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udit Supplemental Data Request Formfor Regents-Authorized Charter Schools

Financial A

School Name:

Date: Latest Audit Period (through June 30):

Financial

Charter School for Applied Technologies

July 27, 2016

Audit Supplemental Data Request Formfor Regents-Authorized Charter Schools

2015

FILL IN GRAY CELLS

Charter School for Applied Technologies STATEMENTS OF FINANCIAL POSITION

$19,018,966 $19,568,966

Unrestricted $11,155,727 Temporarily restricted -TOTAL NET ASSETS $11,155,727 $8,811,451

TOTAL LIABILITIES AND NET ASSETS $33,547,770 $31,853,041

FOR THE YEARS ENDED JUNE 30,

2016 2015 ASSETS

CURRENT ASSETS Cash and cash equivalents $3,773,840

Grants and contracts receivable 300,000

Accounts receivables 152,270

Inventory 91,938

Prepaid Expenses 200,305

Contributions and other receivables -Other -TOTAL CURRENT ASSETS $4,518,353

OTHER ASSETS Investments $9,506,017 Property, Plant and Equipment, Net 19,523,400 Restricted Cash -OTHER ASSETS $29,029,417 $28,684,296

TOTAL ASSETS $33,547,770 $31,853,041

$8,269,073 20,415,223

-

LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable and accrued expenses $368,451

Accrued payroll and benefits 2,259,608

Refundable Advances -

Dreferred Revenue -Current maturities of long-term debt 550,000

Short Term Debt - Bonds, Notes Payable -Other 195,018

TOTAL CURRENT LIABILITIES $3,373,077

$2,199,582 -

699,712 -

269,451 --

$3,168,745

$-2,944,598

-13,026

515,000 --

$3,472,624

LONG-TERM DEBT, net current maturities

TOTAL LIABILITIES $22,392,043 $23,041,590

NET ASSETS $8,811,451

-

Check (0) -

FOR THE YEARS ENDED JUNE 30,

FILL IN GRAY CELLS

Charter School for Applied Technologies STATEMENTS OF ACTIVITIES

REVENUE, GAINS AND OTHER SUPPORT State & Local Operating Revenue $25,018,346 $- $25,018,346 $23,565,529 Federal - Title and IDEA 1,033,344 - 1,033,344 1,873,092 Federal - Other - - - -State and City Grants 64,569 - 64,569 39,463 Contributions and private grants - - - -After school revenue - - - -Other 353,444 - 353,444 346,281 Food Service/Child Nutrition Program 1,257,949 - 1,257,949 163,653

TOTAL REVENUE, GAINS AND OTHER SUPPORT $27,727,652 $- $27,727,652 $25,988,018

EXPENSES Program Services

Regular Education $18,185,561 $- $18,185,561 $16,213,777 Special Education 1,172,735 - 1,172,735 1,612,449 Other Programs 1,769,496 - 1,769,496 4,551,489

Total Program Services $21,127,792 $- $21,127,792 $22,377,715 Supporting Services

Management and general $4,171,807 $- $4,171,807 $3,992,280 Fundraising 187,729 - 187,729 -

TOTAL OPERATING EXPENSES $25,487,328 $- $25,487,328 $26,369,995

SURPLUS / (DEFICIT) FROM SCHOOL OPERATIONS $2,240,324 $- $2,240,324 $(381,977)

Contributions Foundations $- $- $- $-Individuals - - - -Corporations - - - -

Fundraising - - - -Interest income 103,619 - 103,619 -Miscellaneous income - - - -Net assets released from restriction - - - -

TOTAL SUPPORT AND OTHER REVENUE $103,619 $- $103,619 $-

CHANGE IN NET ASSETS $2,343,943 $- $2,343,943 $(381,977)

NET ASSETS BEGINNING OF YEAR $8,811,784 $- $8,811,784 $9,193,428 PRIOR YEAR/PERIOD ADJUSTMENTS - - - 333

NET ASSETS - END OF YEAR $11,155,727 $- $11,155,727 $8,811,784

2016 2015 Temporarily

Unrestricted Restricted Total Total

New York State Education DepartmentRequest for Proposals to Establish Charter Schools Authorized by the

Board of Regents

2015-16 Budget & Cash Flow Template

General Instructions and Notes for New Application Budgets and Cash Flows Templates

1 2

3

4

5

Complete ALL SIX columns in BLUE Enter information into the GRAY cells Cells containing RED triangles in the upper right corner in columns B through G contain guidance on that particular item

Funding by School District information for all NYS School district is located on the State Aid website at https://stateaid.nysed.gov/charter/. Refer to this website for per-pupil tuition funding for all school districts. Rows may be inserted in the worksheet to accomodate additional districts if necessary.

The Assumptions column should be completed for all revenue and expense items unless the item is self-explanatory. Where applicable, please reference the page number or section in the application narrative that indicates the assumption being made. For instance, student enrollment would reference the applicable page number in Section I, C of the application narrative.

- - - -

- - -

- - -

- - -

-

-

PROJECTED BUDGET FOR 2016-2017 Assumptions

July 1, 2016 to June 30, 2017 DESCRIPTION OF ASSUMPTIONS - Please note assumptions when applicable Please Note: The student enrollment data is entered below in the Enrollment Section beginning in row 155. This will populate the data in row 10.

