Audit

1701 North Congress Ave. • Austin,Texas 78701-1494 • 512463-9734 • 512 463-9838 FAX • www.tea.state.tx.us

IMPORTANT:FINAL AUDIT

FINDINGS

CERTIFIED MAIL & EMAIL015-824

2010-2011February 11, 2011

Dr. Richard Clifford, SuperintendentSan Antonio Preparatory AcademyP.O. Box 29690San Antonio, Texas 78229

Subject: Preliminary Investigative ReportComplaint number 201 0-06-1 03

Dear Dr. Clifford:

Enclosed is the final investigative report from Rita Chase, Director of Financial Audits, detailing thefindings and required actions resulting from an on-site investigation of the San Antonio PreparatoryAcademy (SAPA).

The report contains the auditors' findings and the auditors' analysis of the board of managers' responseon behalf of the charter school to the original findings. This report is being issued as a final report inwhich the charter school's response is incorporated as an attachment. The responses from Roi Garciaand Raul Garcia also are addressed in the report.

Should you have any questions, please contact Mike Richmond in the Division of Financial Audits at(512)463-9095.

Sincerely,

Laura TaylorAssociate CommissionerDepartment of Accreditation

LT:rc

Enclosures

cc: SAPA Charter Holder Board MembersSAPA Board of ManagersTravis County District AttorneyOffice of Inspector General, United States Department of EducationRaul GarciaRoi Garcia

M E M O R A N D U M

TO: Laura Taylor, Associate Commissioner for Accreditation

&£-»FROM: Rita Chase, Director of Financial Audits

DATE: February 11,2011

SUBJECT: Special Investigation of San Antonio Preparatory Academy #015-824Complaint number 2010-06-103

On September 20-24, 2010, and October 11-14, 2010, Texas Education Agency (TEA, theagency) auditors from the Division of Financial Audits conducted an on-site investigation of theSan Antonio Preparatory Academy (SAPA) (the charter school) in response to a complaint filedwith the TEA as well as reports from the TEA-appointed superintendent.

Because of the seriousness of the violations described in this report, the TEA has determinedthat it is important to issue its findings to date in this report. However, the TEA may makeadditional findings based on field work that already has been completed. Any additional findingswill be issued in a separate report. The exhibits in this report contain illustrations of investigativefindings and are not all-inclusive.

The auditors reviewed financial records and conducted interviews with the charter schooladministrators and staff, including the superintendent currently assigned by the TEA to thecharter school.

This report supersedes the prior report dated January 21, 2011, and reflects the TEA auditors'analysis of the charter school's, Roi Garcia's and Raul Garcia's responses to the original report.

Through verbal inquiry and examination of charter school records, the auditors discovered thefollowing:

Background: In 2001, Sendero Academy applied for and was granted a contract for charter tooperate a charter school in Texas. Raul Garcia was the founder and chairman of the governingboard of the charter holder. In 2002, the charter school requested a charter amendment topostpone opening the charter school until 2003. In 2003, the San Antonio Preparatory Academybegan operations at 8308 Fredericksburg Road. At the time of opening, the San AntonioPreparatory Academy charter school operated one campus, also referenced as the San AntonioPreparatory Academy. Raul Garcia's son, Roi Garcia, was hired as the superintendent of thecharter school.

The charter school initially leased its campus facility from Pathway Educational Ministry, Inc.(Pathway Educational Ministry), and this lease continues to the present day. Roi Garcia appearsto control Pathway Educational Ministry because Mr. Garcia deposits his personal paychecksand personal reimbursements into a bank account owned by this entity. The charter schoolcampus shares the space with Baruch Hashem Messianic Congregation and several otherchurches. Roi Garcia serves as the senior rabbi of the Baruch Hashem MessianicCongregation.

Laura TaylorFebruary 11, 2011Page 2 of 13

As referenced above, Raul Garcia is the founder of the San Antonio Preparatory Academycharter school and has served as the charter holder board chairman and as the OperationsManager during much or all of its period of operation. Because it is unclear to TEA in whatposition(s) Raul Garcia served during the time period examined in this report, he will bepresented as the founder of the charter holder. During the first five years of the charter school'soperations, Raul Garcia was serving the charter school and, at the same time, operating hisown private school, the Sendero Christian Academy. In 2008, the Sendero Christian Academyceased operations, and the location became a second campus of the charter school, referencedas the Sendero Academy. The Sendero Academy campus is located at 5408 Daughtry Lane.This location of the former private school is also the location of the Sendero Church, for whichRaul Garcia serves as the founder and senior pastor. The charter school leased the space forthe Sendero Academy campus from the Sendero Church.

In September 2009, governance concerns arose at the charter holder level when Roi Garciaenacted his own board of directors to serve as the governing body of the charter holder. Whenit was learned by Raul Garcia that there was another board operating as a governing body, hereasserted the authority of his board as the governing body. It was later determined that theboard appointed by Roi Garcia was not the official board, and the actions taken by the boardwere reversed by action of the original governing board (see Exhibit 1).

In August 2010, a TEA-appointed board of managers and superintendent were assigned tooperate and govern the charter school.

The following findings contained in this report are a sampling of the charter holder board'sfailure to properly exercise its fiduciary responsibility over the charter school's assets and thepublic funds expended by the charter school.

Concern: The charter holder may be in violation of Internal Revenue Code §501(c)(3),which states that the organization must not be organized or operated for the benefit ofthe private interests of an individual, such as the creator or members of the creator'sfamily (see Appendix A). In addition, the charter school had a material weakness ininternal control that may have allowed its officers and employees to violate Texas PenalCode (TPC) §39.02, Abuse of Official Capacity (see Appendix B), and §32.45,Misapplication of Fiduciary Property (see Appendix C). The charter school also may havealso allowed its employees and officers to violate TPC §37.10, Tampering withGovernmental Record (see Appendix D).

Findings: The following was discovered through review of the charter school's financialdocuments and interviews with charter school personnel:

i. There were specific instances in which the former superintendent (Roi Garcia)deposited vendor checks paid for with school funds into the PathwayEducational Ministry's bank account (see Exhibit 2). The Pathway EducationalMinistry's bank account appears to be owned and operated by Roi Garcia. Thisaccount appears to have been used as a personal bank account by Roi Garcia;he deposited his personal paychecks, payroll advances and reimbursementsdirectly into this account. Below is a list of checks that were written to vendorsof the charter school but that were actually deposited into a separate accountcontrolled by the former superintendent (Roi Garcia).

Laura TaylorFebruary 11,2011Page 3 of 13

CheckNumber

11774

114101142511475386541533956393843283652

4363424141414353

Date

11/20/09

8/28/098/31/098/31/0911/15/042/15/0410/24/0412/15/044/1/059/15/04

4/7/053/11/053/11/054/8/05

Amount

$6,837.38

$335.00$2,150.00$895.00$690.00$645.00$667.50

$4,622.43$1,754.00$305.50

$1,102.23$2,756.41$7,371.00$1,490.11

Vendor

Rhino SportsHeave Ho CraneCompanyUniversal CleaningUniversal CleaningJorge GarciaJorge GarciaJorge GarciaJorge GarciaHumbert EscamillaEdgar IbarraSan Antonio WaterSystemCPS EnergyCPS EnergyCPS Energy

ii. TEA obtained a signed statement from an individual, who previously workedas a contractor, stating that the former superintendent (Roi Garcia) requiredthe return of at least four of his paychecks because they were writtenincorrectly or were for excess money. He also stated that he never receivedpayment for the time worked for which the returned checks were originallyissued. Upon review of the checks, it was discovered that the checks weredeposited into the Pathway Educational Ministry's bank account, which isowned and operated by Roi Garcia and is used as his personal bank account.

iii. TEA interviewed a contractor and obtained a signed statement stating that theformer superintendent (Roi Garcia) gave the contractor a false social securitynumber to use because the contractor did not have one. Roi Garcia providedhis spouse's social security number to the contractor so the charter schoolcould set the contractor up as a vendor in its accounting system. Thecontractor also stated that he was asked to pay $35.00 for use of the number,but he never paid it. In reviewing the checks submitted to this vendor, it wasnoted that some of the checks that were addressed to this contractor werediverted into the Pathway Educational Ministry's bank account, which iscontrolled by the former superintendent, Roi Garcia.

iv. Based on review of charter school financial documents, including invoices andcopies of cleared checks, and interviews with school personnel, it wasdetermined that a charter school's founder (Raul Garcia) signed andauthorized payments to a landscaper who completed landscaping jobs for aprivate school operated by the charter school board member. The checks


were made out to the landscaper but were endorsed and deposited into theprivate school's bank account. Questioned costs: $6,300 (see Exhibit 3).

v. The San Antonio Preparatory Academy campus is located at the site of theBaruch Hashem Messianic Congregation. The lease between the San AntonioPreparatory Academy and Pathway Educational Ministry indicates that thecharter school was responsible for all utilities at the San Antonio PreparatoryAcademy campus, even though the charter school was limited to using thebuilding from 6:00 a.m. to 6:00 p.m. Monday through Friday. In addition, thecharter school's insurance listed the owner of the building as additionallyinsured, even though the charter school paid for all of the insurance.Furthermore, the charter school was made responsible for the costs of allconstruction activities and building repairs for the building; even though someof the repairs and/or updates were made in support of church-orientedactivities (see Exhibit 4). Therefore, it appears that the charter school paid allof the costs associated with these transactions, even though the transactionsalso benefitted the Pathway Educational Ministry. The former superintendentRoi Garcia controls Pathway Educational Ministry, Inc.

vi. Through discussions with school administrators, it was disclosed that theschool paid for the painting of the entire interior of the Sendero Academycampus in 2009, even though the charter school leases the building from thechurch and does not have exclusive use of it.

vii. In a review of the 2008-2009 check register for the charter school, it was notedthat the school paid a total of $6,210 to the Emmanuel Worship Center fordesks and chairs (see Exhibit 5). In an interview, school personnel stated thatthe former superintendent, Roi Garcia, purchased the items at an auction. Aschool official also stated that the charter school may have received some ofthe desks but did not receive an amount that was close to the numberreferenced on the invoices. Another school official stated that the Senderocampus never received any of the desks or chairs. Auditors examined thedocuments supporting the check to the Emmanuel Worship Center anddiscovered two invoices, which described the items purchased. The twoinvoice's combined totals were 440 desks, 210 plastic chairs, 55 office chairs,22 pre-kindergarten chairs and 275 folding chairs. The invoices are from theEmmanuel Worship Center, a church for which the former superintendent isthe senior pastor.

The two invoices, which were issued around the same time, are different,leaving the impression that they were generated by different accountingsystems. The word "Emmanuel" is spelled differently on the two invoices. Italso was noted that each invoice has a different address; one address is theSan Antonio Preparatory Academy campus, and the other address belongs tothe Church on the Rock Bookstore, the old name of Emmanuel Worship Centerand the location where the church held services prior to the San AntonioPreparatory Academy location.

viii. Auditors discovered what were purported to be third party invoices which actuallywere created by an employee of the charter school and submitted for payment.


These documents were found on a computer that the former superintendent, RoiGarcia, used when he worked for the charter school. Subsequently, these checkswere deposited into a bank account operated by Roi Garcia. Auditors interviewed avendor whose name appears on these suspect invoices. The vendor denied thatthe he created these suspect invoices and noted that his name was misspelled onthe "invoices."

Another employee stated to the auditors that she was directed by Roi Garcia tocreate a duplicate third party invoice for a vendor of the charter school. Shefurther stated that she was then directed to alter a receipt for goods purchased byRoi Garcia for the church. Roi Garcia told this employee that he planned to submitthis altered receipt to the charter school for reimbursement

ix. A check was written in July 2009 for $3,000 to one of the charter school's vendors.This check was not cashed until December 2,2010 (16 months after it was written).A school official stated that he talked to the vendor, who said that he was notmissing any payments and had not recently cashed any checks from the school.The vendor sent an e-mail verifying this (see Exhibit 6). The check was purportedlyendorsed by the vendor; however, the check was never controlled by the vendorand was in Raul Garcia's possession before the check cleared the bank.

School officials state that they were told by a representative of the Region 20Education Service Center (ESC) that it was contacted by Raul Garciaapproximately six weeks before the check referenced above was cashed. It wasfurther stated that Raul Garcia specifically inquired about the status of thisparticular check but also inquired about the status of others. Other school officialstold the auditors that Raul Garcia had inquired about the status of this $3,000check before it was cashed.

x. Proper internal controls prevent employee theft by segregating duties (see SpecialSupplement to the Financial Accountability System Resource Guide - CharterSchools, §1.5, p. 14). In this instance, key charter school personnel had theauthority to authorize payment and also had the ability to take possession ofchecks that they authorized. This weakness in internal control could have allowedcertain key personnel the ability to generate and take possession of checks.

These findings indicate that Roi Garcia and Raul Garcia may have violated TPC §39.02, Abuseof Official Capacity, because they both appear to have misused property that came into theirpossession through their official capacity at the charter school, and they both appear to haveacted with the intent of obtaining a benefit The findings also indicate that Roi Garcia andRaul Garcia may have violated TPC §32.45, Misapplication of Fiduciary Property, because thecharter school holds the state funds it receives in trust for the benefit of the students (TEC§12.107(2)), and the funds were used for a purpose not authorized by TEC §45.105. Thesefindings also indicate that Roi Garcia may have violated TPC Section 37.10, Tampering withGovernmental Record, by making, presenting and using false invoices with the knowledgethat the invoices were false.

Analysis of the charter school's response:


The board of managers, on behalf of the charter school, agrees with this finding. Theresponses of Mr. Roi Garcia and Mr. Raul Garcia are addressed below.

Concern: The charter school may be in violation of Texas Education Code (TEC) §12.120,which states that a person may not serve as a member, an officer or an employee of anopen-enrollment charter school if the person has been convicted of a felony (seeAppendix E). The charter school may have also violated TPC §37.10, Tampering withGovernmental Record, by filing documents falsely stating that the charter school'sformer superintendent, Roi Garcia, had not been convicted of a felony (see Appendix D).

Findings: The charter school employed Roi Garcia as the charter school'ssuperintendent until March 2010, when Roi Garcia resigned. He stated that he wasresigning due to health issues, but his resignation occurred after an anonymous letterwas mailed to TEA and Raul Garcia, which documented that Roi Garcia was convicted offelony Bank Fraud and served time in a federal prison. Therefore, he was prohibited frombeing employed by the charter school in any capacity by TEC §12.120 (a)(1).

There were numerous years during which the charter school filed an annual governancereporting form declaring that Roi Garcia had not ever been convicted of a felony. Thisfinding indicates that the charter school made, presented, and used a government record(the Governance Reporting Form) with knowledge of its falsity. This conduct may haveviolated Texas Penal Code §37.10, Tampering with Governmental Record.



