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INSTITUTE FOR TRANSPORTATION

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INSTITUTE FOR TRANSPORTATION

    INSTITUTE FOR TRANSPORTATION

    & DEVELOPMENT POLICY

    New York, New York

FINANCIAL STATEMENTS

Years Ended December 31, 2003 and 2002

    CONTENTS

_____________________________________________________________________________________

Combined report on the basic Financial Statements and the Schedules of Federal Awards 1

FINANCIAL STATEMENTS

     Statements of financial position December 31, 2003 and 2002 2

     Statements of activities and changes in net assets Years ended December 31, 2003 and 2002 3

     Statements of cash flows Years ended December 31, 2003 and 2002 4

     Notes to financial statements 5

     Schedule of federal awards 9

ADDITIONAL REPORTS AND SCHEDULES

     Report on compliance and on internal control over financial reporting based on an audit

     financial statements performed in accordance with government auditing standards 11

     Report on compliance with requirements applicable to major programs and on internal

     control over compliance in accordance with OMB Circular A-133 12

     Schedule of findings and questioned costs 14

     Schedule of expenses Year ended December 31, 2003 16

     Schedule of expenses Year ended December 31, 2002 17

_____________________________________________________________________________________

     April 30, 2004

    INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

    Institute for Transportation & Development Policy

We have audited the accompanying statements of financial position for the Institute for Transportation &

    Development Policy (a nonprofit organization) as of December 31, 2003 and 2002, and the related

    statements of activities and cash flows for the years then ended. These financial statements are the

    responsibility of the Institute’s management. Our responsibility is to express an opinion on these

    financial statements based on our audits.

We conducted our audits in accordance auditing standards generally accepted in the United States of

    America and specifically for the year ended December 31, 2003 the standards applicable to financial

    audits contained in Government Auditing Standards, issued by the Comptroller General of the United

    States. Those standards require that we plan and perform the audits 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 provides 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 Institute for Transportation & Development Policy as of December 31, 2003 and

    2002, and the results of its activities and cash flows for the years then ended, in conformity with generally

    accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report dated April 30, 2004,

    on our consideration of the Institute for Transportation & Development Policy's internal control over

    financial reporting and on our test of its compliance with certain provisions of laws, regulations, contracts

    and grants. That report is an integral part of an audit performed in accordance with Government Auditing

    Standards and should be read in conjunction with this report in considering the results of our audit.

Our audit was performed for the purpose of forming an opinion on the basic financial statements of the

    Institute for Transportation & Development Policy taken as a whole. The accompanying schedule of

    expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office

    of Management and Budget Circular A-133, Audits of States, Local Governments, and Non - Profit

    Organizations, and is not a required part of the basic financial statements. Such information has been

    subjected to the auditing procedures applied in the audit of the basic financial statements and, in our

    opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a

    whole.

    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

    STATEMENTS OF FINANCIAL POSITION

    DECEMBER 31, 2003 AND 2002

    20032002

    ASSETS

    Cash and cash equivalents$ 155,951121,120$ Accounts receivable -22,222 Grant receivable 79,00097,893 Inventory -118,371 Travel advance 458- Investments 532532 Equipment (less depreciation of $51,844 and $6,265) 4,69117,000 Deposits 2,5622,667

    TOTAL ASSETS$ 243,194379,805$

    LIABILITIES

    Accounts payable$ 28,23078,138$ Accrued salaries 15,79311,143 Payroll taxes payable 9,91710,424 Note payable 5,200-

    TOTAL LIABILITIES 59,14099,705

    NET ASSETS

    Unrestricted net assets (31,181)32,645 Temporarily restricted net assets 215,235247,455

    TOTAL NET ASSETS 184,054280,100

    TOTAL LIABILITIES AND NET ASSETS$ 243,194379,805$

    See notes to financial statements. 2

    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

    STATEMENTS OF ACTIVITIES

    FOR YEAR ENDED DECEMBER 31, 2003 AND 2002

    20032002CHANGES IN UNRESTRICTED NET ASSETS

    REVENUE AND SUPPORT

    Contributions45,507$ 53,182$ Grants1,336,585 349,221 Bike Sales30,832 - Contract revenue40,946 19,147 In-kind contributions48,122 - Interest income423 2,505

    TOTAL UNRESTRICTED REVENUE AND SUPPORT1,502,415 424,055 NET ASSETS RELEASED FROM RESTRICTIONS121,283 112,980

    TOTAL UNRESTRICTED REVENUE, SUPPORT, AND

    NET ASSETS RELEASED FROM RESTRICTIONS1,623,698 537,035 EXPENSES

    Program services1,492,709 515,350 Management33,301 47,145 Fund-raising33,862 22,870