OTHER FUNDRAISING TOTAL

Total Revenue 26,273,973 700,000 1,325,000 - 50,000 28,348,973 Total Expenses 17,907,372 1,836,631 4,059,335 - 4,119,551 27,922,889

Net Income 8,366,601 (1,136,631) (2,734,335) - (4,069,551) 426,084 Actual Student Enrollment 2,090 - -

Total Paid Student Enrollment 2,069 - 2,069

PROGRAM SERVICES SUPPORT SERVICES


REVENUE REVENUES FROM STATE SOURCES

Per Pupil Revenue Kenmore-Tonawanda $9,977.00 2,123,604 - - - - 2,123,604 Buffalo City Schools $12,505.00 20,798,316 - - - - 20,798,316 Cheektowaga $10,735.00 265,691 - - - - 265,691 North Tonawanda $11,093.00 241,606 - - - - 241,606 Other various 1,652,142 - - - - 1,652,142

25,081,359 25,081,359 represents 18 various districts of residence

Special Education Revenue - 700,000 - - - 700,000 Grants

Stimulus - - - - - -Other - - - - - -

Other State Revenue - - - - - -TOTAL REVENUE FROM STATE SOURCES 25,081,359 700,000 25,781,359

REVENUE FROM FEDERAL FUNDING IDEA Special Needs - - - - - -Title I 932,027 - - - - 932,027 Title Funding - Other 32,365 - - - - 32,365 School Food Service (Free Lunch) - - 1,325,000 - - 1,325,000 Grants

Charter School Program (CSP) Planning & Implementation - - - - - -Other 188,222 - - - - 188,222 US Dept of Education - Counseling Grant

Other Federal Revenue - - - - - -TOTAL REVENUE FROM FEDERAL SOURCES 1,152,614 1,325,000 2,477,614

LOCAL and OTHER REVENUE Contributions and Donations, Fundraising - - - - - -Erate Reimbursement 40,000 - - - - 40,000 Interest Income, Earnings on Investments, - - - - 50,000 50,000 NYC-DYCD (Department of Youth and Community Developmt.) - - - - - -Food Service (Income from meals) - - - - - -Text Book - - - - - -Other Local Revenue - - - - - -

TOTAL REVENUE FROM LOCAL and OTHER SOURCES 40,000 50,000 90,000

TOTAL REVENUE 26,273,973 700,000 1,325,000 50,000 28,348,973

List exact titles and staff FTE"s ( Full time eqiuilivalent) EXPENSES ADMINISTRATIVE STAFF PERSONNEL COSTS No. of Positions

Executive Management 1.00 - - - - 168,300 168,300 Instructional Management 7.00 674,949 - - - - 674,949 Deans, Directors & Coordinators 6.00 - 77,010 94,860 - 349,415 521,285 CFO / Director of Finance 1.00 - - - - 117,300 117,300 Operation / Business Manager 9.00 - - - - 385,350 385,350 Administrative Staff 8.00 257,047 - - - - 257,047

TOTAL ADMINISTRATIVE STAFF 32 931,996 77,010 94,860 1,020,365 2,124,231

INSTRUCTIONAL PERSONNEL COSTS Teachers - Regular 80.00 4,218,183 - - - - 4,218,183 Teachers - SPED 22.00 - 1,159,195 - - - 1,159,195 Substitute Teachers 2.00 333,250 - - - - 333,250 includes Per Diem Costs - FTE reflect full time staff only Teaching Assistants - - - - - - -

REGULAR EDUCATION

SPECIAL EDUCATION

MANAGEMENT & GENERAL

REGULAR EDUCATION

SPECIAL EDUCATION


CY Per Pupil Rate

- -

- -

-

-

-

-









REGULAR EDUCATION

SPECIAL EDUCATION


REGULAR EDUCATION

SPECIAL EDUCATION


Specialty Teachers 38.00 1,922,809 - - - - 1,922,809 Aides 17.00 468,885 - - - - 468,885 Therapists & Counselors 14.00 - 625,779 - - 625,779 Other 2.00 674,640 - 234,750 - - 909,390 includes Stipends

TOTAL INSTRUCTIONAL 175 7,617,768 1,159,195 860,529 9,637,492

NON-INSTRUCTIONAL PERSONNEL COSTS Nurse 3.00 - - 125,869 - - 125,869 Librarian 4.00 164,618 - - - - 164,618 Custodian 12.00 - - - - 421,038 421,038 Security - - - - - - -Other 16.00 - - 336,124 - 639,629 975,753 includes PT staff - FTE reflect full time staff only

TOTAL NON-INSTRUCTIONAL 35 164,618 461,994 1,060,667 1,687,278

SUBTOTAL PERSONNEL SERVICE COSTS 242 8,714,382 1,236,205 1,417,383 2,081,032 13,449,001

PAYROLL TAXES AND BENEFITS Payroll Taxes 666,650 94,570 108,430 - 159,199 1,028,849 Fringe / Employee Benefits 1,867,043 264,855 303,672 - 445,858 2,881,427 Retirement / Pension 1,003,717 128,002 - - 289,408 1,421,127

TOTAL PAYROLL TAXES AND BENEFITS 3,537,410 487,427 412,102 894,465 5,331,403

TOTAL PERSONNEL SERVICE COSTS 12,251,792 1,723,631 1,829,485 2,975,497 18,780,404

CONTRACTED SERVICES Accounting / Audit - - - - 45,000 45,000 Legal - - - - 60,000 60,000 Management Company Fee - - - - - -Nurse Services - - - - - -Food Service / School Lunch - - - - - -Payroll Services - - - - - -Special Ed Services - 113,000 - - - 113,000 Titlement Services (i.e. Title I) - - - - - -Other Purchased / Professional / Consulting 295,076 - 44,602 - 382,547 722,225

TOTAL CONTRACTED SERVICES 295,076 113,000 44,602 487,547 940,225

SCHOOL OPERATIONS Board Expenses - - - - 25,000 25,000 Classroom / Teaching Supplies & Materials 511,084 - - - - 511,084 Special Ed Supplies & Materials - - - - - -Textbooks / Workbooks 75,978 - - - - 75,978 Supplies & Materials other - - - - - -Equipment / Furniture 117,692 - 13,000 - 130,692 Telephone 85,800 - - - - 85,800 Technology 343,800 - - - 25,800 369,600 Student Testing & Assessment 5,250 - - - - 5,250 Field Trips 14,524 - - - - 14,524 Transportation (student) - - 1,270,120 - - 1,270,120 Student Services - other - - - - - -Office Expense 212,150 - - - - 212,150 Staff Development 91,956 - - - 12,000 103,956 Staff Recruitment 500 - - - - 500 Student Recruitment / Marketing 17,200 - - - - 17,200 School Meals / Lunch - - 879,190 - - 879,190 Travel (Staff) 12,450 - - - - 12,450 Fundraising - - - - - -

