RIVERBANK CHARTER SCHOOL OF EXCELLENCE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL ... · 2015-08-11 · RIVERBANK CHARTER SCHOOL OF EXCELLENCE COMPREHENSIVE ANNUAL FINANCIAL REPORT

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RIVERBANK CHARTER SCHOOL OF EXCELLENCE

COMPREHENSIVE ANNUALFINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2014

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Riverbank Charter School of ExcellenceBoard of Trustees

Roebling, New Jersey

Comprehensive Annual Financial ReportFor the Fiscal Year Ended June 30, 2014

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COMPREHENSIVE ANNUAL

FINANCIAL REPORT

OF THE


ROEBLING, NEW JERSEY

FOR THE FISCAL YEAR ENDED JUNE 30, 2014

Prepared By

Riverbank Charter School of ExcellenceFinance Department

And

Barre & Company, CPA’s

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STATE BOARD OF EDUCATION

ARCELIO APONTE......................................................................................MiddlesexPresident

JOSEPH FISICARO.....................................................................................BergenVice President

MARK W. BIEDRON ....................................................................................Hunterdon

RONALD K. BUTCHER................................................................................Gloucester

CLAIRE CHAMBERLAIN ............................................................................Somerset

JACK FORNARO .........................................................................................Warren

EDITHE FULTON.........................................................................................Ocean

ERNEST P. LEPORE...................................................................................Hudson

ANDREW J. MULVIHILL ..............................................................................Sussex

J. PETER SIMON.........................................................................................Morris

DOROTHY S. STRICKLAND .......................................................................Essex

David C. Hespe, Acting Commissioner of EducationSecretary, State Board of Education

RIVERBANK CHARTER SCHOOL OF EXCELLENCETABLE OF CONTENTS

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INTRODUCTORY SECTION .................................................................................................. 1

Transmittal Letter ................................................................................................................ 2Organizational Chart ........................................................................................................... 7Roster of Officials................................................................................................................ 8Consultants and Advisors ................................................................................................... 9

FINANCIAL SECTION.......................................................................................................... 10

Independent Auditor’s Report ........................................................................................... 11

REQUIRED SUPPLEMENTARY INFORMATION – PART I ................................................ 14

Management’s Discussion and Analysis........................................................................... 15

BASIC FINANCIAL STATEMENTS...................................................................................... 22

SECTION A – CHARTER SCHOOL-WIDE FINANCIAL STATEMENTS............................. 23

A-1 Statement of Net Position....................................................................................... 24A-2 Statement of Activities............................................................................................ 25

SECTION B – FUND FINANCIAL STATEMENTS ............................................................... 26

GOVERNMENTAL FUNDS .................................................................................................. 27

B-1 Balance Sheet........................................................................................................ 28B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances ............... 29B-3 Reconciliation of Statement of Revenues, Expenditures, and Changes

in Fund Balances of Governmental Funds to the Statement of Activities............... 30

PROPRIETARY FUNDS....................................................................................................... 31

B-4 Statement of Fund Net Position ............................................................................. 32B-5 Statement of Revenues, Expenses, and Changes in Fund Net Position................ 33B-6 Statement of Cash Flows ....................................................................................... 34

FIDUCIARY FUNDS ............................................................................................................. 35

B-7 Statement of Fiduciary Net Position ....................................................................... 36B-8 Statement of Changes in Fiduciary Net Position .................................................. N/A

NOTES TO BASIC FINANCIAL STATEMENTS .................................................................. 37

REQUIRED SUPPLEMENTARY INFORMATION – PART II ............................................... 57


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FINANCIAL SECTION (CONTINUED)

SECTION C – BUDGETARY COMPARISON SCHEDULE.................................................. 58

C-1 Budgetary Comparison Schedule – General Fund................................................. 59C-1a Combining Schedule of Revenues, Expenditures and Changes in Fund

Balance - Budget and Actual................................................................................ N/AC-1b Community Development Block Grant - Budget and Actual ................................. N/AC-2 Budgetary Comparison Schedule – Special Revenue Fund................................... 61

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION..................................... 62

C-3 Budget-to-GAAP Reconciliation ............................................................................. 63

OTHER SUPPLEMENTARY INFORMATION ...................................................................... 64

SECTION D – SCHOOL BASED BUDGET SCHEDULES................................................. N/A

D-1 Combining Balance Sheet.................................................................................... N/AD-2 Blended Resource Fund - Schedule of Expenditures Allocated by

Resource Type - Actual........................................................................................ N/AD-3 Blended Resource Fund - Schedule of Blended Expenditures - Budget

and Actual ............................................................................................................ N/A

SECTION E – SPECIAL REVENUE FUND .......................................................................... 65

E-1 Combining Schedule of Revenues and Expenditures – Budgetary Basis .............. 66E-2 Preschool Education Aid Schedule of Expenditures – Budgetary Basis ................ 66

SECTION F – CAPITAL PROJECTS FUND ...................................................................... N/A

F-1 Summary Schedule of Project Expenditures ........................................................ N/AF-2 Summary Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Budgetary Basis .................................................................................. N/A

SECTION G – PROPRIETARY FUND.................................................................................. 67

ENTERPRISE FUND .......................................................................................................... N/A

G-1 Combining Schedule of Net Position.................................................................... N/AG-2 Combining Schedule of Revenues, Expenses and Changes in Fund Net

Position ................................................................................................................ N/AG-3 Combining Schedule of Cash Flows..................................................................... N/A


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FINANCIAL SECTION (CONTINUED)

INTERNAL SERVICE FUND .............................................................................................. N/A

G-4 Combining Schedule of Net Position.................................................................... N/AG-5 Combining Schedule of Revenues, Expenses and Changes in Fund Net

Position ................................................................................................................ N/AG-6 Combining Schedule of Cash Flows..................................................................... N/A

SECTION H – FIDUCIARY FUNDS...................................................................................... 68

H-1 Combining Statement of Fiduciary Net Position ..................................................... 69H-2 Combining Statement of Changes in Fiduciary Net Position ................................ N/AH-3 Student Activities Fund – Schedule of Receipts and Disbursements ................... N/AH-4 Payroll Agency Fund – Schedule of Receipts and Disbursements......................... 70

SECTION I – LONG-TERM DEBT...................................................................................... N/A

I-1 Schedule of Mortgage Obligations ....................................................................... N/AI-2 Schedule of Obligations Under Capital Leases .................................................... N/AI-3 Debt Service Fund Budgetary Comparison Schedule .......................................... N/A

STATISTICAL SECTION (UNAUDITED).............................................................................. 71

INTRODUCTION TO THE STATISTICAL SECTION............................................................ 72

FINANCIAL TRENDS ........................................................................................................... 73

J-1 Net Assets/Position by Component........................................................................ 74J-2 Changes in Net Assets/Position ............................................................................. 75J-3 Fund Balances – Governmental Funds.................................................................. 76J-4 Changes in Fund Balances – Governmental Funds............................................... 77J-5 General Fund Other Local Revenue by Source ................................................... N/A

REVENUE CAPACITY INFORMATION ............................................................................. N/A

J-6 Assessed Value and Estimated Actual Value of Taxable Property ...................... N/AJ-7 Direct Overlapping Property Tax Rates................................................................ N/AJ-8 Principal Property Taxpayers*.............................................................................. N/AJ-9 Property Tax Levies and Collections.................................................................... N/A

DEBT CAPACITY INFORMATION..................................................................................... N/A

J-10 Ratios of Outstanding Debt by Type .................................................................... N/AJ-11 Ratios of General Bonded Debt Outstanding ....................................................... N/AJ-12 Direct and Overlapping Governmental Activities Debt ......................................... N/AJ-13 Legal Debt Margin Information ............................................................................. N/A


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STATISTICAL SECTION (UNAUDITED)

DEMOGRAPHIC AND ECONOMIC INFORMATION ......................................................... N/A

J-14 Demographic and Economic Statistics ................................................................. N/AJ-15 Principal Employers, Current and Nine Years Ago............................................... N/A

OPERATING INFORMATION............................................................................................... 78

J-16 Full-Time Equivalent Charter School Employees by Function/Program................. 79J-17 Operating Statistics ................................................................................................ 80J-18 School Building Information.................................................................................. N/AJ-19 Schedule of Allowable Maintenance Expenditures by School Facility.................. N/AJ-20 Insurance Schedule................................................................................................ 81J-21 J-21 Charter School Performance Framework, Financial Performance, Fiscal Ratios 82

*Private Citizens should be listed as Individual Taxpayers 1, Individual Taxpayers 2, etc.

SINGLE AUDIT SECTION.................................................................................................... 83

K-1 Report on Internal Control over Financial Reporting and On Complianceand Other Matters Based On an Audit of Financial StatementsPerformed In Accordance With Government Auditing Standards........................... 84

K-2 Report On Compliance with Requirements That Could Have a Directand Material Effect on Each Major Program and On Internal ControlOver Compliance In Accordance With New Jersey OMB Circular 04-04 ............... 86

K-3 Schedule of Expenditures of Federal Awards – Schedule A .................................. 89K-4 Schedule of Expenditures of State Financial Assistance – Schedule B ................. 90K-5 Notes to the Schedules of Expenditures of Awards and Financial

Assistance.............................................................................................................. 91K-6 Schedule of Findings and Questioned Costs ......................................................... 94K-7 Summary Schedule of Prior Year Audit Findings and Questioned Costs

as Prepared by Management ................................................................................. 97

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INTRODUCTORY SECTION

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Riverbank Charter School of Excellence1300 Hornberger Avenue

Roebling, New Jersey 08554

October 23, 2014Transmittal Letter

Honorable President andMembers of the Board of TrusteesRiverbank Charter School of ExcellenceRoebling, New Jersey

Dear Board Members:

We are pleased to present to you the Comprehensive Annual Financial Report (CAFR)of the Riverbank Charter School of Excellence (Charter School) for the fiscal yearended June 30, 2014. This CAFR includes the Charter School’s Basic FinancialStatement prepared in accordance with Governmental Accounting Standards BoardStatement 34.

The Charter School has elected to adopt this new financial reporting model which webelieve will provide all users of this document with much more useful financial andstatistical information than ever before. Responsibility for both the accuracy of the dataand completeness and fairness of the presentation, including all disclosures, rests withthe management of the Board of Trustees (Board).

To the best of our knowledge and belief, the data presented in this report is accurate inall material respects and is reported in a manner designed to present fairly the financialposition and results of operations of the Charter School. This report will provide thetaxpayers of the Riverbank Charter School of Excellence with comprehensive financialdata in a format enabling them to gain an understanding of the Charter School’sfinancial affairs.

The Comprehensive Annual Financial Report is presented in four sections as follows:

The Introductory Section contains a table of contents, Letter of Transmittal, Listof Principal Officials, and an Organizational Chart of the Charter School;

The Financial Section begins with the Independent Auditors’ Report and includesthe Management’s Discussion and Analysis, the Basic Financial Statements andNotes providing an overview of the Charter School’s financial position andoperating results, and other schedules providing detailed budgetary information;

The Statistical Section includes selected economic and demographic information,financial trends, and the fiscal capacity of the Charter School, generallypresented on a multi-year basis;

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The Single Audit Section — The Charter School is required to undergo an annualsingle audit in conformity with the provisions of the Single Audit Act Amendmentsof 1996, the U.S. Office of Management and Budget (OMB) Circular A-133,“Audits of States, Local Governments and Non-Profit Organizations”, and theNew Jersey State Office of Management and Budget (OMB) Circular 04-04,“Single Audit Policy for Recipients of Federal Grants, State Grants and StateAid”. Information related to this single audit, including the independent auditor’sreport on the internal control and compliance with applicable laws, regulations,contracts and grants, along with findings and questioned costs, are included inthe single audit section of this report.

