Coral Springs Charter Schoolcoralscs.entest.org/pdf/2015 coral springs charter school...2 Coral Springs Charter School We believe that the audit evidence we have obtained is sufficient

Coral Springs Charter School(A Special Revenue Fund of theCity of Coral Springs, Florida)

Basic Financial Statementsand Additional InformationFor the Year Ended June 30, 2015

Coral Springs Charter School

Table of Contents

Independent Auditor’s Report 1 2

Management’s Discussion and Analysis(Not Covered by Independent Auditor’s Report) 3 6

Basic Financial Statements

Government wide Financial Statements:

Statement of Net Position 7

Statement of Activities 8

Fund Basic Financial Statements:

Balance Sheet Governmental Fund 9

Reconciliation of the Balance Sheet of the GovernmentalFund to the Statement of Net Position 10

Statement of Revenues, Expenditures and Change inFund Balance Governmental Fund 11

Reconciliation of the Statement of Revenues,Expenditures and Change in Fund Balanceof the Governmental Fund to the Statement of Activities 12

Statement of Revenues and ExpendituresBudget and Actual General Fund 13

Statement of Assets and Liabilities Agency Fund 14

Notes to Basic Financial Statements 15 23

Other Independent Auditor’s Reports

Independent Auditor’s Report on Internal Control over Financial Reporting andon Compliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards 24 25

Independent Auditor’s Report to the Board of Directors 26 27

KMCcpa.com | 6550 N Federal Hwy, 4th Floor Fort Lauderdale, FL 33308 Phone: 954.771.0896 Fax: 954.938.9353

1

INDEPENDENT AUDITOR’S REPORT

To the City of Coral Springs Charter SchoolBoard of Directors and City ManagerCoral Springs Charter SchoolCoral Springs, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each majorfund, and the aggregate remaining fund information of Coral Springs Charter School (the “School”), aSpecial Revenue Fund of the City of Coral Springs, Florida (the “City”) as of and for the year ended June30, 2015, and the related notes to the financial statements, which collectively comprise the School’sbasic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

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

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditors’ judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentationof the financial statements.

2


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, each major fund, and the aggregateremaining fund information of the School, as of June 30, 2015, and the respective changes in financialposition, and budgetary comparison for the General Fund for the year then ended in accordance withaccounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 1, the financial statements of the School present only the Special Revenue Fundand they do not purport to, and do not, present fairly the financial position of the City as of June 30,2015, and its changes in financial position or budgetary comparisons, where applicable, for the yearended June 30, 2015 in conformity with accounting principles generally accepted in the United Statesof America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that themanagement's discussion and analysis on pages 3 through 6 be presented to supplement the basicfinancial statements. Such information, although not a part of the basic financial statements, isrequired by the Governmental Accounting Standards Board, who considers it to be an essential part offinancial reporting for placing the basic financial statements in an appropriate operational, economic,or historical context. We have applied certain limited procedures to the required supplementaryinformation in accordance with auditing standards generally accepted in the United States of America,which consisted of inquiries of management about the methods of preparing the information andcomparing the information for consistency with management's responses to our inquiries, the basicfinancial statements, and other knowledge we obtained during our audit of the basic financialstatements. We do not express an opinion or provide any assurance on the information because thelimited procedures do not provide us with sufficient evidence to express an opinion or provide anyassurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 8,2015, on our consideration of the School’s internal control over financial reporting and on our tests ofits compliance with certain provisions of laws, regulations, contracts, and grant agreements and othermatters. The purpose of that report is to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of that testing, and not to provide an opinion oninternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the School’s internalcontrol over financial reporting and compliance.

KEEFE McCULLOUGH

Fort Lauderdale, FloridaDecember 8, 2015

MANAGEMENT’S DISCUSSIONAND ANALYSIS

3

Coral Springs Charter SchoolManagement’s Discussion and AnalysisJune 30, 2015

As management of Coral Springs Charter School (the “School”), a Special Revenue Fund of the Cityof Coral Springs, Florida, we offer readers of the School’s basic financial statements this narrativeoverview and analysis of the financial activities of the School for the year ended June 30, 2015 and2014.

Management’s discussion and analysis is included at the beginning of the School’s basic financialstatements to provide, in layman’s terms, the past and current position of the School’s financialcondition. This summary should not be taken as a replacement for the audit which consists of thebasic financial statements and other supplementary information.

Financial Highlights

Our basic financial statements provide these insights into the results of this year’s operations.

• The School’s net position exceeded its liabilities by $ 6,139,206 as of June30, 2015. Of this amount, $ 4,473,774 represents unrestricted netposition.

• The School’s net position increased by $ 29,524 during the current fiscalyear as a result of this year’s operations.

• As of June 30, 2015, the School’s fund balance was $ 4,525,505.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the School’s basic financialstatements. The School’s basic financial statements are comprised of three components:1) government wide basic financial statements, 2) fund basic financial statements, and 3) notes tothe basic financial statements. This report also contains other supplementary information inaddition to the basic financial statements themselves.

Government Wide Basic Financial Statements: The government wide basic financial statementsare designed to provide readers with a broad overview of the School’s finances, in a manner similarto a private sector business.