- -

- -

-

-









REGULAR EDUCATION

SPECIAL EDUCATION


REGULAR EDUCATION

SPECIAL EDUCATION


Other 1,585,758 - 15,759 - 3,950 1,605,467 TOTAL SCHOOL OPERATIONS 3,074,142 2,178,069 66,750 5,318,961

FACILITY OPERATION & MAINTENANCE Insurance 13,966 - - - 193,500 207,466 Janitorial - - - - 121,200 121,200 Building and Land Rent / Lease 683,396 - - - 58,092 741,488 Repairs & Maintenance - - 7,180 - 92,985 100,165 Equipment / Furniture - - 3,250 3,250 Security - - - - 120,730 120,730 Utilities 425,000 - - - - 425,000

TOTAL FACILITY OPERATION & MAINTENANCE 1,122,361 7,180 589,757 1,719,298

DEPRECIATION & AMORTIZATION 1,164,000 - - - - 1,164,000 DISSOLUTION ESCROW & RESERVES / CONTIGENCY - - - - - - an escrow account has been established

TOTAL EXPENSES 17,907,372 1,836,631 4,059,335 4,119,551 27,922,889

NET INCOME 8,366,601 (1,136,631) (2,734,335) - (4,069,551) 426,084

ENROLLMENT - *School Districts Are Linked To Above Entries*

Kenmore-Tonawanda 215 215 Buffalo City Schools 1,680 1,680 Cheektowaga 25 25 North Tonawanda 22 22 Other 148 148

TOTAL ENROLLMENT 2,090 2,090

REVENUE PER PUPIL 12,571 - 634

EXPENSES PER PUPIL 8,568 - 1,942

REGULAR EDUCATION

SPECIAL EDUCATION

TOTAL ENROLLED

CHARTER SCHOOL FOR

APPLIED TECHNOLOGIES

AND AFFILIATES

SINGLE AUDIT REPORTING PACKAGE

JUNE 30, 2016

CHARTER SCHOOL FOR APPLIED TECHNOLOGIES AND AFFILIATES

Table of Contents

June 30, 2016

Consolidated Financial Statements

Independent Auditors Report


Notes to Consolidated Financial Statements

Additional Information

Consolidated Schedule of Expenses

Consolidating Balance Sheets

Consolidating Statements of Activities

Schedule of Expenditures of Federal Awards and Related Notes

Reports on Federal Award Programs

Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Independent Auditors Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance

Schedule of Findings and Questioned Costs

Corrective Action Plan

INDEPENDENT AUDITORS REPORT

The Board of Trustees Charter School for Applied Technologies

We have audited the accompanying consolidated balance sheets of Charter School for Applied Technologies and Affiliates (the Organization) as of June 30, 2016 and 2015, and the related consolidated statements of activities and cash flows for the years then ended, and the related notes to consolidated financial statements.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and 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 audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of June 30, 2016 and 2015, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.


Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying additional information as listed in the table of contents, including the schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the consolidated financial statements.

The accompanying additional information including the schedule of expenditures of federal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 28, 2016 on our consideration of the Organizations internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organizations internal control over financial reporting and compliance.

October 28, 2016

2


Consolidated Balance Sheets

June 30, 2016 2015

Assets

Current assets:

Cash

Receivables (Note 2)

Prepaid expenses and other assets

$ 5,586,539

987,981

329,021

6,903,541

$ 2,862,335

592,849

287,967

3,743,151

Property and equipment, net (Note 3) 19,539,946 20,439,229

Investments held in trust (Note 4) 2,216,750 2,216,520

Other investments (Note 5) 4,864,679 4,807,758

Deferred financing costs, net 945,055 994,795

$ 34,469,971 $ 32,201,453

Liabilities and Net Assets

Current liabilities:

Current portion of long-term debt (Note 7)

Accounts payable and accrued expenses

Deferred revenue

$ 550,000

2,437,029

98,132

3,085,161

$ 515,000

3,070,370

135,532

3,720,902

Long-term debt (Note 7) 19,040,268 19,568,966

Net assets:

Unrestricted 12,344,542 8,911,585

$ 34,469,971 $ 32,201,453

See accompanying notes. 3


Consolidated Statements of Activities

For the years ended June 30, 2016 2015

Support and revenue:

Enrollment fees:

Revenue - resident student enrollment

Revenue - students with disabilities

Revenue - additional state aid

Federal grants

State grants

Food service and vending

Investment income

Other income

Total support and revenue

$ 24,073,775

886,135

438,855

2,111,068

39,260

145,520

93,735

1,713,394

29,501,742

$ 22,826,914

738,615

-

1,873,092

39,463

163,653

64,926

1,553,014

27,259,677

Expenses:

Program expenses:

Regular education

Special education

Other programs

Total program expenses

Supporting services:

Management and general

Total expenses

15,827,570

1,554,962

4,476,507

21,859,039

4,209,746

26,068,785

15,802,164

1,629,532

5,778,592

23,210,288

4,383,525

27,593,813

Change in net assets 3,432,957 (334,136)

Net assets - beginning 8,911,585 9,245,721

Net assets - ending $ 12,344,542 $ 8,911,585



Consolidated Statements of Cash Flows

For the years ended June 30, 2016 2015

Operating activities:

Cash received from enrollment fees $ 25,106,440 $ 23,558,694

Cash received from federal and state grants

Cash received from food service and vending

Interest received

2,067,697

145,520

113,981

2,381,756

163,653

101,608

Cash received from other sources 1,655,818 1,774,738

Payments to employees for services and benefits

Payments to vendors and suppliers

Interest paid

Net operating activities

(18,536,545)

(5,588,718)

(1,395,988)

3,568,205

(16,997,497)

(7,243,352)