Charter School Organization

An elected six-member Board of Trustees (the “Board”) serves as the policy maker forthe Charter School. The Board adopts an annual budget and directly approves allexpenditures which serve as the basis for control over and authorization for allexpenditures of the Charter School funds.

The Lead Person is the chief executive officer of the Charter School, responsible to theBoard for total educational and support operations. The Business Administrator is thechief financial officer of the Charter School, responsible to the Board for maintaining allfinancial records, issuing warrants in payment of liabilities incurred by the CharterSchool, acting as custodian of all Charter School funds, and investing idle funds aspermitted by New Jersey law.

1. REPORTING ENTITY AND ITS SERVICES: Riverbank Charter School ofExcellence is an independent reporting entity within the criteria adopted by theGovernment Auditing Standards Board (GASB) as established by GASB Statement No.14. All funds and account groups of the school are included in this report. RiverbankCharter School of Excellence and Board of Trustees, constitutes the Charter School’sreporting entity.

The focus of education at Riverbank Charter School of Excellence has always beenwhat is best for the success of the children. With this in mind, the school provides a fullrange of educational services appropriate to meeting the needs of all students in gradesKindergarten thru Grade 3 during the 2013-2014 school year. Such instructionalservices include regular education, special education and basic skills program.

Riverbank Charter School of Excellence ended the 2013-2014 school year with anenrollment of 143 students. The following details the student enrollment of the CharterSchool over the last year:

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REPORTING ENTITY AND ITS SERVICES (CONTINUED):

Fiscal Student Average DailyYear Enrollment Enrollment

2013-2014 143 143.202012-2013 142 142.002011-2012 135 135.002010-2011 118 118.00

Average Daily Enrollment

2. ECONOMIC CONDITION AND OUTLOOK: In September of 2008, RiverbankCharter School of Excellence was “chartered” by the Commissioner of Education for theState of New Jersey to operate an independent public school. Riverbank CharterSchool of Excellence is accountable to its students, parents, community, and the NewJersey Department of Education to fulfill its mission and deliver an exceptionalacademic program that leads to achievement for all of our students.

Riverbank Charter School of Excellence serves as a positive school culture functioningto sharpen the focus of staff and students, building commitment and sense ofcommunity, fostering motivation to achieve valued ends, and encouraging productivityand learning. Our school’s mission is to provide students with opportunities to developtheir intellectual, emotional and social potential through the implementation of adynamic curriculum that fosters learning through a cooperative effort involving home,school, and community. By all three working together, students can attain theirmaximum potential critical thinkers, lifelong learners, and responsible, contributingcitizens in a rapidly changing pluralistic society. With this is the belief that children learnbest when the significant adults in their lives – parents, teachers and communitymembers – work together to encourage and support their development. As such, webelieve that parental involvement in a child’s education is paramount.

Since the school’s inception, students have continually demonstrated their knowledgeby scoring proficient or advanced proficient on all standardized tests.

We are privileged that our parents send their children to Riverbank Charter School ofExcellence. More than 98% of our parents are pleased with the progress their childrenare making. Our school families appreciate the effort, time, improvements, andconsistency each year. We are highly recommended through word of mouth, and ourpresence in the township has grown more favorable each year.

Riverbank Charter School of Excellence is fiscally solvent and continues to maintain asurplus while expanding educational programs, extra-curricular activities, providingvarious professional development training for staff, as well as improvements to theschool building.It is our goal to be continuously growing, improving, and achieving higher goals eachyear. We are confident that Riverbank Charter School of Excellence will soon berecognized as a Blue Ribbon School in the State of New Jersey.

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3. MAJOR INITIATIVES: The Charter School has developed a comprehensivestrategic plan to support its mission and vision and serves as a blueprint for theachievement of its goals. The plan includes objectives, such as pupil achievement asmeasured by standardized tests and teacher assessment instruments; formalprofessional development for the certified and non-certified staff; and theimplementation of a technology plan in all classrooms.

4. INTERNAL ACCOUNTING CONTROLS: Management of the Charter School isresponsible for establishing and maintaining an internal control designed to ensure thatthe assets of the Charter School are protected from loss, theft or misuse and to ensurethat adequate accounting data are compiled to allow for the preparation of financialstatements in conformity with generally accepted accounting principles (GAAP).Internal control is designed to provide reasonable, but not absolute, assurance thatthese objectives are met. The concept of reasonable assurance recognizes that:

a) the cost of a control should not exceed the benefits likely to be derived; andb) the valuation of costs and benefits requires estimates and judgments by

management.

As a recipient of federal and state financial assistance, the Charter School isresponsible for ensuring that adequate internal controls are in place to ensurecompliance with applicable laws and regulations related to those programs. Internalcontrol is also subject to periodic evaluation by the Charter School’s management.

As part of the Charter School’s single audit described earlier, tests are made todetermine the adequacy of internal controls, including that portion related to federal andstate financial assistance programs, as well as to determine that the Charter School hascomplied with applicable laws and regulations.

5. BUDGETARY CONTROLS: In addition to internal accounting controls, theCharter School maintains budgetary controls. The objective of these budgetary controlsis to ensure compliance with legal provisions embodied in the annual appropriatedbudget approved by the voters of the municipality. Annual appropriated budgets areadopted for the general fund and the special revenue fund. The final budget amount, asamended for the fiscal year, is reflected in the financial section.

An encumbrance accounting system is used to record outstanding purchasecommitments on a line item basis. Open encumbrances at year-end are eithercancelled or are included as reappropriations of fund balance in the subsequent year.Those amounts to be reappropriated are reported as reservations of fund balance atJune 30, 2014.

6. CASH MANAGEMENT: The investment policy of the Charter School is guidedin large part by state statute as detailed in “Notes to the Basic Financial Statement”Note 3. The Charter School had adopted a cash management plan which requires it todeposit funds in public depositories protected from loss under the provisions of the

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7. Governmental Unit Deposit Protection Act (“GUDPA”). GUDPA was enacted in1970 to protect Government Units from a loss of funds on deposit with a failed bankinginstitution in New Jersey. The law requires governmental units to deposit public fundsonly in public depositories located in New Jersey, where the funds are secured inaccordance with the Act.

8. RISK MANAGEMENT: The Board carries various forms of insurance, includingbut not limited to general liability, directors and officers insurance and workmen’scompensation.

9. OTHER INFORMATION:

Independent Audit - State statutes require an annual audit by independent certifiedpublic accountants or registered municipal accountants. The accounting firm of Barre &Company, Certified Public Accountants, was selected by the Board of Trustees. Inaddition to meeting the requirements set forth in State statutes, the audit also wasdesigned to meet the requirements of the Single Audit Act of 1984 and the Single AuditAct Amendment of 1996 and the related OMB Circular A-133, “Audits of State, LocalGovernments and Non-Profit Organization” and State Treasury Circular Letter 04-04OMB, “Single Audit Policy for Recipients of Federal Grants, State Grants, and StateAid.” The auditors’ report on the basic financial statements and specific requiredsupplemental information is included in the financial section of this report. The auditors’reports, related specifically to the single audit, are included in the single audit section ofthis report.

10. ACKNOWLEDGEMENTS: We would like to express our appreciation to themembers of the Riverbank Charter School of Excellence Board of Trustees for theirconcern in providing fiscal accountability to the citizens and taxpayers of the CharterSchool and thereby contributing their full support to the development and maintenanceof our financial operation. The preparation of this report could not have beenaccomplished without the efficient and dedicated services of our staff.

Respectfully submitted,

Deborah PontorieroBusiness Administrator

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RIVERBANK CHARTER SCHOOL OF EXCELLENCEROEBLING, NEW JERSEY

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ROSTER OF OFFICIALSJUNE 30, 2014

Roster of Officials

MEMBERS OF THE BOARD OF TRUSTEES

Stuart Carroll Board President

Tanya Soltys Trustee

Tom Hopkins Trustee

Kathleen Magoon Trustee

Susan McCool Trustee

SCHOOL OFFICIALS

Beth Kelley School Leader

Deborah Pontoriero SBA

Charles Murray (Ex-Officio) Teacher Representative

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CONSULTANTS AND ADVISORSConsultants and Advisors

Audit Firm

Barre & CompanyCertified Public Accountants

2204 Morris Avenue, Suite 206Union, New Jersey 07083

Attorney

Parker McCay P.A.1009 Lenox Drive

Suite 102ALawrenceville New Jersey 08648

Official Depository

Sun National Bank411 Route 33

Hamilton New Jersey 08619

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FINANCIAL SECTION

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BARRE & COMPANYCERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS


(908) 686-3484FAX – (908) 686-6055

www.cpa-bc.com [email protected] Independence Way Suite 300 Princeton, NJ 08540 (609) 275-4810

Independent Auditor’s Report


Honorable PresidentMembers of the Board of TrusteesRiverbank Charter School of ExcellenceCounty of BurlingtonRoebling, New Jersey

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities,the business-type activities, the aggregate discretely presented component units, eachmajor fund, and the aggregate remaining fund information of the Riverbank CharterSchool of Excellence (Charter School), in the County of Burlington, State of NewJersey, as of and for the fiscal year ended June 30, 2014, and the related notes to thefinancial statements, which collectively comprise the Charter School’s basic financialstatements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

The Charter School’s management is responsible for the preparation and fairpresentation of these financial statements in accordance with accounting principlesgenerally accepted in the United States of America; this includes the design,implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whetherdue to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on ouraudit. We conducted our audit in accordance with auditing standards generallyaccepted in the United States of America and the standards applicable to financial auditcontained in Government Auditing Standards, issued by the Comptroller General of theUnited States; and audit requirements as prescribed by the Office of Finance,Department of Education, State of New Jersey. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of

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the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparationand 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 opinionon the effectiveness of the entity’s internal control. Accordingly, we express no suchopinion. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of significant accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all materialrespects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund,and the aggregate remaining fund information of the Riverbank Charter School ofExcellence, in the County of Burlington, State of New Jersey, as of June 30, 2014, andthe respective changes in the financial position and, where applicable, cash flowsthereof for the year then ended in accordance with accounting principles generallyaccepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require thatthe Management’s Discussion and Analysis and Budgetary Comparison Informationstarting on pages 15 and 58, respectively, be presented to supplement the basicfinancial statements. Such information, although not a part of the basic financialstatements, is required by the Governmental Accounting Standards Board whoconsiders it to be an essential part of financial reporting for placing the basic financialstatements in an appropriate operational, economic, or historical context. We haveapplied certain limited procedures to the required supplementary information inaccordance with auditing standards generally accepted in the United States of America,which consisted of inquiries of management about the methods of preparing theinformation and comparing the information for consistency with management’s responseto our inquiries, the basic financial statements, and other knowledge we obtained duringour audit of the basic financial statements. We do not express an opinion or provideany assurance on the information because the limited procedures do not provide us withsufficient evidence to express an opinion or provide any assurance.

Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statementsthat collectively comprise the Charter School’s basic financial statements. Theaccompanying supplementary information such as the combining and individual of

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nonmajor fund financial statements and schedules of expenditures of federal awardsand state financial assistance, as required by U.S. Office of Management and Budget(OMB) Circular A-133, “Audits of States, Local Governments, and Non-ProfitOrganizations,” and New Jersey OMB’s Circular 04-04, “Single Audit Policy forRecipients of Federal Grants, State Grants and State Aid,” respectively; and the otherinformation, such as the introductory and statistical sections are presented for purposesof additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and schedules ofexpenditures of federal awards and state financial assistance are the responsibility ofmanagement and were derived from and relate directly to the underlying accounting andother records use to prepare the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basic financialstatements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare thebasic financial statements or to the basic financial statements themselves, and otheradditional procedures in accordance with auditing standards generally accepted in theUnited States of America. In our opinion, the combining and individual nonmajor fundfinancial statements and schedules of expenditures of federal awards and state financialassistance are fairly stated, in all material respects, in relation to the basic financialstatements as a whole.