The statement of net position presents information on all of the School’s assets and liabilities, anddeferred inflows/outflows of resources, with the difference between the two reported as netposition. Over time, increases or decreases in net position may serve as a useful indicator ofwhether the financial position of the School is improving or deteriorating.

The statement of activities presents information showing how the School’s net position changedduring the year. All changes in net position are reported as soon as the underlying event giving riseto the change occurs, regardless of the timing of related cash flows. Thus, revenues and expensesare reported in this statement for some items that will only result in cash flows in future fiscalperiods (e.g. uncollected revenues and services rendered, but unpaid).

The government wide basic financial statements include all governmental activities that areprincipally supported by grants and entitlements from the state for full time equivalent funding.The School does not have any business type activities. The governmental activities of the Schoolprimarily include instruction and instructional support services.

The government wide basic financial statements can be found on pages 7 and 8 of this report.

4


Fund Basic Financial Statements: A fund is a grouping of related accounts that is used to maintaincontrol over resources that have been segregated for specific activities or objectives. The School,like other state and local governments, uses fund accounting to ensure and demonstratecompliance with finance related legal requirements.

Governmental Funds: Governmental funds are used to account for essentially the same functionsreported as governmental activities in the government wide basic financial statements. However,unlike the government wide basic financial statements, governmental fund basic financialstatements focus on near term inflows and outflows of spendable resources, as well as balances ofspendable resources available at the end of the fiscal year. Such information may be useful inevaluating the School’s near term financing requirements.

Because the focus of governmental funds is narrower than that of the government wide financialstatements, it is useful to compare the information presented for governmental funds with similarinformation presented for governmental activities in the government wide financial statements.By doing so, readers may better understand the long term impact of the School’s near termfinancing decisions. Both the governmental fund balance sheet and the governmental fundstatement of revenues, expenditures and change in fund balance provide a reconciliation tofacilitate this comparison between governmental funds and governmental activities.

The School maintains only one governmental fund type, which is the General Fund. Information ispresented in the governmental fund balance sheet and the governmental fund statement ofrevenues, expenditures and change in fund balance for the General Fund.

The School adopts an annual budget for its governmental fund. A budgetary comparison statementhas been provided for the General Fund to demonstrate compliance with the budget.

The governmental fund basic financial statements can be found on pages 9 through 13 of thisreport.

Agency Fund: In addition, the School has one Agency Fund which is a student activity fund. Thisfund is formed for education and school purposes.

The basic Agency Fund financial statement can be found on page 14 of this report.

Notes to Basic Financial Statements: The notes provide additional information that is essential fora full understanding of the data provided in the government wide and fund financial statements.The notes to basic financial statements can be found on pages 15 through 23 of this report.

Government Wide Financial Analysis

The School has been in operation since 1999; therefore, comparative government wide data ispresented. The School’s net position was $ 6,139,206 at June 30, 2015, which representsunrestricted net position of $ 4,473,774 and amounts invested in capital assets of $ 1,665,432. TheSchool’s net position was $ 6,109,682 at June 30, 2014. Of this amount, $ 4,232,918 representedunrestricted net position and amounts invested in capital assets were $ 1,876,764.

5


Our analysis in the table below focuses on the net assets of the School’s governmental activities, asof June 30, 2015 and 2014:

Coral Springs Charter SchoolNet Position

June 30, June 30,2015 2014

ASSETS:Current and other assets $ 5,512,968 $ 5,304,758Capital assets, net of depreciation 1,665,432 1,876,764

Total assets 7,178,400 7,181,522

LIABILITIES:Current liabilities 1,026,261 1,057,541Noncurrent liabilities 12,933 14,299

Total liabilities 1,039,194 1,071,840

NET POSITION:Net investment in capital assets 1,665,432 1,876,764Unrestricted 4,473,774 4,232,918

Total net position $ 6,139,206 $ 6,109,682

Governmental Activities

The results of this year’s operations for the School as a whole are reported in the statement ofactivities on page 8. The table below provides a condensed presentation of the School’s revenuesand expenses for the years ended June 30, 2015 and 2014:

Coral Springs Charter SchoolChange in Net Position

June 30, June 30,2015 2014

REVENUES:General revenues $ 10,794,233 $ 10,278,052Program revenues 1,073,597 1,220,579

Total revenues 11,867,830 11,498,631

FUNCTIONS/PROGRAMEXPENSES:Instruction 6,658,484 6,869,202Instructional support services 4,220,306 4,175,902Non instructional expenses 959,516 959,420

Total expenses 11,838,306 12,004,524

Change in net position $ 29,524 $ (505,893)

6


Governmental Fund Expenditures

In the table below, we have presented the cost of the largest functions/programs as a percentageof total governmental expenditures:

Expenditures Percent Expenditures Percent

Governmental expenditures:Instructional expenditures $ 6,504,233 55.9% $ 6,636,312 56.7%Administrative services 1,260,037 10.8% 1,087,682 9.3%Plant operations and maintenance 2,019,467 17.4% 2,030,216 17.3%Fiscal services 696,795 6.0% 687,781 5.9%Other instructional support services 490,887 4.2% 620,318 5.3%All other functions/programs 661,020 5.7% 647,602 5.5%

Total governmentalexpenditures $ 11,632,439 100.0% $ 11,709,911 100.0%

2015 2014Functions/Programs

Capital Assets

At June 30, 2015, the School had capital assets of $ 1,665,432 net of accumulated depreciation, ascompared to $ 1,876,764 at June 30, 2014. A detailed schedule is on page 21 in the notes to thebasic financial statements.