Concern: The charter holder may be in violation of Internal Revenue Code §501(c)(3)which states that "the organization must not be organized or operated for the benefit ofthe private interests such as the creator" (see Appendix A). In addition, the charterschool may have had a material weakness in internal control that allowed its employeesand officers to violate TPC39.02, Abuse of Official Capacity (see Appendix B); §32.45,Misapplication of Fiduciary Property (see Appendix C); and TPC §37.10, Tampering withGovernmental Record (see Appendix D). The charter school did not maintain adequatedocumentation to comply with requirements for the State Fiscal Stabilization Fund of theAmerican Reinvestment and Recovery Act (ARRA).

Finding: In a review of actual expenditures of ARRA funds, auditors discovered that thecharter school bought used playground equipment from the former superintendent (RoiGarcia), who purchased it in an auction from a neighboring school district for $4,110 onFebruary 5, 2010 (see Exhibit 7, total of lots 7, 10 and 15). On or about February 8, 2010,the charter school processed an "authorization voucher for vendor payment" for PlanetPlaygrounds of Texas. The voucher was for the purchase of playground equipment in theamount of $9,795. The voucher is signed by Roi Garcia.

Auditors attempted to verify the existence of Planet Playgrounds (the vendor) by callingthe number listed on the invoice, but the person who answered the phone informed theauditors that the phone number did not belong to the Planet Playgrounds. Further, the


address listed on the invoice was the same address as the personal address of an elderin the church that employs Roi Garcia as the senior rabbi, Baruch Hashem MessianicCongregation. Auditors contacted the authorized Texas dealer for a company calledPlanet Playgrounds, and this authorized dealer denied that the document in question washis invoice and noted that he does not have a San Antonio address. The invoice alsocontained the tax identification number of the charter school, not the purported vendor.Because of these discrepancies, the auditors were not able to verify the validity of thetransaction (see Exhibit 7 page 7).

The auditors then examined the payment that was purportedly issued to PlanetPlaygrounds and noted that the check had been processed without an endorsement andstamped "Credited to the Account of within named payee Lack of endorsementguaranteed."

The auditors concluded that the invoices appear to be fraudulent given that the vendordenied the existence of the invoice, the invoice contained an address that did not belongto the vendor, and the invoice contained the tax identification number of the charterschool and not the vendor. Because the equipment was purchased with federal funds,the expenditures are not allowable due to lack of documentation. See 34 C.F.R. §74.21(b)(6) and (b)(7) (Appendix F).

Given that: 1) the original equipment was purchased at an auction by Roi Garcia; 2) RoiGarcia signed the authorization for vendor payment listing invoices from a vendor thathad not done work with the school; and 3) the check written to Planet Playgrounds wasfor $9,795 rather the $4,110 purchase price, it appears that Roi Garcia may have createdfalse invoices to cause the check to be written. The fact that the check was processedwithout an endorsement indicates that an employee(s) of the Wells Fargo Bank may haveallowed this fraudulent transaction to occur through either misfeasance or malfeasance.

These findings indicate that the charter school may have allowed part of its earnings toinure to the benefit of its employees and officers. Further, the charter school may haveallowed Roi Garcia to violate TPC §39.02, Abuse of Official Capacity, because he appearsto have misused property that came into his possession through his official capacity atthe charter school, and he appears to have acted with the intent of obtaining a benefit.The findings also indicate that the charter school allowed Roi Garcia to violate TPC§32.45, Misapplication of Fiduciary Property, because the charter school holds the statefunds it receives in trust for the benefit of the students (TEC §12.107(2)), and the fundswere used for a purpose not authorized by TEC §45.105. These findings also indicate thatthe charter school may have allowed Roi Garcia to violate TPC Section 37.10, Tamperingwith Governmental Record, by making, presenting and using false invoices with theknowledge that the invoices were false.

Additional questionable expenditures include an invoice from a contractor for $5,300,which states that services provided included a playground foundation and a toilet (seeExhibit 7). However, there is no foundation for the playground and no toilet in theplayground area. An additional expenditure of $5,950 was made to the Smart Electric Co.However, the Smart Electric Co. refunded the charter school $4,950, and the charterschool has failed to reimburse the remaining $4,950 to the ARRA fund.


As a result of these findings, auditors question the use of $9,795 of funds for thepurchase of playground equipment, $5,300 for the installation of the equipment, and$4,950 for electrical work. Total questioned costs are $20,045.



Concern: The charter school may have been in violation TPC §39.02, Abuse of OfficialCapacity (see Appendix B), and §32.45, Misapplication of Fiduciary Property (seeAppendix C).

Finding: In interviews with charter school personnel, it was disclosed that, on a fewoccasions, Sendero Assembly of God Church used buses, leased by the school, forchurch functions without reimbursing the charter school. In review of charter schoolleases it was noted that the charter school leased buses from Sendero Assembly of GodChurch for three years, beginning September 1, 2009. Costs related to fuel, bus drivers'salaries, bus insurance, bus inspections, license plates, flat tires, and tire replacementswere the charter school's responsibility (see Exhibit 8). However there was nodocumentation provided to show that the church reimbursed the charter school for theuse of the buses.



Concern: The charter school was allowing the daycare located on the San AntonioPreparatory Academy campus to feed children not enrolled in the charter school from thecharter school lunch program without reimbursing the charter school for the lunches.

Finding: The Pathway Educational Ministry, which is controlled by the formersuperintendent, Roi Garcia, operated a daycare at the San Antonio Preparatory Academycampus facility starting in 2003 and ending in 2008, when the daycare was closedbecause it was operating without a license. Based on interviews with school personnel,auditors determined that, during the time that the daycare was in operation, the daycarewould accept any child in San Antonio ages 3 and 4 years old. At times, the childrenenrolled in the daycare located on the San Antonio Preparatory Academy campus hadthe option to pay the daycare for meals that were provided by the charter school, eventhough the children were not enrolled in the charter school. There was no evidenceprovided to the auditors to demonstrate that the Pathway Educational Ministryreimbursed the charter school for the cost of these meals.




Concern: The charter school has a history of failing to disclose the total compensationfor members of the governing board and their family members. This information isrequired to be disclosed on the annual governance reporting form as required by TEC§12.119(b) and 19 Texas Administrative Code (TAC) §100.101.

Finding: A review of the charter school's Annual Governance Reporting Forms revealedthat the school has failed to disclose the information required by TEC §12.119(b) and 19TAC §100.101 (see Exhibit 9). The charter school has failed to disclose contractualrelationships between the founder of the charter holder (Raul Garcia), an officer of thecharter school (Roi Garcia), and a board member.

Raul Garcia had a contractual relationship with Sendero Church where he serves as theSenior Pastor. Sendero Church leases buses to the charter school.

Roi Garcia controls the following companies who had contractual obligations with thecharter school: Gershoni Security (provides security cars parked at the SAPA campus,Pathways Educational Ministry (leases the building to the SAPA campus) andEducational Care (provided afterschool care for the SAPA campus and 15 passengervans).

Also a board member provided campus security in the morning and afternoons under thecompany name Lone Star Security.

The charter school is required by 19 TAC §100.101 to disclose all compensation,remuneration, and benefits received by board members and by officers of the charterschool. The charter school submitted governance reporting forms that failed to discloseany compensation, remuneration, or benefits received by any of the board members orcharter school officers.



Concern: Charter school employees may have been utilized to conduct personalbusiness and perform personal services for the charter school's superintendent (RoiGarcia), which may constitute a violation of TPC §39.02(a)(2) (see Appendix G).

Findings: The auditors interviewed and obtained a signed statement from a contractorwho stated that he provided personal services to the charter school's superintendent(Roi Garcia) while on school time. The personal services included services such asmowing the grass and moving exercise equipment during school hours.Analysis of the charter school's response:



Concern: The charter school may have preferentially contracted with individuals whohave relationships with the founder of the charter holder, including family members andmembers of the congregation of the church for which Raul Garcia serves as the pastor.

Findings: The charter school entered into a series of transactions with the individualswho have relationships with the founder of the charter holder where these individualsappear to have received preferential treatment.

i. The charter school employs several individuals who have relationships with thefounder of the charter holder (Raul Garcia), including: his son, Roi Garcia, as thesuperintendent, who also owns or controls Pathway Educational Ministry, Inc.,Educational Care, and Gershoni Security; a niece as the REIMS Coordinator and,at one time, the bookkeeper; his daughter as an accounting clerk; a son-in-lawas a school's vice principal (the son-in-law also serves in Raul Garcia's churchas a senior pastor); a grandson as an accounting clerk; another grandson as ateacher's aide; a sister-in-law to Roi Garcia as a teacher's aide and, at one time,a daycare employee; a brother-in-law as a contractor for the heating, ventilation,and air conditioning; an associate pastor at Raul Garcia's church as thebusiness manager; and two other church members as charter school boardmembers who also hold contracts with the school.

ii. The brother-in-law of the former superintendent (Roi Garcia) was the heatingand air conditioning repairman. He was responsible for all maintenance andrepairs on the heating, ventilation, and air conditioning system. Upon review ofthe Texas Department of Licensing and Regulation website, it appears that hewas not certified or licensed to work on the heating and cooling system.

iii. As of September 21, 2010, there were 29 family and church members that wereemployed with the charter school.

iv. These transactions violate the laws and rules applicable to charter schools asfollows:

a. The charter school's hiring practices contain a material weakness ininternal control because the charter school did not properly authorize,approve and document all changes in employment (additions andterminations), salary and wage rates, and payroll deductions. It appearsthat the positions held by people with relationships to the founder of thecharter holder did not go through the charter school's normal hiringpractice of posting the job notice, collecting applications, and selecting thebest qualified candidate through a process including interviews andreference checks, as required by the Financial Accountability SystemResource Guide, §1.5.4.7 (see Appendix H).

b. The charter holder breached its fiduciary duty to use its state funding forthe benefit of the students, TEC §12.107(2) (see to Appendix I). The charterschool failed to ensure that it obtained the most qualified candidate for thepositions held by people with relationships to the founder of the charterholder because it engaged in self-dealing by restricting its candidate pool


to members of the charter holder's and superintendent's family andchurch members.

c. The charter holder board members breached their duty to act in the bestinterests of the non-profit corporation. Texas Business Organizations Code(TBOC) §22.221 refer to Appendix J for TBOC §22.221). The corporateboard members failed to ensure that the corporation obtained the mostqualified candidate for the positions held by people with relationships tothe founder of the charter holder because they allowed the charter schoolto restrict the candidate pool to people with relationships to the founder ofthe charter holder.

d. The non-profit corporation may have allowed part of its net earnings toinure to the benefit of the founder, superintendent and his family inviolation of Internal Revenue Code §501(c)(3) (see Appendix A). Thecharter school preferentially hired several people with relationships to thefounder of the charter holder. Because the family and members were notsubject to the normal hiring process, they may be receiving compensationin excess of the fair market value of their services.



Required Actions:

1. TEA take appropriate administrative actions regarding the violations of state andfederal rules and regulations and the failure of the charter holder board to upholdtheir fiduciary responsibilities in safeguarding the assets of the school.

2. The charter school must notify appropriate law enforcement authorities of thepossible fraudulent activities which have taken place during the past severalyears.

3. The charter school must reimburse all questionable costs for which there isinsufficient evidence that the expenditures were for the benefit of the school.

4. The charter school must conduct a comprehensive review of all internal controlpolicies and procedures to make the necessary modifications to address thefindings contained in this report.


The board of managers, in its response to the report on behalf of the charter school, agreed withthe auditors' findings and provided actions undertaken by the charter school to address therequired actions contained in the report as noted below.

Laura TaylorFebruary 11, 2011Page 12 of 13

The board of managers, on behalf of the charter school, stated that a copy of the report wasfiled with the White Collar Crime Division for Bexar County on January 27, 2011, and furtherstated that it will work with TEA to repay federal program funds for which it has insufficientdocumentation to support expenditures.

The board of managers, on behalf of the charter school, responded with actions that the boardof managers and school have taken to address weaknesses in internal controls. The schoolhas canceled all credit cards, with the exception of two gas cards and a store card that are keptin a secure location in the business office. The business manager requires preauthorizationbefore he approves use of the cards. Additionally, all checks issued by the charter school nowrequire two signatures, one each from the superintendent and the president of the board ofmanagers. The board of managers also reviews all invoices at its monthly board meeting. Theboard of managers is taking a more active role in school administration by reviewing all vendorpayments, and the board has approved three budget amendments to the 2010-2011 budget.The charter school has contracted with the Texas Association of School Business Officials(TASBO) to perform a management review during spring 2011. Moreover, the board ofmanagers has reviewed all existing vendor contracts and continues to review and authorize, asappropriate, any new vendor contracts before implementation. The board of managers andsuperintendent also consult legal counsel if there are no policies or procedures currently inplace that dictate a specific course of action.

Analysis of responses from Mr. Raul Garcia and Mr. Roi Garcia:

The agency also received responses from Mr. Roi Garcia and Mr. Raul Garcia; however, theresponses do not adequately address the findings reflected in the preliminary report. Specifically,the response from Mr. Raul Garcia generally includes only short notations related to certainchecks issued by the charter school and provides no additional documentation that would supporta change to the agency's preliminary findings. One invoice dated August 3, 2006, and a buslease agreement dated August 5, 2009, which already had been reviewed by agency audit staffduring the audit, also were included, without any additional explanation provided. As a result ofMr. Garcia's failure to provide sufficient explanations and supporting materials to refute theagency's original findings, the final report reflects no changes to the agency's conclusions.

In regard to the response to the preliminary report submitted by Mr. Roi Garcia, the agency hasdetermined that the response is, at best, insufficient and, at worst, additional evidence of Mr.Garcia's improprieties. Specifically, the response includes, but is not limited to, the following:

• Three unnotarized statements attempting to explain why certain checks were deposited intothe Pathway Educational Ministry account, which, as noted in the preliminary audit report,appears to function as the personal account for Mr. Roi Garcia. The statements, by way ofexplanation, reference deposits into church accounts; however, the Pathway EducationalMinistry account is not a church account. In specific regard to the statement submitted onbehalf of Universal Cleaning of San Antonio, the agency notes that the signature on thestatement is not from a recognized individual with an ownership interest in the entity.

• Two invoices, dated August 12, 2006, and August 17, 2006, the authenticity of which isunclear. The invoices, which have corresponding checks in the amounts of $4,000 and$3,800, respectively, made out to Pathway Educational Ministry, contain nodocumentation or notation of the date received, date of payment, or source of payment.


