2013-12-18T06:47:54-06:00 2013-06-30 521853933 RIBIS JONES & MARESCA PA 10500 LITTLE PATUXENT PARKWAY SUITE 770 COLUMBIA MD 21044 990 2012-07-01 562106758 CONSUMER EDUCATION SERVICES INC CONS 9198615324 3700 BARRETT DRIVE RALEIGH NC 27609 DIANE CHEN 9198615324 2013-12-16 1 DAVID JONES P01361002 4108840220 2012 2016-02-25 16:41:14Z DIANE CHEN 3700 BARRETT DRIVE RALEIGH NC 27609 29616046 0 X WWW.CESISOLUTIONS.ORG X 1998 NC CONSUMER EDUCATION SERVICES, INC. ("CESI") IS A NON-PROFIT SERVICE PROVIDER OF COMPREHENSIVE PERSONAL FINANCIAL EDUCATION AND SOLUTIONS FOR ALL LIFE STAGES AND FOR ALL OF LIFE'S MILESTONES. OUR GOAL IS ENHANCED ECONOMIC SECURITY FOR EVERYONE WE SERVE. 6 6 109 0 996080 255624 6106233 5000680 21837455 14929986 100434 658807 0 0 28044122 20589473 0 0 0 0 4204069 3952912 0 0 0 16812410 11040370 21016479 14993282 7027643 5596191 27986505 33541823 3162516 2861411 24823989 30680412 X CONSUMER EDUCATION SERVICES, INC. ("CESI") IS A NON-PROFIT SERVICE PROVIDER OF COMPREHENSIVE PERSONAL FINANCIAL EDUCATION AND SOLUTIONS FOR ALL LIFE STAGES AND FOR ALL OF LIFE'S MILESTONES. OUR GOAL IS ENHANCED ECONOMIC SECURITY FOR EVERYONE WE SERVE. 0 0 4950960 13564144 CREDIT COUNSELING AND EDUCATION - THIS PROGRAM ASSISTS CLIENTS IN MANAGING THEIR PERSONAL FINANCES THROUGH THE PROVISION OF DEBT MANAGEMENT SERVICES, CREDIT COUNSELING, EDUCATION AND TRAINING, AND BUDGET PLANNING. CESI OFFERS ASSISTANCE OVER THE PHONE, ONLINE, AND IN PERSON. CERTIFIED CREDIT COUNSELORS DISCUSS VARIOUS OPTIONS WITH CLIENTS REGARDING FINANCIAL DECISIONS. THEY ASSESS INDIVIDUALS' PERSONAL FINANCIAL SITUATIONS AND ASSIST THEM IN DEVELOPING A BUDGET IN ORDER TO IMPROVE THEIR OVERALL CREDIT. DURING THE FISCAL YEAR ENDING JUNE 30, 2013, APPROXIMATELY 40,000 FINANCIALLY DISTRESSED INDIVIDUALS RECEIVED CREDIT COUNSELING AND FREE EDUCATIONAL RESOURCE MATERIALS.CESI ALSO OFFERS A WIDE VARIETY OF HOUSING COUNSELING SERVICES TO POTENTIAL HOMEBUYERS AND CURRENT HOMEOWNERS. THESE SERVICES INCLUDE EDUCATION THROUGH GROUP SESSIONS AND ONE-ON-ONE COUNSELING. THE AREAS OF FOCUS ARE PRE-PURCHASE EDUCATION AND COUNSELING, LOSS MITIGATION COUNSELING, FORECLOSURE PREVENTION COUNSELING, AND REVERSE MORTGAGE COUNSELING. 628355 369762 COMMUNITY EDUCATION OUTREACH - CESI SUPPORTS THE ADVANCEMENT OF FINANCIAL LITERACY EDUCATION WITHIN LOCAL AND STATE COMMUNITIES THROUGH A STRONG COMMUNITY OUTREACH PROGRAM. OUTREACH EFFORTS INCLUDE GROUP EDUCATION PROGRAMS, USUALLY IN PARTNERSHIP WITH LOCAL COMMUNITY AGENCIES OR EDUCATIONAL INSTITUTIONS. THE SECOND PART OF THE CESI OUTREACH PROGRAM EFFORT IS IN THE FORM OF FREE INDIVIDUAL FINANCIAL COUNSELING AT THE CESI CENTER WITH AN ACCREDITED CESI COUNSELOR.CESI OFFERS NUMEROUS FINANCIAL EDUCATIONAL RESOURCES, WHICH ARE EASILY ACCESSED BY ALL CONSUMERS AND NOT JUST CESI CUSTOMERS. THESE RESOURCES ARE DESIGNED TO HELP CONSUMERS BETTER MANAGE THEIR FINANCES AND TO ACHIEVE THE GOAL OF BECOMING DEBT FREE. IN ADDITION, CONSUMERS MAY PARTICIPATE IN CESI'S FREE