Audited

Financial Statements

The Boston Harbor Association, Inc.

December 31, 2010





































The Boston Harbor Association, Inc.


Audited Financial Statements

December 31, 2010



INDEPENDENT AUDITORS' REPORT 1

AUDITED FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION 2

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS 3

STATEMENT OF CASH FLOWS 4

NOTES TO FINANCIAL STATEMENTS 5










INDEPENDENT AUDITORS' REPORT







Board of Trustees
The Boston Harbor Association, Inc.


We have audited the accompanying statement of financial position of The
Boston Harbor Association, Inc. as of December 31, 2010, and the related
statements of activities and changes in net assets and cash flows for the year
then ended. These financial statements are the responsibility of the
Association's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of The Boston Harbor Association, Inc.
at December 31, 2010 and the results of its activities and cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.

G. T. Reilly & Company

Milton, Massachusetts
November 9, 2011




2

The accompanying notes are an integral part of these financial statements.
The Boston Harbor Association, Inc.
Statement of Financial Position
December 31, 2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 1) 292,959 $
Prepaid expenses 2,265
TOTAL CURRENT ASSETS 295,224
EQUIPMENT (Note 1)
Office equipment 41,918
Less accumulated provisions for depreciation (39,472)
2,446
FUNDS HELD FOR OTHERS (Note 5) 59,674
TOTAL ASSETS 357,344 $
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable 1,802 $
Accrued expenses 31,097
TOTAL CURRENT LIABILITIES 32,899
FIDUCIARY LIABILITY (Note 5) 59,674
NET ASSETS (Note 1)
Unrestricted 259,344
Temporarily restricted (Note 4) 5,427
TOTAL NET ASSETS 264,771
TOTAL LIABILITIES AND NET ASSETS 357,344 $


3

The accompanying notes are an integral part of these financial statements.
The Boston Harbor Association, Inc.
Statement of Activities and Changes in Net Assets
Year Ended December 31, 2010
Temporarily
Unrestricted Restricted Total
REVENUE AND SUPPORT
Gifts and donations 8,324 $ - $ 8,324 $
Grants 66,499 35,000 101,499
Memberships 77,143 - 77,143
Event income 187,712 - 187,712
Contributed facilities (Notes 1 & 3) 28,000 - 28,000
Other income 1,077 - 1,077
Net assets released from restrictions
through satisfaction of restrictions (Notes 1 & 4) 29,573 (29,573) -
TOTAL REVENUES AND SUPPORT 398,328 5,427 403,755
PROGRAM SERVICE EXPENSES
Salaries 166,512 - 166,512
Payroll taxes 11,788 - 11,788
Employee benefits 13,428 - 13,428
Event expenses 39,458 - 39,458
Outside services 39,236 - 39,236
Office expense 8,067 - 8,067
Telephone 2,215 - 2,215
Meetings 2,537 - 2,537
Postage 567 - 567
TOTAL PROGRAM SERVICE EXPENSES 283,808 - 283,808
MANAGEMENT & GENERAL EXPENSES
Salaries 20,814 - 20,814
Payroll taxes 1,474 - 1,474
Employee benefits 1,679 - 1,679
Occupancy (Note 3) 41,352 - 41,352
Office expenses 1,009 - 1,009
Legal and accounting 7,388 - 7,388
Telephone 2,215 - 2,215
Meetings 317 - 317
Depreciation 6,309 - 6,309
Repairs & maintenance 2,151 - 2,151
Postage 567 - 567
Insurance 1,596 - 1,596
Miscellaneous 2,362 - 2,362
TOTAL MANAGEMENT & GENERAL EXPENSES 89,233 - 89,233
FUNDRAISING EXPENSES
Salaries 28,930 - 28,930
Payroll taxes 2,048 - 2,048
Employee benefits 1,679 - 1,679
Event expenses 18,212 - 18,212
Office expenses 1,008 - 1,008
Meetings 317 - 317
TOTAL FUNDRAISING EXPENSES 52,194 - 52,194
TOTAL EXPENSES 425,235 - 425,235
CHANGE IN NET ASSETS (26,907) 5,427 (21,480)
NET ASSETS AT BEGINNING OF YEAR, AS ORIGINALLY REPORTED 317,608 - 317,608
RESTATEMENT TO REFLECT CORRECTION OF
ACCOUNTING METHOD (NOTE 1) (31,357) - (31,357)
NET ASSETS AT BEGINNING OF YEAR, AS RESTATED 286,251 - 286,251
NET ASSETS AT END OF YEAR 259,344 $ 5,427 $ 264,771 $