• Notations made, presumably by Mr. Roi Garcia, on a printout of a business organizationinquiry from the Secretary of State's website for Planet Playgrounds, which states, "DBA:Planet Playgrounds of South Texas" on one line and "Playground World" on another line.In a related search by agency auditors, it was determined that no official state recordsexist for an entity named Planet Playgrounds of South Texas. It was further noted thatPlayground World has been out of existence since 2003.

• Submission of an invoice to Planet Playground (invoice #3523), not previously seen byauditors, that does not resemble in appearance or amount other Planet Playgroundinvoices reviewed by auditors and referenced in the preliminary audit report. Thisinvoice has the same invoice number as an invoice included and questioned as part ofthe agency's preliminary findings.

• Pictures, which it is assumed purport to document the existence of a toilet facilityadjacent to the playground, have been identified by school staff as pictures of abathroom that is located in the existing school building and which was in place prior tothe purported construction of a playground bathroom facility.

• Pictures, which recently were made by Mr. Roi Garcia at the site of the SenderoAcademy campus, which, it appears, purport to document the purchase of a largenumber of desks and chairs for the benefit of the school. However, as referenced onpage 4 of the audit report, one school staff member previously stated that the largenumber of desks and chairs referenced in school documents was not received by theschool, and another staff member stated that the Sendero Academy campus received nodesks or chairs.

Therefore, the agency has concluded that the response from Mr. Roi Garcia provides noadditional documentation that would support a change to the agency's preliminary findings and,in fact, raises additional questions regarding Mr. Garcia's actions. As a result of Mr. Garcia'sfailure to provide sufficient explanations and supporting materials to refute the agency's originalfindings, the final report reflects no changes to the agency's conclusions.

Inurement/Private Benefit - Charitable Organizations Page 1 of 1

Inurement/Private B*n«flt - Charitable Organizations

A section 501 (c)(3) organization must not be organized or operated (or the benefit of private interests, such as thecreator or the creator's family, shareholder) of the organization, other designated individual*, or persons controlleddirectly or indrectty by such private interests. No part of tha net earnings of a section 501(c)(3) organization may inureto the benefit of any private shareholder or individual A private shareholder or individual is a person having a personaland private interest In tha activities of tha organization.

Return to Life Cycle of a Public Charity

Page Last Reviewed or Updated: August 13, 2010

http://\vww.irs.gov/charities/charitable/article/0,,id=l23297,00.html

Appendix A, page 1 or 1

9/15/2010

PENAL CODE CHAPTER 39. ABUSE OF OFFICE Page 1 of 2

Sec. 39.02. ABUSE OF OFFICIAL CAPACITY. (a) A public servant

commits an offense if, with intent to obtain a benefit or with intent

to harm or defraud another, he intentionally or knowingly:

(1) violates a law relating to the public servant's office

or employment; or

(2) misuses government property, services, personnel, or

any other thing of value belonging to the government that has come

into the public servant's custody or possession by virtue of the

public servant's office or employment.

(b) An offense under Subsection (a)(1) is a Class A

misdemeanor.

(c) An offense under Subsection (a)(2) is:

(1) a Class C misdemeanor if the value of the use of the

thing misused is less than $20;

(2) a Class B misdemeanor if the value of the use of thething misused is $20 or more but less than $500;

(3) a Class A misdemeanor if the value of the use of thething misused is $500 or more but less than $1,500;

(4) a state jail felony if the value of the use of the

thing misused is $1,500 or more but less than $20,000;

(5) a felony of the third degree if the value of the useof the thing misused is $20,000 or more but less than $100,000;

(6) a felony of the second degree if the value of the useof the thing misused is $100,000 or more but less than $200,000; or

(7} a felony of the first degree if the value of the useof the thing misused is $200,000 or more.

(d) A discount or award given for travel, such as frequent

flyer miles, rental car or hotel discounts, or food coupons, are not

things of value belonging to the government for purposes of this

section due to the administrative difficulty and cost involved inrecapturing the discount or award for a governmental entity.

(e) If separate transactions that violate Subsection (a)(2) are

conducted pursuant to one scheme or continuing course of conduct, the

conduct may be considered as one offense and the value of the use of

the things misused in the transactions may be aggregated in

determining the classification of the offense.

(f) The value of the use of a thing of value misused under

Subsection (a)(2) may not exceed:

Appendix B, page 1 of 2

http://www.statutes.legis.state.tx.us/Docs/PE/htm/PE.39.htm 9/14/2010

PENAL CODE CHAPTER 39. ABUSE OF OFFICE Page 2 of 2

(1) the fair market value of the thing at the time of the

offense; or

(2) if the fair market value of the thing cannot be

ascertained, the cost of replacing the thing within a reasonable time

after the offense.

Acts 1973, 63rd Leg., p. 883, ch. 399, Sec. 1, eff. Jan. 1, 1974.

Amended by Acts 1983, 68th Leg., p. 3241, ch. 558, Sec. 7, eff. Sept.

1, 1983. Renumbered from Penal Code Sec. 39.01 and amended by Acts

1993, 73rd Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 82, Sec. 1, eff. September 1,

2009.

Appendix B, page 2 of 2


PENAL CODE CHAPTER 32. FRAUD Page 1 of 2

Sec. 32.45. MISAPPLICATION OF FIDUCIARY PROPERTY OR PROPERTY OF

FINANCIAL INSTITUTION. (a) For purposes of this section:

(1) "Fiduciary" includes:

(A) a trustee, guardian, administrator, executor,

conservator, and receiver;

(B) an attorney in fact or agent appointed under a

durable power of attorney as provided by Chapter XII, Texas Probate

Code;

(C) any other person acting in a fiduciary capacity,

but not a commercial bailee unless the commercial bailee is a party

in a motor fuel sales agreement with a distributor or supplier, as

those terms are defined by Section 153.001, Tax Code; and

(D) an officer, manager, employee, or agent carrying

on fiduciary functions on behalf of a fiduciary.

(2) "Misapply" means deal with property contrary to:

(A) an agreement under which the fiduciary holds the.property; or

(B) a law prescribing the custody or disposition of

the property.

(b) A person commits an offense if he intentionally, knowingly,

or recklessly misapplies property he holds as a fiduciary or property

of a financial institution in a manner that involves substantial risk

of loss to the owner of the property or to a person for whose benefit

the property is held.

(c) An offense under this section is:

(1) a Class C misdemeanor if the value of the property

misapplied is less than $20;

(2) a Class B misdemeanor if the value of the property

misapplied is $20 or more but less than $500;

(3) a Class A misdemeanor if the value of the property

misapplied is $500 or more but less than $1,500;

(4} a state jail felony if the value of the property

misapplied is $1,500 or more but less than $20,000;

(5) a felony of the third degree if the value of the

property misapplied is $20,000 or more but less than $100,000;

(6) a felony of the second degree if the value of the

property misapplied is $100,000 or more but less than $200,000; or

(7) a felony of the first degree if the value of the

Appendix C, page 1 of 2


PENAL CODE CHAPTER 32. FRAUD Page 2 of 2

property misapplied is $200,000 or more.

(d) An offense described for purposes of punishment by

Subsections (c)(l)-(6) is increased to the next higher category of

offense if it is shown on the trial of the offense that the offense

was committed against an elderly individual as defined by Section

22.04.

(e) With the consent of the appropriate local county or

district attorney, the attorney general has concurrent jurisdiction

with that consenting local prosecutor to prosecute an offense under

this section that involves the state Medicaid program.


Amended by Acts 1991, 72nd Leg., ch. 565, Sec. 2, eff. Sept. 1, 1991;

Acts 1993, 73rd Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994; Acts

1997, 75th Leg., ch. 1036, Sec. 14, eff. Sept. 1, 1997; Acts 2001,

77th Leg., ch. 1047, Sec. 1, eff. Sept. 1, 2001; Acts 2003, 78th

Leg., ch. 198, Sec. 2.137, eff. Sept. 1, 2003; Acts 2003, 78th Leg.,

ch. 257, Sec. 14, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 432,

Sec. 3, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch. 728, Sec. 23.001(77), eff. September

1, 2005.

Appendix C. page 2 of 2


PENAL CODE CHAPTER 37. PERJURY AND OTHER FALSIFICATION Page 1 of 4

Sec. 37.10. TAMPERING WITH GOVERNMENTAL RECORD. (a) A person

commits an offense if he:

(1) knowingly makes a false entry in, or false alteration

of, a governmental record;

(2) makes, presents, or uses any record, document, or

thing with knowledge of its falsity and with intent that it be taken

as a genuine governmental record;

(3) intentionally destroys, conceals, removes, or

otherwise impairs the verity, legibility, or availability of a

governmental record;

(4) possesses, sells, or offers to sell a governmental

record or a blank governmental record form with intent that it be

used unlawfully;

(5) makes, presents, or uses a governmental record with

knowledge of its falsity; or

(6) possesses, sells, or offers to sell a governmental

record or a blank governmental record form with knowledge that it was

obtained unlawfully.

(b) It is an exception to the application of Subsection (a)(3)

that the governmental record is destroyed pursuant to legal

authorization or transferred under Section 441.204, Government Code.

With regard to the destruction of a local government record, legalauthorization includes compliance with the provisions of Subtitle C,

Title 6, Local Government Code.

(c)(l) Except as provided by Subdivisions (2), (3), and (4) and

by Subsection (d), an offense under this section is a Class A

misdemeanor unless the actor's intent is to defraud or harm another,

in which event the offense is a state jail felony.

(2) An offense under this section is a felony of the third

degree if it is shown on the trial of the offense that the

governmental record was:

(A) a public school record, report, or assessment

instrument required under Chapter 39, Education £ode, or was a

license, certificate, permit, seal, title, letter of patent, or

similar document issued by government, by another state, or by the

United States, unless the actor's intent is to defraud or harm

another, in which event the offense is a felony of the second degree;

(B) a written report of a medical, chemical,

Appendix D, page 1 of 4



toxicological, ballistic, or other expert examination

or test performed on physical evidence for the purpose of determining

the connection or relevance of the evidence to a criminal action; or

(C) a written report of the certification,

inspection, or maintenance record of an instrument, apparatus,

implement, machine, or other similar device used in the course of an

examination or test performed on physical evidence for the purpose of

determining the connection or relevance of the evidence to a criminal

action.

(3} An offense under this section is a Class C misdemeanor

if it is shown on the trial of the offense that the governmental

record is a governmental record that is required for enrollment of a

student in a school district and was used by the actor to establish

the residency of the student.

(4) An offense under this section is a Class B misdemeanor

if it is shown on the trial of the offense that the governmental

record is a written appraisal filed with an appraisal review board

under Section 41.43(a-l), Tax Code, that was performed by a person

who had a contingency interest in the outcome of the appraisal review

board hearing.

(d) An offense under this section, if it is shown on the trial

of the offense that the governmental record is described by Section

37.01(2) (D), is:

(1) a Class B misdemeanor if the offense is committed

under Subsection (a)(2) or Subsection (a)(5) and the defendant is

convicted of presenting or using the record;

(2) a felony of the third degree if the offense is

committed under:

(A) Subsection (a)(l), (3), (4), or (6); or

(B) Subsection (a)(2) or (5) and the defendant is

convicted of making the record; and

(3) a felony of the second degree, notwithstanding

Subdivisions (1) and (2), if the actor's intent in committing the

offense was to defraud or harm another.

(e) It is an affirmative defense to prosecution for possession

under Subsection (a)(6) that the possession occurred in the actual

discharge of official duties as a public servant.

(f) It is a defense to prosecution under Subsection (a) (1), (a)

Appendix 0, page 2 of 4



(2), or (a)(5) that the false entry or false information could

have no effect on the government's purpose for requiring the

governmental record.

(g) A person is presumed to intend to defraud or harm another

if the person acts with respect to two or more of the same type of

governmental records or blank governmental record forms and if each

governmental record or blank governmental record form is a license,

certificate, permit, seal, title, or similar document issued by

government.

(h) If conduct that constitutes an offense under this section

also constitutes an offense under Section 32.48 or 37.13, the actor

may be prosecuted under any of those sections.

(i) With the consent of the appropriate local county or

district attorney, the attorney general has concurrent jurisdiction

with that consenting local prosecutor to prosecute an offense under

this section that involves the state Medicaid program.

(j) It is not a defense to prosecution under Subsection (a)(2)

that the record, document, or thing made, presented, or used displays

or contains the statement "NOT A GOVERNMENT DOCUMENT" or another

substantially similar statement intended to alert a person to the

falsity of the record, document, or thing, unless the record,

document, or thing displays the statement diagonally printed clearly

and indelibly on both the front and back of the record, document, or

thing in solid red capital letters at least one-fourth inch in

height.


Amended by Acts 1989, 71st Leg., ch. 1248, Sec. 66, eff. Sept. 1,

1989; Acts 1991, 72nd Leg., ch. 113, Sec. 4, eff. Sept. 1, 1991; Acts

1991, 72nd Leg., ch. 565, Sec. 5, eff. Sept. 1, 1991; Acts 1993, 73rd

Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994; Acts 1997, 75th Leg.,

ch. 189, Sec. 6, eff. May 21, 1997; Acts 1997, 75th Leg., ch. 823,

Sec. 4, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 659, Sec. 2,* ->

eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 718, Sec. 1, eff. Sept.

1, 1999; Acts 2001, 77th Leg., ch. 771, Sec. 3, eff. June 13, 2001;

Acts 2003, 78th Leg., ch. 198, Sec. 2.139, eff. Sept. 1, 2003; Acts

2003, 78th Leg., ch. 257, Sec. 16, eff. Sept. 1, 2003.

Amended by:




Acts 2005, 79th Leg., Ch. 1364, Sec. 1, eff. June 18, 2005.

Acts 2007, 80th Leg., R.S., Ch. 1085, Sec. 2, eff. September 1,

2007.


2009.


2009.



EDUCATION CODE CHAPTER 12. CHARTERS Page 1 of 1

Sec. 12.120. RESTRICTIONS ON SERVING AS MEMBER OF GOVERNING

BODY OF CHARTER HOLDER OR OPEN-ENROLLMENT CHARTER SCHOOL OR AS

OFFICER OR EMPLOYEE. (a) A person may not serve as a member of the

governing body of a charter holder, as a member of the governing body

of an open-enrollment charter school, or as an officer or employee of

an open-enrollment charter school if the person:

(1) has been convicted of a felony or a misdemeanor

involving moral turpitude;

(2) has been convicted of an offense listed in Section

37.007 (a);

(3) has been convicted of an offense listed in Article

62.001 (5), Code of Criminal Procedure; or

(4) has a substantial interest in a management company,

(b) For purposes of Subsection (a)(4), a person has a

substantial interest in a management company if the person:

(1) has a controlling interest in the company;

(2) owns more than 10 percent of the voting interest in

the company;

(3} owns more than $25,000 of the fair market value of the

company;

(4) has a direct or indirect participating interest by

shares, stock, or otherwise, regardless of whether voting rights are

included, in more than 10 percent of the profits, proceeds, or

capital gains of the company;

(5) is a member of the board of directors or other

governing body of the company;

(6) serves as an elected officer of the company; or

(7) is an employee of the company.