General Fund Budgetary Highlights

Revenues were favorable to the budget for the year ended June 30, 2015 as actual enrollmentexceeded budgeted enrollment. Expenditures fluctuated over several categories and ended theyear unfavorable to the budget; however, an increase in expenditures was expected due to theincrease in enrollment. Overall, the School ended the year with a change in fund balance whichwas $ 790,541 favorable to the budget.

Economic Factors and Next Year’s Budget

The State of Florida is projecting an increase in Florida Education Finance Program funding for thenext fiscal year of approximately 3%. This increase will be offset by a reduction in Public EducationCapital Outlay, a funding pool which includes all charter schools.

Expenditures are budgeted in proportion to enrollment as well as strategic objectives at the School.In addition, a 2% salary increase pool has been built into the budget for all eligible school staff.

Requests for Information

If you have any questions about this report or need additional information, please contact HillaryDaigle, Controller; Charter Schools USA; 800 Corporate Drive, Suite 124; Fort Lauderdale, Florida33334.

BASICFINANCIAL STATEMENTS

The accompanying notes to basic financial statements are an integral part of these statements.

7

GovernmentalActivities

Current Assets:Cash and cash equivalents $ 5,463,709Due from other governments 30,674Prepaid expenditures 4,214Deposits 14,371

Total current assets 5,512,968

Noncurrent Assets:Capital assets, net of accumulated depreciation 1,665,432

Total assets 7,178,400

Current Liabilities:Accounts payable 1,678Accrued expenses 807,481Due to management company 159,234Due to Agency Fund 19,070Compensated absences 38,798

Total current liabilities 1,026,261

Noncurrent Liabilities:Compensated absences 12,933

Total noncurrent liabilities 12,933

Total liabilities 1,039,194

Commitments (Note 6)

Net Position:Net investment in capital assets 1,665,432Unrestricted 4,473,774

Total net position $ 6,139,206

Coral Springs Charter SchoolStatement of Net PositionJune 30, 2015


8

GovernmentalActivities

Net RevenueCharges Operating Capital (Expense) andfor Grants and Grants and Change in

Expenditures Services Contributions Contributions Net Position

Functions/Programs:Instruction $ 6,658,484 $ $ 66,388 $ $ (6,592,096)Pupil personal services 464,662 (464,662)Instruction and curriculumdevelopment services 17,963 (17,963)Instructional staff trainingservices 8,262 924 (7,338)School Board 14,776 (14,776)School administration 1,260,037 (1,260,037)Fiscal services 696,795 (696,795)Food services 234,022 44,342 136,136 (53,544)Central services 13,923 (13,923)Pupil transportation 243,675 (243,675)Operation of plant 2,166,979 825,807 (1,341,172)Maintenance of plant 58,728 (58,728)

Total governmentalactivities $ 11,838,306 $ 44,342 $ 203,448 $ 825,807 (10,764,709)

General revenues:Grants and entitlements 10,615,585Contributions and other 155,000Investment income 22,198Miscellaneous 1,450

Total general revenues 10,794,233

Change in net position 29,524

Net position, July 1, 2014 6,109,682

Net position, June 30, 2015 $ 6,139,206

Program Revenues

Coral Springs Charter SchoolStatement of ActivitiesFor the Year Ended June 30, 2015


9

GeneralFund

Assets:Cash and cash equivalents $ 5,463,709Due from other governments 30,674Prepaid expenditures 4,214Deposits 14,371

Total assets $ 5,512,968

Liabilities:Accounts payable $ 1,678Accrued expenses 807,481Due to management company 159,234Due to Agency Fund 19,070

Total liabilities 987,463

Commitments (Note 6)

Fund Balance:Nonspendable:Prepaid expenditures 4,214Deposits 14,371Assigned:Working capital 800,000Reserve and replacement 2,279,462Technology replacement 401,001Subsequent year projects textbooks, consumables and testing materials 54,693Subsequent year projects technology hardware and software 117,500Subsequent year projects furniture, fixtures and equipment 26,500Subsequent year projects A/C repair 53,000Unassigned 774,764

Total fund balance 4,525,505

Total liabilities and fund balance $ 5,512,968

Coral Springs Charter SchoolBalance Sheet Governmental Fund6/30/2015


10

Total Fund Balance of Governmental Fund, Page 9 $ 4,525,505

Amounts reported for governmental activities in the statementof net position are different because:

Capital assets used in governmental activities are notfinancial resources and; therefore, are not reportedin the governmental fund.

Cost of capital assets $ 4,644,635Less accumulated depreciation (2,979,203) 1,665,432

Certain liabilities are not due and payable in thecurrent period and therefore are not reportedin the funds.

