Page 12 - Child Care Resource Center

Child Care Resource Center, Inc. Notes to Financial Statements
Note 2 – Summary of Significant Accounting Policies
Cash, cash equivalents, and cash held in reserve – For the purpose of the statement of cash flows, CCRC considers all temporary, short-term, highly liquid investments purchased with original maturities of three months or less to be cash, cash equivalents, and cash held in reserve.
The following table provides a reconciliation of cash, cash equivalents, and cash held in reserve reported within the statements of financial position that sum to the total of the same such amounts shown in the statements of cash flows:
Cash and cash equivalents Cash held in reserve
Total cash, cash equivalents, and cash held in reserve as presented on the statements of cash flows
June 30,
2021 2020
$ 28,931,581 $ 12,672,595 1,421,659 586,938
$ 30,353,240 $ 13,259,533
Cash held in reserve relates to an advance payment from California Department of Education (CDE) and California Department of Social Services (CDSS), which is maintained in a separate deposit account pursuant to the requirements of certain child development grant contracts with CDE. The related liability has been reflected in Reserve Funds in the accompanying statements of financial position at June 30, 2021 and 2020. On an annual basis, CDE/CDSS reviews and calculates the Reserve Funds liability in the accompanying statements of financial position, and as result, either CDE will submit an additional advance payment to CCRC for an increase in Reserve Funds liability or CCRC will return to CDE/CDSS the amount in excess of the Reserve Funds liability. Under CDE’s rules, the advance payment may be used for operations in certain cases. Any unused reserve funds must be returned to CDE/CDSS upon termination of services under the child development contracts. Cash held in reserve pursuant to contracts with the CDE/CDSS at June 30, 2021 and 2020, was $1,080,115 and $586,938, respectively. In addition, in fiscal year 2021, CCRC set aside certain reserves to comply with contracts entered into with the Child Care Alliance of Los Angeles in the amount of $341,544.
Government contracts receivable – Government contracts receivable consist of unsecured reimbursements due from various program funding sources for services performed prior to year-end. An allowance for uncollectible government contracts receivable is provided based upon management’s judgement considering such factors as prior collection history, type of contract, and nature of the activity. CCRC recorded an allowance for uncollectable government contract receivables of $20,911 at June 30, 2020. There were no recorded allowances for uncollected government contract receivables at June 30, 2021.
Other receivables – Other receivables consist primarily of unsecured amounts due from family fees. CCRC carries its receivables at invoiced amounts less allowance for doubtful accounts. CCRC does not accrue interest on its receivables. On a periodic basis, CCRC evaluates its accounts receivable and establishes allowances based on overdue accounts and a history of past write-offs. CCRC recorded an allowance for uncollectable other receivables of $795,495 at June 30, 2021. There was no allowance recorded at June 30, 2020.
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