(1,414,438)

2,325,162

Investing activities:

Property and equipment expenditures

Withdrawals from (deposits to) investments held in trust, net

Purchases of other investments

Sales of other investments

(251,604)

(230)

(1,404,667)

1,327,500

(1,682,310)

29

(2,099,955)

2,025,977

Net investing activities (329,001) (1,756,259)

Financing activities:

Principal repayments on long-term debt (515,000) (205,000)

Net change in cash 2,724,204 363,903

Cash - beginning 2,862,335 2,498,432

Cash - ending $ 5,586,539 2,862,335$

Reconciliation of change in net assets to net

cash flows from operating activities:

Change in net assets

Adjustments to reconcile change in net assets to

net cash flows from operating activities:

Depreciation and amortization

Realized and unrealized losses on other investments

$ 3,432,957

1,221,929

20,246

$ (334,136)

1,232,026

36,682

Changes in operating assets and liabilities:

Receivables

Prepaid expenses and other assets

Accounts payable and accrued expenses

Deferred revenue

(395,132)

(41,054)

(633,341)

(37,400)

609,105

(39,665)

746,165

74,985

Net operating activities $ 3,568,205 2,325,162$



Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies:

Organization:

The consolidated financial statements of Charter School for Applied Technologies and Affiliates (the Organization) include the accounts of Charter School for Applied Technologies (the School), EST, LLC (the LLC), and eDoctrina Corporation (the Corporation), affiliated entities of which the School is the sole member or stockholder.

The School operates a charter school in Buffalo and Kenmore, New York approved by the Board of Regents of the State of New York. The School offers classes from kindergarten through grade 12. The School is chartered through June 2020, after which time the charter may be renewed, upon application.

The LLC was formed to serve as a resource to other charter schools. The Corporation provides educational support products and services to public, private and charter schools. Income from these entities is recorded as other income in the consolidated statements of activities. All significant inter-entity accounts and transactions have been eliminated in the accompanying consolidated financial statements.

EST, LLC was established to provide management services to the School and Corporation. During 2016, the LLC had limited activity as management is currently evaluating the continuance of the LLC.

Subsequent Events:

Management has evaluated events and transactions for potential recognition or disclosure through October 28, 2016, the date the consolidated financial statements were available to be issued.

Cash:

Cash in financial institutions potentially subjects the Organization to concentrations of credit risk, since it may exceed insured limits at various times throughout the year.

Receivables:

Receivables are stated at the amounts management expects to collect from outstanding balances. Balances that are still outstanding after reasonable collection efforts are written off through a charge to bad debts expense and a credit to accounts receivable. An allowance for doubtful accounts is considered unnecessary by management because all significant amounts deemed uncollectible are written off each year.

Property and Equipment:

Property and equipment is stated at cost net of accumulated depreciation. Depreciation is provided using the straight-line method over estimated useful lives. Maintenance and repairs are charged to operations as incurred; significant improvements are capitalized.

Investments:

Investments are stated at fair value as determined by quoted prices in active markets.

Bond Discount and Deferred Financing Costs:

Bond discount and issuance costs associated with the issuance of the 2005 Series bonds are amortized on a straight-line basis over the life of the bonds. Unamortized bond discount is presented as a reduction in the face amount of the bonds payable, whereas issuance costs are recorded as deferred financing costs. Amortization of bond discounts was $21,302 and $21,301 for 2016 and 2015. Amortization of bond issuance costs was $49,740 for each of the years ended June 30, 2016 and 2015.

Grants:

The Organization is the recipient of awards and reimbursements from federal, state, and local sources. The awards and reimbursements are subject to compliance and financial audits by the funding sources. Management believes no significant adjustments are necessary to recognized amounts.

6

The Organization records grant awards accounted for as exchange transactions as deferred revenue until related services are performed.

Transportation:

Several school districts provide the School with certain transportation services without cost to the charter school. The value of these services has not been recorded in these financial statements.

In August 2015, the School entered into a 5 year agreement whereby the Buffalo School District will provide student transportation services to city residents previously paid for by the School.

Enrollment Fees:

The School is reimbursed based on the approved operating expense per pupil of the public school district in which the student resides. The amount received each year from the resident district is the product of the approved operating expense per pupil and the full time equivalent enrollment of the students in the school residing in the district. Approximately 83% of enrollment fees are received annually from the Buffalo School District.

Income Taxes:

The School is a 501(c)(3) organization exempt from taxation under 501(a) of the Internal Revenue Code. The LLC is considered a disregarded entity for tax purposes. Consequently, all tax reporting for the LLC is consolidated with the activity of the Organization. The Corporation is taxed as a separate entity. Management believes it is no longer subject to examination by Federal and State taxing authorities for years prior to 2013.

Use of Estimates:

The preparation of consolidated 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cost Allocation:

The Organizations costs of providing its various programs and activities have been summarized on a functional basis in the consolidated statements of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

2. Receivables:

2016 2015 Grants $ 325,893 $ 243,102 Enrollment 540,044 247,719 Other 122,044 102,028

$ 987,981 $ 592,849

In July 2016, all New York State charter schools serving students in the 2015-2016 school year received additional state aid. The additional aid was based on the number of students served and was paid directly from the New York Department of Education. Additional aid totaling $438,855 is included as enrollment fees receivable on the accompanying balance sheets as of June 30, 2016.

3. Property and Equipment:

2016 2015 Land $ 323,845 $ 288,204 Building and improvements 26,758,189 26,643,482 Furniture and equipment 3,489,419 3,388,163

Vehicles 75,092 75,092 30,646,545 30,394,941

Less accumulated depreciation 11,106,599 9,955,712 $ 19,539,946 $ 20,439,229

Depreciation expense for the years ended June 30, 2016 and 2015 was $1,150,887 and $1,160,985.

7

4. Investments Held in Trust:

The following accounts are held by a trustee in compliance with the issuance of 2005 Series bonds (Note 7).