Compensated absences (51,731)

Net Position of Governmental Activities, Page 7 $ 6,139,206

Coral Springs Charter SchoolReconciliation of the Balance Sheet of the Governmental Fundto the Statement of Net PositionJune 30, 2015


11

GeneralFund

Revenues:Federal through state $ 173,194State sources 11,471,646Local sources 222,990

Total revenues 11,867,830

Expenditures:Instruction 6,504,233Pupil personnel services 464,662Instruction and curriculumdevelopment services 17,963Instructional staff training services 8,262School Board 14,776School administration 1,260,037Fiscal services 696,795Food services 234,022Central services 13,923Pupil transportation 243,675Operation of plant 1,960,739Maintenance of plant 58,728Facilities acquisition and construction 154,624

Total expenditures 11,632,439

Net change in fund balance 235,391

Fund Balance, July 1, 2014 4,290,114

Fund Balance, June 30, 2015 $ 4,525,505

For the Year Ended June 30, 2015

Statement of Revenues, Expenditures andChange in Fund Balance Governmental Fund



12

Change in Fund Balance Total Governmental Fund, Page 11 $ 235,391

Amounts reported for governmental activities in thestatement of activities are different because:

Governmental funds report capital outlays asexpenditures; however, in the statement of activities,the costs of those assets are depreciated over theirestimated useful lives as provison for depreciation.

Cost of capital assets $ 154,624Provision for depreciation (365,956) (211,332)

Certain items reported in the statement of activitiesdo not require the use of current financial resources,and therefore, are not reported as expenditures inthe governmental funds.

Change in compensated absences 5,465

Change in Net Position of Governmental Activities, Page 8 $ 29,524

For the Year Ended June 30, 2015

Coral Springs Charter SchoolReconciliation of the Statement of Revenues,

Governmental Fund to the Statement of ActivitiesExpenditures and Change in Fund Balance of the


13

Originaland FinalBudget Actual Variance

Revenues:Federal through state $ 223,870 $ 173,194 $ (50,676)State sources 10,913,350 11,681,300 767,950Local sources 39,192 222,990 183,798

Total revenues 11,176,412 12,077,484 901,072

Expenditures:Instruction 6,433,636 6,504,233 (70,597)Pupil personal services 522,671 464,662 58,009Instruction and curriculumdevelopment services 20,000 17,963 2,037Instructional staff training services 27,089 8,262 18,827School Board 15,600 14,776 824School administration 1,169,301 1,260,037 (90,736)Fiscal services 703,044 696,795 6,249Food services 250,310 234,022 16,288Central services 207,264 223,577 (16,313)Pupil transportation 278,101 243,675 34,426Operation of plant 1,932,516 1,960,739 (28,223)Maintenance of plant 38,000 58,728 (20,728)Community services 1,530 1,530Facilities acquisition and construction 132,500 154,624 (22,124)

Total expenditures 11,731,562 11,842,093 (110,531)

Net change in fund balance $ (555,150) $ 235,391 $ 790,541

Coral Springs Charter SchoolStatement of Revenues and ExpendituresBudget and Actual General FundFor the Year Ended June 30, 2015


14

StudentActivities

Assets:Cash and cash equivalents $ 194,770Due from General Fund 19,070

Total assets $ 213,840

Liabilities:Due to students $ 213,840

Total liabilities $ 213,840

June 30, 2015

Coral Springs Charter SchoolStatement of Assets and Liabilities Agency Fund

15

Coral Springs Charter SchoolNotes to Basic Financial StatementsJune 30, 2015

Note 1 Organization and Operations

Coral Springs Charter School (the “School”) was established in July 1999 as a Florida nonprofitorganization. The School, which is reported as a Special Revenue Fund of the City of Coral Springs,Florida (the “City”), was established as a charter school and services students from sixth throughtwelfth grade. A charter from the School Board of Broward County, Florida was granted to the Cityto operate a charter school pursuant to Section 228.056 of the Florida Statutes. As of June 30,2015, 1,647 students were enrolled in the School.

The School is part of the City’s government and is not a separate legal entity apart from the City.The financial statements of Coral Springs Charter School present only the balances, activity, anddisclosures related to the School. They do not purport to, and do not, present fairly the financialposition of the City as of June 30, 2015, and its changes in financial position or budgetarycomparisons, where applicable, for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.

Note 2 Summary of Significant Accounting Policies

Reporting entity: The School operates under a charter granted by the sponsoring School District,the School Board of Broward County (the “District”). The current charter is effective until June2029, and may be renewed in increments of five years by mutual written agreement between theSchool and the District. At the end of the term of the charter, the District may choose not to renewthe charter under grounds specified in the charter in which case the District is required to notifythe School in writing at least ninety days prior to the charter's expiration. During the term of thecharter, the District may also terminate the charter if good cause is shown.

The School may also be financially accountable if an organization is fiscally dependent on theSchool regardless of whether the organization has a separately elected governing board, agoverning board appointed by another government, or a jointly approved board. In addition,component units can be other organizations for which the nature and significance of theirrelationship with the School are such that exclusion would cause the reporting entity's basicfinancial statements to be misleading or incomplete.

As a result of evaluating the above criteria, management has determined that no component unitsexist for which the School is financially accountable which would require inclusion in the School'sbasic financial statements.