Added by Acts 1999, 76th Leg., ch. 1335, Sec. 3, eff. June 19, 1999.

Amended by Acts 2001, 77th Leg., ch. 1504, Sec. 17, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch. 100.8, Sec. 2.04, eff. September 1,

2005.

Appendix E, page 1 of 1

http://www.statutes.legis.state.tx.us/Docs/ED/htm/ED. 12.htm 12/20/2010

Office of the Secretary, Education §74.21

with ED. Annual certifications and rep-resentations shall be signed by respon-sible officials with the authority to en-sure recipients' compliance with thepertinent requirements.(Authority: 20 U.S.C. 122le-3, 3474; OMB Cir-cular A-110)

Subpart C—Post-AwardRequirements

FINANCIAL AND PROGRAM MANAGEMENT

§74.20 Purpose of financial and pro-gram management.

Sections 74.21 through 74.28 prescribestandards for financial managementsystems, methods for making pay-ments and rules for—

(a) Satisfying cost sharing andmatching requirements;

(b) Accounting for program income;(c) Approving budget revisions;(d) Making audits;(e) Determining allowability of cost;

and(f) Establishing fund availability.

(Authority: 20 U.S.C. 122le-3, 3474; OMB Cir-cular A-110)

8 74.21 Standards for financial man-agement systems.

(a) Recipients shall relate financialdata to performance data and developunit cost information whenever prac-tical.

(b) Recipients' financial managementsystems snail provide for the following:

(1) Accurate, current, and completedisclosure of the financial results ofeach federally-sponsored project in ac-cordance with the reporting require-ments established in §74.52. If the Sec-retary requires reporting on an accrualbasis from a recipient that maintainsits records on other than an accrualbasis, the recipient shall not be re-quired to establish an accrual account-ing aystem. These recipients may de-velop accrual data for its reports onthe basis of an analysis of the docu-mentation on hand.

(2) Records that identify adequatelythe source and application of funds forfederally-sponsored activities. Theserecords shall contain information per-taining to awards, authorizations, obli-gations, unobligated balances, assets,outlays, income, and interest.

(3) Effective control over and ac-countability for all funds, property,and other assets. Recipients shall ade-quately safeguard all assets and assurethey are used solely for authorized pur-poses.

(4) Comparison of outlays with budg-et amounts for each award. Wheneverappropriate, financial informationshould be related to performance andunit cost data.

(5) Written procedures to minimizethe time elapsing between the transferof funds to the recipient from the U.S.Treasury and the issuance or redemp-tion of checks, warrants or paymentsby other means for program purposesby the recipient. To the extent that theprovisions of the Cash Management Im-provement Act (CMIA) (Pub. L. 101-453)govern, payment methods of Stateagencies, instrumentalities, and fiscalagents shall be consistent with CMIATreasury-State Agreements or theCMIA default procedures codified at 31CFR Part 205—Withdrawal of Cashfrom the Treasury for Advances underFederal Grant and Other Programs.

(6) Written procedures for deter-mining the reasonableness,allocability, and allowability of costsin accordance with the provisions ofthe applicable Federal cost principlesand the terms and conditions of theaward.

(7) Accounting records including costaccounting records that are supportedby source documentation.

(c) Where the Federal Governmentguarantees or insures the repayment ofmoney borrowed by the recipient, theSecretary may require adequate bond-ing and insurance if the bonding andinsurance requirements of the recipi-ent are not deemed adequate to protectthe interest of the Federal Govern-ment.

(d) The Secretary may require ade-quate fidelity bond coverage where therecipient lacks sufficient coverage toprotect the Federal Government's in-terest.

(e) Where bonds are required underparagraphs (a) and (b) of this section,the bonds shall be obtained from com-panies holding certificates of authorityas acceptable sureties, as prescribed in

115

Appendix F, page 1 of 2

§74.22 34 CFR Subtitle A (7-1-10 Edition)

31 CFE Part 223—Surety CompaniesDoing Business with the United States.

(Approved by the Office of Management andBudget under control number 1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Cir-cular A-110)

[59 FR 34724, July 6, 1994, as amended at 60FR 6660, Feb. 3,1995]

§ 74.22 Payment.(a) Payment methods shall minimize

the time elapsing1 between the transferof funds from the United States Treas-ury and the issuance or redemption ofchecks, warrants, or payment by othermeans by the recipients. Paymentmethods of State agencies or instru-mentalities shall be consistent withTreasury-State CMIA agreements ordefault procedures codified at 31 CFRpart 205.

(b)(l) Recipients are paid in advance,provided they maintain or demonstratethe willingness to maintain—

(1) Written procedures that minimizethe time elapsing: between the transferof funds and disbursement by the re-cipient; and

(11) Financial management systemsthat meet the standards for fund con-trol and accountability as establishedin §74.21.

(2) Cash advances to a recipient orga-nization are limited to the minimumamounts needed and be timed to be inaccordance with the actual, Immediatecash requirements of the recipient or-ganization in carrying out the purposeof the approved program or project.

(3) The timing and amount of cashadvances are as close as is administra-tively feasible to the actual disburse-ments by the recipient organization fordirect program or project costs and theproportionate share of any allowableindirect costs.

(c) Whenever possible, advances areconsolidated to cover anticipated cashneeds for all awards made by the Sec-retary.

(1) Advance payment mechanisms in-clude, but are not limited to. Treasurycheck, and electronic funds transfer.

(2) Advance payment mechanisms aresubject to 31 CFR part 205.

(3) Recipients are authorized to sub-mit requests for advances and reim-

bursements at least monthly whenelectronic fund transfers are not used.

(d) Requests for Treasury check ad-vance payment shall be submitted onSF-270—Request for Advance or Reim-bursement—or other forms as may beauthorized by OMB. This form Is not tobe used when Treasury check advancepayments are made to the recipientautomatically through the use of a pre-determined payment schedule or if pre-cluded by ED instructions for elec-tronic funds transfer.

(e) Reimbursement is the preferredmethod when the requirements in para-graph (b) of this section cannot be met.The Secretary may also use this meth-od on any construction agreement, orif the major portion of the construc-tion project is accomplished throughprivate market financing or Federalloans, and the Federal assistance con-stitutes a minor portion of the project.

(1) When the reimbursement methodis used, the Secretary makes paymentwithin 30 days after receipt of the bill-ing, unless the billing is improper.

(2) Recipients are authorized to sub-mit request for reimbursement at leastmonthly when electronic funds trans-fers are not used.

(f) If a recipient cannot meet the cri-teria for advance payments and theSecretary has determined that reim-bursement Is not feasible because therecipient lacks sufficient working cap-ital, the Secretary may provide cash ona working capital advance basis. Underthis procedure, the Secretary advancescash to the recipient to cover its esti-mated disbursement needs for an ini-tial period generally geared to theawardee's disbursing cycle. Thereafter,the Secretary reimburses the recipientfor its actual cash disbursements. Theworking capital advance method ofpayment is not used for recipients un-willing or unable to provide timely ad-vances to their subreciplent to meetthe subrecipient's actual cash disburse-ments.

(g) To the extent available, recipi-ents shall disburse funds available fromrepayments to and interest earned on arevolving fund, program income, re-bates, refunds, contract settlements,audit recoveries, and interest earnedon these funds before requesting addi-tional cash payments.

116

Appendix F, page 2 of 2

TEXAS PENAL CODE 39.02

Sec. 39.02.

ABUSE OF OFFICIAL CAPACITY.

(a) A public servant commits an offense if, with intent to obtain a benefit or with intent to harm

or defraud another, he intentionally or knowingly:

(1) violates a law relating to the public servant's office or employment; or

(2) misuses government property, services, personnel, or any other thing of value belonging

to the government that has come into the public servant's custody or possession by virtue of

the public servant's office or employment.

(b) An offense under Subsection (a)(1) is a Class A misdemeanor.

(c) An offense under Subsection (a)(2) is:

(1) a Class C misdemeanor if the value of the use of the thing misused is less than $20;

(2) a Class B misdemeanor if the value of the use of the thing misused is $20 or more but

less than $500;

(3) a Class A misdemeanor if the value of the use of the thing misused is $500 or more but

less than $1,500;

(4) a state jail felony if the value of the use of the thing misused is $1,500 or more but less

than $20,000;

(5) a felony of the third degree if the value of the use of the thing misused is $20,000 or

more but less than $100,000;

(6) a felony of the second degree if the value of the use of the thing misused is $100,000 or

more but less than $200,000; or

(7) a felony of the first degree if the value of the use of the thing misused is $200,000 or

more.

(d) A discount or award given for travel, such as frequent flyer miles, rental car or hotel

discounts, or food coupons, are not things of value belonging to the government for

purposes of this section due to the administrative difficulty and cost involved in recapturing

the discount or award for a governmental entity.

(e) If separate transactions that violate Subsection (a)(2) are conducted pursuant to one

scheme or continuing course of conduct, the conduct may be considered as one offense

and the value of the use of the things misused in the transactions may be aggregated in

determining the classification of the offense.

(f) The value of the use of a thing of value misused under Subsection (a)(2) may not exceed:

(1) the fair market value of the thing at the time of the offense; or

(2) if the fair market value of the thing cannot be ascertained, the cost of replacing the thing

within a reasonable time after the offense.

Appendix G, page 1 of 2

TEXAS PENAL CODE 39.02

Acts 1973, 63rd Leg., p. 883, ch. 399, Sec. 1, eff. Jan. 1, 1974. Amended by Acts 1983, 68th

Leg., p. 3241, ch. 558, Sec. 7, eff. Sept. 1, 1983. Renumbered from Penal Code Sec. 39.01 and

amended by Acts 1993, 73rd Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994.

Amended by: Acts 2009, 81st Leg., R.S., Ch. 82, Sec. 1, eff. September 1, 2009.

Appendix G. page 2 of 2

Financial Accounting and Reporting • 555

93. Requiring grantees to evidence correction of previously detected deficiencies beforeapproval of an extension or renewal of a grant

94. Entitlement procedures ensuring that statistics or data used to allocate funds areaccurately accumulated (for example, census bureau forms)

95. Requiring statements of recipient compliance with entitlement conditions (for example,statement of assurances) to be filed and having a responsible official review them

96. Review of audited financial statements or other compliance requirements of entitlementrecipients on a timely basis and investigation of unusual items

1.5.4.7 Employee Compensation

Segregation of Duties

1. Segregation of responsibilities for supervision and time-keeping functions frompersonnel, payroll processing, disbursement and general ledger functions

2. Segregation of responsibilities for the payroll processing function from the generalledger function

3. Supervision of payroll distribution by employees:

- Who are not responsible for hiring or firing employees

Who do not approve time reports

Who take no part in payroll preparation

4. Segregation of responsibilities for initiating payments under employee benefit plansfrom accounting and general ledger functions

5. Reconciliation of the payroll bank account regularly by employees independent of allother payroll transaction processing activities

6. If EDP is used, maintaining the principle of segregation of duties in processingactivities

January 2010 Texas Education Agency - Resource GuideAppendix H. page 1 of 5

556 Financial Accounting and Reporting

Procedural Controls

Personnel

1. Properly authorizing, approving and documenting all changes in employment (additionsand terminations), salary and wage rates, and payroll deductions

8. Promptly reporting notices of additions, separations and changes in salaries, wages anddeductions to the payroll-processing function

9. Maintaining appropriate payroll records for accumulated employee benefits (vacation,pension data, etc.)

10. Interviewing terminating employees as a check on departure and as a final review ofany termination settlement by the personnel department

11. Written personnel policies

12. Establishing controls to ensure that payroll costs charged to grants are in compliancewith grant agreements

13. Payroll and personnel policies governing compensation that are in accordance with therequirements of grant agreements

14. Determining that wages are at or above the federal minimum wage

Supervision/Time-keeping

15. Review and approval of hours worked, overtime hours and other special benefits by theemployee's supervisor

16. Time-keeping and attendance records and procedures

17. Review for completeness and approval of timecards or other time reports by theemployee's supervisor

Texas Education Agency - Resource Guide January 2010Appendix H, page 2 of 5

Financial Accounting and Reporting - 557

18. Punching of timecards, if used, only by the employees to whom they are issued

19. Placing the time clock in a position where it can be observed by a supervisor

20. Procedures for authorizing, approving and recording vacations, holidays and sick leave,and approving and controlling compensatory time

Payroll Processing

21. Controls over payroll preparation

22. Approval and documentation of changes to the EDP master payroll file

23. Limiting access to the EDP master payroll file to employees who are authorized tomake changes

24. Review and approval of completed payroll registers before disbursements are made

25. Review of documents supporting employee benefit payments (such as accumulatedvacation or sick leave) before disbursements are made

26. Review for reasonableness of comparisons (reconciliations) of gross pay of current toprior-period payrolls by a knowledgeable person not otherwise involved in payrollprocessing

27. Review of the payroll (examination of authorizations for changes noted onreconciliations) by an employee not involved in its preparation

28. Balancing the distribution of dollars and hours of gross pay with payroll registers, andreview by someone independent but knowledgeable of this area

29. Including in the review a comparison to amounts appropriated and budgeted

30. Prohibiting payroll advances to officials and employees or subjecting them toappropriate review

3anuary 2010 Texas Education Agency - Resource GuideAppendix H, page 3 of 5

558 - Financial Accounting and Reporting

Disbursement

31. Keeping the signature plates and use of the payroll check signing machines undercontrol of the official whose name appears on the signature plate or an employee towhom he has delegated that responsibility

32. Maintaining a lot that reconciles the counter on the check signing machine with thenumber of checks issued in each payroll

33. Maintaining a separate, imprest-basis, payroll bank account

34. Regularly reconciling the payroll bank account

35. Comparing payroll check endorsements, on a test basis, with signatures on file bysomeone independent of the payroll department

36. If payment is made in cash, requiring signed receipts, having someone independent ofthe payroll department compare them, on a test basis, with signatures on file

37. Controlling the supply of unused payroll checks

38. Requiring employees to provide identification before being given checks or payenvelopes

39. Prohibiting employees from accepting another employee's pay

40. Returning unclaimed wages to a custodian independent of the payroll department

41. Having employees who distributed checks or pay envelopes make a report of unclaimedwages directly to the accounting department

42. Making payments of unclaimed wages at a later date only upon presentation ofappropriate evidence of employment and approval by an officer or employee who is notresponsible for payroll preparation or time reporting

43. Comparing W-2 forms to payroll records and mailing by employees not otherwiseinvolved in the payroll process

Texas Education Agency - Resource Guide January 2010Appendix H, page 4 of 5

Financial Accounting and Reporting • 559

44. Procedures for investigating returned W-2s

45. Periodic distribution of payroll checks by the internal auditors to ascertain thatemployees exist for all checks prepared

General Ledger

46. Adequate account coding procedures for classification of employee compensation andbenefit costs so that such costs are recorded in the proper general ledger account

47. Proper recording or disclosure of accrued liabilities for unpaid employee compensationand benefit costs

1.5.4.8 Information Technology

Segregation of Duties

1. Independence of the EDP department from the accounting and operating departmentsfor which it processes data

2. Appropriate segregation of duties within the data processing function for (a) systemsdevelopment (design and programming), (b) technical support (maintenance of systemssoftware) and (c) operations

3. In smaller and minicomputer installations with limited opportunities for segregation ofduties, procedures for user departments to:

Utilize batch or other input controls

- Control master file changes

Balance master files between processing cycles

4. Having the personnel policies of the EDP function include such procedures as referencechecks, security statements, rotation of duties and terminated employee securitymeasures that enhance segregation of duties and otherwise improve controls

January 2010 Texas Education Agency - Resource GuideAppendix H, page 5 of 5

EDUCATION CODE CHAPTER 12. CHARTERS Page 1 of 1

Sec. 12.107. STATUS AND USE OF FUNDS. (a) Funds received

under Section 12.106 after September 1, 2001, by a charter holder:

(1) are considered to be public funds for all purposesunder state law;

(2) are held in trust by the charter holder for the

benefit of the students of the open-enrollment charter school;

(3) may be used only for a purpose for which a school may

use local funds under Section 45.105(c); and

(4) pending their use, must be deposited into a bank, as

defined by Section 45.201, with which the charter holder has enteredinto a depository contract.