The introductory and statistical sections have not been subjected to the auditingprocedures applied in the audit of the basic financial statements, and accordingly, we donot express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our reportdated October 23, 2014 on our consideration of the Riverbank Charter School ofExcellence’s internal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements and othermatters. The purpose of that report is to describe the scope of our testing of internalcontrol over financial reporting and compliance and the results of that testing, and not toprovide an opinion on internal control over financial reporting or on compliance. Thatreport is an integral part of an audit performed in accordance with Government AuditingStandards in considering the Charter School’s internal control over financial reportingand compliance.

Richard M. BarreLicensed Public School AccountantNo. CS-01181Barre & Company, CPA’s

October 23, 2014

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REQUIRED SUPPLEMENTARY INFORMATION – PART I

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MANAGEMENT’S DISCUSSION AND ANALYSISFOR FISCAL YEAR ENDED JUNE 30, 2014

UNAUDITEDManagement’s Discussion and Analysis

The discussion and analysis of Riverbank Charter School of Excellence’s financialperformance provides an overall review of the Charter School’s financial activities forthe fiscal year ended June 30, 2014. The intent of this discussion and analysis is tolook at the Charter School’s financial performance as a whole; readers should alsoreview the basic financial statements and notes to enhance their understanding of theCharter School’s financial performance.

The Management’s Discussion and Analysis (MD&A) is an element of RequiredSupplementary Information specified in the Governmental Accounting StandardsBoard’s (GASB) Statement No. 34 — Basic Financial Statements and Management’sDiscussion and Analysis for State and Local Governments issued in June 1999. Certaincomparative information between the current year (2013-2014) and the prior year(2012-2013) is required to be presented in the MD&A.

Financial Highlights

Key financial highlights for 2014 are as follows:

General revenues accounted for $1,627,498 or 97% of all revenues. Programspecific revenues in the form of charges for services and operating grants andcontributions accounted for $45,983 or 3% of total revenues of $1,673,481.

The Charter School had $1,716,086 in expenses; only $45,983 of theseexpenses were offset by program specific charges for services, grants orcontributions. General revenues of $1,627,498 were not adequate to providefor these programs.

Among governmental funds, the General Fund had $1,621,044 in revenuesand $1,661,970 in expenditures. The General Fund’s fund balancedecreased $40,926. This decrease was anticipated by the Board of Trustees.

This annual report consists of a series of financial statements and notes to thosestatements. These statements are organized so the reader can understand RiverbankCharter School of Excellence as a financial whole, an entire operating entity. Thestatements then proceed to provide an increasingly detailed look at specific financialactivities.

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UNAUDITED(CONTINUED)

Using this Comprehensive Annual Financial Report (CAFR)

The Statement of Net Position and Statement of Activities provide information about theactivities of the whole Charter School, presenting both an aggregate view of the CharterSchool’s finances and a longer-term view of those finances. Fund financial statementsprovide the next level of detail. For governmental funds, these statements tell howservices were financed in the short-term as well as what remains for future spending.The fund financial statements also look at the Charter School’s most significant fundswith all other non-major funds presented in total in one column. In the case ofRiverbank Charter School of Excellence, the General Fund is by far the most significantfund.

Reporting the Charter School as a Whole

Statement of Net Position and the Statement of Activities

While this document contains the large number of funds used by the Charter School toprovide programs and activities, the view of the Charter School as a whole looks at allfinancial transactions and ask the question, “How did we do financially during 2014?”The Statement of Net Position and the Statement of Activities answer this question.These statements include all assets and liabilities using the accrual basis of accountingsimilar to the accounting used by most private-sector businesses. This basis ofaccounting takes into account all of the current year’s revenues and expensesregardless of when cash is received or paid.

These two statements report the Charter School’s net position and changes in thatposition. This change in net position is important because it tells the reader that, for theCharter School as a whole, the financial position of the Charter School has improved ordiminished. The causes of this change may be the result of many factors, somefinancial and some not. Non-financial factors include current laws in New Jerseyrestricting revenue growth, facility condition, required educational programs and otherfactors.

In the Statement of Net Position and the Statement of Activities, the Charter School isdivided into two kinds of activities:

Governmental activities — All of the Charter School’s programs and servicesare reported here including instruction, administration, support services, andcapital outlay.

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Statement of Net Position and the Statement of Activities (Continued)

Business-Type Activity — This service is provided on a charge for goods orservices basis to recover all the expenses of the goods or services provided.The Food Service enterprise fund is reported as a business activity.

Reporting the Charter School’s Most Significant Funds

Fund Financial Statements

Fund financial reports provide detailed information about the Charter School’s funds.The Charter School uses many funds to account for a multitude of financialtransactions. The Charter School’s governmental funds are the General Fund andSpecial Revenue Fund.

Governmental Funds

The Charter School’s activities are reported in governmental funds, which focus on howmoney flows into and out of those funds and the balances left at year-end available forspending in the future years. These funds are reported using an accounting methodcalled modified accrual accounting, which measures cash and all other financial assetsthat can readily be converted to cash. The governmental fund statements provide adetailed short-term view of the Charter School’s general government operations and thebasic services it provides. Governmental fund information helps the reader determinewhether there are more or fewer financial resources that can be spent in the near futureto finance educational programs. The relationship (or differences) betweengovernmental activities (reported in the Statement of Net Position and the Statement ofActivities) and governmental funds is reconciled in the financial statements.

Enterprise Fund

The enterprise fund uses the same basis of accounting as business-type activities;therefore, these statements are essentially the same.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of thedata provided in the Charter School-wide and fund financial statements. The notes tothe financial statements can be found starting on page 37 of this report.

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The Charter School as a Whole

Recall that the Statement of Net Position provides the perspective of the Charter Schoolas a whole. Net position may serve over time as a useful indicator of a government’sfinancial position.

The Charter School’s financial position is the product of several financial transactionsincluding the net results of activities.

The Charter School’s combined Net Position were $300,350 on June 30, 2014.

Governmental Activities

The Charter School’s total revenues were $1,651,915 for the year ended June 30, 2014,this includes $55,158 of state reimbursed TPAF social security contributions.

The total cost of all program and services were $1,692,841 for 2014. Instructioncomprises 46% of Charter School expenses.

The Statement of Activities shows the cost of program services and the charges forservices and grants offsetting those services.

Instruction expenses include activities directly dealing with the teaching of pupils andthe interaction between teacher and student, including extracurricular activities.

Administration includes expenses associated with administrative and financialsupervision of the Charter School.

Support services include the activities involved with assisting staff with the content andprocess of teaching to students, including curriculum and staff development and thecosts associated with operating the facility.

Capital Outlay represents instructional and/or non-instructional equipment purchasedand is capitalized when such equipment is over the $2,000 threshold.

Business-Type Activities

Revenues for the Charter School’s business-type activities (Food service program) werecomprised of charges for services and federal and state reimbursements.

18




Business-Type Activities

Food service expenses exceeded revenue by $1,679 and $360 for 2014 and2013 respectively.

Charges for services represent $10,264 and $14,136 of revenue for 2014and 2013 respectively. This represents amounts paid by patrons for dailyfood.

Federal and state reimbursements for meals, including payments for free andreduced lunches and breakfast were $11,302 and $10,325 for 2014 and 2013respectively.

The Charter School’s Funds

All governmental funds (i.e., general fund and special revenue fund, presented in thefund-based statements) are accounted for using the modified accrual basis ofaccounting. Total revenues amounted to $1,651,915 and expenditures were$1,692,841 for 2014. The net change in fund balance was most significant in thegeneral fund with a decrease of $40,926 in 2014.

As demonstrated by the various statements and schedules included in the financialsection of this report, the Charter School continues to meet its responsibility for soundfinancial management. The following schedules present a summary of the revenues ofthe governmental funds for the fiscal year ended June 30, 2014.

Increase/ Percent of2014 Percent of (Decrease) Increase/

Revenues Amount Total From 2013 (Decrease)

Local Sources 926,518$ 56.09% 406,826$ 78.28%State Sources 694,526 42.04% (342,934) -33.06%Federal Sources 30,871 1.87% 17,397 129.12%

Total 1,651,915$ 100.00% 81,289$

The following schedule represents a summary of general fund and special revenue fundexpenditures for the fiscal year ended June 30, 2014.

19




The Charter School’s Funds (Continued)

Increase/ Percent of2014 Percent of (Decrease) Increase/

Expenditures Amount Total From 2013 (Decrease)

Instruction 614,694$ 36.31% (99,135)$ -13.89%Administration 909,256 53.71% 293,829 47.74%Support Services 168,891 9.98% 12,236 7.81%

Total 1,692,841$ 100.00% 206,930$

General Fund Budgeting Highlights

The Charter School’s budget is prepared according to New Jersey law, and is based onaccounting for certain transactions on a basis of cash receipts, disbursements, andencumbrances. The most significant budgeted fund is the General Fund.

Over the course of the year, the Charter School revised the annual operatingbudget in accordance with state regulations. Revisions in the budget were madeto recognize revenues that were not anticipated and to prevent over-expendituresin specific line item accounts.

Capital Assets (Net of Depreciation)

At the end of the fiscal year 2013, the Charter School had $0 invested in machinery andequipment.

For the Future

The Riverbank Charter School of Excellence is in stable financial condition presently.The Charter School is proud of its community support. A major concern is thecontinued enrollment growth of the Charter School with the increased reliance onfederal and state funding.

20




For the Future (Continued)

In conclusion, Riverbank Charter School of Excellence has committed itself to financialstability for many years. In addition, the Charter School’s system for financial planning,budgeting, and internal financial controls are well regarded. The Charter School plansto continue its sound fiscal management to meet the challenge of the future.

Contacting the Charter School’s Financial Management

This financial report is designed to provide our citizens, taxpayers, and creditors with ageneral overview of the Charter School’s finances and to show the Charter School’saccountability for the money it receives. If you have questions about this report or needadditional information, contact Deborah Pontoriero, Business Administrator, atRiverbank Charter School of Excellence, 1300 Hornberger Avenue, Roebling, NewJersey 08554.

21

BASIC FINANCIAL STATEMENTS

22

SECTION A – CHARTER SCHOOL-WIDE FINANCIAL STATEMENTS

The statement of net position and the statement of activities display informationabout the Charter School. These statements include the financial activities of theoverall Charter School, except for fiduciary activities. Eliminations have beenmade to minimize the double-counting of internal activities. These statementsdistinguish between the governmental and business-type activities of the CharterSchool.

23

A-1

Governmental Business-TypeActivities Activities Total

ASSETS:Cash and Cash Equivalents 59,515$ 4,394$ 63,909$Interfund Receivables 120,699 5,872 126,571Receivables 131,474 583 132,057Security Deposit 22,110 - 22,110

Total Assets 333,798 10,849 344,647

LIABILITIES:Interfund Payable 44,297 - 44,297

Total Liabilities 44,297 - 44,297

NET POSITION:Unrestricted 289,501 10,849 300,350

Total Net Position 289,501$ 10,849$ 300,350$


June 30, 2014Statement of Net Position

The accompanying Notes to Basic Financial Statements are an integral part of this statement.

24

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25

SECTION B – FUND FINANCIAL STATEMENTS

The Individual Fund statements and schedules present more detailed informationfor the individual fund in a format that segregates information by fund type.