Basis of presentation: Based on the guidance provided in the American Institute of Certified PublicAccountants Audit and Accounting Guide Not for Profit Organizations and provisions of Section228.056(9), Florida Statutes the School is presented as a governmental organization for financialstatement reporting purposes.

Government wide basic statements: The School's basic financial statements include bothgovernment wide (reporting the School as a whole) and fund basic financial statements (reportingthe School's major fund). Both the government wide and fund basic financial statementscategorize primary activities as either governmental or business type. All of the School's activitiesare classified as governmental activities.

Government wide basic statements: In the government wide statement of net position, thegovernmental activities column is presented on a consolidated basis, if applicable, and is reportedon a full accrual, economic resource basis, which recognizes all noncurrent assets and receivablesas well as all noncurrent debt and obligations.

16


Note 2 Summary of Significant Accounting Policies (continued)

The government wide statement of activities reports both the gross and net cost of each of theSchool's functions. The net costs, by function, are also supported by general revenues(unrestricted contributions, investment earnings, miscellaneous revenue, etc.). The statement ofactivities reduces gross expenses (including provision for depreciation) by related programrevenues, operating and capital grants and contributions. Program revenues must be directlyassociated with the function. Operating grants include operating specific and discretionary (eitheroperating or capital) grants while the capital grants column reflects capital specific grants. For theyear ended June 30, 2015 the School had program revenues of $ 1,073,597.

This government wide focus is more on the ability to sustain the School as an entity and the changein the School's net position resulting from the current year's activities.

Fund basic financial statements: The accounts of the School are organized on the basis of funds.The operations of the funds are accounted for with a separate set of self balancing accounts thatcomprise its assets, liabilities, equity, revenues and expenditures.

The General Fund is employed in accounting for the financial activities of the School. It is agovernmental fund type and is used to account for all financial transactions.

The Agency Fund accounts for student monies that are attributable to school and other educationalactivities.

Measurement focus and basis of accounting: Basis of accounting refers to the point at whichrevenues or expenditures/expenses are recognized in the accounts and reported in the financialstatements. It relates to the timing of the measurements made regardless of the measurementfocus applied. Governmental funds use the current financial resources measurement focus and thegovernmental wide statement uses the economic resources measurement focus.

Governmental activity in the government wide basic financial statements is presented on the fullaccrual basis of accounting. Revenues are recognized when earned and expenses are recognizedwhen incurred.

The governmental funds basic financial statements are presented on the modified accrual basis ofaccounting under which revenue is recognized in the accounting period in which it becomessusceptible to accrual (i.e., when it becomes both measurable and available). "Measurable" meansthe amount of the transaction can be determined and "available" means collectible within sixtydays after year end or soon enough thereafter to be used to pay liabilities of the current period.For this purpose the current period means one hundred and twenty days.

Cash and cash equivalents: The School considers all demand accounts and money market fundswhich are not subjected to withdrawal restrictions to be cash and cash equivalents.

The School maintains its cash accounts at one financial institution. The School’s accounts at thisinstitution, at times, may exceed the federally insured limit. The School has not experienced anylosses in such accounts and does not believe it is exposed to any significant credit risk.

In addition, most of the School’s cash and cash equivalents are maintained in the City’s pooled cashaccount. This enables the City to invest large amounts of idle cash for short periods of time and tooptimize earnings potential. At June 30, 2015, the balance in this account amounted to$ 4,954,789.

Prepaid items: Certain payments to vendors reflect costs applicable to future accounting periodsand are recorded as prepaid items.

17



Revenue recognition: Student funding is provided by the State of Florida through the SchoolBoard. Such funding is recorded as entitlement revenue in the government wide financialstatements and state source revenue in the fund financial statements and is net of a 2%administration fee retained by the School Board. This funding is received on a pro rata basis over atwelve month period and is adjusted for changes in full time equivalent (FTE) student population.

Capital assets: Property and equipment purchased or acquired are capitalized at historical cost orestimated historical cost. Capital assets are defined by the School as assets with a cost of $ 750 anduseful life of over one year. Donated property and equipment assets are valued at the estimatedfair market value as of the date received. Additions, improvements and other capital outlays thatsignificantly extend the useful life of an asset are capitalized and depreciated over the remaininguseful lives of the related fixed assets. Other costs incurred for repairs and maintenance areexpensed as incurred.

Depreciation on all assets is provided on the straight line basis over the estimated useful lives asfollows:

Improvements other than building 5 10 yearsBuilding improvements 15 yearsComputer hardware 3 yearsFurniture, fixtures, and equipment 5 yearsAudio visual materials 5 yearsComputer software 3 years

Deferred outflows/inflows of resources: In addition to assets, the statement of net position willsometimes report a separate section for deferred outflows of resources. This separate financialstatement element, deferred outflows of resources, represents a consumption of net position thatapplies to a future period(s) and so will not be recognized as an outflow of resources(expense/expenditure) until then. The School does not have any items that qualify for reporting inthis category.

In addition to liabilities, the statement of net position will sometimes report a separate section fordeferred inflows of resources. This separate financial statement element, deferred inflows ofresources, represents an acquisition of net position that applies to a future period(s) and so will notbe recognized as an inflow of resources (revenue) until that time. The School does not have anyitems that qualify for reporting in this category.