(b) A charter holder shall deliver to the agency a copy of the

depository contract between the charter holder and any bank intowhich state funds are deposited.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995.

Amended by Acts 2001, 77th Leg., ch. 1504, Sec. 7, eff. Sept. 1,

2001.

Appendix I, page 1 of 1

http://www.statutes.legis.state.tx.us/Docs/ED/htm/ED.12.htm 12/21/2010

BUSINESS ORGANIZATIONS CODE CHAPTER 22. NONPROFIT CORPORATIONS Page 1 of 49

BUSINESS ORGANIZATIONS CODE

TITLE 2. CORPORATIONS

CHAPTER 22. NONPROFIT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 22.001. DEFINITIONS. In this chapter:

(1) "Board of directors" means the group of persons vested

with the management of the affairs of the corporation, regardless of

the name used to designate the group.

(2) "Bylaws" means the rules adopted to regulate or manage

the corporation, regardless of the name used to designate the rules.

(3) "Corporation" or "domestic corporation" means a

domestic nonprofit corporation subject to this chapter.

(4) "Foreign corporation" means a foreign nonprofit

corporation.

(5) "Nonprofit corporation" means a corporation no part of

the income of which is distributable to a member, director, or

officer of the corporation.

(6) "Ordinary care" means the care that an ordinarily

prudent person in a similar position would exercise under similar

circumstances.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

Sec. 22.002. MEETINGS BY REMOTE COMMUNICATIONS

TECHNOLOGY. Subject to the provisions of this code and the

certificate of formation and bylaws of a corporation, a meeting of

the members of a corporation, the board of directors of a

corporation, or any committee designated by the board of directors of

a corporation may be held by means of a remote electronic^

communications system, including videoconferencing technology or the

Internet, only if:

(1) each person entitled to participate in the meeting

consents to the meeting being held by means of that system; and

(2) the system provides access to the meeting in a manner

Appendix J. page 1 of 2

http://www.statutes.legis.state.tx.us/Docs/BO/htm/BO.22.htm 9/15/2010

BUSINESS ORGANIZATIONS CODE CHAPTER 22. NONPROFIT CORPORATE. Page 24 of 49

consent in writing to the action.


Amended by:

Acts 2007, 80th Leg., R.S., Ch. 688, Sec. 90, eff. September 1,

2007.

Sec. 22.221. GENERAL STANDARDS FOR DIRECTORS. (a) A director

shall discharge the director's duties, including duties as a

committee member, in good faith, with ordinary care, and in a manner

the director reasonably believes to be in the best interest of the

corporation.

(b) A director is not liable to the corporation, a member, or

another person for an action taken or not taken as a director if the

director acted in compliance with this section. A person seeking to

establish liability of a director must prove that the director did

not act:

(1) in good faith;

(2) with ordinary care; and

(3) in a manner the director reasonably believed to be in

the best interest of the corporation.


Sec. 22.222. RELIGIOUS CORPORATION DIRECTOR'S GOOD FAITH

RELIANCE ON CERTAIN INFORMATION. A director of a religious

corporation, in the discharge of a duty imposed or power conferred on

the director, including a duty imposed or power conferred as a

committee member, may rely in good faith on information or on an

opinion, report, or statement, including a financial statement or

other financial data, concerning the corporation or another person

that was prepared or presented by:

(1) a religious authority; or

(2) a minister, priest, rabbi, or other person whose

position or duties in the religious organization the director

believes justify reliance and confidence and whom the director

believes to be reliable and competent in the matters presented.

Appendix J, page 2 of 2

http://www.statutes.legis.state.tx.us/Docs/BO/htm/BO.22.htm 9/15/2010

in the Rules and Regulations of the Charter School, I do not see where Charter Academycan have two school boards.

Just this last month, March 2009, f found out that a second board was formed about sevenmonths ago.

This second board was formed in secret because a second campus of same school districtnever saw any announcement to their meetings or to accept new board members. These

school meetings are supposed to be announced to the public.

I have just discovered that this school board was formed seven months ago. I found out by

mistake. The principle of the first campus told our principal of the second campus thatthey had a new board.

Once the new board found out 1 knew, they came to post a notice on the second campus

for their next meeting.

When 1 found out about their school board meeting 1 went to see what they were doing.

One of the items on their agenda was to make some revisions to the charter rules andregulations I received in May 2001, when I received the license for our Charter School. 1was told then that this were the only rules and regulations to this Charter School, and it

was not permitted for us to change the rules and regulations they have given me.

Why this school board was kept a total secret from me, the president when articles for

committees of the board, says on Page 78, Section 5-6, that the President shall be the Chief

Executive of the corporation and shall have the full authority.

With the authority given to me by the corporation that holds the Charter School license(given to me in May 2001). To remove and suspend any employee, or agent; in general to

exercise ail power usually pertaining to the office of President of a corporation.

I delcare null and void and suspend and remove the new president and board members

and declare all their board minutes null and void.

Raul C. GarciaPresident of the Corporation and Chief Executive Officer of this Charter School

Exhibit 1, page 1 of 4 „

Board Meeting MinutesSendero Preparatory Academy District

August 11,2008

Present: Raul Garcia, Carmen Lira, Rachelle DeFreest, Daniela Rendon

Proceedings: First point of business was approval of the budget. The budgetwas reviewed and approved.

The playground was oearlng completion for the beginning of school, August20*.

A complete file was to be kept for all expenses to be reimbursed when the firstcheck was to be received in September.

Signed;

Exhibit 1, page 2 of 4

San Antonio Preparatory Academy8308 Fredericksburg Road

San Antonio, TX 78229

ADMINISTRATIVE BOARD MINUTES

3uly 25, 2008

PRESENT: Mr. Roi Garcia, Superintendent and Mrs. Diana Metz,Business Manager, San Antonio Preparatory Academy and Dr.Jonathan Almirudis. Proper notice was posted on the front doors aswell as the main corridor July 2, 2008.

A meeting took place on July 25, 2008, 3:15 PM, where it wasdiscussed that the previous board members: Carmen Lira, RachelleDeFreest and Daniela Rendon were not eligible to be board membersany longer as the two campuses had merged and they are paidemployees of that facility that is under the direction of Mr. RaulGarcia.

Recommendations were discussed to appoint professional membersof integrity to replace these previous members. It was decided toappoint:

Mr. Marcus Arizola, R.N., B.S.N., Audle Murphy Veteran's HospitalMr. Richard Medina, Fire Fighter, E.M.T. Intermediate, San AntonioFire Department.Dr, Jonathan Almirudis, D,C.f Chiropractor

Minutes were taken by Mrs. Metz. The meeting was closed at 4:58PM.

Exhibitl, page 3 of 4

Board Meeting MintuesSendero Preparatory Academy District

March 31,2009

Present: Raul Garcia, Carmen Lira, Daniela Renton, Rachelle DeFreest

On Tuesday, March 3 Ist, at 9:30 a.m. the Sendero Board met with the permission of thePresident of the corporation, Raul C. Garcia, at 5408 Daughtry.

The School Board voted for the following new board members for the Seiidero AcademyDistrict:

Steve Bonnell

JoeOzuna

Joe Vaughn

They voted to dissolve the Board put together in the summer of 2008, without theknowledge and permission of the President of the Corporation and Charter School (Mr.Raul C. Garcia) who was having heart surgery at that time.

Therefore the vote is to dissolve the board and their minutes of the Board as well

Rachelle DeFreest

Daniela Rendon

Exhibit 1, page 4 of 4 -

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USE AGREEMENTBETWEEN

SENDERO ACADEMYdba SAN ANTONIO PREPARATORY ACADEMY

ANDPATHWAY EDUCATIONAL MINISTRY

THIS USE AGREEMENT, hereinafter referred to as "AGREEMENT" is made andentered into on this 1st day of August, 2009, between Sendero Academy dbp SanAntonio Preparatory Academy a Texas tax-exempt religious organizationniereinafterreferred to as "USER", AND PATHWAY EDUCATIONAL MINISTRY, a Texas tax-exempt religious organization, hereinafter referred to as "OWNER" for the use of thefacility as described in the AGREEMENT under paragraph entitled "Dedicated Space"and located at 8308 Fredericksburg Road, San Antonio, Bexar County, Texas.

SECTION IRECITALS

WHEREAS, OWNER has a facility located at 8308 Fredericksburg Road, San Antonio,Bexar County, Texas and desires to make the facility available to USER at specifiedtimes stated herein this AGREEMENT.

WHEREAS, USER desires to use facility as defined herein, and use of for educationalpurposes.

NOW THEREFORE, OWNER and USER enter into this AGREEMENT for the use ofthe facility as expressed in this AGREEMENT.

SECTION IIDUTIES OF USER

A. Use of Premises: User may use their designated space on Monday throughFriday from 6:00 AM to 6:00 PM. Any additional usage must be requested inwriting by submitting a "Building Request Form" and approved by OWNER.

B. Parking: USER shall be entitled to use the designated parking spaces on thegrounds as agreed upon.

C. Furnishings: The AGREEMENT includes the furnishings available from OWNERat the commencement of this AGREEMENT or that shall from time to time be added,modified or removed by OWNER. USER shall return all such items at the end of theAGREEMENT in a condition as good as the condition at the beginning of theAGREEMENT, except for such deterioration that might result from normal use offurnishings. USER shall be required to replace any furnishings of OWNER, whichare damaged as a result of USER'S use. Additionally, USER and OWNER agree thatfurnishings owned by USER may be utilized in the facility for mutual use of OWNERand USER. USER will supply a detailed inventory to OWNER of furnishingssupplied by USER for use in the facility. Should in the course of USER'S furnishingsand/or equipment sustain damage while in use of OWNER, the above guidelines shallbe applied in the same manner. No signs can be placed on the premises without prior

I/Exhibit 4. page"! of 4

consent of OWNER. All remodeling or modification of building must be approvedby OWNER in writing.

D. Maintenance: USER agrees to be responsible for maintenance, equipment(including air conditioning/heating) and cleaning of that portion of the facility beingused by USER. " f\"\<<tM QU K

E. Storage: USER shall be entitled to store items of personal property if Space isavailable and pre-approved by OWNER during the term of AGREEMENT.

F. Dedicated Space: If OWNER is not using that certain space, USER requests thefollowing space become designated for use only by USER. Large auditorium andsmall chapel when available.Any changes to the need for additional or less dedicated space shall have to bereviewed by and approved by OWNER.

G. Use Payments: User agrees to pay the amount of $2&QQQ-iK)..Per month ten daysbefore thefT*1 day of eachpionth during the term of this AGREEMENT. This is forusage of the 'facility as described irt Section II, Paragraph F above.H. Mechanics Liens: Neither the USER nor anyone claiming through the USER shallhave the right to file mechanics liens or any other kind of lien on the facility and thefiling of this AGREEMENT constitutes notice that such liens are invalid.

I. Conflicting Times of Facility Use: USER acknowledges that there might betimes when the use the facility as designated conflicts between USER andOWNER. USER and OWNER agree to cooperate to make the best arrangementto satisfy the use of the facility by both parties when such conflict occurs. If anagreement cannot be successfully reached, the OWNER will make the finaldecision on usage.

J. Utilities; USER shall be responsible for their own utilities. Any additional use ofthe facility will result in the following surcharges:

Additional usage will be monitored and invoiced at the above rate.

\ SECTION IIIINDEMNIFICATION AND INSURANCE

Indemnification1. OWNER agrees to defend, indemnify, and hold harmless the USER, its

officers, agents and members thereof, from any and all claims, expenses,losses, lawsuits or other liability to any third party, arising out of OWNER'Sfailure to perform any of its obligations or duties hereunder or in connectionwith the negligent performance o its duties or obligations hereunder or respectto any act or omission of any OWNER member rendering services under thisAGREEMENT.

2. USER agrees to defend, indemnify, and hold harmless the OWNER, its -officers, agents, and members thereof from any and all claims, expenses,losses, lawsuits or other liability to any third party arising out of USER'Sfailure to perform any of its obligations or duties hereunder or in connectionwith the negligent performance of its duties or obligations hereunder or with


respect to any act of omission of any USER member rendering services underthis AGREEMENT.