ONLINE COURSES THROUGH CESI DEBT SOLUTIONS UNIVERSITY, WHICH PROVIDES A COMPREHENSIVE FINANCIAL LITERACY CURRICULUM THAT OFFERS SELF-PACED INSTRUCTIONAL SESSIONS. THIS PROGRAM ASSISTS CONSUMERS WITH THE NECESSARY SKILLS TO IMPROVE THEIR FINANCIAL MANAGEMENT PRACTICES THAT INCLUDE DEBT MANAGEMENT, MINIMIZING CREDIT CARD SPENDING AND DEVELOPING A BUDGET. CESI ALSO OFFERS A VARIETY OF EDUCATIONAL RESOURCES THAT INCLUDE PERSONAL FINANCIAL CALCULATORS, A BI-MONTHLY E-NEWSLETTER, EDUCATIONAL BLOGS AND ON-LINE COMMUNITY MESSAGE BOARDS, AS WELL AS VARIOUS E-LEARNING RESOURCES SUCH AS VIDEO WEBCASTS. 7512500 CLIENT PAYMENT PROCESSING - THIS PROGRAM PROVIDES SERVICES TO ITS DEBT MANAGEMENT PARTICIPANTS WITH RESPECT TO PROCESSING PAYMENTS, WORKING WITH CREDITORS TO SECURE A REDUCTION IN INTEREST RATES, AND EDUCATING AND TRAINING CLIENTS TO BETTER MANAGE THEIR FINANCES. THE CLIENT PAYMENT PROCESSING IS OUTSOURCED TO A THIRD-PARTY SERVICE PROVIDER WITH CESI'S FINAL APPROVAL. 817204 MEMBER BENEFITS SERVICES - THIS PROGRAM OFFERS VARIOUS BENEFIT SERVICES TO ITS CLIENTS PARTICIPATING IN THE DEBT MANAGEMENT PROGRAM. SUCH BENEFITS INCLUDE REBATES ON EVERYDAY PURCHASES (E.G., GROCERIES, CLOTHING, ETC.), A DISCOUNT SAVERS CLUB BOOKLET, VISION CARE DISCOUNTS ON EYE EXAMS AND EYE SURGERIES, DISCOUNTS ON PRESCRIPTION MEDICINE, ONLINE COUPONS FOR RESTAURANTS, HOTEL RESERVATIONS, AND TRAVEL, AND AN ARRAY OF OTHER DISCOUNT SERVICES. AS OF JUNE 5, 2011, CESI CEASED OFFERING MEMBER BENEFITS SERVICES TO NEW CLIENTS; HOWEVER, CESI CONTINUES TO PROVIDE MEMBER BENEFITS SERVICES TO CLIENTS WHO WERE ALREADY ENROLLED AT THIS DATE. 817204 13909019 1 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 16 0 1 109 1 1 1 0 0 0 0 0 0 0 0 0 X 6 6 0 0 0 0 0 0 0 1 1 0 0 0 1 1 1 1 1 1 1 0 WV NC IL OR X DIANE CHEN 9198615330 3700 BARRETT DRIVE RALEIGH NC 27609 ROBERT J FITZGERALD 15.00 X X 0 0 0 DR JAMES WANG 1.00 X 0 0 0 DR FRED MANGUM 1.00 X 0 0 0 AMY BLACKWELL 5.00 X 0 0 0 MONICA SMILEY 1.00 X 0 0 0 DR EDWARD ERICKSON 1.00 X 0 0 0 DR DIANE CHEN 40.00 X 196208 0 48059 STEVE COLE 40.00 X 84330 0 10716 280538 0 58775 1 0 1 0 AMERIX CORPORATION 9755 PATUXENT WOODS DR STE 100 COLUMBIA MD 21046 BACK OFFICE DEBT MANAGEMENT PROCESSING 6639319 SUTHERLAND ASBILL & BRENNAN LLP 1275 PENNSYLVANIA AVE WASHINGTON DC 20004 LEGAL 813300 PARKER POE 401 S TRYON STREET CHARLOTTE NC 28202 LEGAL 285033 GOOGLE PO BOX 39000 SAN FRANCISCO CA 94139 MARKETING 217296 ICCO 9900 WEST SAMPLE ROAD STE 200 CORAL SPRINGS FL 33065 SOFTWARE 181208 10 5000680 5000680 DEBT MANAGEMENT PROGRAM 900099 13564144 13564144 MEMBER BENEFIT SERVICES 812900 996080 996080 HOUSING SERVICES 812900 369762 369762 14929986 271911 271911 9413469 9026573 386896 386896 386896 20589473 13933906 996080 658807 339310 288413 50897 2928856 2489527 439329 110060 93551 16509 271461 230742 40719 303225 257741 45484 724665 615974 108691 48668 48668 335683 285330 50353 737035 737035 787741 713307 74434 183469 155949 27520 150000 127500 22500 71094 