4

The accompanying notes are an integral part of these financial statements.
The Boston Harbor Association, Inc.
Statement of Cash Flows
Year Ended December 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets (21,480) $
Adjustments to reconcile change in net assets
to net cash provided by operating activities:
Depreciation 6,309
Changes in operating assets and liabilities:
Other receivables -
Prepaid expenses (1,198)
Accounts payable 1,802
Accrued expenses (1,327)

NET CASH USED IN OPERATING ACTIVITIES (15,894)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 308,853
CASH AND CASH EQUIVALENTS AT END OF YEAR 292,959 $



5
The Boston Harbor Association, Inc.


Notes to Financial Statements

December 31, 2010


Note 1 Nature of Activities and Significant Accounting Policies

Nature of Activities The Boston Harbor Association, Inc. (the Association) is a nonprofit association of
individual, corporate and organizational members allied to enhance Boston Harbor through balanced,
environmentally sensitive and accessible development, maintenance, and use. The Association advocates
for greater public access, open spaces, and public amenities along Boston Harbor, monitors water quality
improvements and supports the restoration of Boston Harbor beaches for swimming, supports a
comprehensive and affordable water transportation network throughout the Harbor, educates urban youths
about Boston Harbor and related career opportunities, and promotes a "green" working port and waterfront.
The Association is also a leader in focusing attention on sea-level rise in Boston Harbor.

Correction of Accounting Method During the current year the Association corrected its method of
recording prepaid insurance and compensated employee absences (vacations) by commencing to accrue
and record them as earned, regardless of when paid, as required under generally accepted accounting
principles. The correction has been made retrospectively by restating prior years financial statements.
Accordingly, net assets have been decreased in the amount of $31,357 as of the beginning of the current
fiscal year for the effect of retroactively recording the prepaid insurance and accrued expenses.

The change in accounting method had the effect of decreasing the change in net assets for the year ended
December 31, 2010 by approximately $2,100.

Basis of Accounting The financial statements of the Association have been prepared on the accrual basis
of accounting.

Financial Statement Presentation The Association reports information regarding its financial position and
activities according to three classes of net assets as determined by donor-imposed restrictions: unrestricted
net assets, temporarily restricted net assets, and permanently restricted net assets.

Unrestricted Net Assets Unrestricted net assets are those net resources that bear no external
restrictions and are generally available for use by the Association. Unrestricted contributions are
recorded as support when received or unconditionally committed.

Temporarily Restricted Net Assets Restricted grants and contributions are recorded as temporarily
restricted support and net assets when received or committed. Transfers are made to unrestricted net
assets as costs are incurred or time restrictions or program restrictions have lapsed (see Note 4).

Permanently Restricted Net Assets Contributions established by donor restrictions to permanently
maintain the principal, while allowing the use of income generated therefrom, are classified as
permanently restricted support and net assets. Income derived from the investment of permanently
restricted funds is reported as unrestricted revenue or as restricted revenue depending on the terms
of the donor instrument. Unrealized gains or losses on permanently restricted fund investments are
reported as increases or decreases in temporarily restricted net assets unless the donor explicitly
states otherwise. There are no permanently restricted net assets at December 31, 2010.

6

Note 1 - Nature of Activities and Significant Accounting Policies (Cont.)

Contributions and Donor Restrictions The Association reports grants and contributions of cash or other
assets in the statement of activities as temporarily restricted net assets when received, if they are received
with donor stipulations that limit, specify or otherwise restrict the use of such contributions. When a donor
restriction expires, either by use of the funds for the specified purpose or by the expiration of a time
restriction, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the
statement of activities as net assets released from restrictions. Contributions are recorded as unrestricted
net assets if the restrictions are met in the year that the contribution is made. Additionally, contributions of
donated non-cash assets are recorded at their fair values in the period received.

Accounting Estimates The presentation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenue, support and
expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Cash Equivalents For purposes of the statement of cash flows, the Association considers all highly-liquid
investments with a maturity of three months or less at the time of acquisition to be cash equivalents.

