St.

Louis County Children’s Service Fund

Keeping Kids First

Introduction:
The St Louis County Children’s Service Fund is entrusted by the county residents to invest wisely and
responsibly in the youth of St Louis County in a manner which earns and sustains the public trust as well
as to ensure the best return on the investment. A second objective is to provide non-financial support
for improving the financial and management capabilities of the local agencies.

The following measures and ratios provide a general guideline of the financial stability, potential risks
and compensating factors for an agency ability to continue operating and financial support the funded
projects. They comprise both non-numeric measures and standard financial ratios of the agencies
balance sheet, revenue and expenses.

Assess the ability to identify issues and promote corrective action

Non-Numeric Measures:
Financial Capability

The measure of the organization’s internal ability to properly maintain the internal control over their
data and financial records, report, analyze results and take necessary action.

Financial Capacity

The measure of the organization’s internal ability to complete the necessary tasks to support the
organization’s financial capabilities.

Financial System

The measure of the agencies tools used to collect maintains report and provides proper
internal control over the financial activity and performance.

Documents Requested:
2 * most current years of:

1. Outside Audit Report including the Auditor Opinion, comments, notes

2. Management letter prepared by the outside Auditor.
3. Federal 990
4. Budget vs. actual report

*Agencies of less than 2 years provide what financial information is available.

 St. Louis County Children’s Service Fund
Keeping Kids First

Financial Measures
The following financial ratios are general measures of the financial health and sustainability of the
agency. Additional ratios and measures will be developed for analyzing the agencies specific programs.

Ratio – Adequacy of Resources

 Liquid Funds Indicator

LFI = Total Net Assets – Restricted Net Assets – Fixed Assets

Average Monthly Expenses
The liquid funds indicator takes into account debt and non-liquid assets. It is similar to the
defensive interval in its use but is more conservative. In Liquid Funds Indicator the Total Net
Assets (total assets less total liabilities) is calculated then assets which cannot be quickly turned
into cash are removed. These non-liquid assets include any assets with permanent restrictions
and fixed assets. It also determines the number of months of expenses that can be covered by
existing liquid assets.

 Savings Indicator Ratio of Cash Flow Trends

SI= Revenue – Expense

Total Expense
The savings indicator measures the increase or decrease in the ability of an organization to add
to its net assets. Values greater than one indicate an increase in savings. The savings indicator is
a simple way to determine if an organization is adding to or using up its net asset base.

 Debt Ratio (DR):

DI = Average Total Debt

Average Total Assets
Measures the proportion of assets provided by debt. High values indicate future liquidity
problems or reduced capacity for future borrowing.
 St. Louis County Children’s Service Fund
Keeping Kids First

 Months of Cash (MC):

MC = Cash + Investments + Receivables

Average Monthly Expenses
Reflects how many months the organization could operate if no additional funds were received
beyond the receivables booked. Receivables are used unless considered un-collectable or
extensively delayed.

Revenue Ratios:
 Revenue Source Ratios

Revenue Source
Total Revenue
Revenue Source Ratio measures the variability in the number of material revenue streams providing an
indicator in an agencies reliance on a single source of funds. The revenue source ratio is a count of the
non CSF revenue sources which constitute greater than or equal to 5% of the total revenue.

The revenue sources are analyzed in order to establish what proportion each of these revenue streams
contributes to the organization’s total revenues. Strong revenue streams may compensate for a week
Balance Sheet position. Example sources may include:

1. Children’s Service Funds

2. Federal funds
3. State funds
4. Other County funds
5. Program service Fees
6. United Way
7. Other Foundations
8. Corporate Donations
9. Individual Donations
10. Dividends and interest
11. Special events Revenue
12. Release of Temp. Restricted Funds
13. Other
St. Louis County Children’s Service Fund
Keeping Kids First

 Program / Development / Administration Expense Ratios

The following expense ratios provide visibility of how funds are distributed between and agencies
administrative, development and program activities. The information is useful in analyzing the
general allocation of expenditures by the agency in total and a comparative base for measuring the
program’s expense allocation.

Program Expense Ratio = Total Program Expenses

Total Expenses

Development Expense Ratio = Total Development Expenses

Total Expenses

Administrative Expense Ratio = Total Administrative Expenses

Total Expenses