2016 2015 Reserve Fund $ 1,914,938 $ 1,914,938 Custodian and other funds 251,812 251,582 Repair fun 50,000 50,000

$ 2,216,750 $ 2,216,520

5. Other Investments:

Cash Equities Mutual funds Fixed income

2016 143,246$

1,876,953 1,394,424 1,450,056 4,864,679$

$

$

2015 164,778

1,681,893 2,063,199

897,888 4,807,758

Investment returns are as follows:

Interest and dividends Realized and unrealized

losses

2016 113,981$

(20,246) 93,735$

$

$

2015 101,608

(36,682) 64,926

Investment fees totaling $29,186 and $36,685 were expensed for the years ended June 30, 2016 and 2015.

6. Short-Term Borrowings:

The School has available a $1,000,000 demand line of credit from a financial institution, with interest payable at 1.50% plus LIBOR and secured by investments of the School. There were no amounts outstanding as of June 30, 2016 and 2015.

7. Long-Term Debt:

2016 2015 Erie County Industrial Development

Agency Civic Facility Revenue Bonds (Charter School for Applied Technologies Project), Series 2005A (tax exempt) Bonds, principal payments beginning June 2016 in annual principal installments ranging from $515,000 to $1,790,000, plus interest from date of issuance at rates ranging from 6.250% to 6.875%, due June 2035. $ 19,995,000 $ 20,510,000

Less current portion 550,000 515,000 Less unamortized bond discount 404,732 426,034

$ 19,040,268 $ 19,568,966

In June 2005, the School entered into an installment sale agreement with the Erie County Industrial Development Agency (ECIDA), principally to finance the cost of acquiring, renovating, and equipping certain buildings to be used for expansion of the School, including the establishment of a high school and refinancing of existing debt. To finance the project, ECIDA authorized the sale of Civic Facility Revenue Bonds in the aggregate amount of $21,940,000 under a trust indenture with a bank as trustee. The sale is secured by mortgage and security agreements granting the trustee a mortgage lien on and security interest in real and personal property as well as certain revenues, subject to permitted encumbrances. The bonds are further secured by the reserve fund (Note 4).

Aggregate maturities of long-term debt subsequent to June 30, 2016 are:

2017 $ 550,000 2018 585,000 2019 625,000

2020 665,000 2021 710,000

Thereafter 16,860,000 $ 19,995,000

Interest expense for the years ended June 30, 2016 and 2015 was $1,395,988 and $1,414,438.

8

8. Retirement Plans:

The Corporation maintains a defined contribution 401(k) profit sharing plan covering essentially all employees. Employer discretionary contributions to the plan totaled $93,416 and $68,236 for the years ended June 30, 2016 and 2015.

The School maintains a 403(b) plan covering qualified employees. The plan does not require employer contributions.

The School participates in the New York State Teachers Retirement System (TRS) and New York State and Local Employees Retirement System (ERS) (the Systems), which are cost-sharing multiple employer public employee retirement systems. The Systems offer a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability.

New York State Teachers Retirement System:

TRS is administered by the New York State Teachers Retirement Board and provides benefits to plan members and beneficiaries as authorized by the Education Law and the Retirement and Social Security Law of the State of New York. TRS issues a publicly available financial report that contains financial statements and required supplementary information. The report may be obtained from TRS at www.nystrs.org.

New York State and Local Employees Retirement System:

ERS provides retirement benefits as well as death and disability benefits. New York State Retirement and Social Security Law governs obligations of employers and employees to contribute and provide benefits to employees. ERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained from the New York State and Local Retirement System at www.osc.state.ny.us/retire.

Funding Policies:

No employee contribution is required for those whose service began prior to July 1976. The Systems require employee contributions of 3% of salary for the first 10 years of service for those employees who joined the System from July 1976 through December 2009. Participants whose service began on or after January 1, 2010 through March 31, 2012 are required to contribute 3% (ERS) or 3.5% (TRS) of compensation throughout their active membership in the Systems. Participants whose service began on or after April 1, 2012 are required to contribute a percentage ranging from 3% to 6% each year, based on their level of compensation.

For ERS, the Comptroller annually certifies the rates used, expressed as a percentage of the wages of participants, to compute the contributions required to be made by the School to the pension accumulation fund. The rates range from 9.3% to 15.9% and 10.5% to 18.7% for 2016 and 2015, dependent on the participants tier. Required contributions for ERS were $320,986 and $313,480 for the years ended June 30, 2016 and 2015.

Pursuant to Article 11 of the Education Law, rates are established annually for TRS by the New York State Teachers Retirement Board at an actuarially determined rate. The rate is 13.26% of the annual covered payroll as of June 30, 2016, and 17.53% for the year ended June 30, 2015. The required contributions for TRS were $1,242,235 and $1,486,175 for the years ended June 30, 2016 and 2015.

9. Lease Obligations:

The Organization leases certain equipment and property under terms of various operating leases through July 2034. Rental expense for all operating leases amounted to $615,070 and $507,370 for the years ended June 30, 2016 and 2015.

Future minimum annual rentals due under these leases are:

2017 $ 613,613 2018 672,286 2019 650,940 2020 668,182 2021 686,649 Thereafter 10,179,855

$ 13,471,525

9

www.osc.state.ny.us/retirehttp:www.nystrs.org



Consolidated Schedule of Expenses

For the year ended June 30, 2016 (with summarized comparative totals for 2015)

2016 2015

Number

of Regular Special Other Management

positions Education Education Programs and General Total Total

Administrative Staff 32.00 884,214$ 75,604$ 93,143$ 1,082,971$ $ 2,135,932

Instructional 179.59 7,248,287 1,082,884 237,124 - 8,568,295

Non-Instructional 43.61 127,077 - 1,078,644 890,285 2,096,006

255.20 8,259,578$ $ 1,158,488 $ 1,408,911 $ 1,973,256 $ 12,800,233

Salaries 8,259,578$ $ 1,158,488 $ 1,408,911 $ 1,973,256 $ 12,800,233 $ 12,273,198