26

GOVERNMENTAL FUNDS

27

B-1


Governmental FundsBalance SheetJune 30, 2014

SpecialGeneral Revenue

Fund Fund TotalASSETS:

Current Assets:Cash and Cash Equivalents 15,218$ 44,297$ 59,515$

Interfund Receivables 120,699 - 120,699Receivables From Other Governments 112,294 - 112,294Receivables, Net 19,180 - 19,180

Other Assets 22,110 - 22,110

Total Current Assets 289,501 44,297 333,798

Total Assets 289,501$ 44,297$ 333,798$

LIABILITIES AND FUND BALANCES:Liabilities:

Current Liabilities:Interfund Payables -$ 44,297$ 44,297$

Total Current Liabilities - 44,297 44,297

Total Liabilities - 44,297 44,297

Fund Balances:Unassigned:

General Fund 289,501 - 289,501

Total Fund Balances 289,501 - 289,501

Total Liabilities and Fund Balances 289,501$ 44,297$

289,501$Net Position of Governmental Activities


28

B-2


Governmental FundsStatement of Revenues, Expenditures and Changes in Fund Balance

For the Fiscal Year Ended June 30, 2014


Fund Fund TotalREVENUES:Local Sources:Local Tax Levy 926,518$ -$ 926,518$

Total Local Sources 926,518 - 926,518

State Sources 694,526 - 694,526Federal Sources - 30,871 30,871

Total Revenues 1,621,044 30,871 1,651,915

EXPENDITURES:Instruction 586,001 28,693 614,694Administration 909,256 - 909,256Support Services 166,713 2,178 168,891

Total Expenditures 1,661,970 30,871 1,692,841

NET CHANGE IN FUND BALANCES (40,926) - (40,926)

FUND BALANCES, JULY 1 330,427 - 330,427

FUND BALANCES, JUNE 30 289,501$ -$ 289,501$


29

B-3

Total net change in fund balances - governmental fund (from B-2) (40,926)$

Change in net position of governmental activities (40,926)$



Reconciliation of the Statement of Revenues, ExpendituresAnd Changes in Fund Balances of Governmental Funds

To the Statement of Activities

The accompanying Notes to Basic Financial Statements are integral part of this statement.

30

PROPRIETARY FUNDS

31

B-4

Business-TypeActivities

Food Service

ASSETS:Cash and Cash Equivalents 4,394$Intergovernmental Accounts Receivables:

Due From Other Funds 5,872Receivables From Other Government-Federal 563Receivables From Other Government-State 20

Total Assets 10,849$

LIABILITIES AND NET POSITION:

NET POSITION:Unassigned 10,849

Total Net Position 10,849

Total Liabilities and Net Position 10,849$

RIVERBANK CHARTER SCHOOL OF EXCELLENCEProprietary Fund

Statement of Net PositionJune 30, 2014


32

B-5


Food ServiceOPERATING REVENUES:

Charges for Services:Daily Sales Non-reimbursable Program 10,264$

Total Operating Revenues 10,264

OPERATING EXPENSES:Cost of Sales 23,245

Total Operating Expenses 23,245

OPERATING INCOME (12,981)

NONOPERATING REVENUES:State Source:

State Lunch Program 406Federal Source:

Federal Lunch Program 10,896

Total Nonoperating Revenues 11,302

CHANGE IN NET POSITION (1,679)

TOTAL NET POSITION, JULY 1 12,528

TOTAL NET POSITION, JUNE 30 10,849$

RIVERBANK CHARTER SCHOOL OF EXCELLENCEProprietary Fund

Statement of Revenues, Expenses, and Changes in Net PositionFor the Fiscal Year Ended June 30, 2014


33

B-6


Statement of Cash FlowsFor The Fiscal Year Ended June 30, 2014


Food Service

CASH FLOWS FROM OPERATING ACTIVITIES:Cash Received from Customers 10,264$Cash Payments to Suppliers and Employees (23,157)

Net Cash Used by Operating Activities (12,893)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:Cash Received from Federal and State Reimbursements 11,302

Net Cash Provided by Noncapital Financing Activities 11,302

Net Increase in Cash and Cash Equivalents (1,591)

Cash and Cash Equivalents, July 1 5,985

Cash and Cash Equivalents, June 30 4,394$

Reconciliation of Operating Income to Net Cash Provided byOperating Activities:

Operating Income Provided by Operating Activities (12,981)$DepreciationChanges in Assets and Liabilities:

Increase in Interfund Accounts Receivable 31Increase in Intergovernmental Accounts Receivable 57

Net Cash Used by Operating Activities (12,893)$

Proprietary Funds


34

FIDUCIARY FUNDS

35

B-7


Fiduciary FundStatement of Fiduciary Net Position

June 30, 2014

AgencyFund

ASSETS:Cash and Cash Equivalents 82,273$

Total Assets 82,273$

LIABILITIES:Liabilites:

Interfund Payable 82,273$

Total Liabilities 82,273$


36

NOTES TO THE FINANCIAL STATEMENTS

37

RIVERBANK CHARTER SCHOOL OF EXCELLENCENotes to the Financial Statements

June 30, 2014

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Riverbank Charter School of Excellencehave been prepared in conformity with generally accepted accountingprinciples (GAAP) as prescribed by the Governmental AccountingStandards Board (GASB). The GASB is the accounting standard-settingbody responsible for establishing governmental accounting and financialreporting principles. The more significant accounting policies of theCharter School are described below.

In June 1999, the Governmental Accounting Standards Board (GASB)unanimously approved Basic Financial Statements and Management’sDiscussion and Analysis for State and Local Governments (Statement No.34). This Statement provides for the most significant change in financialreporting in over twenty years and was implemented for the fiscal yearending June 30, 2004. In addition, the Charter School has implementedGASB Statement No. 37, Basic Financial Statements and Management’sDiscussion and Analysis for State and Local Governments: Omnibus andStatement No. 38, Certain Financial Statement Note Disclosures.

Starting on fiscal year ended June 30, 2013, the Charter Schoolimplemented Governmental Accounting Standard Board (GASB)Statement No. 63, “Financial Reporting of Deferred Outflows ofResources, Deferred Inflows of Resources, and Net Position.” GASBStatement No. 63 identifies net position, rather than net position, as theresidual of all other elements presented in a statement of financialposition. This change was incorporated in the Charter School’s June 30,2013 fiscal year financial statements; however, there was no effect onbeginning net position/fund balance.

A. Reporting Entity

The Charter School is an instrumentality of the State of New Jersey,established to function as an educational institution. The school isgoverned by an independent Board of Trustees, which consists of parents,founders and other community representatives in accordance with itscharter, which was appointed by the State Department of Education. Anadministrator is appointed by the board and is responsible for theadministrative control of the Charter School.

The primary criterion for including activities within the Charter School’sreporting entity, as set forth in Section 2100 of the GASB Codification ofGovernmental Accounting and Financial Reporting Standards, is thedegree of oversight responsibility maintained by the School. Oversightresponsibility includes financial interdependency, selection of governing

38


June 30, 2014

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reporting Entity (Continued)

authority, designation of management, ability to significantly influenceoperations and accountability for fiscal matters.

The combined financial statements include all funds and account groupsfor the Charter School over which the Board of Trustees exercisesoperating control.

B. Basis of Presentation

The Charter School’s basic financial statements consist of Charter School-wide statements, including a statement of net position and a statement ofactivities, and fund financial statements which provide a more detailedlevel of financial information.

Charter School-wide Statements: The statement of net position and thestatement of activities display information about the Charter School as awhole. These statements include the financial activities of the overallCharter School, except for fiduciary activities. Eliminations have beenmade to minimize the double-counting of internal activities. Thesestatements distinguish between the governmental and business-typeactivity of the Charter School. Governmental activities generally arefinanced through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole orin part by fees charged to external parties.

The statement of net position presents the financial condition of thegovernmental and business-type activities of the Charter School at fiscalyear end. The statement of activities presents a comparison betweendirect expenses and program revenues for the business-type activities ofthe Charter School and for each function of the Charter School’sgovernmental activities. Direct expenses are those that are specificallyassociated with a program or function and, therefore, are clearlyidentifiable to a particular function. Program revenues include (a) feesand charges paid by the recipients of goods or services offered by theprograms and (b) grants and contributions that are restricted to meetingthe operational or capital requirements of a particular program.

Revenues that are not classified as program revenues, including all taxes,are presented as general revenues. The comparison of direct expenseswith program revenues identifies the extent to which each governmentalfunction or business segment is self-financing or draws from the generalrevenues of the Charter School.

39


June 30, 2014


Basis of Presentation (Continued)

Fund Financial Statements: During the fiscal year, the Charter Schoolsegregates transactions related to certain Charter School functions oractivities in separate funds in order to aid financial management and todemonstrate legal compliance. The fund financial statements provideinformation about the Charter School’s funds, including its fiduciary funds.Separate statements for each fund category — governmental, proprietary,and fiduciary — are presented. The New Jersey Department of Education(NJDOE) has elected to require New Jersey Charter Schools to treat eachgovernmental fund as a major fund in accordance with the option noted inGASB No. 34, paragraph 76. The NJDOE believes that the presentationof all funds as major is important for public interest and to promoteconsistency among Charter School financial reporting models.

The Charter School reports the following governmental funds:

General Fund: The general fund is the general operating fund of theCharter School and is used to account for all expendable financialresources except those required to be accounted for in another fund.Included are certain expenditures for vehicles and movable instructional ornon-instructional equipment which are classified in the capital outlaysubfund.

As required by the New Jersey State Department of Education, theCharter School includes budgeted capital outlay in this fund. Generallyaccepted accounting principles as they pertain to governmental entitiesstate that general fund resources may be used to directly finance capitaloutlays for long-lived improvements as long as the resources in suchcases are derived exclusively from unrestricted revenues. Resources forbudgeted capital outlay purposes are normally derived from State of NewJersey Aid, district taxes, and appropriated fund balance. Expendituresare those that result in the acquisition of or additions to fixed assets forland, existing buildings, improvements of grounds, construction ofbuildings, additions to or remodeling of buildings and the purchase of built-in equipment. These resources can be transferred from and to CurrentExpense by Board resolution.

Special Revenue Fund: The special revenue fund is used to account forthe proceeds of specific revenue from State and Federal Government,(other than major capital projects or the enterprise funds) and localappropriations that are legally restricted to expenditures for specifiedpurposes.

40


June 30, 2014


Basis of Presentation (Continued)

Capital Projects Fund: The capital projects fund is used to account for allfinancial resources to be used for the acquisition or construction of majorcapital facilities (other than those financed by proprietary funds).

Debt Service Fund: Not Applicable.

The Charter School reports the following proprietary funds:

Enterprise (Food Service) Fund: This enterprise fund accounts for allrevenues and expenses pertaining to the cafeteria operations. The foodservice fund is utilized to account for operations that are financed andoperated in a manner similar to private business enterprises. The statedintent is that the cost (i.e. expenses including depreciation and indirectcosts) of providing goods or services to the students on a continuing basisare financed or recovered primarily through user charges.

Additionally, the Charter School reports the following fund type:

Fiduciary Funds: The Fiduciary Funds are used to account for assets heldby the Charter School on behalf of others and include the Payroll AgencyFund, Net Payroll Account and Student Activities.

C. Basis of Accounting – Measurement Focus

Basis of accounting determines when transactions are recorded in thefinancial records and reported on the financial statements.

Charter School-wide, Proprietary, and Fiduciary Fund FinancialStatements: The Charter School-wide financial statements are preparedusing the accrual basis of accounting. Governmental funds use themodified accrual basis of accounting; the enterprise fund and fiduciaryfunds use the accrual basis of accounting. Differences in the accrual andmodified accrual basis of accounting arise in the recognition of revenue,the recording of deferred revenue, and in the presentation of expensesversus expenditures. The Charter School is entitled to receive moniesunder the established payment schedule and the unpaid amount isconsidered to be an “accounts receivable”. Revenue from grants,entitlements, and donations is recognized in the fiscal year in which alleligibility requirements have been satisfied.