Unearned revenue: Unearned revenue arises when the School receives resources before it has alegal claim to them.

Compensated absences: The School’s policy permits employees to accumulate earned but unusedpaid time off, which is eligible for payment upon separation from service. The liability for suchleave is reported as incurred in the government wide financial statements. A liability for thoseamounts is recorded in the governmental funds only if the liability has matured as a result ofemployee resignations or retirements. The liability for compensated absences includes salaryrelated benefits, where applicable. Payments for compensated absences are generally paid out ofthe General Fund.

Net position: Net position is classified in three categories. The general meaning of each is asfollows:

Net investment in capital assets represents the difference between thecost of capital assets, less accumulated depreciation, reduced by theoutstanding balances of any borrowings used for the acquisition,construction or improvement of those assets.

18



Restricted consists of net position with constraints placed on their useeither by 1) external groups such as creditors, grantors, contributors, orlaws or regulations of other governments, or 2) law throughconstitutional provisions or enabling legislation.

Unrestricted indicates that portion of net position that is available tofund future operations.

Fund balance: The governmental fund financial statements present fund balances based on theprovisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund TypeDefinitions. This Statement provides more clearly defined fund balance classifications and also setsa hierarchy which details how the School may spend funds based on certain constraints. Thefollowing are the fund balance classifications used in the governmental fund financial statements:

Nonspendable this classification includes amounts that cannot be spentbecause they are either not in spendable form or are legally orcontractually required to be maintained intact. The School classifiesinventories, prepaid items, long term notes receivable and deposits asnonspendable since they are not expected to be converted to cash or arenot expected to be converted to cash within the next year.

Restricted this classification includes amounts that are restricted forspecific purposes by external parties such as grantors and creditors or areimposed by law through constitutional provisions or enabling legislation.

Committed this classification includes amounts that can be used forspecific purposes voted on through formal action of the Board ofDirectors (the highest level of decision making authority). The committedamount cannot be used for any other purpose unless the Board ofDirectors removes or changes the commitment through formal action.

Assigned this classification includes amounts that the Board of Directorsintends to use for a specific purpose but they are neither restricted norcommitted. The School classifies existing fund balance to be used in thesubsequent year’s budget for elimination of a deficit as assigned.

Unassigned this classification includes amounts that have not beenrestricted, committed or assigned for a specific purpose within theGeneral Fund.

The details of the fund balances are included in the Governmental Fund Balance Sheet on page 9.

When the School incurs expenditures for which restricted or unrestricted fund balance is available,the School would consider restricted funds to be spent first. When the School has expenditures forwhich committed, assigned or unassigned fund balance is available, the School would considercommitted funds to be spent first, then assigned funds and lastly unassigned funds.

Budget: An operating budget is adopted and maintained by the governing board for the Schoolpursuant to the requirements of Florida Statutes. The budget is adopted using the same basis ofaccounting that is used in the preparation of the financial statements, except for the reporting of a2% administration fee retained by the School Board.

19



The Charter School is reported as a Special Revenue Fund of the City. Accordingly, its budget isincluded in the legally adopted budget of the City. The City established the following budgetaryprocedures that relate to the Charter School and have been reflected in the Charter School’sfinancial statements.

Prior to September 30, the City Manager submits to the City of Coral Springs Charter School Boardof Directors the proposed operating budget for the Charter School Special Revenue Fund. Thisbudget is based on the Charter School’s fiscal year, which is from July 1 to June 30. The City’s fiscalyear is from October 1 to September 30. The operating budget includes proposed expendituresand the means of financing them.

Public hearings are conducted at City Hall to obtain taxpayer comments. Prior to September 30,the budget is legally enacted through passage of a resolution by the City of Coral Springs CharterSchool Board of Directors.

The budget is adopted in accordance with accounting principles generally accepted in the UnitedStates of America (GAAP).

Each department director within the City is authorized to transfer budget amounts withinindividual departments. Revisions which alter the total expenditures of any department within afund must be approved by the City Manager. Revisions which alter the total expenditures of anyfund must be approved by the City of Coral Springs Charter School Board of Directors. Actualexpenditures and operating transfers out may not exceed “budget” appropriations at the individualfund level. Legal level of control is maintained at the fund level. For the year ending June 30, 2015,expenditures exceeded the budget by $ 110,531. This variance was covered by revenues in excessof the budget.

If, during the course of the fiscal year, it becomes evident that a particular fund is unable to providethe required level of services to the community due to unexpected higher costs of providingservices or a shortfall of revenue, the budget may be amended. The Director of Financial Servicessubmits to the City of Coral Springs Charter School Board of Directors a request to amend thebudget. The request contains explanations written by the director of the department making therequest. The request includes a proposal for financing if additional expenditures are requested.

Appropriations which are neither expended, encumbered, nor specifically designated to be carriedover, lapse at the end of the fiscal year. At year end, open encumbrances lapse in the CharterSchool Special Revenue Fund.