Equipment Equipment is recorded at cost or, in the case of donated assets, at fair market value.
Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments
are capitalized as additions to property and equipment. Depreciation is computed using the straight-line
method over the estimate asset useful life of 5 years. Depreciation expense for 2010 is $6,309.

Income Taxes The Association is exempt from federal income taxes under Section 501(c)(3) of the
Internal Revenue Code. The Association is also exempt from Massachusetts state income taxes and,
therefore, has made no provision for federal or state income taxes in the accompanying financial
statements.

Contributed Facilities and Services The difference between the estimated fair rental value of the facilities
and the amounts actually paid for rent is recorded as support with an equivalent amount recorded as rent
expense (see Note 3).

During the year ended December 31, 2010 the values of contributed services meeting the requirements for
recognition was not material and not recorded in the accompanying statement of activities. Many individuals
volunteer their time and perform a variety of tasks that assist the Association however; these services do
not meet the criteria for recognition as contributed services in the financial statements.

Functional Allocation of Expenses The costs of providing various programs and other activities have been
summarized on a functional basis in the statement of activities. Accordingly, certain costs have been
allocated among the programs and supporting services benefited.

Evaluation of Subsequent Events In accordance with generally accepted accounting principles,
management has evaluated subsequent events involving the Association for potential recognition or
disclosure in the accompanying financial statements. Subsequent events are events or transactions that
occurred after December 31, 2010, up through November 9, 2011, the date the accompanying financial
statements were available to be issued.


Note 2 - Pension Plan

The Association sponsors a Simple IRA plan for those employees eligible for participation. Contributions
made for the year ended December 31, 2010 totaled $7,748.

7
Note 3 Contributed Facilities

On October 31, 2009, the Association entered into a lease expiring on December 31, 2012 requiring an
annual base rent of $1. Accordingly, for the year ended December 31, 2010 the Association has recorded
as support contributed facilities of $28,000 representing the fair value of the rented facilities, with an
equivalent amount recorded as rent expense. In addition, the Association is responsible for its portion of
real estate taxes and operating expenses which totaled $13,352 for the year ended December 31, 2010.


Note 4 Temporarily Restricted Net Assets

Temporarily restricted net assets consist of funds received for the purpose of supporting the sea-level rise
project affecting the Boston waterfront area. During the year ended December 31, 2010, the Association
received $35,000 and expended $29,573 of the funds for its designated purpose. As of December 31,
2010, the Association has $5,427 of temporarily restricted funds designated for the sea-level rise project.


Note 5 Funds Held for Others

In a prior year, the Association accepted donations on behalf of the J udge A. David Mazzone Deer Island
Memorial Committee, Inc., for the purpose of creating and maintaining a memorial for J udge Mazzone on
Deer Island. The Association does not have oversight or responsibility as to how the funds are used and
only acts as a custodian to the funds. The funds are maintained in a separate bank account. The
Association reports unexpended cash as funds held for others in its statement of financial position with an
equivalent amount reported as fiduciary liability. As of December 31, 2010, the fiduciary funds and liability
attributable to the Mazzone Fund was $59,674. A summary of funds received and disbursed to maintain the
memorial for the year ended December 31, 2010 is as follows:

Funds held for others at beginning of year 64,925 $
Donations -
Interest earned 35
Cash disbursements (5,286)
Funds held for others at end of year 59,674 $


Note 6 - Financial Instruments, Credit Risk and Concentration Risks

The Associations financial instruments that may be subject to concentrations of credit risk consist of cash
and cash equivalents.

The Association maintains its cash deposits with a high-quality financial institution. At December 31, 2010,
bank balances did not exceed the FDIC insurance limit. The Associations cash equivalents consist of
money market funds held by a national investment house, which approximates $274,000 at December 31,
2010.

The Association receives its support and revenues from individuals, corporations, charitable organizations
and foundations located within Massachusetts. During the year ended December 31, 2010 a charitable
foundation and the Boston Water and Sewer Commission contributed $35,000 and $20,000, respectively,
or 35% and 20%, respectively, of grants received. Additionally one corporation accounted for 15%
($10,000) of total membership income for the year ended December 31, 2010.