deposits at the Council's depository bank exceeded the $100,000 limit of FDIC insurance by $ 227,594. On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009. NOTE 7- EMPLOYEE BENEFIT PLAN The Council provides finro retirement programs for its employees. The first, a tax-sheltered annuity plan, is optionally available to each permanent employee and allows the employees to contribute a portion of their salary to the plan. This plan represents no additional cost to the Council. The second, a simplified employee pension plan (SEP), requires the Council to contribute five percent of each eligible employee's annual salary. During the year ended August 31, 2008, the Council contributed $42,380 to the SEP. SEP contributions vest immediately to the employees and, therefore, the Council does not participate in any market value changes in plan assets. NOTE 8- NET ASSETS DESIGNATED FOR CONTINGENCIES The Council's Board of Directors has designated net assets in the amount of $ 190,000 for contingencies related to future funding of its various programs. The Board of Directors has established this designation based upon an estimate of three months' fixed operating expenses, including its obligation under its facility lease agreement. . 000106