Governmental Fund Financial Statements: Governmental funds arereported using the current financial resources measurement focus and the

41


June 30, 2014


Basis of Accounting – Measurement Focus (Continued)

modified accrual basis of accounting. Under this method, revenues arerecognized when measurable and available. “Measurable” means theamount of the transaction can be determined and “available” meanscollectible within the current period or soon enough thereafter to be usedto pay liabilities of the current period. Expenditures are recorded when therelated fund liability is incurred, except for principal and interest on generallong-term debt, claims and judgments, and compensated absences, whichare recognized as expenditures to the extent they have matured. Generalcapital asset acquisitions are reported as expenditures in governmentalfunds. Proceeds of general long-term debt and acquisitions under capitalleases are reported as other financing sources.

All governmental and business-type activities and enterprise funds of theCharter School follow FASB Statements and Interpretations issued on orbefore November 30, 1989, Accounting Principles Board Opinions, andAccounting Research Bulletins, unless those pronouncements conflict withGASB pronouncements.

D. Budgets/Budgetary Control

Annual appropriated budgets are prepared in the spring of each year forthe general and special revenue funds. Budgets are prepared using themodified accrual basis of accounting except for special revenue funds asdescribed later. The legal level of budgetary control is established at lineitem accounts within each fund. Line item accounts are defined as thelowest (most specific) level of detail as established pursuant to theminimum chart of accounts referenced in N.J.A.C. 6:20-2A.2 (m) 1. Allbudget amendments/transfers must be approved by School Boardresolution. All budget amounts presented in the accompanyingsupplementary information reflect the original budget and the amendedbudget (which have been adjusted for legally authorized revisions of theannual budgets during the year).

Appropriations, except remaining project appropriations, encumbrances,and unexpended grant appropriations, lapse at the end of each fiscal year.The capital projects fund presents the remaining project appropriationscompared to current year expenditures.

Formal budgetary integration into the accounting system is employed as amanagement control device during the fiscal year. For governmentalfunds, there are no substantial differences between the budgetary basis ofaccounting and generally accepted accounting principles (GAAP) with the

42


June 30, 2014


Budgets/Budgetary Control (Continued)

exception of the special revenue fund as noted below. Encumbranceaccounting is also employed as an extension of formal budgetaryintegration in the governmental fund types. Unencumbered appropriationslapse at fiscal year end.

The accounting records of the special revenue fund are maintained on thegrant accounting budgetary basis. The grant accounting budgetary basisdiffers from GAAP in that the grant accounting budgetary basis recognizesencumbrances as expenditures and also recognizes the related revenues,whereas the GAAP basis does not. Sufficient supplemental records aremaintained to allow for the presentation of GAAP basis financial reports.

The following presents a reconciliation of the special revenue funds fromthe budgetary basis of accounting to the GAAP basis of accounting:

2014 2013

Total Revenues & Expenditures(Budgetary Basis) 30,871$ 13,474$

Adjustments:Less Encumbrances at June 30, 2014 - -Plus Encumbrances at June 30, 2013 - -

Total Revenues and Expenditures(GAAP Basis) 30,871$ 13,474$

E. Encumbrances AccountingiUnder encumbrance accounting purchase orders, contracts and otherUnder encumbrance accounting purchase orders, contracts and othercommitments for the expenditure of resources are recorded to reserve aportion of the applicable appropriation. Open encumbrances ingovernmental funds, other than the special revenues fund, are reported asreservations of fund balances at fiscal year end as they do not constituteexpenditures or liabilities but rather commitments related to unperformedcontracts for goods and services.

Open encumbrances in the special revenue fund for which the CharterSchool has received advances are reflected in the balance sheet asdeferred revenues at fiscal year-end. The encumbered appropriationauthority carries over into the next fiscal year. An entry will be made atthe beginning of the next fiscal year to increase the appropriation reflected

43


June 30, 2014


in the certified budget by the outstanding encumbrance amount as of thecurrent fiscal year end.

F. Assets, Liabilities, and Equity

Interfund Transactions:

Transfers between governmental and business-type activities on theCharter School-wide statements are reported in the same manner asgeneral revenues.

Exchange transactions between funds are reported as revenues in theseller funds and as expenditures/expenses in the purchaser funds. Flowsof cash or goods from one fund to another without a requirement forrepayment are reported as interfund transfers. Interfund transfers arereported as other financing sources/uses in governmental funds and afternon-operating revenues/expenses in the enterprise fund. Repaymentsfrom funds responsible for particular expenditures/expenses to the fundsthat initially paid for them are not presented on the financial statements.

Inventories:

Inventory purchases, other than those recorded in the enterprise fund, arerecorded as expenditures during the year of purchase. Enterprise fundinventories are valued at cost, which approximates market, using the first-in/first-out (FIFO) method.

Allowance for Uncollectible Accounts:

No allowance for uncollectible accounts has been recorded as all amountsare considered collectible.

Capital Assets:

The Charter School has established a formal system of accounting for itscapital assets. Purchased or constructed capital assets are reported atcost. Donated capital assets are valued at their estimated fair marketvalue on the date received. The cost of normal maintenance and repairsthat do not add to the value of the asset or materially extend assets’ livesare not capitalized. The Charter School does not possess anyinfrastructure. The capitalization threshold used by Charter Schools in theState of New Jersey is $2,000.

44


June 30, 2014


All reported capital assets except for land and construction in progress aredepreciated. Depreciation is computed using the straight-line methodunder the half-year convention over the following estimated useful lives:

Assets, Liabilities, and Equity (Continued)

EstimatedAsset Class Useful Lives

School Buildings 50Building Improvements 20

Electrical/Plumbing 30Office & Computer Equipment 5-10

In the fund financial statements, fixed assets used in governmental fundoperations are accounted for as capital outlay expenditures of thegovernmental fund upon acquisition. Fixed assets are not capitalized andrelated depreciation is not reported in the fund financial statements.

Compensated Absences:

The Charter School employees do not accumulate sick leave, therefore,no liability is reflected in the basic financial statements.

Deferred Revenue:

Deferred revenue arises when assets are recognized before revenuerecognition criteria have been satisfied. Grants and entitlements receivedbefore the eligibility requirements are met are also recorded as deferredrevenue.

Accrued Liabilities and Long-Term Obligations:

All payables, accrued liabilities, and long-term obligations are reported onthe Charter School-wide financial statements. In general, governmentalfund payables and accrued liabilities that, once incurred, are paid in atimely manner and in full from current financial resources are reported asobligations of the funds.

Net Position:

Net position represents the difference between assets and liabilities. Netinvestment in capital assets consists of capital assets, net of accumulateddepreciation, reduced by the outstanding balance of any borrowing usedfor the acquisition, construction, or improvement of those assets. Net

45


June 30, 2014


position are reported as restricted when there are limitations imposed ontheir use either through the enabling legislation adopted by the CharterSchool or through external restrictions imposed by creditors, grantors, or


laws or regulations of other governments. The Charter School’s policy isto first apply restricted resources when an expense is incurred forpurposes for which both restricted and unrestricted net position isavailable.

Fund Balance Reserves:

The Charter School reserves those portions of fund balance which arelegally segregated for a specific future use or which do not representavailable expendable resources and, therefore, are not available forappropriation or expenditure. Unreserved fund balance indicates thatportion which is available for appropriation in future periods. A fundbalance reserve has been established for encumbrances in accordancewith N.J.S.A. 18:7.

Revenues — Exchange and Non-exchange Transactions:

Revenue resulting from exchange transactions, in which each party givesand receives essentially equal value, is recorded on the accrual basiswhen the exchange takes place. On the modified accrual basis, revenueis recorded in the fiscal year in which the resources are measurable andbecome available. Available means the resources will be collected withinthe current fiscal year or are expected to be collected soon enoughthereafter to be used to pay liabilities of the current fiscal year. For theCharter School, available means within sixty days of the fiscal year end.

Non-exchange transactions, in which the Charter School receives valuewithout directly giving equal value in return, include grants, entitlements,and donations. Revenue from grants, entitlements, and donations isrecognized in the fiscal year in which all eligibility requirements have beensatisfied. Eligibility requirements include timing requirements, whichspecify the year when the resources are required to be used or the fiscalyear when use is first permitted; matching requirements, in which theCharter School must provide local resources to be used for a specifiedpurpose; and expenditure requirements, in which the resources areprovided to the Charter School on a reimbursement basis. On themodified accrual basis, revenue from non-exchange transactions mustalso be available before it can be recognized.

46


June 30, 2014


Under the modified accrual basis, the following revenue sources areconsidered to be both measurable and available at fiscal yearend:property taxes available as an advance, interest, and tuition.


Operating Revenues and Expenses:

Operating revenues are those revenues that are generated directly fromthe primary activity of the enterprise fund. For the Charter School, theserevenues are sales for food service. Operating expenses are necessarycosts incurred to provide the service that is the primary activity of theenterprise fund.

Allocation of Indirect Expenses

The Charter School reports all direct expenses by function in theStatement of Activities. Direct expenses are those that are clearlyidentifiable with a function. Indirect expenses are allocated to functionsbut are reported separately in the Statement of Activities. Employeebenefits, including the employer’s share of social security, workerscompensation, and medical and dental benefits, were allocated based onsalaries of that program. Depreciation expense, where practicable, isspecifically identified by function and is included in the indirect expensecolumn of the Statement of Activities. Depreciation expense that could notbe attributed to a specific function is considered an indirect expense and isreported separately on the Statement of Activities. Interest on long-termdebt is considered an indirect expense and is reported separately on theStatement of Activities.

Extraordinary and Special Items:

Extraordinary items are transactions or events that are unusual in natureand infrequent in occurrence. Special items are transactions or eventsthat are within the control of management and are either unusual in natureor infrequent in occurrence. Neither of these types of transactionsoccurred during the fiscal year.

Management Estimates:

The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reportedamounts of revenues and expenditures/expenses during the reportingperiod. Actual results could differ from those estimates.

47


June 30, 2014



Accrued Salaries and Wages

Certain Charter School employees who provide services to the CharterSchool over the ten-month academic year have the option to have theirsalaries evenly disbursed during the entire twelve-month year. NewJersey statutes require that these earned but undisbursed amounts beretained in a separate bank account.

NOTE 2: CASH AND CASH EQUIVALENTS AND INVESTMENTS

Cash and cash equivalents includes petty cash, change funds, amounts indeposits, money market accounts and short-term investments with originalmaturities of three months or less.

Investments are stated at cost, or amortized cost, which approximatesmarket. The amortized cost method involves valuing a security at its coston the date of purchase and thereafter assuming a constant amortizationto maturity of any discount or premium. The Board classifies certificatesof deposit which have original maturity dates of more than three monthsbut less than twelve months from the date of purchase, as investments.

GASB Statement No. 3 requires disclosure of the level of custodial creditrisk assumed by the Board in its cash, cash equivalents and investments.Category 1 includes deposits/investments held by the Board’s custodialbank trust department or agent in the Board’s name. Category 2 includesuninsured and unregistered deposits/investments held by the Board’s

custodial bank trust department or agent in the Board’s name. Category 3includes uninsured or unregistered deposits/investments held by a brokeror dealer, or held by the Board’s custodial bank trust department or agentbut not in the Board’s name. These categories are not broadrepresentations that deposits or investments are “safe” or “unsafe”.

Deposits

New Jersey statutes require that Charter Schools deposit public funds inpublic depositories located in New Jersey which are insured by theFederal Deposit Insurance Corporation, the Federal Savings and LoanInsurance Corporation, or by any other agency of the United States that

48


June 30, 2014

NOTE 2: CASH AND CASH EQUIVALENTS AND INVESTMENTS (CONTINUED)

Deposits (Continued)

insures deposits made in public depositories. Charter Schools are alsopermitted to deposit public funds in the State of New Jersey CashManagement Fund.