Employee benefits and taxes 2,826,281 117,054 165,898 452,933 3,562,166 3,423,135

Retirement 1,281,856 53,090 116,742 204,949 1,656,637 1,867,891

Consultants 7,200 - 6,180 180 13,560 10,027

Contracted services 25,519 85,648 28,969 565,052 705,188 652,819

Equipment rental 62,748 - 3,459 7,398 73,605 71,390

Insurance 164,818 10,301 20,602 10,301 206,022 185,467

Interest 1,116,790 69,799 139,599 69,800 1,395,988 1,414,438

Building leases 600,696 - 23,800 899 625,395 479,995

Professional fees 18,689 - 105,622 38,521 162,832 140,666

Maintenance and repairs 602 - 17,006 78,105 95,713 249,773

Marketing 11,781 60 7,198 25,952 44,991 43,028

Minor equipment 91,805 - 19,525 72,229 183,559 721,188

Office expense 124,896 - 142,902 79,001 346,799 285,206

Supplies and materials 126,117 - 983,556 169,067 1,278,740 1,418,452

Other expenses 43,710 - 84,947 54,665 183,322 206,354

Staff development 65,162 40 4,598 2,256 72,056 52,960

Student services - - 852,000 - 852,000 2,245,120

Technology - - 194,905 - 194,905 174,710

Utilities 31,617 - 16,828 344,700 393,145 445,970

14,859,865 1,494,480 4,343,247 4,149,264 24,846,856 26,361,787

Depreciation and amortization 967,705 60,482 133,260 60,482 1,221,929 1,232,026

Total $ 15,827,570 $ 1,554,962 $ 4,476,507 $ 4,209,746 $ 26,068,785 $ 27,593,813




Consolidating Balance Sheets

For the years ended June 30, 2016

Consolidated

School LLC Corp Eliminations Totals

Assets

Current assets:

Cash $ 4,986,834 $ 29,473 $ 570,232 -$ 5,586,539$

Receivables 949,541 - 83,126 (44,686) 987,981

Prepaid expenses and other assets 291,628 20 37,373 - 329,021

6,228,003 29,493 690,731 (44,686) 6,903,541

Property and equipment, net 19,523,400 - 16,546 - 19,539,946

Investments held in trust 2,216,750 - - - 2,216,750

Other investments 5,114,679 - - (250,000) 4,864,679

Deferred financing costs, net 945,055 - - - 945,055

$ 34,027,887 $ 29,493 $ 707,277 (294,686)$ 34,469,971$

Liabilities and Net Assets

Current liabilities:

Current portion of long-term debt 550,000$ -$ -$ $ - $ 550,000

Accounts payable and

accrued expenses 2,257,294 45,090 179,331 (44,686) 2,437,029

Deferred revenue 6,796 - 91,336 - 98,132

2,814,090 45,090 270,667 (44,686) 3,085,161

Long-term debt 19,040,268 - - - 19,040,268

Net assets:

Unrestricted 12,173,529 (15,597) 436,610 (250,000) 12,344,542

$ 34,027,887 $ 29,493 $ 707,277 $ (294,686) $ 34,469,971

2015

School LLC Corp Eliminations

Consolidated

Totals

$ 2,199,582

699,712

269,451

3,168,745

$ 51,937

-

20

51,957

$ 435,816

112,823

18,496

567,135

175,000$

(219,686)

-

(44,686)

2,862,335$

592,849

287,967

3,743,151

20,415,223 - 24,006 - 20,439,229

2,216,520 - - - 2,216,520

5,057,758 - - (250,000) 4,807,758

994,795 - - - 994,795

$ 31,853,041 $ 51,957 $ 591,141 (294,686)$ 32,201,453$

$ 515,000 $ - $ - -$ 515,000$

2,944,598

13,026

3,472,624

49,260

-

49,260

121,198

122,506

243,704

(44,686)

-

(44,686)

3,070,370

135,532

3,720,902

19,568,966 - - - 19,568,966

8,811,451 2,697 347,437 (250,000) 8,911,585

$ 31,853,041 $ 51,957 $ 591,141 (294,686)$ 32,201,453$

11



Consolidating Statement of Activities

For the years ended June 30, 2016

Consolidated

School LLC Corp Eliminations Totals

Support and revenue:

Enrollment fees:

Revenue - resident

student enrollment $ 24,073,775 $ - $ - -$ 24,073,775$

Revenue - students

with disabilities 886,135 - - - 886,135

Revenue - additional

state aid 438,855 - - - 438,855

Federal grants 2,111,228 - - - 2,111,228

State grants 39,260 - - - 39,260

Food service and vending 145,520 - - - 145,520

Investment income 85,876 6 7,853 - 93,735

Other income 214,149 1,677 1,510,547 (13,139) 1,713,234

Total support and revenue 27,994,798 1,683 1,518,400 (13,139) 29,501,742

Expenses:

Program expenses:

Regular education 15,840,709 - - (13,139) 15,827,570

Special education 1,554,962 - - - 1,554,962

Other programs 3,047,280 - 1,429,227 - 4,476,507

Total program expenses 20,442,951 - 1,429,227 (13,139) 21,859,039

Supporting services:

Management and general 4,189,769 19,977 - - 4,209,746

Total expenses 24,632,720 19,977 1,429,227 (13,139) 26,068,785

Change in net assets 3,362,078 (18,294) 89,173 - 3,432,957

Net assets - beginning 8,811,451 2,697 347,437 (250,000) 8,911,585

Net assets - ending $ 12,173,529 $ (15,597) $ 436,610 (250,000)$ 12,344,542$

2015

School LLC Corp Eliminations

Consolidated

Totals

$ 22,826,914 $ - $ - -$ 22,826,914$

738,615 - - - 738,615

-

1,873,092

39,463

163,653

63,064

283,217

25,988,018

-

-

-

-

141

479,976

480,117

-

-

-

-

1,721

1,254,819

1,256,540

-

-

-

-

-

(464,998)