B. Insurance: USER, at its sole cost and expense, shall procure andmaintain such policies of comprehensive general liability insurance, professionalliability and other insurance as shall be necessary, but at a minimum of $1,000,000 toinsure USER, its associates, agents and Associates against any claim or claims fordamages arising by reason of personal injury or death occasioned directly inconnection with the provision of any services hereunder by USER, the use of USERproperty or facilities of the activities or USER, its officers, agents or associates inconnection with the performance of this AGREEMENT or otherwise. In theperformance of this requirement, USER shall provide from their insurance company aCertificate of Insurance to the OWNER naming the OWNER (Pathway EducationalMinistry) as Additional insured,

SIGNED AND AGREED TO:

PATHWAYTOUCATIONAL MINISTRY

SUPERINTENDENTSENDERO ACADEMY dba SAN ANTONIO PREPARATORY ACADEMY



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BUI To:

San Antonio PreparatoryAcademy

Ship To:

San Antonio Preparatory Academy

Emmanuel Worship Center

Invoice No.:

Customer ID:

8308 Fredricksburg RdSan Antonio, Texas 78229

Phone: 210-2754855

Invoice1239 j

Date

6/30/09

Order No. Sales Rep. FOB Ship Via Terms Tax ID ~1—I

Quantity

220

100

Item

Desks

Chairs

Description Discount

JUN 30 2009

Taxable Unit Price

$10.00

$5,00

.1

Total

2,200.00

"""suolocT

-H

Subtotal:

Tax:

$2,700.00

Shipping: $100.00

Miscellaneous:

Due: I

Wells Fargo View Check Copy Page 1 of 1


View Check Copy

eh Number Datt P«Ud Chsck Amount

07/15/09 $2,800.00 NCHKl

»»»im« "' - SAB *NTONtQ PRtMjWOmr ACAOEMV

CEHtrat' ••' ~ T J1 *"' »i""~A go •"•"•:• •f-'''

V. TX - 7833B ' ' "

: •11282 -

Account Numtjer

(Sr Equal Houalng Lender

01995 - 2010 Weil* Fargo. All rights reserved.


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i

o


San Antonio Preparatory Academy8308 Fredericksburg RoadSan Antonio, Texas 78229

Vendor

*

Purchase OrderDate

/^ JflV* A

P. 0. No.SAP281-09

Ship ToSan Antonio Preparatory Academy8308 Fredericksburg RoadSan Antonio, Texas 78229

Description Quantity Rate/ Unit Amount

ito

[ Freight

f Total


a»o&o

I

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Emmanual Center6401 Bandera Road

San Antonio, Texas 78238(210) 884-2687 Fax (210) 521-4387

San Antonio Prep Academy8308 Fredricksburg RoadSan Antonio, Texas 78229(210)593-0111

18 June 2009

220 each of Student Desks- 12.50Slightly used Poly Student Combo Sled Base Chair Desks $96.80

$2,750.00

110 each of Hertz Hard Plastic ChairSlightly used 500 Series Hard Plastic Chair $43.90

55 office chairs (donation)

22 pre-K chairs (donation)

275 Folding chairs (donation)

5.00 550.00

0

0

0

Shipping 110.00

Total Due

Terms net 10 days

$3,410.00



Wells Fargo View Check Copy Pagel ofl


View Check Copy

Chech Number

} I\ •::

i "•;•' .*•-

M; H':"i

t*.

Check Amount

$3,410.00

Account Number

•NCHH

& Equal HouKng Lander

O 19S5 - 2010 Wells Faryo. All rigtits reserved,

Exhibits, page9 of 9

https://image.wellsfargo.coni/imagemai^display.do?SAMLart=AAE3WoFDyJmYH%2F... 11/30/2010

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From: Fettpe Bores (fTpainting®hotmai>.com)To: roWara98@yahoo,eom;Date: Thu, December 16, 2010 8:08:25 AMCc:Subject: [ No Subject ]

To whom Is mayconcern, 12-16-10

I Felipe flores of F. F, Painting did not cash or deposit a check of $3,000 in the month of December 2010.

-Felipe f lores210-422-314*


Wells Fargo View Check Copy Page 1 of

Wrtls Fargo Business Online*

Vi*w Chech Copy

13,00000 •CHOICE iv cowMl*Ci*t cmeiwreioonowowf

* *V

a tquM Howiinv LvtMW- 2010 ¥W« C»Tjn. All rtBMi '

https://image. weHsfargo.com/imagcman/di5play.do ?scssionld=bb6a8c9447c38ccee551ce... 12/13/2010


Page ! of I

From: Edwin Morales ([email protected])Tot [email protected];Date: Wed, December 15, 20NM 1:09:13 PMCc;Subject: Fw: question

Mr. LaraI just got home 111:08 pmThis is the e-mail

From:Sent; Wednesday, December 01, 2010 2:n PM •--Tor Efhyln,Mgra(c5Subject: Re; question

Mr. Morales,

The two checks you have indicated* betotfhave never cleared the bank.

Thank you,Daniel

From: Edwin MojsteSSent: Wednesday, December 01, 2010 1:07 PMTo; Danie.UKO.fctaSubject; question

Good Afternoon Mr. Escorcia,Can you please let me know if this check already cleared on bankCheck f 3533 Check amount: $1,775.92 Date: 7/15/2009check #11380 check amount: $ 3,000.00 Dat«: 8/11/2009

Thank youEdwin MoralesAccounts PayableSendero Academy DBASan Antonio Prep Academy5408 Daughtry OrSan Antonio, TX, 78238Tel- (210)543-7218Fax: (210)5684366EmaH: accts,payabte@hoTrnail com

http://ua.mg4.mail yahoo.com/dc/launch?.gx:=!&.raDd="33k376atiogd8 12/16/2010


SUtut

Still outstandingStilt outstandincStill outstandingPosted to bank.Still outstanding

Ort|tn»l Ch*c*sNumber

311333733458

•!&*!$&&3778

Amount|_ 1,775.92

1,775.921,775.92

*S$i&S$$lB2,098.67

Date4/30/20096/15/20096/30/2009'J'/ifyZ$&8/31/2009

-->-->->-->

— >

Replacement ChecksNumber

12090

12703

Amount

7,103.68

2,098.67

Date

2/19/2010

8/31/2010

Four

checks

TOTAL = $ 9,202.35 TOTAl = S 9,102.35


Date Run. 04-28-2010 3:59 PMCnty Disl: 015-824Fund 256 / 0 TITLE XIV SFSFReport Type: A/A

Fnc-Obt.So-Orfl-Progu11-6000

11-630011-6390

CK-012037 02 02-05-2010 PA-002574CK-012060 02 02-05-2010 PA-002575CK-012076 02 02-12-2010 PA-002590CK-012076 02 02-12-2010 PA-002590CK-012076 02 02-12-2010 PA-002590

'11-6395.00-001-024000

•11-6395.00-002-024000GJ-BUD012 12 12-18-2009

-11 -6395.00-002-02400011-6395.XX-XXX-XXXXXX

•11-6399.00-001-024000GJ-BUD012 12 12-18-2009

M1-6399.QO-QQ1-024QQO

' 11-6399.00-002-024000GJ-BUD012 12 12-18-2009

• 11-6399.00-002-02400011-6399.XX-XXX-XXXXXX11 -63XX.XX-XXX-XXXXXX11-XXXX.XX-XXX-XXXXXX1K-XXXX.XX-XXX-XXXXXX

Detail General LedgerSan Antonto Preparatory Academy

As erf: May

YeaMo-Date

Program: FIN1400Page: 99 of 268File ID: C

Description

INSTRUCTIONE X P E N D I T U R E SSUPPLIES AND MATERIALSSUPPLIES a MATERIALS-GENCEASAR CASTILLOSMART ELECTRIC COPLANET PLAYGROUNDS OF TEXA;PLANET PLAYGROUNDS OF TEXA:PLANET PLAYGROUNDS OF TEXA:CAPITAL OUTLAY

CAPIAL OUTLAYTITLE XIV SFSFCAPIAL OUTLAY

GENERAL SUPPLIESTITLE XIV SFSFGENERAL SUPPLIES

GENERAL SUPPLIESTITLE XIV SFSFGENERAL SUPPLIES

Appropriation

-12,000.00

.00-18,000.00-18,000.00-30,000.00

.00-4,882.00-4,882.00

.00-7,324,00-7,324.00

-12,206-00-42,206.00

-112,206.00-112,206.00

Encumbrance Expenditure Balance

.00

.00

.00,00

.00

.00

,00

.00

.00

.0050.0050.00

5,300.004.950.00-1,295.004.750.003,750.00

21.045.00

.00

.00

.0021.045.00

.00

.00,00

,00.00.00.00

21,045.0022,245.0022,245.00

9,045 00*

00"

-18,00000--8,955 00

00-

-4.BB2 QfT

oo-

-7,324.00*-12,206.00-21,161,00-89,911 00-89,911 00


Auction Bids Won - By LotAuction Number: Northside LSD. (Online) (02-05-10) - 507 Richalijd Hills Dr..

San Antonio, Texas 78245

Lot*

I ""

2

i , 1|— r-i4

I 5

! 6

7

i 8

9

10

i H12

13<r M

15

' J6

i ": IS

19

20

JgnttM&EJfttfV"'~* /'' "•'• fl

' J !..,:. «»-, , 1 '^îife&,.; fa**r,-

(L) BALL RETURN (DISASSEMBLEDPLAYGROUND EUTPMENT)i I ) TOTS CHOICE (DISASSEMBLEDPLAYGROUND EQUIPMENT

IN97

97

CLOT) ASSTO- DISASSEMBLED 97PLAYGROUND EQUIPMENT t[LOT) ASSTD. DISASSEMBLEDPLAYGROUND EQUIPMENT(1) JACK'N-JILL (DISASSEMBLEDPLAYGROUND EQUIPMENT)CO JACK-N-JTLL (DISASSEMBLEDPLAYGROUND EQUIPMENT)(1) TOTS CHOICE (DISASSEMBLEDPLAYGROUND EQUIPMENTCl) JACK-N-JILL (DISASSEMBLEDPLAYGROUND EQUIPMENT)(LOT) ASSTD. DISASSEMBLEDPLAYGROUND EQUIPMENTfl) TOTS CHOICE (DISASSEMBLEDPLAY(3ROUND EQUIPMENT

97

97

97

97

97

97

97

fl) TOTS CHOICE (DISASSEMBLED 91PLAYGROUND EQUIPMENTCl) JACK-NJILL (DISASSEMBLEDPLAYGROUND EQUIPMENT)

97

( I) TOTS CHOICE (DISASSEMBLED 97PLAYGROUND EQUIPMENT(1) JACK-N-IILL (DISASSEMBLED i 91PLAYGROUND EQUIPMENT) ;( 1) JACK-N-JILL (DISASSEMBLED 97PLAYGROUND EQUIPMENT)(1) JACK-N-JILL (DISASSEMBLED 97PLAYGROUND EQUIPMENT)(LOT) ASSTD. DISASSEMBLED f 97PLAYGROUND EQUIPMENTCLOT) ASSTD. DISASSEMBLED 97PLAYGROUND EQUIPMENT(1) JACK-N-JJLL (DISASSEMBLED i 97PLAYGROUND EQUIPMENT)CLOT) ASSTD. DISASSEMBLEDPLAYGROUND EQUIPMENT

2 1 (LOT) PRE-K FURNITURE

22

-~2f~

' 24

7.5

r 97

97

( 1) ONAN GENSET Q AS GENERATOR 97

(LOT) PRE-K FURNiniRE 97

(LOT) PRE-K FURNrrUKE ; 97

(LOT) PRE-K FURNITURE 9T

Jfflp^H ^S ife-; '*: " ""SSEiiaî-.r.^:-'

Jensen, Jennifer (JcjsajXBidder #:1)Kmen, Albert CAihll72)(Bitider#;2)Bealy, William (WebeatyXBidder#:3)Lciva, Antonio (Tels tar) (Bidder fr:4)Torres, Monica (Jcls)(Bidder #: 5)

Brewer, Don (RawhideXBidder #-.6)Garcia. Roi (Rotgarcia)(Bidderff: 9)

Brewer, Don (RawhjdeX Bidder f :6)Herrera, Alben (Arhl272)CBidder»:2)Garcia, Red (Roigarcia)(Bidder #: 9)

Herrera, Albert < Arh 1 272)(Bidder*:2)Koehn. Chris (1966LemansKBtdder*;7)Herrera, Albert (Arhl272)CBidder*:1)Berliger, YoJanda (Saleml)(Bidder»;8)Garcia, Roi (Roigarcia)<Bidder#: 9)

^WHHnDgfjd

170,00

412.00

280.00

280,00

260.00

3)0.00

1,850.00

725.00

450.00

1,850.00

1,450.00

191.00

2,620-00

725-00

410.00

Koehn, Chris ( ! 966LemansXBidder 1 60.00*7) iBeaty, William (Webeary)(Bidder 485.00*: 3JJensen, Jennifer (JcjsajXBidder #: i ! ,050 001 ) . . .Luff, Lawrence (Tatshirt)(Bidder #:JOJHerrera, Albert (Arh (272XBidder#:2J_Puente, Carme! (OlW)(Bidder frJ2)

195.00

390,00

185.00

Beaty, William (WeheatyKBiddec ; 725.00#:3)

•"ftwo&e&No

No

t~l«o~

No

No

No

No

Mo

No

No

No

No

No

No

""""NtT"^

No

"~No

No

No

No

No

""NO

Oviedo, Sonia (Clm5799XBiddcr #: 98.00 \ NoH) !

K

^

^

Bakait, (bironke 280.00! No(GraceiimeXBidderW. 13) : 'Puemc.CarmehoihdXBidiler*. 1 80.00 1 Mn '12)

Lemons Page I


Page 1 of 1

U/ELUt )>4ffV> MMCYEK4* .PLRÂftATORVACADEMV• (ZH»693-0111 12075

PAY

...-PLACET PLatG#CK}SfcS OT TEXAS10919 KfiHLftC tARK." ^•.^•-''"

rcj '4^9.1.^. .. -", . Bi.AMTCHTO, ^TX .78229 •' '

Or

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j r' ri^ iPLANET PLAYGROUNDS OF TE!

PLANET PLAYGROUNDS OF TEi

PLANET PLAYGROUNDS OF TE

S^T f-'raf.jv:.;.. -:::<!,:;;,:; j.i?i!i

012076

012076

012076

20100212

20100212

20100212

jMWafolfliiNl;.?!!»'iP ')!'?!" " ' " ! 'Pt:;|*i;;ffrT" ' :*.•" ' ' •

$3,750,00

$4,750.00

$1,295.00

$9,795.00


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Planet Playgrounds of TexasSmAntooio.TX 78229Fbonct <2IO) 912 4855 F« (210) 56! 244$

InvoiceBillTo:8308 ftwteodobwg Bead$m tattoo, TX 78229

Ship3308

Bio, TX 78229Customer ID; 4291

Date

2-8-10

Quantity

Order No.. .._._

Item

PM 100027 2( ft tower, metal sSde,ra sdwy ban, ucad, pirn

Sales Rqp.C.Jonaa

De«rip(iOtt

FOB

destination Fxeigjhcincluded

Toms Tax ID

31-17441 6

Twable Unit Price

50% Non-ttMHe " "T $3,750.00

Subtotal:

Shipping;

Balance Due ; 13,750.00


F E B . ' 1 . 2 0 1 0 11 :23AM ' 3 A P A ' N 0 . 2 6 1 " " F . 4

Planet Playgrounds of Texas7*78229

Phone: (210] 9124855 Fa* pao) 5682445

Bill TO;

$308 FwKnctabwg Ro«4

2-8-10

Quantity

i

OrferNo.