New Jersey statutes require public depositories to maintain collateral fordeposits of public funds that exceed depository insurance limits as follows:

The market value of the collateral must equal at least five percentof the average daily balance of collected public funds on deposit.

In addition to the above collateral requirement, if the public fundsdeposited exceed 75% of the capital funds of the depository, thedepository must provide collateral having a market value at least equal to100% of the amount exceeding 75%.

All collateral must be deposited with the Federal Reserve Bank of NewYork, the Federal Reserve Bank of Philadelphia, the Federal Home LoanBank of New York, or a banking institution that is a member of the FederalReserve System and has capital funds of not less than $25,000,000.

Investments

New Jersey statutes permit the Board to purchase the following types ofsecurities:

a. Bonds or other obligations of the United States or obligationsguaranteed by the United States.

b. Bonds of any Federal Intermediate Credit Bank, Federal HomeLoan Bank, Federal National Mortgage Agency or of any UnitedStates Bank for Cooperatives which have a maturity date notgreater than twelve months from the date of purchase

c. Bonds or other obligations of the Charter School.

As of June 30, 2014, cash and cash equivalents and investments of theCharter School consisted of the following:

General Special Proprietary Fiduciary

Fund Revenue Fund Funds Total

Operating

Account 15,218$ 44,297$ 4,394$ 82,273$ 146,182$

49


June 30, 2014


Investments (Continued)

The investments recorded in the Charter School-wide statements havebeen recorded at amortized cost. In accordance with GASB 31,participating interest earning investment contracts that have a remainingmaturity at the time of purchase of one year or less may be reported atamortized cost. For those securities purchased more than one year fromthe maturity date, the difference between the carrying amount and marketvalue is not material to the Charter School-wide statements. The carryingamount of the Board’s cash and cash equivalents at June 30, 2014 was$146,182 and the bank balance was $153,683. All bank balances werecovered by federal depository insurance and/or covered by a collateralpool maintained by the banks as required by New Jersey statutes.

Risk Category

All bank deposits, as of the balance sheet date, are entirely insured orcollateralized by a collateral pool maintained by public depositories asrequired by the Governmental Unit Deposit Protection Act. In general,bank deposits are classified as to credit risk by three categories describedbelow:

Category 1 — Insured or collateralized with securities held by the Board orby its agent in the Board’s name.

Category 2 — Collateralized with securities held by the pledging publicdepository’s trust department or agent in the Board’s name.

Category 3 — Uncollateralized, including any deposits that arecollateralized with securities held by the pledging public depository, or byits trust department or agent, but not in the Board’s name.

As of June 30, 2014, the Board had funds invested and on deposit inchecking accounts. These funds constitute deposits with financialinstitutions” as defined by GASB Statement No. 3 and are classified asCategory 1, both at year-end and throughout the year.

50


June 30, 2014


New Jersey Cash Management Fund

All investments in the Fund are governed by the regulations of theInvestment Council, which prescribe specific standards designed to insurethe quality of investments and to minimize the risks related to investments.In all the years of the Division of Investment’s existence, the Division hasnever suffered a default of principal or interest on any short-term securityheld by it due to the bankruptcy of a securities issuer; nevertheless, thepossibility always exists, and for this reason a reserve is beingaccumulated as additional protection for the “Other-than-State”participants. In addition to the Council regulations, the Division setsfurther standards for specific investments and monitors the credit of alleligible securities issuers on a regular basis.

As of June 30, 2014, the Charter School had no funds on deposit with theNew Jersey Cash Management Fund.

NOTE 3: RECEIVABLES

Receivables at June 30, 2014, consisted of accounts (tuition),intergovernmental, grants, and miscellaneous.

All receivables are considered collectible in full. A summary of theprincipal items of intergovernmental receivables follows:

Statements StatementsState Aid 19,180$ 19,200$Federal Aid - 563Other 112,294 112,294Gross Receivables 131,474 132,057Less: Allowance for Uncollectibles - -

Total Receivables, Net 131,474$ 132,057$

51


June 30, 2014

NOTE 4: INTERFUND TRANSFERS AND BALANCES

Transfers between funds are used to repay expenses paid by anotherfund.

The following interfund balances remained on the fund financialstatements at June 30, 2014:

Interfund InterfundFund Receivable Payable

General Fund 120,698$ -$Special Revenue Fund - 44,297Proprietary Fund 5,872 -Fiduciary Fund - 82,273

Total 126,570$ 126,570$

NOTE 5: CAPITAL ASSETS

In January 11, 2001, the New Jersey State Department of Educationannounced that effective July 1, 2001, the capitalization threshold used byCharter Schools in the State of New Jersey is increased to $2,000. Theprevious threshold was $500.

For the fiscal year ended June 30, 2014, there were no assets thatexceeded the threshold amounts.

NOTE 6: RENTAL LEASE

The school leased space at the premises located at 1238-1300Hornberger Avenue, Roebling, NJ under a lease agreement for five yearscommencing July 1, 2009 and ending June 30, 2014. The lease requiresannual rental payments of $118,552 for the first and second year, andthereafter, the lease payments shall be adjusted per the terms set forth inthe lease agreement, relative to Consumer Price Index. In addition, theschool is responsible for all utilities and certain building maintenance itemsas set forth in the lease. Rent Expense amounted to $125,435 for theyear ended June 30, 2014. The rent expense was greater than the leaseamount because the school paid CAM charges.

52


June 30, 2014

NOTE 7: PENSION PLANS

Description of Plans

All required employees of the school are covered by either the PublicEmployees’ Retirement System or the Teachers’ Pension and AnnuityFund which have been established by state statute and are administeredby the New Jersey Division of Pension and Benefits (Division). Accordingto the State of New Jersey Administrative Code, all obligations of bothsystems will be assumed by the State of New Jersey should the Systemsterminate. The Division issues a publicly available financial report thatincludes the financial statements and required supplementary informationfor the Public Employees Retirement System and the Teachers’ Pensionand Annuity Fund. These reports may be obtained by writing to theDivision of Pensions and Benefits, P.O. Box 295, Trenton, New Jersey,08625.

Teachers’ Pension and Annuity Fund (TPAF)

The Teachers’ Pension and Annuity Fund was established as of January1, 1955, under the provisions of N.J.S.A. 18A:66 to provide retirementbenefits, death, disability and medical benefits to certain qualifiedmembers. The Teachers’ Pension and Annuity Fund is considered a cost-sharing multiple-employer plan with a special funding situation, as undercurrent statute, all employer contributions are made by the State of NewJersey on behalf of the Charter School and the system’s other relatednoncontributing employers. Membership is mandatory for substantially allteachers or members of the professional staff certified by the State Boardof Examiners, and employees of the Department of Education who havetitles that are unclassified, professional and certified.

Public Employees’ Retirement System (PERS)

The Public Employees’ Retirement System was established as of January1, 1955 under the provisions of N.J.S.A. 43:1 5A to provide retirement,death, disability and medical benefits to certain qualified members. ThePublic Employees’ Retirement System is a cost-sharing multiple-employerplan. Membership is mandatory for substantially all full-time employees of

53


June 30, 2014

NOTE 7: PENSION PLANS (CONTINUED)

Public Employees’ Retirement System (PERS) (Continued)

the State of New Jersey or any county, municipality, school district orpublic agency, provided the employee is not required to be a member ofanother State-administered retirement system or other state or localjurisdiction.

Vesting and Benefit Provisions

The vesting and benefit provisions for PERS are set by N.J.S.A. 43:15Aand 43.3B, and N.J.S.A. 18A:66 for TPAF. All benefits vest after eight toten years of service, except for medical benefits that vest after 25 years ofservice. Retirement benefits for age and service are available at age 60and are generally determined to be 1/60 of the final average salary foreach year of service credit, as defined. Final average salary equals theaverage salary for the final three years of service prior to retirement (orhighest three years’ compensation if other than the final three years).Members may seek early retirement after achieving 25 years of servicecredit or they may elect deferred retirement after achieving eight to tenyears of service in which case benefits would begin the first day of themonth after the member attains normal retirement age. The TPAF andPERS provides for specified medical benefits for members who retire afterachieving 25 years of qualified service, as defined, or under the disabilityprovisions of the System.

Members are always fully vested for their own contributions and, afterthree years of service credit, become vested for two percent of relatedinterest earned on the contributions. In the case of death beforeretirement, members’ beneficiaries are entitled to full interest credited tothe members’ accounts.

Significant Legislation

Legislation enacted during the year ended June 30, 1997 (Chapter 115,P.L. 1997) changed the asset valuation method from market related valueto full-market value. This legislation also contained a provision to reducethe employee contribution rate by 1/2 of one percent to 4.5 percent forcalendar years 1998 and 1999, and to allow for a reduction in theemployee’s rate after calendar year 1999, providing excess valuationassets are available. The legislation also provided that the CharterSchools’ normal contributions to the Fund may be reduced based on therevaluation of assets. From fiscal year 1997 to fiscal year 2003, State andlocal government employers were not required to make contributions to

54


June 30, 2014

NOTE 7: PENSION PLANS (CONTINUED)

Significant Legislation (Continued)

the pension funds. The use of surplus pension assets replaced the annualpayments that would otherwise have been made by employers.Subsequent law, P.L.2003, c.108, led to the resumption of contributions,on a phased-in approach. In 2009, employer contributions to PERS werefurther amended by P.L.2009, c.19.

Contribution Requirements

The contribution policy is set by N.J.S.A. 43:15A, Chapter 62, P.L. of1994, Chapter 115, P.L. of 1997 and N.J.S.A. 18:66 and requirescontributions by active members and contributing employers. Planmember and employer contributions may be amended by State of NewJersey legislation. TPAF and PERS provide for employee contributions of6.64% of employees’ annual compensation, as defined. Employers arerequired to contribute at an actuarially determined rate in both TPAF andPERS. The actuarially determined contribution includes funding for cost-of-living adjustments, noncontributory death benefits, and post-retirementmedical premiums. Under current statute the Charter School is anoncontributing employer of TPAF.

PercentageYear Annual Pension of APC Net Pension

Funding Cost (APC) Contributed Obligation

06/30/14 4,205$ 100% 4,205$06/30/13 64,687 100% 64,68706/30/12 32,743 100% 32,743

PercentageYear Annual Pension of APC Net Pension

Funding Cost (APC) Contributed Obligation

06/30/14 68,112$ 100% 68,112$06/30/13 64,687 100% 64,68706/30/12 32,743 100% 32,743

Three-Year Trend Information for PERS

Three-Year Trend Information for TPAF (Paid on-behalf of the District)

55


June 30, 2014

NOTE 8: POST-RETIREMENT BENEFITS

P.L. 1987, c.384 and P.L. 1990, c.6 required Teachers’ Pensions andAnnuity Fund (TPAF) and the Public Employees’ Retirement System(PERS), respectively, to fund post-retirement medical benefits for thosestate employees who retire after accumulating 25 years of credited serviceor on a disability retirement. P.L. 2007, c.103 amended the law toeliminate the funding of post-retirement medical benefits through theTPAF and PERS. It created separate funds outside of the pension plansfor the funding and payment of post-retirement medical benefits for retiredstate employees and retired educational employees. As of June 30, 2013there were 100,134 retirees receiving post-retirement medical benefits andthe State contributed $1.07 billion on their behalf. The cost of thesebenefits is funded through contributions by the state in accordance withP.L. 1994, c.62. Funding of post-retirement medical premiums changedfrom a pre-funding basis to a pay-as-you-go basis beginning in Fiscal Year1994.

The state is also responsible for the cost attributable to P.L. 1992 c.126,which provides free health benefits to members of PERS and the AlternateBenefit Program who retired from a board of education or county collegewith 25 years of service. The state paid $173.8 million toward Chapter 126benefits for 17,356 eligible retired members in Fiscal Year 2013.