    TOTAL EXPENSES1,559,872 585,365 INCREASE IN UNRESTRICTED NET ASSETS63,826 (48,330) CHANGES IN TEMPORARILY RESTRICTED NET ASSETS

    Grants153,503 187,835 Net assets released from restrictions(121,283) (112,980) INCREASE IN TEMPORARILY RESTRICTED NET ASSETS32,220 74,855

    INCREASE IN NET ASSETS96,046 26,525 NET ASSETS AT BEGINNING OF YEAR184,054 157,529

    NET ASSETS AT END OF YEAR280,100$ 184,054$ See notes to financial statements. 3

    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

    STATEMENTS OF CASH FLOWS

    FOR YEARS ENDED DECEMBER 31, 2003 AND 2002

    20032002

    CASH FLOWS FROM OPERATING ACTIVITIES

    Increase in net assets$ 26,52596,046$ Adjustments to reconcile increase in net assets

    to net cash provided by operating activities:

    Depreciation 2,01045,579 (Increase) decrease in operating assets:

    Accounts receivable -(22,222)

    Grants receivable (39,000)(18,893)

    Inventory -(118,371)

    Deposits (762)(105)

    Travel advance (458)458 Increase (decrease) in operating liabilities:

    Accounts payable 22,39449,908

    Salaries and payroll taxes payable 18,741(4,143)

    Note payable 5,200(5,200)

    NET CASH PROVIDED BY OPERATING ACTIVITIES 34,65023,057

    CASH FLOWS FROM INVESTING ACTIVITIES

    Purchase of computers and equipment (3,569)(57,888)

    DECREASE IN CASH AND CASH EQUIVALENTS 31,081(34,831)

    CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 124,870155,951

    CASH AND CASH EQUIVALENTS, END OF YEAR$ 155,951121,120$

    See notes to financial statements. 4

    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

    NOTES TO FINANCIAL STATEMENTS

    NOTE 1 NATURE OF ORGANIZATION

Institute for Transportation & Development Policy was organized as a nonprofit corporation in

    Washington, D.C. in 1985 and operates out of its offices in New York City, New York. The Institute is a

    research, dissemination, and project-implementing agency, which seeks to promote the use of non-

    motorized vehicles and the broader implementation of sustainable transportation policies worldwide. The

    Institute is supported primarily through grants, donor contributions, and contract revenue. Members

    include bicycle activists, transportation planners, economic development specialists, small business

    people, environmentalists, and other professionals, and are primarily, but not exclusively U.S. citizens.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Basis of Accounting Financial statement presentation follows the recommendation of the FASB in its Statement of Financial Accounting Standards (SFAS) No. 117 Financial Statements of Not-for-Profit

    Organizations. Under SFAS No. 117, the Institute is required to report information regarding their

    financial position and activities according to three classes of net assets: unrestricted, temporarily

    restricted, and permanently restricted. The Institute does not have any permanently restricted net assets.

Use of Estimates The preparation of financial statements in conformity with generally accepted

    accounting principles requires management to make estimates and assumptions that affect certain

    reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

    Cash and Cash Equivalents For the purposes of the Statement of Cash Flows, the Institute considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash

    equivalents.

Grants Receivable Amounts recorded as grants receivable represent amounts earned by year end, but

    not received by year end. Government grant revenue is recognized to the extent that expenditures have

    met the grant restrictions. No allowance has been made for uncollectible amounts, as management

    believes the receivable balance at year end is fully collectible.

Promises to Give Unconditional promises to give are recognized as revenue in the period received and

    as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Promises to

    give are recorded at net realizable value, if they are expected to be collected in one year, and at fair value

    if they are expected to be collected in more than one year. Conditional promises to give are recognized

    when the conditions on which they depend are substantially met.

    Equipment and Depreciation Equipment consists of computer equipment and office furniture and is recorded at cost. These assets are being depreciated over their estimated useful lives using the straight-

    line method of depreciation but amounts in connection with Federally funded programs are expensed

    when purchased. It is the Institute’s practice to capitalize assets costing $100 or more.

Income Tax Status The Institute is exempt from federal and state income taxes under section 501(c)(3)

    of the Internal Revenue Code and similar state provisions.

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    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

     NOTES TO FINANCIAL STATEMENTSNOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Credit risk

The Institute maintains cash in bank deposit accounts, which, at times, may exceed federally insured

    limits. The Institute has not experienced any losses in such accounts. Management believes it is not

    exposed to any significant credit risk on cash.