8S6

Item

Ppg 100089 1

InvoiceInvoice No,: 3522

Customer ID: 4291

Sato Rep.

Clones

Description

& tower, slide, bridge

FOB StapVu T«ntu

Upon receiptdestination FreightIncluded

Discount Turtle Uric Price

50% Non-taxable S2,590.oo

31-1744166

51,295.00

Tax

Shipping:


F E B . 112010 \};1W S A P A HO, 261 " 'P. 3

Planet Playgrounds of Texas10919 HuntanParkStnAaKnto,Tx 7Q224Phone: plO) 912 4*55 Fax: [210] 566 2445

BUI To: Snip8306

San jWfljwio, 137029

Date

2-8-10

Quantityf

Order Mo.

857

Salts Rep.C Jones

Itam

20 ft tower, SUde, firepole, slide bar,monkey bars, tunnel,plus installation

InvoiceInvoice No.:

Customer IP:

3523

4291

FOB Ship "Via __ Tenns TwIDdestination Preigtic Upon rtcdpt 31-1744166

included

Dbcorot Tinbfe

Non-taxable

Unit Price Total

$4,750.'00

H750.00

Tax

Shipping:

S4.7SO.OO


BUSINESS ORGANIZATIONS INQUIRY Page 1 of

UCC 1 Business Organizations | Trademarks | Notary j Account

FIND ASSUMED NAME SEARCH

This search was performed on with the following search parameter:ENTITY NAME : Planet Playgrounds

There are no records which match your inquiry.

. Return

Help/Fees | Briefcase I Logout

instructions.* To view additional information pertaining to a particular filing select the number associated with the name.* To place an order for additional information about a filing select the radial button listed under 'Mark' that is associated with the

entity and press the 'Order1 button,

Exhibit/, page 10of 18

https://direct.sos.state.tx.us/corpjnquiry/corp_inquiry-fmd.asp 10/7/2010

BUSINESS ORGANIZATIONS INQUIRY Page 1 of

UCC I Business Organizations | Trademarks | Notary | Account | Help/Fees j Briefcase | LogoutNAME AVAILABILITY SEARCH

This search was performed on with the following search parameter:ENTITY NAME : Planet Playgrounds

There are no records which match your inquiry.

Return taOi&r

Instructions:* To view additional information pertaining to a particular filing select the number associated with the name.4 To place an order for additional information about a filing select the radial button listed under 'Mark' that is associated with the

entity and press the 'Order1 button.


https://direct.sos.state.tx.us/corp_inquiry/corpjnquiry-find.asp 10/7/2010

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Exhibit/, page 12 of 18

C&C CONSTRUCTION

Cesar Castillo

9638 WicklowSan Antonio, TX 78250

Ph# (210) 643-5671

INOVICE NUMBER 745INVOICE DATE: 1/31/10

BILLTOiSAN ANTONIO PREPARATORY ACADEMY8308 FREDERICKSBUJRG RDSAN ANTONIO, TX 78229

iPlayground Improvements

1

2.

Playground Recjreation Center Foundationi

$3,950.00

Installation of PJayground Toilet Labor/Materials ( 1,400.00_j

TOTAL:

.

$ 5,300.00


FOLDER 5

• SMART ELECTRICAL REIMBURSEMENT CHECK

• VOUCHER CHECK

• INVOICE 2-4-2010

• CHECK ROSTER


. ^ .__.

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Exhibit?, page 16 of 18

4. 2 0 ' ' 0 '.

Smart Electric15M0 Rey»4 RidgeH8lot*s>Tex« 78023Phom: 2KKB6-3108 Cell

TECL #18390

210-887-tQ75

Reûtarted ty Texai Degt. of Licensing :& Raguttiion78711

mt5

INVOICE

Date: February^2010

San Antonio Prep Academy8303 Fredericksburg RogdSan Antonio, Texas 78229

Work Description AMOUNT

Install outside security tigfrts on playground at above address and bringcower Co site. Labor 8t Materials $ 4,950.00

VOTAL | $ 4,950.00

Exhibit/, page 17 of 18

;> :4fei§u [ • l&itt trip' :

SMART ELECTRIC CO

SMART ELECTRIC CO

K 'M~'-£012026012060

si Q-lfW20100129

20100205

^. i iT;:':;-' - '1

$1,000.00$4,950.00


School Bus

Lease Agreement

August 5, 2009

Sendero Assembly of God is leasing three Thomas School Buses to Sendero

Academy. Each bus seats 72 school students.\

The upkeep and repair will be the responsibility of Sendero Assembly of God

(Leasee). The diesei fuel, bus drivers salaries, bus insurance, bus inspections,

license-plates, flat tires, and tire replacements will all be the responsibility of

Sendero Academy (Leasor).

The cost of this lease for Sendero Academy {Leasee) will be $6,875.00 per

month for 36 months.

Sendero Assembly of God RepresentativeDate: <? - / <? ~ 0*°*.^

Sendero~Ackdemy RepresentativeDate: __g~ l O~ V* "I.

Commencement Date: September 1, 2009

Termination Date: August 31, 2012Exhibits, page 1 of 1

H / N O V . 2 0 . 7 M 9 : SNOV. 13. 7009 V.57W

A P A CHARTER SCMGOLS "NO. 739 °. in'HO. 123' " *F . 2/1

Tes» Education. Agency -Reporting !Fo

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CSP-001R02


RECEIPT OF ON-SITE INVESTIGATION REPORTTexas Education AgencySchool Financial Audit*

Ttis local education agency (LEA) must complete this form by selecting only one of the two options as itsresponse to the findings as detailed In the enclosed On-site investigation Pepo/t

V^ 1. The LEA agreed with the contents of the report, including the agency's findings andrequired actions.

2. Th« LEA is in receipt of and disagrees with the contents of the report and/or the agency'srequired actions and is submitting those objections in writing. Any disagreement must beaccompanied by all LEA data and/or documentation available and necessary for theTexas Education Agency's (TEA'S) reconsideration of the preliminary findings under 19Texas Administrative Code (TAG) §97.1033(c).

Failure by the LEA to respond by the date specified below wiH be Interpreted as agreement with thereport.

Date

San Antonio Preparatory Academy 015-82-4

This Receipt of Report form and any documentation submitted by the LEA Is due to the TexasEducation Agency on or before February 7. 2011.

Return this form and supporting documentation to:

Michael RtohmowJDirector of InvestigationsTexas Education Agency1701 North Congress AvenueAustin, Texas 78701Fax:(512)463-0443

February 1st, 2011

Michael RichmondDirector of InvestigationsTexas Education Agency1701 North Congress AvenueAustin, Texas 78701

''-•'iv/^/j^Subject: Preliminary Investigative Report " "50/10,

Complaint Number: 2010-06-103

Dear Mr. Richmond:

I have reviewed the preliminary investigative report and have taken the following actions to date:

I contacted the Assistant Criminal District Attorney, Chief, White Collar Crime Division for BexarCounty, Texas on January 27th, 2011 and forwarded to her office a copy of the PreliminaryInvestigative Report.

The charter school conducted a preliminary review of all internal control policies and proceduresafter the assignment of the BOM and State Appointed Superintendent on August 2nd, 2010. As aresult of that preliminary review the following actions were taken and are on going:

A review of the Credit Card use procedures was conducted and all credit cards werecollected. The cards currently available for use are the Exxon and Shell cards which areused for fueling of the buses and the Best Buy card. All cards are kept in a securelocation in the business office. The Business Manager for the Charter authorizes use ofthe cards after request are received and upon his approval-

All checks now have to have two signatories, the Superintendent and the President ofthe Board of Managers.

The Charter continues to contract with ESC Region 20 for Budget/Payroll Services. TheCharter has expanded if s use of ESC 20 services to include working with their FederalPrograms personnel to address concerns with Federal Program operations and withChild Food Nutrition personnel to address concerns with the operations of the FederalLunch Program operation of the Charter.

The Charter contracted with Padgett Stratemann & Co. LLP to conduct the external auditfor the 2009/20104scheol year, They will also" be providing additional recommendationson internal controls regarding the daily operations of the Charter. In addition, theBOM has authorized the Superintendent to contract with TASBO to perform aManagement Review of the Charter which will be conducted during the spring of 2011.Recommendations will be implemented as to the operations of the Charter.

The BOM reviews and approves all payment of bills at it's monthly BOM meetings. In

addition the administration has recommended and the BOM has approved three budgetamendments to the 2010-2011 Charter budget.

The BOM and Superintendent have reviewed all existing vendor contracts in an effort toinsure their compliance with existing statutes. In addition, any proposed new contractsare presented to the BOM for approval prior to implementation.

The BOM and Superintendent work closely with legal counsel to advise in the absence ofDistrict policies.

The Charter will work with the TEA during the Spring of 2011 to coordinate the reimbursementof all questionable cost for which there is insufficient evidence that the expenditures were forthe benefit of the school.

Should you have any further questions please contact me.

Sincerely,

Richard J. Cliffor<State Appointed SuperintendentSendero Charter School dba San Antonio Preparatory School

1701 North Congress Ave. • Austin, Texas 78701-1494 • 512463-9734 • 512 463-9838 FAX * www.tea.state.tx.us

January 24, 2011

PRELIMINARYINVESTIGATIVE

REPORT

CERTIFIED MAIL015-824

2010-2011

Mr. Raul Garcia Mr, Raul GarciaSan Antonio Preparatory Academy 6614 Fontana PointP.O. Box 29690 San Antonio, Texas 78240San Antonio, Texas 78229

Subject: Preliminary Investigative ReportComplaint Number 2010-06-103

Dear Mr. Garcia:

Attached is a preliminary investigative report from Rita Chase, Director of Financial Audits,detailing the findings resulting from an on-site investigation of the San Antonio PreparatoryAcademy. The auditors' findings are issued initially as a preliminary report for your review andcomment under Texas Education Code §39.058(b).

Please review the report carefully and file within 10 business days from the date of this letter awritten response that addresses all findings to which you wish to respond.

Should you have any questions, please contact Mike Richmond in the Division of FinancialAudits at (512) 463-9095.

Sincerely,


LT:rc

Enclosure

Manual Gaitan Lawn Care6205 Village Point


(210)683-7870

INVOKE

Number: 101

Data: Augu*t 03, 2000

RECEIVEDFEB 0 7 ZOil

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PO Number T«nn» Cu*iom*r * Svrvfc* Rap.

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Rent for Academy

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Rent for Academy u- * o 000FELIPE FLORES HAS NOT BEEN PAID THE $I I—i-n i- ' «-^ Exhibrt3. p a g o 3 o f l 2

AND NEEDA TO GET PAID.

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( SAN ANTONIO PREPARATORY ACADEMY&*08 DAUGHTRY OR

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CK* 1340 3399.20

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SAN ANTONIO PREPARATORY ACADEMYus,

SAM ANTONIO, I* '0233

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Antonio. TX 78238

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SAN ANTONIO PREPARATORY ACADEMY5408 OAUGHTHY PR.


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ACCREDITATIONE,h,M 3 page ^^ of .2

School Bus

Lease Agreement

August 5, 2009

Sendero Assembly of God is leasing three Thomas School Buses to Sendero

Academy. Each bus seats 72 school students.•>

The upkeep and repair will be the responsibility of Sendero Assembly of God

(Leases). The diesel fuet, bus drivers salaries, bus insurance, bus inspections,

license -plates, flat tires, and tire replacements will all be the responsibility of

Sendero Academy (Leaser).

The cost of this lease for Sendero Academy (Leases) wiit be $6,875.00 per

month for 36 months.

Sendero Assembly of God RepresentativeDate: # ' '' °~<?£^L

RECEIVEDFEB07.ZOH


Commencement Date: September 1, 2009

Termination Date: August 31, 2012

Seadero Acdemy RepresentativeDate $* l O-


1701 Worth Congress Ave. • Austfn.Texas 78701-1494 • 512463-9734 • 5T2463-9838FAX -rwww.tea.state.tx.us

Robert ScottCommissioner

PRELIMINARYINVESTIGATIVE

REPORT

CERTIFIED MAIL015-824

2010-2011

Mr. Roi Garcia3134 QuakertownSan Antonio, Texas 78230



January 24, 2011

Mr. Roi GarciaSan Antonio Preparatory AcademyP.O. Box 29690San Antonio, Texas 78229

Subject: Preliminary investigative ReportComplaint Number 2010-06-103

Dear Mr, Garcia:

Attached is a preliminary investigative report from Rita Chase, Director of Financial Audits,detailing the findings resulting from an on-site investigation of the San Antonio PreparatoryAcademy. The auditors' findings are issued initially as a preliminary report for your review andcomment under Texas Education Code §39.058(b).

Please review the report carefully and file within 10 business days from the date of this letter awritten response that addresses al! findings to which you wish to respond.

Should you have any questions, please contact Mike Richmond in the Division of FinancialAudits at (512) 463-9095.

Sincerely,


LT-.rc

Enclosure

consent of OWNER. All remodeling or modification of building must be approvedby OWNER in writing.

A 1). Maintenance: USER agrees to be responsible for maintenance, equipment™ (including air conditioning/heating) and cleaning of that portion of the facility being

used by USER. -; A ' ^ ^ M QO K"E. Storage: USER shall be entitled to store items of personal property if Space is

available and pre-approvcd by OWNER during the term of AGREEMENT.K. Dedicated Space: If OWNER is not using that certain space, USER requests the

following space become designated for use only by USER, Large auditorium andsmall chapel when available.Any changes to the need for additional or less dedicated space shall have to bereviewed by and approved by OWNER,

^ G. Use Payments: User agrees to pay the amount of $28,000,00 per month (en days** before thtifr* day of each [month during the term of this AGREEMENT. This is for

usage of theTacility as described in Section II, Paragraph F above.H. Mechanics Liens: Neither the USER nor anyone claiming through the USER shallhave the right to file mechanics liens or any other kind of lien on the facility and thefiling of tliis AGREEMENT constitutes notice that such liens arc invalid.

I. Conflicting Times of Facility Use: USER acknowledges that there might betimes when the use the facility as designated conflicts between USER andOWNER. USER and OWNER agree to cooperate to make the best arrangementto satisfy the use of the facility by both parties when such conflict occurs. If anagreement cannot be successfully reached, the OWNER will make the finaldecision on usage.