NOTE 9: RISK MANAGEMENT

The Charter School is exposed to various risks of loss related to torts;theft of, damage to, and destruction of assets; errors and omissions;injuries to employees; and natural disasters.

Property and Liability Insurance

The Charter School maintains commercial insurance coverage forproperty, liability, student accident, and surety bonds. A completeschedule of insurance coverage can be found in the Statistical Section ofthis Comprehensive Annual Financial Report.

NOTE 10: FUND BALANCE APPROPRIATED

General Fund

The General Fund surplus in the financial statements at June 30, 2014,was $289,501 , and is unreserved and undesignated.

56

REQUIRED SUPPLEMENTARY INFORMATION – PART II

57

SECTION C – BUDGETARY COMPARISON SCHEDULE

58

C-1Sheet 1

VarianceFinal to Actual

Original Budget Final FavorableBudget Transfers Budget Actual (Unfavorable)

REVENUES:Local Sources:

"Local Levy" Local Share - Charter School Aid 931,319$ -$ 931,319$ 926,518$ (4,801)$

Total Local Sources 931,319 - 931,319 926,518 (4,801)

Categorical Aid:"Local Levy" State Share - Charter School Aid 545,284 - 545,284 540,522 (4,762)Special Education 19,358 - 19,358 24,417 5,059Security Aid 7,052 - 7,052 6,317 (735)

Total Categorical Aid 571,694 - 571,694 571,256 (438)

Revenues From Other Sources:Reimbursed TPAF Social Security

Contributions (Non-Budgeted) - - - 55,158 55,158Reimbursed Pension Contributions (Non-Budgeted) 68,112 68,112

Total Revenues From Other Sources - - - 123,270 123,270

Total Revenues 1,503,013 - 1,503,013 1,621,044 118,031

EXPENDITURES:Instruction:

Salaries of Teachers 544,129 (90,082) 454,047 454,047 -Other Salaries for Instruction 28,500 4,657 33,157 33,157 -Purchased Prof/Tech Services 15,000 (12,164) 2,836 2,836 -Other Purchased Services 17,500 5,253 22,753 22,753 -General Supplies 46,182 27,026 73,208 73,208 -Textbooks 4,000 (4,000) - - -Miscellaneous 10,500 (10,500) - - -

Total Instruction 665,811 (79,810) 586,001 586,001 -

Administration:Salaries - General Administration 256,458 33,666 290,124 290,124 -Salaries of Secretarial/Clerical Assistants 53,050 (9,250) 43,800 43,800 -Total Benefits Cost 194,070 27,371 221,441 310,646 (89,205)Purchases Prof/Tech Services 24,500 59,554 84,054 84,054 -Other Purchased Services 22,590 22,436 45,026 45,026 -Communications/Telephone 4,190 (67) 4,123 4,123 -Supplies and Materials 8,000 (4,270) 3,730 3,730 -Miscellaneous Expenses 2,500 1,983 4,483 4,483 -

Total Administration 565,358 131,423 696,781 785,986 (89,205)


General FundBudgetary Comparison Schedule


See Management's Discussion and Analysis section of this report for an explanation of significant budget variances, original and final.

59

C-1Sheet 2

VarianceFinal to Actual

Original Budget Final FavorableBudget Transfers Budget Actual (Unfavorable)


General FundBudgetary Comparison Schedule


(Continued from Prior Page)Support Services:

Rental of Land and Buildings 150,506$ (25,071)$ 125,435$ 125,435$ -$Transportation-Other Than To/From School 3,000 (3,000) - - -Insurance for Property, Liability and Fidelity 8,000 1,690 9,690 9,690 -Supplies and Materials 4,000 1,431 5,431 5,431 -Energy Costs (Heat and Electricity) 12,500 13,655 26,155 26,155 -Miscellaneous Expenses 1,000 (998) 2 2 -

Total Support Services 179,006 (12,293) 166,713 166,713 -

Reimbursed TPAF Social SecurityContributions (Non-Budgeted) - - - 55,158 (55,158)

Reimbursed Pension Contributions (Non-Budgeted) 68,112 (68,112)

Total Expenditures 1,410,175 39,320 1,449,495 1,661,970 (212,475)

Excess (Deficiency) of RevenuesOver (Under) Expenditures 92,838 (39,320) 53,518 (40,926) (94,444)

FUND BALANCE, JULY 1 330,427 - 330,427 330,427 -

FUND BALANCE, JUNE 30 423,265$ (39,320)$ 383,945$ 289,501$ (94,444)$

Recapitulation of Excess (Deficiency) of RevenuesOver (Under) Expenditures

Budgeted Fund Balance 423,265$ (39,320)$ 383,945 289,501$ (94,444)$

Total 423,265$ (39,320)$ 383,945$ 289,501$ (94,444)$

See Management's Discussion and Analysis section of this report for an explanation of significant budget variances, original and final.

60

C-2

VarianceOriginal Budget Final FavorableBudget Transfers Budget Actual (Unfavorable)

REVENUES:Federal Sources 30,871$ -$ 30,871$ 30,871$ -$

Total Revenues 30,871 - 30,871 30,871 -

EXPENDITURES:Instruction:Salaries of Teachers 9,470 - 9,470 9,470 -Purchased Prof/Tech Services 19,223 - 19,223 19,223 -

Total Instruction 28,693 - 28,693 28,693 -

Support Services:Personal Services - Employee Benefits 2,178 - 2,178 2,178 -

Total Support Services 2,178 - 2,178 2,178 -

Total Expenditures 30,871 - 30,871 30,871 -

Excess (Deficiency) of Revenues Over(Under) Expenditures -$ -$ -$ -$ -$


Special Revenue FundBudgetary Comparison Schedule


61

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

62

C-3

Note A - Explanation of differences between Budgetary Inflows andGAAP Revenues and Expenditures


Fund FundSources/Inflows of Resources

Actual amounts (budgetary) "revenues" from the [C-1] 1,621,044$ [C-2] 30,871$

budgetary comparison schedules

Difference - Budget to GAAPGrant accounting budgetary basis differs fromGAAP in that encumbrances are recognized asexpenditures, and the related revenue isrecognized -

Total revenues as reports on the statement of revenues,expenditures and changes in fund balance -governmental funds. [B-2] 1,621,044$ [B-2] 30,871$

Uses/Outflows of resources

Actual amounts (budgetary basis) "total outflows" fromthe budgetary comparison schedule [C-1] 1,661,970$ [C-2] 30,871$

Differences - Budget to GAAP:

Encumbrances for supplies and equipment ordered butnot received are reported in the year the order is placedfor budgetary purposes, but in the year the supplies arereceived for financial accounting purposes. -

Total expenditures as reported on the statement ofrevenues, expenditures and changes in fund balances -governmental funds. [B-2] 1,661,970$ [B-2] 30,871$


Note to RSI

Budgetary Comparison ScheduleBudget-To-GAAP Reconciliation


63

OTHER SUPPLEMENTARY INFORMATION

64

SECTION E – SPECIAL REVENUE FUNDDETAIL STATEMENTS

Special revenue funds are used to account for the proceeds of specific revenuesources (other than expandable trusts or major capital projects) that are legallyrestricted to expenditures for specific purposes.

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66

SECTION G – PROPRIETARY FUNDSDETAIL STATEMENTS

Proprietary Funds are used to account for operations that are financed andoperated in a manner similar to private business enterprises – where the intent ofthe district’s board is that the costs of providing goods or services be financedthrough user charges.

Food Services Fund – This fund provides for the operation of food service in allschool district.

THIS SECTION HAS ALREADY BEEN INCLUDED IN STATEMENTS B-4, B-5, ANDB-6.

67

SECTION H – FIDUCIARY FUNDSDETAIL STATEMENT

Fiduciary Funds are used to account for funds received by the Charter School fora specific purpose.

Agency Funds are used to account for assets held by the school district as anagent for individuals, private organizations, other governments and/or otherfunds.

Payroll Fund – this agency fund is used to account for payroll transactionsof the school district.

68

H-1

TotalPayroll Payroll AgencyAgency Account Fund

ASSETS:Cash and Cash Equivalents 42,240$ 40,033$ 82,273$

Total Assets 42,240$ 40,033$ 82,273$

LIABILITIES:Liabilities:

Interfund Payable 42,240$ 40,033$ 82,273$

Total Liabilities 42,240$ 40,033$ 82,273$

Agency Fund


Fiduciary FundsCombining Statement of Fiduciary Net Position

June 30, 2014

69

H-4

Balance Cash Cash BalanceJuly 1, 2013 Receipts Disbursements June 30, 2014

ASSETS:Cash and Cash Equivalents 54,654$ 214,246$ 226,660$ 42,240$

Total Assets 54,654$ 214,246$ 226,660$ 42,240$

LIABILITIES:Interfund Accounts Payable 54,654$ 214,246$ 226,660$ 42,240$

Totals 54,654$ 214,246$ 226,660$ 42,240$


Fiduciary Funds

Schedule of Receipts and DisbursementsJune 30, 2014

Payroll Agency Funds

70

STATISTICAL SECTION(UNAUDITED)

STATISTICAL SECTION (UNAUDITED)Riverbank Charter School of Excellence has been inoperation for five (5) years. GASB requires that ten yearsof statistical data be presented. State law usually grantscharters for less than ten years. Therefore, only statisticaldata for five (5) years are available and have beenpresented. Each year thereafter, an additional year’s datawill be included until ten years of data is presented.

71

Riverbank Charter School of Excellence J seriesStatistical SectionINTRODUCTION TO THE STATISTICAL SECTION

Contents

Financial TrendsThese schedules contain trend information to help the reader understandhow the charter school’s financial performance and well being have changedover time.

Revenue Capacity (Not Applicable To Charter School)These schedules contain information to help the reader assess the district’smost significant local revenue source, the property tax.

Debt CapacityThese schedules present information to help the reader assess theaffordability of the charter school’s current levels of outstanding debt and thecharter school’s ability to issue additional debt in the future.

Demographic and Economic InformationThese schedules offer demographic and economic indicators to help thereader understand the environment within which the charter school’s financialactivities take place.

Operating InformationThese schedules contain service and infrastructure data to help the readerunderstand how the information in the charter school’s financial report relatesto the services the district provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived fromthe comprehensive annual financial reports (CAFR) for the relevant year. The charterschool implemented GASB Statement 34 in the fiscal year ending June 30, 2010;schedules presenting charter school-wide information include information beginning inthat year.