    Functional Expenses Indirect functional expenses have been allocated between Program Services, Management, and Fund-raising based on personnel time spent for each activity. Direct expenses are

    respectively recorded by function.

NOTE 3 FAIR VALUES OF FINANCIAL INSTRUMENTS

The Institute’s financial instruments, none of which are held for trading purposes, include cash, cash

    equivalents and receivables. The Institute estimates that the fair value of all financial instruments at

    December 31, 2003 does not differ materially from the aggregate carrying values of its financial

    instruments recorded in the accompanying statement of financial position.

The estimated fair value amounts have been determined using available market information and

    appropriate valuation methodologies. The carrying amounts of cash and receivables approximate fair

    values because of the short maturities of those instruments.

    NOTE 4 CONTRIBUTED SERVICES

The value of contributed services reflected in the accompanying financial statements was determined by

    taking the volunteer hours provided times the rate of pay the person would have received for their

    services.

NOTE 5 ALLOCATION OF JOINT COSTS

There were no joint costs of information during 2003 and 2002.

NOTE 6 INVESTMENTS

The Institute acquired an equity stake (2,500 shares) in a private venture known as “Trichakra Cycles

    Private, Limited” of India for $532. There is no ready market for the shares. The investment is carried at

    cost. Management believes this approximates the fair market value.

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    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

     NOTES TO FINANCIAL STATEMENTS

    NOTE 7 GRANTS

Grant revenue for the year ending December 31, 2003 consists of the following:

    TemporarilyRestricted

    Unrestricted*RestrictedPurpose

    Alternative Gifts International38,166$ -$ Cottonwood Foundation1,000 - U.S. Agency for International

    Development1,109,694 - Roy A. Hunt Foundation5,000 - Fair Share Foundation700 - Marcia Brady Tucker Foundation15,000 - U.N. Environment Programme20,000 - The International Foundation5,000 - William & Flora Hewlett Foundation142,025 57,975 Latin America and China ProjectToyota Foundation- 70,528 Indonesia ProjectRockefeller Brothers- 25,000 China Project and Urban Husbandry

    Total1,336,585$ 153,503$

Grant revenue for the year ending December 31, 2002 consists of the following:

    TemporarilyRestricted

    Unrestricted*RestrictedPurpose

    Alternative Gifts International50,568$ -$ New Land Foundation15,000 - The Roy A. Hunt Foundation5,000 - U.S. Agency for International

    Development79,000 - W. Alton Jones Foundation100,000 - Tides Foundation12,500 - The International Foundation15,000 - Toyota Foundation828 84,160 Indonesia ProjectRockefeller Brothers71,325 103,675 Central Europe, China Project, Urban Husbandry

    Total349,221$ 187,835$ *If restrictions are met in the period in which the funds were received, the funds are shown as unrestricted.

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    INSTITUTE FOR TRANSPORTATION & DEVELOPMENT POLICY

    NOTES TO FINANCIAL STATEMENTS NOTE 8 RESTRICTED NET ASSETS

The Institute did not have any permanently restricted net assets as of December 31, 2003 and 2002.

    Temporarily restricted net assets are restricted for the following projects.

    20032002Central Europe Project1,436$ 74,865$ Urban Husbandry27,400 27,400 Indonesia Project122,505 84,160 China Project38,139 28,810 Latin America Project57,975 -

    Total247,455$ 215,235$

NOTE 9 COMMITMENTS

Operating lease

Effective February 6, 2002, the Institute entered into a new three year operating lease with a two year

    extension for office space as joint tenant with another not-for-profit organization. The total rent is at the

    rate of $3,843 per month, with annual increases of about 4%, through February 2005. The Institute has

    agreed with its joint tenant to pay about 33% of the total rent or $1,281 per month. The Institute is

    responsible for its own share of utilities that are billed separate from rent. The Institute’s share of

    minimum future lease payments are as follows:

    200416,626$

    20051,441

    $ 18,067

Rent expense for office space for the years ending December 31, 2003 and 2002, including rent outside of

    the United States, was $23,728 and $19,550, respectively.

Federal matching requirement

The Institute has a grant from the U.S. Agency for International Development (USAID) with anticipated

    total expenditures of $2,588,099. Half of the funds for this grant will come from USAID with the

    Institute providing the remaining portion. At December 31, 2003 USAID had provided $298,924 of the

    funds and The Institute has provided $141,160 of the funds.

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