A .). Utilities: USER shall be responsible for their own utilities. Any additional use ofthe facility will result in the following surcharges:

^[L-U't- -

f O Additional usage will be monitored and invoiced at the above rate.r>t>Jx'

^•>^Y\ •• /

s V\x -A SECTION III^T A- \ V\t* INDEMNIFICATION AND INSURANCE

V. J > i.U' *v. ?- . * -xX >K ,.

*sK '$ A. IndemnificationOWNER agrees to defend, indemnify, and hold harmless the \ 'SHR, itsofficers, agents and members thereof, from any and all claims, expenses,losses, lawsuits or other liability to any third party, arising out of OWNER'Sfailure to perform any of its obligations or duties hereunder or in connectionwith the negligent performance o its duties or obligations hereunder or respectto any act or omission of any OWNER member rendering services under thisAGREEMENT.USEJR agrees to defend, indemnify, and hold harmless the OWNER, itsofficers, agents, and members thereof from any and all claims, expenses,losses, lawsuits or other liability to any third party arising out of USER'Sfailure to perform any of its obligations or duties hereunder or in connectionwith the negligent performance of its duties or obligations hereunder or with


Lxhibil 4 page 2 of 4


respect to any act of omission of any USER member rendering services underthis AGREEMENT.

B- Insurance: USER, irt its sole cost and expense, shall procure andmaintain such policies of comprehensive general liability insurance, professionalliability and other insurance as shall be necessary, hut at a minimum of $1,000,000 toinsure USER, its associates, agents and Associates against any claim or claims fordamages arising by reason of personal injury or death occasioned directly inconnection with the provision of any services hereunder by USER, the use of USERproperty or facilities of the activities or USER, its officers, agents or associates inconnection with the performance of this AGREEMENT or otherwise. In theperformance of this requirement, USER shall provide from their insurance company aCertificate of Insurance to the OWNER naming the OWNER (Pathway EducationalMinistry") as Additional insured.

SIGNED AND AGREED TO:

. . *A,PATHWAT&bUCATIONAL MINISTRY '

SU PERINTENDENTSFNDERO ACADEMY dba SAN ANTONIO PREPARATORY ACADEMY

RECEIVEDFEB 07 2011

DEPARTMENT OFACCREDITATION ****>* *. page 3 of 4

RE: Energy Audii Report 2/2/11 5:00 HM

From: Swope, Richard D <[email protected]>To: Roi Garcia <[email protected]>

Subject: RE. Energy Audit ReportDate: Wed, Feb2, 2011 7:53 am

Roi,

In order to come up with a percentage assignment I have to make some assumptions about how the power isused. If I make assumption more favorable to the school, then the church would owe about 8% of the bill. If Ifavor the church then the percentage drops to about 2%. The thing is that I cannot be sure how accurate anyparticular assumption is without some actual data. I do believe that your current 20% share is too high for thechurch. I am hoping that the ePower Toolz will be available early next year so that we can have actual data toback up any allocations.

Rich SwopeCPS Energy(210)353-4824(210) 667-7774 Cell

From: Roi Garcia [mailto:[email protected]: Tuesday, February 01, 2011 5:24 PMTo: Swope, Richard DSubject: Re: Energy Audit Report

RichGreetings!In you study of the square footage and hours of usage what percentage is an equitable percentage for the school andthe church. Yes, I do want take up the EPowerToolz.

In your letter you stated.

"In looking at your facility I believe that the school will be responsible for both the majority ofthe consumption as well as setting the peak demand. Based on the hours of operation andsquare footage used by the school and the church I believe the electricity division would bemore in the range of 2% to 8% for the school depending on the assumptions used."

I dont understand the 2% and 8%. Can you explain a bit more.

Thanks

Roi Garcia

Original MessageFrom: Swope, Richard D <[email protected]>To: [email protected] <[email protected]>Sent: Tue, Feb 1, 2011 3:46 pmSubject: Energy Audit Report

http://mail.aol.com/33189-lll/aot-l/en-us/mail/PrintMessage.4spx

RECEIVEDFEB 07 20!)


Page 1 of 2

,W. 2 . 2 0 1 0 3 : ^ 9 A M S A P A W.090

1 ««J,754.00

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RECEIVEDFEB012W


To Whom It May Concern:

January 27,2011

1 submitted an invoice on electric work done at San Antonio Academy. Our terms are to paid uponwork completion. I received a check for the amount of the invoice. When the check came from theschool, I gave the church permission to deposit the check they had given me.

RECEIVEDFEB 0 1

OFACCREDITATION

Universal Cleaning of SA gave permission for the Pathway Ministries to deposit checks in UniversalCleaning name to pay advancements in funds. The school did not give advancements on paychecksand the church provided the funds for an employee that requested advancements for emergencies.In August IS, of 2010, a request was made to the district business office, Daniel Escorcia, not to useour name, registration, social security, for future transactions. Our business was to concentrateonly on domestic and not commercial cleaning.

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To Whom It May Concern:

January 27, 2011

My name is Edgar Ibarra. I worked for San Antonio Prep Academy in fall and spring of 2004. !borrowed some funds from the church. When my check came in from the school, I paid the loanwith the payroll check and gave permission for the church to deposit in the account

RECEIVEDFEB07 2011

DEPARTMENT OFACCRED/TATION

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DEPARTMfeNT OF

Pathway Educational Ministry8308 Fredricksburg RoadSan Antonio, Texas 78229

(210)593-0113 Fax 210-521-4387

Invoice # 2779

January 20, 2006

San Antonio Prep Academy8308 Fredrickburg RoadSan Antonio, Texas 78229[210)593-0111

Rent for Month of February 2006 $20, 000.00

RECEIVEDFEB07 2011


Pathway Educational Ministry8308 Fredricksburg Road

San Antonio, Texas 78229(210)593-0113 Fax 210-521-4387

Invoice # 2774

December 20, 2005

San Antonio Prep Academy8308 Fredrickburg RoadSan Antonio, Texas 78229(210)593-0111

Rent for Month of January 2006 $20, 000.00

RECEIVEDFEB 0 7 ZG1I

DEPARTMbNTOFACCREDITATION

C&C CONSTRUCTION

Cesar Castillondccon struct! on. us.9638 Wicklow

San Antonio, TX 78250Ph# (210) 643-5671

INOVICE NUMBER: 745INVOICE DATE: 1/31/10

BILL TO:SAN ANTONIO PREPARATORY ACADEMY8308 FREDERICKSBU|RG RDSAN ANTONIO, TX7S229

iPlayground Improvements

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2-r

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Playground Reqreation Center FoundationJ

Installation of P1

TOTAL:

ayground Toilet Labor/Materials

33,900.00

1,400-00 1

$ 5,300.00 |

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Merchant Rhino Sports15029 N 74th St

Scottsdale, AZ 85260

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Transaction ID:

Transaction Status:

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Card Number:

Payment Method:Amount:

Invoice:

Customer ID:

24-NOV-2009 19:04:33

Captured/Pending Settlement

VisaUSD 1.838.380005427San Antonio

BILLING INFORMATION

Roy Garcia

8308 Fredericksburg Rd


SHIPPING INFORMATIONRoy Garcia

8308 Fredericksburg RdSan Antonio, TX 78229

RECEIXFEB07 Z O . l


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15029 N 74th St

Scottsdale, AZ 85260

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Payment Method:Amount:Invoice:

Customer ID:

21-AU9-2009 10:25:19

Captured/Pending Settlement

VisaUSD 4,999.00

Garde

San Antonio

BILLING INFORMATION

Roy Garcia



SHIPPING INFORMATION

Joshua Garcia



RECEIVEDFEB 0 7 Zflll

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COST ID: "42,91.!-' : . " "SAN AHTCMIO;'TX 7B229

RECEIVED.. FEB'07 201


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DEPARTMEiv? ;;tACCREDITATiOiM

trxlnbi! 7. payc 7 of 18

FLS. ' I - i O l O M : 2 3 A a 2 * '10 261

SlOArtOrtOi IX 73229PhoM! (210} 9124055 Fas (219) SffBttS

Bill To:H JOI PtBderidshnj K»dS3B Aafiato, TX 71239

Ship'OOt P Rdcndoburi ReadSu Ac OTHJ.TX 78229

Pate

2 BIO

Quantity

OnfciNo.

Iteza

100089 14

SakjRep.

CJones

Description

ft tower, slide, bridge

InvoiceInvoice No.;

Customer ID:

FOB

destination Freightladuded

3522

4291

Tenm Tec 12

U poo receipt 31-1744166

TutblB Unit Price Tool

50% Non-taxable S2,590.oo $1,295.00'

Softool: SI ,295.00

Tax.

Shipping!

Balance LJur.

RECEIVEDFEB07 201!



S A M NO, 261 F.

Planet Playgrouads of Texas1OTW Hamtoa?arkStn Antonio, Tx7»2»Phaw: (210) 9i2 4*55 Fax [710] S682WS

Bill To;8308 FiKSxa Amaoio. T3t 7E29

Date

2-fr-lO

Quantity

I

Invoice

Soft Aatouo, TX 78229

Invoice No.;

Customer ID;

Order Nf).

8S7

3 ales Rap,

C foots

FOB

destinationifldwded

3523

4291

Tons

Upon receipt

Itam

20ftrow»r,SUcle,flrep( 10, slide bar.nnnknybaj-s; tunnel,pi as installation

Ducomt Taiibls Unit Price

50% Non-taxable 59,500.00

turn31-1744166

Total

54,750!00

H 730,00

Tax

Shipping



54,750.00

t Ktvhit 7, pagu 9 ol 18

Planet Playgrounds of Texas10919 Hamlen Park

San Antonio, TX 78229Phone 210-239-9023 Fax 210-5682445

Inv:3523

Customer ID 4291

2-10-2010

Bill To:

San Antonio Prep Academy8308 Fredricksburg Rd,San Antonio, Texas 78229 (210) 593-0111

70 bags of Rubber Mulch for Playground 8.97

labor. Pick up, place on playground

1 each Red monkey iron playset

1 each Red dome iron playset

2 each 25 x 40 Wood plank playground

1 each 18 x 28 wood plank playground

1 Installation and labor of 20 Ft tower, playground

renovation/ painting

1 Installation and labor of 20 Ft Tower playground

renovation, painting

1 installation and labor of 14ft tower, playground

renovation, painting

Price included with sale of Playground EquipmentRECEIVED

FEB07 2011

DEPARTMENT OrACCREDITATION

$627.90

200.00

300.00

150.00

350.00

150.00

750.00

450.00

750.00

450.00

750.00

450.00

$5,347.90

-0-

-o LU. t-t.Premium Rubber Mulch, Red - 713924 at The Home Depot 2/2/11 6:03 PM

r.inrc s.ivmq Mora doing: Welcome, (Sign In >-••! Registeri f-

Share -r Email t Print

Vigoro ,8 Cu. Ft.Premium Rubber Mulch,RedMndnl ff 7n'*; 4 ;5tore

* + •*•*•• 4 ;;'/5 - Kt'

$8.97/EA-Each

15) Wfito 3 fiovifswSHOPPERS WHOVIEWED THIS ITEMALSO VIEWED

S4Q2.30/Each

Description

This mulch do«s not atiract ants I! is cu;;t t?ttective ;ind environmentally triprid'y Thisproduct carries a !2 year Warranty Inis product incurs Less cost and lt!S:> Inhor incurnpanson to other mulches that are not made oi a rucye^d Rubber

Preserves ground moisture without absorptionEliminates annual mulchingEasy lo maintainInhibits growth of mold, fungi, and reducing allergen riskMFG Biand Name VigoroMF-'G Model # . 7139?4MFG Part tt 713924

S539.10/Each

Specifications

Assembled Depth (in.) 10 0 mAssembled Height (in.) 100 inAssembled Width (in.) U) 0 in0aa Caoacitv/Drv Volume feu. ft.l 'fl f t-1

S339.00/Each

E-MAIL EXCLUSIVES

, •, 4:. ,f .-!•-. (rnci It .. H.,'?,. : .;

Enter Emait Address

i oLLOW THE HOME DEPOT

AOOUT THfe HOME DEPOT STRESS FREESHOPPING

CUSTOMER SERVICE CREDIT CENTER

http;//www.homedcpol.com/h^dl/N-5yciv/R-100664068/h_d2/ProductDisplay?langld»-I&stofeld= 100514catalog(d= 10053 Page 1 of 2

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I l l IS INHSS ORGANIZATIONS INQUIRY

UCC | Husincss Organisations j Trademarks] Notary | Account) Help/Fees | Uricfca.se

N A M E AVAILABILITY SKAKCH

This search was performed on wilh the following scurch parameterENTITY NAME : Planet Playgrounds

There nre no records which match your inquiry.

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Instructions:4 To view additional information pertaining to a particular filing select the number associated with the name.* To placo an order for additional information about a filing select the radial button listed under 'Mark' that is associated with the

entity and press the 'Order' button.

RECEIVEDFEB07 2011


/. page U o t i i l

Hips ://dirtxt. sos.slate,tx.Li.s/corpiiu]uiry/corp_intjuiry-find.u.sp

10:37 AM

From: [email protected]

To: [email protected]: Request Follow up

Date: Thu, Feb3, 201110:21 am

Good Morning Mr. Garcia,

! wanted to give you an update on the progress of gathering the documents together.It is taking me a little longer than expected since some items were back dated back to 2005.Our, operations team is working on this and I am anticipating receiving them early next week.

I apologize for the delay.

Have a great day.

Joshua VasquezBusiness Banking Specialist I Wells Fargo Bank NA4351 Medical Or San Antonio TX 78229Office: (210) 856-3316 I Cell: (210) 319-0498 I Fax: (210) 614-4286

This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this forthe addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you havereceived this message in error, please advise the sender immediately by reply e-mail and delete this message. Thank you for yourcooperation.

RECEIVEDFEB 0 7

http://mall. aol.com/3il89-lll/aol-l/en-us/mail/PnntMessage.aspx Page 1 of 1

JIOV 9: 30AM 3 A P A HO,

VEUO^MNO AMCTCttk • 4363

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$-1,102 J3

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' >£B07

DEPARTMEM Of

Exhibit 2, page IS of 25

HOtO HOAM ' 3 A P A NO. 090 P. 12

Two

C.P.S,P.O. BOX 2671

78219-0001

MEMO.

$"2/75$.* 1

'**"*** DOU>pS

RECEIVEDFEB07 2011


, page 20 of 25

, NOV. ?. ? O i O 9 : 0 0 A M S A P A ). 090 f. ID

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DOLLAHS

RECEIVEDFEB 0 7 2C 1 •

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. ,W. 2.20111 HOAM SAM 3 . 0 9 0 f .

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PAY TO "me

««• •»•»•»• ***** »*••»-« *•»*•«•»DQUARS

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MEMO.


Wells Fargo View Check Copy Page 1 of

Wells Fargo Business Online4

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