(464,998)

-

1,873,092

39,463

163,653

64,926

1,553,014

27,259,677

16,213,777

1,612,449

4,551,489

22,377,715

53,385

17,083

41,105

111,573

-

-

1,185,998

1,185,998

(464,998)

-

-

(464,998)

15,802,164

1,629,532

5,778,592

23,210,288

3,992,280

26,369,995

391,245

502,818

-

1,185,998

-

(464,998)

4,383,525

27,593,813

(381,977) (22,701) 70,542 - (334,136)

9,193,428 25,398 276,895 (250,000) 9,245,721

8,811,451$ $ 2,697 $ 347,437 $ (250,000) 8,911,585$

12

g



Schedule of Expenditures of Federal Awards

For the year ended June 30, 2016

Federal Grantor/Pass-Through Grantor/Program Title

CFDA

Number

Grantor

Number Expenditures

U.S. Department of Education

Fund for the Improvement of Education 84.215 N/A $ 168,889

Passed through New York State Department of Education:

Title I Grants to Local Educational Agencies

Title I Grants to Local Educational Agencies

English Language Acquistion State Grants

Supporting Effective Instruction State Grant

Supporting Effective Instruction State Grant

Total New York State Department of Education

84.010

84.010

84.365

84.367

84.367

0021-15-4050

0021-16-4050

0293-16-4050

0147-15-4050

0147-16-4050

112,275

655,594

9,338

2,883

21,704

801,794

Total U.S. Department of Education 970,683

U.S. Department of Agriculture

Passed through New York State Department of Education:

Child Nutrition Cluster

School Breakfast Program

National School Lunch Program

Summer Food Service Program for Children

Total Child Nutrition Cluster

10.553

10.555

10.559

N/A

N/A

N/A

330,588

734,314

5,669

1,070,571

Passed through New York State Office of General Services:

Child Nutrition Discretionary Grants Limited Availability

Total U.S. Department of Agriculture

10.579 N/A 69,814

1,140,385

Total Expenditures of Federal Awards $ 2,111,068



Notes to Schedule of Expenditures of Federal Awards

1. Summary of Significant Accounting Policies:

Basis of Presentation

The accompanying schedule of expenditures of federal awards presents the activity of all federal award programs administered by Charter School for Applied Technologies and Affiliates (the Organization), an entity as defined in Note 1 to the Organizations consolidated financial statements. Federal awards received directly from federal agencies, as well as federal awards passed through from other governmental agencies, are included on the schedule of expenditures of federal awards.

Basis of Accounting

The amounts reported as federal expenditures generally were obtained from the appropriate federal financial reports for the applicable programs and periods. The amounts reported in these federal financial reports are prepared from records maintained for each program, which are periodically reconciled with the Organizations financial reporting system. The federal expenditures are recorded on an accrual basis.

Indirect Costs

The Organization does not use the 10% de minimus indirect cost rate permitted by the Uniform Guidance.

Non-Monetary Federal Program

The Organization is the recipient of a federal award program that does not result in cash receipts or disbursements, termed a non-monetary program. During the year ended June 30, 2016, the Organization used $69,814 worth of commodities under the Child Nutrition Discretionary Grants Limited Availability program (CFDA Number 10.579).

14

INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of Charter School for Applied Technologies & Affiliates (the Organization), which comprise the consolidated balance sheet as of June 30, 2016, and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements, and have issued our report thereon dated October 28, 2016.

Internal Control over Financial Reporting

In planning and performing our audit of the consolidated financial statements, we considered the Organizations internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organizations internal control. Accordingly, we do not express an opinion on the effectiveness of the Organizations internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Organizations consolidated financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

15

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organizations internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organizations internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

October 28, 2016

16

INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE


Report on Compliance for Each Major Federal Program

We have audited Charter School for Applied Technologies and Affiliates (the Organization) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Organizations major federal programs for the year ended June 30, 2016. The Organizations major federal programs are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs.

Managements Responsibility

Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditors Responsibility

Our responsibility is to express an opinion on compliance for each of the Organizations major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Organizations compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination on the Organizations compliance.

Opinion on Each Major Federal Program

In our opinion, the Organization complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016.

Other Matters

The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as item [2016-001]. Our opinion on each major federal program is not modified with respect to these matters.

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The Organizations response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The Organizations response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control Over Compliance

Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Organizations internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organizations internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance that we consider to be significant deficiencies as described in the accompanying schedule of findings and questioned costs as item [2016-001]. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

The Organizations response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the Organizations response and, accordingly, we express no opinion on the response.

This report is intended solely for the information and use of management, Board of Trustees, others within the entity, federal awarding agencies, and pass-through entities, and is not intended to be and should not be used by anyone other than those specified parties.

October 28, 2016

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Schedule of Findings and Questioned Costs


Section I. Summary of Auditors Results


Type of auditors report issued: Unmodified

Internal control over financial reporting: Material weakness(es) identified? No Significant deficiency(ies) identified? None reported

Noncompliance material to consolidated financial statements noted? No

Federal Awards

Internal control over major programs: Material weakness(es) identified? No Significant deficiency(ies) identified? Yes [2016-001]

Type of auditors report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in

accordance with section 2 CFR 200.516(a)? Yes [2016-001]

Identification of major programs:

Name of Federal Program or Cluster CFDA# Amount

Child Nutrition Cluster

School Breakfast Program 10.553 $ 330,588

National School Lunch Program 10.555 734,314

Summer Food Service Program for Children 10.559 5,669Total Child Nutrition Cluster $ 1,070,571

Dollar threshold used to distinguish between type A and type B programs: $750,000

Auditee qualified as low-risk auditee? Yes

Section II. Financial Statement Findings

No findings were reported.