A reconciliation of the General Fund presented on a budgetary basis to the amount presented inaccordance with generally accepted accounting principles (GAAP) is as follows:

Revenues Expenditures

Budgetary basis, page 13 $ 12,077,484 $ 11,842,093Less: 2% administration feeretained by the School Districtincluded as revenue and expenditureson a budgetary basis (209,654) (209,654)

GAAP basis, page 11 $ 11,867,830 $ 11,632,439

20



Use of estimates: The preparation of financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptions that affect certainreported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Date of management review: Subsequent events were evaluated by management throughDecember 8, 2015, which is the date that the financial statements were available to be issued.

Note 3 Cash and Cash Equivalents

At June 30, 2015, the carrying amount of the deposits and cash on hand is as follows:

Carrying BankAmount Balance

Cash on hand $ 500 $Demand accounts 703,190 803,029City of Coral Springs pooled cash 4,954,789 4,954,789

$ 5,658,479 $ 5,757,818

State statutes require, and it is the School’s policy, that all deposits be made into, and be held by,financial institutions designated by the Treasurer of the State of Florida as “qualified publicdepositories” as defined by Chapter 280 of the Florida Statutes. This Statute requires that everyqualified public depository institution maintain eligible collateral to secure the public entity’s funds.The minimum collateral to be pledged by an institution, the collateral eligible for pledge, andreporting requirements of the qualified public depositor to the Treasurer is defined by the Statute.Collateral is pooled in a multiple qualified public depository institution pool with the ability toassess members of the pool should the need arise. The School’s deposits are held in a qualifiedpublic depository. They are covered by the collateral pool, as the School has identified itself as apublic entity at June 30, 2015.

Note 4 Due From Other Governments

Due from other governments at June 30, 2015 consists of an amount due from the District for FTEand Perkins Grant funding.

21


Note 5 Capital Assets

Capital asset balances and activity for the year ended June 30, 2015 are as follows:

Balance at Balance atJuly 1, June 30,2014 Additions Transfers 2015

Capital assets, depreciable:Improvements other than building $ 1,440,080 $ $ $ 1,440,080Building improvements 1,261,970 1,261,970Computer hardware 1,012,159 135,863 1,148,022Furniture, fixtures and equipment 675,821 15,312 691,133Audio visual materials 51,113 51,113Computer software 48,868 3,449 52,317

Total capital assets,depreciable 4,490,011 154,624 4,644,635

Accumulated depreciation:Improvements other than building 825,603 122,109 947,712Building improvements 249,865 84,131 333,996Computer hardware 908,857 89,441 998,298Furniture, fixtures and equipment 542,554 62,405 (40) 604,919Audio visual materials 41,016 4,067 40 45,123Computer software 45,352 3,803 49,155

Total accumulated depreciation 2,613,247 365,956 2,979,203

Net capital assets $ 1,876,764 $ (211,332) $ $ 1,665,432

Provision for depreciation was charged to governmental activities as follows:

Instruction $ 159,716Operation of plant 206,240

$ 365,956

Note 6 Commitments

Leases: The City previously entered into an operating lease agreement on behalf of the School forthe use of its premises. The lease term is for one year and renews automatically as long as the Cityoperates the School. Monthly payments under this lease are $ 118,333. The facility rent expensefor the year ended June 30, 2015 was approximately $ 1,420,000.

Management agreement: The City has a formal agreement with Charter Schools USA, Inc.(“CSUSA”) to manage, staff, and operate the School. The agreement requires the City to pay anannual management fee to CSUSA equal to $ 316.25 per enrolled student, up to $ 513,267. CSUSAalso receives an incentive fee of $ 124.03 per enrolled student, up to $ 201,301. This incentive feeis also contingent on certain performance goals being achieved by the School, as well as availabilityof funds and other conditions. Additionally, CSUSA is reimbursed by the City for expenditures paidby CSUSA on behalf of the School. Payments required under the agreement are to be made by theSchool. This agreement expires June 30, 2016. Total fees amounted to $ 693,581 for the yearended June 30, 2015.

The School also has an amount due to CSUSA of $ 159,234 at June 30, 2015. This amount is shownon the basic financial statements as an amount due to management company.

22


Note 6 Commitments (continued)

FTE Funding: The School receives funding from the District which is received from the State ofFlorida that is based, in part on a computation of the number of full time equivalent (FTE) studentsenrolled in the School. The accuracy of the data provided by the School supporting the FTE count issubject to state audit and, if found to be in error, could result in refunds or in decreases in futurefunding allocations.

It is the opinion of management that the amount of revenue which may be remitted back to theState due to errors in the FTE count or amount of grant expenditures which may be disallowed bygranting agencies, if any, will not be material to the financial position of the School.

Post retirement benefits: The School does not provide post retired benefits to retired employees.

Note 7 Long Term Liabilities

Changes in the School’s long term liabilities for fiscal year ended June 30, 2015, are as follows:

Balance at Balance at AmountJuly 1, July 1, Due Within2014 2014 One Year

Compensated absences $ 57,196 $ 15,488 $ 20,953 $ 51,731 $ 38,798

Increases Decreases

Note 8 Employee Benefit Plan

During the year ended June 30, 2015, the School offered all of its full time employees, who hadattained 21 years of age, a retirement plan under Internal Revenue Code Section 401(k). Theemployee is allowed to contribute up to a maximum of 20% of their annual gross compensation,subject to certain limitations. The School contributed a matching amount of $ 38,721 for the yearended June 30, 2015.

