Page 25 - FY 2021-2022 Audited Financial Statements

Child Care Resource Center, Inc. Notes to Financial Statements
Note 10 – Retirement Plans
CCRC maintains two contributory retirement plans for its eligible employees. Both are defined contribution pension plans, one under Internal Revenue Code Section 403(b) that is available to all employees with at least one year of employment and 1,000 hours of service and the other under Section 457(b) that is available for executive management employees who maintain a director level title or above for one year or more. CCRC also provides a 403(b) Employer Match of 50% on salary deferrals that do not exceed 7% of compensation. During the years ended June 30, 2022 and 2021, CCRC made discretionary employer contributions to these plans totaling $3,453,353 and $2,265,974, respectively, which are recorded within “employee benefits” in the accompanying statements of functional expenses.
Note 11 – Commitments and Contingencies and Subsequent Events
Contingencies – Grant revenue from federal, state, and local agencies is subject to review by funding agencies under the terms of their contracts. The review could result in the disallowance of expenditures under the terms of the grant or reductions of future grant funds. Based on prior experience, management believes that costs ultimately disallowed, if any, would not materially affect the financial position of CCRC.
Legal matters – CCRC is subject to various litigation claims that arise in the ordinary course of business. It is the opinion of management, after consultation with its legal counsel, that the ultimate disposition of these matters will not have a material adverse effect on CCRC’s statements of financial position and that no accruals for any matters are necessary at June 30, 2022 and 2021.
Leases – CCRC leases various equipment and facilities under non-cancelable operating lease agreements expiring at various dates through 2026. The future minimum lease payments required under these lease agreements at June 30, 2022, are as follows:
Years Ending June 30, 2023
2024
2025
2026
$
3,358,109 3,089,008 2,646,145 1,486,517
Rent expense for facilities includes common maintenance charges. Total rent expense for the years ended June 30, 2022 and 2021, was $4,439,810 and $4,634,901, respectively.
Subsequent to fiscal year 2022, CCRC entered into an agreement to purchase the building and land for its headquarter office located in Chatsworth, California. The purchase was finalized on July 8, 2022, for a total consideration of $20,250,000 ($8,500,000 for the building and $11,750,000 for the land) which included cash of approximately $2,700,000, a promissory note with a financial institution of approximately $17,200,000 and CCRC lease security deposits of approximately $350,000. The promissory note bears annual interest rate of 4.50% and matures on July 1, 2037.
23
$ 10,579,779