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Schedule of Findings and Questioned Costs (continued)


Section III. Federal Award Findings and Questioned Costs

Finding 2016-001: School Breakfast Program (CFDA Number 10.553), National School Lunch Program (CFDA Number 10.555), Summer Food Service Program for Children (CFDA Number 10.559)

Criteria: An organization participating in the Child Nutrition Cluster programs is required to ensure that meals submitted for reimbursement accurately reflect meals served for eligible students (7 CFR 210.7 and 7 CFR 220.9).

Condition: From our original sample of 25 meals claimed for reimbursement from various dates, we noted on October 7, 2015, one meal was claimed where the identified student was absent from school. We selected an additional 15 students identified as absent on October 7, 2015 to determine if reimbursement claims were submitted, and noted one additional exception, resulting in 2 errors out of 20 claims tested for that day.

Approximately 1,650 students are eligible for free or reduced meals out of the total 2,000 students attending the School. Also, 190 students were absent on October 7, 2015.

Cause: Management of the School believes student identification numbers were manually keyed into the cafeteria cash register incorrectly. Consequently, the misidentified students may have been in attendance and served lunches that day which were not submitted for reimbursement, which would offset the incorrect lunches claimed.

Effect: The Schools records indicate meal reimbursement was claimed for students who are not in attendance on that date.

Recommendation: A point of sale student verification system should be implemented to ensure accurate information is maintained to support reimbursed meals.

Managements Response: The School is in the process of implementing an enhanced student identification system at the cafeteria registers which will include a photograph of the student purchasing the meal. In addition, the School will be performing an internal review of meal counts for reimbursement.

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.


Corrective Action Plan (unaudited)

June 30, 2016

Finding 2016-001:

CFDA #10.553 School Breakfast ProgramCFDA #10.555 National School Lunch ProgramCFDA #10.559 Summer Food Service Program for Children

Corrective Action:

The School is in the process of implementing an enhanced student identification system at the cafeteria registers which will include a photograph of the student purchasing the meal. In addition, the School will be performing an internal review of meal claims submitted.

Contact:

Tanya Moore, Chief Financial Officer

Anticipated Completion Date:

By June 30, 2017

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________________________________________________________________

________________________________________________________________

Disclosure of Financial Interest by a Current or Proposed Charter School

Education Corporation Trustee

Trustee Name: Robert Mikulec

Name of Charter School Education Corporation (for an unmerged school, this is the Charter School Name):


1. List all positions held on the education corporation board (e.g., president, treasurer, parent representative).

Board Chair

2. Is the trustee an employee of any school operated by the Education Corporation? ____Yes _X___No

If Yes, for each school, please provide a description of the position(s) you hold, your responsibilities, your salary and your start date.

3. Is the trustee an employee or agent of the management company or institutional partner of the charter school(s) governed by the Education Corporation?

____Yes _X___No


4. Identify each interest/transaction (and provide the requested information) that you or any of your immediate family members or any persons who live with you in your house have held or engaged in with the charter school(s) governed by the Education Corporation during the time you have served on the board, and in the six-month period prior to such service. If there has been no such financial interest or transaction, write None. Please note that if you answered Yes to Questions 2-4 above, you need not disclose again your employment status, salary, etc.

Date(s) Nature of Financial Interest/Transaction

Steps taken to avoid a conflict of interest,

(e.g., did not vote, did not participate in

discussion)

Name of person holding interest or

engaging in transaction and relationship to

yourself

________ ________________________________________________________

NONE

5. Identify each individual, business, corporation, union association, firm, partnership, committee proprietorship, franchise holding company, joint stock company, business or real estate trust, non-profit organization, or other organization or group of people doing business with the school(s) governed by the Education Corporation and in which such entity, during the time of your tenure as a trustee, you and/or your immediate family member(s) or person(s) living in your house had a financial interest or other relationship. If you are a member, director, officer or employee of an organization formally partnered with the school(s) that is/are doing business with the school(s) through a management or services agreement, please identify only the name of the organization, your position in the organization, and the relationship between such organization and the school(s). If there was no financial interest, write None.

Organization conducting

business with the school(s)

Nature of business

conducted

Approximate value of the

business conducted

Name of Trustee and/or immediate family member of household holding an

interest in the organization conducting business with

the school(s) and the nature of the interest

Steps Taken to Avoid

Conflict of Interest

NONE

Completed by: Tanya Moore, CFO 7/29/16

Signature Date

Please note that this document is considered a public record and as such, may be made available to members of the public upon request under the Freedom of Information Law. Personal contact information provided below will be redacted.

Business Telephone: ____________________________________________________

Business Address: _____________________________________________________

E-mail Address: ________________________________________________________

Home Telephone: ___ ________________________________________

Home Address: ___________________________________________________

________________________________________________________________

________________________________________________________________



Trustee Name: John Cinquino




Treasurer




____Yes _X___No






discussion)



yourself

________ ________________________________________________________

NONE




Nature of business

conducted


business conducted






NONE


Signature Date


Business Telephone: __

Business Address: ____

E-mail Address: _______

Home Telephone: _______________________________________________________

Home Address: ___________________________________________________

________________________________________________________________

________________________________________________________________



Trustee Name: Karen Kelley




Trustee / Member




____Yes _X___No






discussion)



yourself

________ ________________________________________________________

NONE




Nature of business

conducted


business conducted






NONE


Signature Date



Business Address: ___

E-mail Address: ______

Home Telephone: _______________________________________________________

Home Address: ___________________________________________________

________________________________________________________________

________________________________________________________________



Trustee Name: Joseph Berti




Trustee / Member




____Yes _X___No






discussion)



yourself

________ ________________________________________________________

NONE




Nature of business

conducted


business conducted






NONE


Signature Date




E-mail Address: _______________________________________________________

Home Telephone: _______________________________________________________

Home Address: ___________________________________________________

________________________________________________________________

________________________________________________________________



Trustee Name: Eaton Lattman




Trustee / Member




____Yes _X___No






discussion)



yourself

________ ________________________________________________________

NONE




Nature of business

conducted


business conducted






NONE


Signature Date




E-mail Address: _______

Home Telephone: _______________________________________________________

Home Address: ___________________________________________________

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