Note 9 Capital Appropriations Funding

The Florida Department of Education has approved a Charter School Capital Outlay (CSCO) awardfor the School. In each year that funds are appropriated by the state for charter school capitaloutlay purposes those funds are allocated among eligible charter schools. The funds for theSchool’s allocation are transferred to the School once a CSCO Plan has been provided to andapproved by the sponsoring district. The School’s CSCO Award totaled $ 825,807 for the 2014 2015school year which has been recognized as revenue in the accompanying basic financial statements.If the CSCO funds are used to acquire tangible property assets, the School Board has a reversionaryinterest in those assets. In the event of nonrenewal, termination, or breach of the charter schoolagreement, ownership of the assets would automatically revert to the School Board. The Schoolhas elected to use these funds to pay its portion of the lease expense on the facility.

Note 10 Risk Financing

The School is exposed to various risks of loss related to torts, thefts of, damage to, and destructionof assets and natural disasters. The School has obtained property insurance from commercialcompanies including, but not limited to, general liability and errors and omissions insurance. Therehave been no claims in excess of insurance coverage limits during the past three years.

23


Note 10 Risk Financing (continued)

As disclosed in Note 6, CSUSA employs all of the employees of the School. As a result, the School isnot exposed to medical or workers’ compensation claims for these individuals. In addition, CSUSAcarries all required insurance including, but not limited to, general liability and errors and omissionsinsurance.

OTHER INDEPENDENTAUDITOR’S REPORTS


24

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER

MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited, in accordance with the auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standardsissued by the Comptroller General of the United States, the financial statements of the governmentalactivities, each major fund, and the aggregate remaining fund information of Coral Springs CharterSchool (the “School”), a Special Revenue Fund of the City of Coral Springs, Florida, as of and for theyear ended June 30, 2015, and the related notes to the financial statements, which collectivelycomprise the School’s basic financial statements, and have issued our report thereon dated December8, 2015.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the School’s internalcontrol over financial reporting (internal control) to determine the audit procedures that areappropriate in the circumstances for the purpose of expressing our opinions on the financialstatements, but not for the purpose of expressing an opinion on the effectiveness of the School’sinternal control. Accordingly, we do not express an opinion on the effectiveness of the School’s internalcontrol.

A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, to prevent, ordetect and correct, misstatements on a timely basis. A material weakness is a deficiency, or acombination of deficiencies, in internal control, such that there is a reasonable possibility that amaterial misstatement of the entity's financial statements will not be prevented, or detected andcorrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, ininternal control that is less severe than a material weakness, yet important enough to merit attentionby those charged with governance.

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

25


Compliance and Other Matters

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

Purpose of this Report

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

KEEFE McCULLOUGH



26

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS


Report on the Financial Statements

We have audited the financial statements of Coral Springs Charter School (the “School”), a SpecialRevenue Fund of the City of Coral Springs, Florida, as of and for the fiscal year ended June 30, 2015,and have issued our report thereon dated December 8, 2015.

Auditor’s Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States and Chapter 10.850, Rules of theAuditor General.

Other Report

We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Financial Statements Performed inAccordance with Government Auditing Standards. Disclosures in that report, which is dated December8, 2015, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.854(1)(e)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address findings and recommendations made in the precedingannual financial audit report. There were no recommendations made in the preceding audit report.

Official Title

Section 10.854(1)(e)5., Rules of the Auditor General, requires the name or official title of the entity.The official title of the entity is Coral Springs Charter School.

Financial Condition

Section 10.854(1)(e)2., Rules of the Auditor General, require that we report the results of ourdetermination as to whether or not the School has met one or more of the conditions described inSection 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connectionwith our audit, we determined that the School did not meet any of the conditions described in Section218.503(1), Florida Statutes.

27


Pursuant to Sections 10.854(1)(e)6.a. and 10.855(12), Rules of the Auditor General, we appliedfinancial condition assessment procedures for the School. It is management’s responsibility to monitorthe School’s financial condition, and our financial condition assessment was based in part onrepresentations made by management and the review of financial information provided by same.

Transparency

Sections 10.854(1)(e)7. and 10.855(13), Rules of the Auditor General, require that we report the resultsof our determination as to whether the School maintains on its website the information specified inSection 1002.33(9)(p), Florida Statutes. In connection with our audit, we determined that the Schoolmaintained on its website the information specified in Section 1002.33(9)(p), Florida Statutes.

Other Matters

Section 10.854(1)(e)3., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, we didnot have any such recommendations.

Section 10.854(1)(e)4., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the financial statements that is less that material but which warrantsthe attention of those charged with governance. In connection with our audit, we did not have anysuch findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies, the Board of Directors and applicablemanagement and is not intended to be and should not be used by anyone other than these specifiedparties.

KEEFE McCULLOUGH


Documents

Coral Springs Charter Schoolcoralscs.entest.org/pdf/2015 coral springs charter school...2 Coral Springs Charter School We believe that the audit evidence we have obtained is sufficient