63984 7110 42734 42734 241383 205175 36208 60751 51638 9113 INCOME TAXES 77748 77748 PROCESSING FEES 5802614 5802614 CLIENT DISCOUNT BENEFIT 739456 739456 COMMUNITY OUTREACH 680198 578168 102030 357131 352433 4698 14993282 13909019 1084263 0 9917884 5330421 3144619 2967378 1813 1626 1550000 1550000 49344 66347 2864674 1004276 1798228 1860398 10405441 20545413 1119176 1220240 27986505 33541823 433647 376207 2637730 2321665 91139 163539 3162516 2861411 X 24823989 30680412 24823989 30680412 27986505 33541823 X 5596191 1445747 -1185515 X X 0 1 X 1 0 X 5996798 6162335 7888564 6106233 5000680 31154610 5996798 6162335 7888564 6106233 5000680 31154610 7609832 23544778 169873 52652 183584 100434 1717747 2224290 2427 227 2654 33381554 120626251 0.70530 0.72630 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 X 156896 156896 1378399 94827 1283572 1241920 848389 393531 87459 61060 26399 1860398 NONQUALIFIED RETIREMENT PLAN LIABILITY 163539 163539 X 20589473 0 20589473 0 20589473 14993282 0 14993282 0 14993282 PART IV, LINE 2B: CESI OFFERS DEBT MANAGEMENT PROGRAMS TO ASSIST CLIENTS IN PAYING THEIR UNSECURED DEBTS. FUNDS RECEIVED FROM CLIENTS PARTICIPATING IN THE DEBT MANAGEMENT PROGRAM ARE DEPOSITED INTO VARIOUS DEPOSITORY ACCOUNTS. FUNDS ARE THEN TRANSFERRED FROM THE DEPOSITORY ACCOUNTS INTO A SEPARATE FOR THE BENEFIT OF OTHERS ACCOUNT (THE "FBO ACCOUNT") ON A DAILY BASIS. FUNDS RESIDING IN THE FBO ACCOUNTS ARE DISBURSED TO CREDITORS AND PORTIONS OF THE FUNDS ARE DISBURSED TO CESI'S OPERATING ACCOUNT AS CONTRIBUTIONS MADE TO CESI BY CREDITORS AND/OR CLIENTS. CERTAIN STATES REQUIRE THAT CLIENT FUNDS BE HELD IN A DEPOSITORY ACCOUNT WITHIN THAT STATE UNTIL THE RESPECTIVE CLIENT'S CREDITORS ARE PAID. IN THIS SITUATION CREDITORS ARE PAID FROM MONIES FROM THIS STATE'S DEPOSITORY ACCOUNT. INTEREST INCOME EARNED ON FUNDS HELD IN THE VARIOUS RESTRICTED CASH ACCOUNTS IS USED TO PAY FOR BANK FEES AND OTHER EXPENSES. CESI IS RESPONSIBLE FOR ANY EXCESS EXPENSES ARISING FROM THE ACTIVITIES OF THESE ACCOUNTS. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: SUBSEQUENT TO THE ISSUANCE OF THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2013, CESI AND THE INTERNAL REVENUE SERVICE ENTERED INTO A CLOSING AGREEMENT IN WHICH A SETTLEMENT ARRANGEMENT WAS REACHED BETWEEN THE TWO PARTIES. AS A RESULT, CESI RETAINS ITS 501(C)(3) TAX-EXEMPT STATUS, AND THE INITIAL UNCERTAIN TAX POSITION WAS RESOLVED. NO FURTHER ACTION DEEMED NECESSARY. THE FOLLOWING TAX POSITION WAS TAKEN FROM THE JUNE 30, 2013, YEAR-END AUDITED FINANCIAL STATEMENTS: OVER THE PAST SEVERAL YEARS, THE INTERNAL REVENUE SERVICE ("IRS") HAS ENGAGED IN AUDITING A LARGE NUMBER OF TAX-EXEMPT ORGANIZATIONS THAT PROVIDE CREDIT COUNSELING AND DEBT MANAGEMENT SERVICES TO THE PUBLIC TO DETERMINE IF THEY, IN FACT, QUALIFY FOR TAX-EXEMPT STATUS. IN 2004, CESI WAS ONE OF THE ORGANIZATIONS SELECTED TO BE EXAMINED. AS A RESULT OF THE IRS' EXAMINATION, THE EXAMINING REVENUE AGENT PROPOSED THAT CESI'S TAX-EXEMPT STATUS UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE (THE "IRC") BE REVOKED RETROACTIVELY. CESI'S WRITTEN PROTEST CONTESTING THE PROPOSED REVOCATION WAS SUBMITTED ON NOVEMBER 3, 2005. AS OF AUGUST 21, 2013, THE IRS HAD NOT ISSUED A FINAL DETERMINATION REVOKING ITS PRIOR RECOGNITION OF CESI'S TAX-EXEMPT STATUS. THEREFORE, CESI CONTINUES TO BE RECOGNIZED BY THE IRS AS AN ORGANIZATION EXEMPT FROM FEDERAL INCOME TAX UNDER SECTION 501(C)(3) AND AS A PUBLIC CHARITY UNDER THE IRC SECTION 509(A)(2). CESI IS ALSO REQUIRED TO CONTINUE FILING THE ANNUAL FORM 990 WITH THE IRS. CESI'S LEGAL COUNSEL IS CURRENTLY IN ACTIVE SETTLEMENT DISCUSSIONS WITH THE IRS, UNDER WHICH THE IRS WOULD CONTINUE TO RECOGNIZE CESI AS A TAX-EXEMPT ORGANIZATION FOR ALL PERIODS SINCE THE EFFECTIVE DATE OF THE INITIAL DETERMINATION LETTER ISSUED BY THE IRS ON JANUARY 14, 1999. IF A SETTLEMENT IS REACHED, THEN IT IS POSSIBLE THAT A SETTLEMENT PAYMENT COULD BE REQUIRED TO BE MADE BY CESI IN ORDER TO RESOLVE THE MATTER. IF A SETTLEMENT AGREEMENT IS NOT REACHED, AND A FINAL REVOCATION OF TAX-EXEMPT STATUS WERE TO OCCUR, THEN IT COULD RESULT IN FEDERAL AND STATE INCOME TAX LIABILITIES THAT WOULD BE DUE FROM CESI. HOWEVER, MANAGEMENT BELIEVES THAT THERE IS SUBSTANTIAL UNCERTAINTY REGARDING THE AMOUNT OF ANY POTENTIAL LIABILITIES (INCLUDING TO WHAT EXTENT), AND CONSEQUENTLY, IS AT THIS TIME UNABLE TO MAKE A RELIABLE ESTIMATE OF WHAT THE TOTAL POTENTIAL LIABILITIES MIGHT BE. FINANCIAL ACCOUNTING STANDARDS REQUIRE THE RESERVATION FOR A CONTINGENT LIABILITY ONLY IN CIRCUMSTANCES WHERE THE LIABILITY APPEARS TO BE PROBABLE. ACCORDINGLY, NO CONTINGENT LIABILITY RESERVE HAS BEEN ESTABLISHED FOR ANY POTENTIAL INCOME TAX LIABILITIES THAT MIGHT RESULT IF CESI'S TAX-EXEMPT STATUS IS ULTIMATELY REVOKED. X 0 0 0 0 0 0 0 0 0 DR DIANE CHEN 196208 0 0 0 0 0 30000 0 18059 0 244267 0 0 0 FORM 990, PART VI, SECTION B, LINE 11 THE PRESIDENT & CEO AND THE DIRECTOR OF FINANCE ARE RESPONSIBLE FOR REVIEWING AND APPROVING THE FORM 990 AND THE FORM 990-T BEFORE IT IS FILED. FORM 990, PART VI, SECTION B, LINE 12C OFFICERS, DIRECTORS AND KEY EMPLOYEES ARE REQUIRED TO DISCLOSE ANY POTENTIAL CONFLICTS OF INTEREST ANNUALLY ON A CONFLICT OF INTEREST FORM. ANY KNOWN CONFLICTS OF INTEREST REQUIRE IMMEDIATE DISCLOSURE. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS GENERALLY DETERMINES THE SALARY OF THE PRESIDENT & CEO AND KEY EMPLOYEES. THE LAST SALARY REVIEW FOR THE CEO WAS IN 2010, AND THE LAST SALARY REVIEW FOR KEY EMPLOYEES WAS IN 2012. FORM 990, PART VI, SECTION C, LINE 19 CESI MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. THE ORGANIZATION'S FORM 990 IS ALSO AVAILABLE ON GUIDESTAR.COM. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: UNREALIZED GAIN ON CASH SURRENDER VALUE OF LIFE INSURANCE 14,485. SETTLEMENT PAYMENT -1,200,000. FORM 990, PART XII, LINE 2C: THE ORGANIZATION HAS NOT CHANGED ITS AUDIT OVERSIGHT PROCESS OR SELECTION OF AN INDEPENDENT ACCOUNTANT PROCESS DURING THE TAX YEAR.