72

FINANCIAL TRENDS

73

J-1

2014 2013 2012 2011 2010

Governmental ActivitiesUnrestricted 289,501$ 330,428$ 245,713$ 137,575$ (5,826)$

Total Governmental Activities Net Assets/Position 289,501$ 330,428$ 245,713$ 137,575$ (5,826)$

Business-Type ActivitiesUnrestricted 10,849$ 12,528$ 12,888$ 10,764$ 4,577$

Total Business-Type Activities Net Assets/Position 10,849$ 12,528$ 12,888$ 10,764$ 4,577$

Charter School-wideUnrestricted 300,350$ 342,956$ 258,601$ 148,339$ (1,249)$

Total Charter School-wide Net Assets/Position 300,350$ 342,956$ 258,601$ 148,339$ (1,249)$


Net Assets/Position by ComponentLast Five Fiscal Years

(accrual basis of accounting)

Source: Charter School's Records

74

J-2

2014 2013 2012 2011 2010Expenses

Governmental Activities:Instruction 771,055$ 896,360 767,187 534,634 441,435Administration 762,587 441,606 448,514 335,023 360,701Support Services 159,199 147,945 147,469 133,592 184,095Capital Outlay - - - 73,868 36,426

Total Governmental Activites Expenses 1,692,841 1,485,911 1,363,170 1,077,117 1,022,657

Business-Type Activities:Food Service 23,245 24,821 22,707 16,409 10,017

Total Business-Type Activites Expenses 23,245 24,821 22,707 16,409 10,017

Total Charter School Expenses 1,716,086$ 1,510,732$ 1,385,877$ 1,093,526$ 1,032,674$

Program Revenues

Governmental Activities:Operating Grants and Contributions 24,417$ 15,468$ 7,160$ 3,612$ 2,165$

Total Governmental Activites Expenses 24,417 15,468 7,160 3,612 2,165

Business-Type Activities:Charges for Services 10,264 14,136 15,128 16,448 10,114Operating Grants and Contributions 11,302 10,325 9,703 6,148 4,480

Total Business-Type Activities Expenses 21,566 24,461 24,831 22,596 14,594

Total Charter School Program Revenue 45,983$ 39,929$ 31,991$ 26,208$ 16,759$

Net (Expense)/Revenue

Governmental Activities (1,668,424)$ (1,470,443)$ (1,356,010)$ (1,073,505)$ (1,020,492)$Business-Type Activities (1,679) (360) 2,124 6,187 4,577

Total Charter School Net Expense (1,670,103)$ (1,470,803)$ (1,353,886)$ (1,067,318)$ (1,015,915)$

General Revenues and Other Changes in Net Assets/Position

Governmental Activities:General Purposes 926,518$ 519,692$ 862,793$ 713,437$ 434,916$Federal and State Aid Not Restricted 700,980 1,035,466 599,077 503,469 579,750Miscellaneous Income - - 2,278 - -

Total Governmental Activities 1,627,498 1,555,158 1,464,148 1,216,906 1,014,666

Total Charter School Wide 1,627,498$ 1,555,158$ 1,464,148$ 1,216,906$ 1,014,666$

Change in Net Assets/Position

Governmental Activities (40,926)$ 84,715$ 108,138$ 143,401$ (5,826)$Business-Type Activities (1,679) (360) 2,124 6,187 4,577

Total Charter School (42,605)$ 84,355$ 110,262$ 149,588$ (1,249)$

RIVERBANK CHARTER SCHOOL OF EXCELLENCEChanges in Net Assets/Position

Last Five Fiscal Years(accrual basis of accounting)


75

J-3

2014 2013 2012 2011 2010General Fund

Unreserved 289,501$ 330,428 245,713 137,575 (5,826)

Total General Fund 289,501$ 330,428$ 245,713$ 137,575$ (5,826)$


Fund Balances - Governmental FundsLast Five Fiscal Years

(modified accrual basis of accounting)


76

J-4

2014 2013 2012 2011 2010

Revenues:

Local Sources: 926,518$ 519,692$ 863,078$ 713,437$ 434,916$Revenue from Community Services Activities - 1,993 - -State Sources 694,526 1,037,460 569,589 488,420 553,933Federal Sources 30,871 13,474 36,648 18,661 27,982

Total Revenues 1,651,915 1,570,626 1,471,308 1,220,518 1,016,831

Expenditures:

Instruction 614,694 713,829 627,123 439,842 380,718Administration 909,256 615,427 578,159 421,785 335,633Support Services 168,891 156,655 157,888 141,622 269,880Capital Outlay - - - 73,868 36,426

Total Expenditures 1,692,841 1,485,911 1,363,170 1,077,117 1,022,657

Excess (Deficiency) of RevenuesOver (Under) Expenditures (40,926) 84,715 108,138 143,401 (5,826)

Net Change in Fund Balance (40,926)$ 84,715$ 108,138$ 143,401$ (5,826)$

RIVERBANK CHARTER SCHOOL OF EXCELLENCEChanges in Fund Balances - Governmental Funds

Last Five Fiscal Years(modified accrual basis of accounting)


77

OPERATING INFORMATION

78

J-16

Function 2014 2013 2012 2011 2010

Instruction 13 12 11 12 9

Administrative 3 3 2 2 2

Support Services 3 3 2 2 2

Food Service 1 1 1 - -

Total 20 19 16 16 13


Full-Time Equivalent Charter School Employees by FunctionLast Five Fiscal Years


79

J-1

7

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ge

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ge

Perc

ent

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/D

aily

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dent

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ting

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endance

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llment

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143

1,6

61,9

70

$11,6

22

$12.0

8%

13

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143.2

138

0.8

4%

96.3

7%

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142

1,4

72,4

37

10,3

69

$5.6

9%

12

9:1

142

138

4.9

3%

97.1

8%

2012

135

1,3

24,5

29

9,8

11

$17.5

9%

11

10:1

135

131.6

12.5

9%

97.4

8%

2011

118

984,5

88

8,3

44

$-1

7.8

5%

12

10:1

118

112.4

38.9

8%

95.2

5%

2010

72

731,3

40

10,1

58

$N

/A9

8:1

72

72

N/A

100.0

0%

RIV

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BA

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s

80

J-20

Coverage DeductibleCOMMERCIAL PACKAGE

Commercial General Liability - Great AmericanEach Occurrence 1,000,000$General Aggregate 2,000,000Products-completed operations aggregate limit 2,000,000Personal and advertising injury 1,000,000Damage to premises rented 100,000Premises medical payments 5,000

Commercial Property - Great AmericanBuilding (RC) 90% co-ins 3,000,000$ 1,000$Business Personal Property 75,000 1,000Equipment Breakdown Limit 3,075,000

Business Automobile Coverage - Great AmericanNon-owned and Hired Car Limit 1,000,000$

Umbrella Liability - Great AmericanLimit of Liability Each occurrence 4,000,000$General Aggregate 4,000,000Products/Completed Ops Agg 4,000,000Self-Insured Retention 10,000

Workman's Compensation - The HartfordBodily Injury by Accident 1,000,000$Bodily Injury by Disease (policy limit) 1,000,000Bodily Injury by Disease (each employee) 1,000,000

D&O Including Employment Related Practices & EducatorsWrongful Acts (Great American)

D&O Limit 1,000,000$Employment Related Practices Limit 1,000,000Retention Limit 2,500$

Student Accident Insurance (Bollinger)Full Excess Coverage - Maximum Benefit 1,000,000$


June 30, 2010(Unaudited)

Insurance Schedule


81

J-2

1

2012

2013

2014

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82

SINGLE AUDIT SECTION

83



(908) 686-3484FAX – (908) 686-6055


K-1 Report on Internal Control over Financial Reporting and on Compliance andOther Matters Based On an Audit of Financial Statements Performed InAccordance With Government Auditing Standards

K-1Page 1


Honorable President andMembers of the Board of TrusteesRiverbank Charter School of ExcellenceCounty of BurlingtonRoebling, New Jersey

We have audited, in accordance with the auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained inGovernment Auditing Standards issued by the Comptroller General of the UnitedStates; and audit requirements as prescribed by the Office of School Finance,Department of Education, State of New Jersey, the financial statements of thegovernmental activities, the business-type activities, the aggregate discretely presentedcomponent units, each major fund, and the aggregate remaining fund information ofRiverbank Charter School of Excellence (Charter School), in the County of Burlington,State of New Jersey, as of and for the fiscal year ended June 30, 2014, and the relatednotes to the financial statements, which collectively comprise the Charter School’s basicfinancial statements, and have issued our report thereon dated October 23, 2014.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered theCharter School’s internal control over financial reporting (internal control) to determinethe audit procedures that are appropriate in the circumstances for the purpose ofexpressing our opinions on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness of the Charter School’s internal control.Accordingly, we do not express an opinion on the effectiveness of the Charter School’sinternal control.

A deficiency in internal control exists when the design or operation of a control does notallow management or employees, in the normal course of performing their assignedfunctions, to prevent, or detect and correct, misstatements on a timely basis. A materialweakness is a deficiency, or a combination of deficiencies, in internal control, such thatthere is reasonable possibility that a material misstatement of the entity’s financialstatements will not be prevented, or detected and corrected on a timely basis.

84

K-1Page 2

A significant deficiency is a deficiency, or a combination of deficiencies, in internalcontrol that is less severe than a material weakness, yet important enough to meritattention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the firstparagraph of this section and was not designed to identify all deficiencies in internalcontrol that might be material weakness or significant deficiencies. Given theselimitations, during our audit we did not identify any deficiencies in internal control thatwe consider to be material weakness. However, material weakness may exist that havenot been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Charter School’s financialstatements are free from material misstatement, we performed tests of its compliancewith certain provisions of laws, regulations, contracts, and grant agreements,noncompliance with which could have a direct and material effect on the determinationof financial statement amounts. However, providing an opinion on compliance withthose provisions was not an objective of our audit, and accordingly, we do not expresssuch an opinion. The results of our tests disclosed no instances of noncompliance orother matter that are required to be reported under Government Auditing Standards andaudit requirements as prescribed by the Office of School Finance, Department ofEducation, State of New Jersey.

Restriction on Use

This report is intended solely for the information and use of management, the auditcommittee, Riverbank Charter School of Excellence Board of Trustees, others within theentity, and the New Jersey Department of Education and other federal and stateawarding agencies and pass-through entities and is not intended to be and should notbe used by anyone other than those specified parties.


October 23, 2014

85



(908) 686-3484FAX – (908) 686-6055


K-2 Report on Compliance with Requirements That Could Have a Direct andMaterial Effect on Each Major Program and On Internal Control overCompliance In Accordance With OMB Circular A-133 and New Jersey OMBCircular 04-04

K-2Page 1


Honorable President andMembers of the Board of TrusteesRiverbank Charter School of ExcellenceCounty of BurlingtonRoebling, New Jersey

Report on Compliance for Each Major State Program

We have audited the compliance of the Riverbank Charter School of Excellence(Charter School), in the County of Burlington, State of New Jersey, with the types ofcompliance requirements described in the New Jersey State Aid/Grant ComplianceSupplement that could have a direct and material effect on each of the Charter School’smajor state programs for the year ended June 30, 2014. The Charter School’s majorstate programs are identified in the summary of auditor’s results section of theaccompanying schedule of findings and questioned costs.

Management’s Responsibility

The Charter School’s management is responsible for compliance with the requirementsof laws, regulations, contracts, and grants applicable to its state programs.

Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of the CharterSchool’s major state programs based on our audit of the types of compliancerequirements referred to above. We conducted our audit of compliance in accordancewith auditing standards generally accepted in the United States of America; thestandards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; the audit requirements asprescribed by the Office of School Finance, Department of Education, State of NewJersey; and New Jersey OMB’s Circular 04-04, Single Audit Policy for Recipients ofFederal Grants, State Grants and State Aid. Those standards and New Jersey OMB’sCircular 04-04 require that we plan and perform the audit to obtain reasonableassurance about whether noncompliance with the types of compliance requirements

86

K-2Page 2

referred to above that could have a direct and material effect on a major state programoccurred. An audit includes examining, on a test basis, evidence about the CharterSchool’s compliance with those requirements and performing such other procedures aswe considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance foreach major state program. However, our audit does not provide a legal determination ofthe Charter School’s compliance.

Opinion on Each Major State Program

In our opinion, the Riverbank Charter School of Excellence, in the County of Burlington,State of New Jersey, complied, in all material respects, with the types of compliancerequirements referred to above that could have a direct and material effect on each ofits major state programs for the year ended June 30, 2014.

Report on Internal Control over Compliance

Management of Riverbank Charter School of Excellence is responsible for establishingand maintaining effective internal control over compliance with the types of compliancerequirements referred to above. In planning and performing our audit of compliance, weconsidered the Charter School’s internal control over compliance with the types ofrequirements that could have a direct and material effect on each major state programto determine the auditing procedures that are appropriate in the circumstances for thepurpose of expressing an opinion on compliance for each major state program and totest and report on internal control over compliance in accordance with New JerseyOMB’s Circular 04-04, but not for the purpose of expressing an opinion on theeffectiveness of internal control over compliance. Accordingly, we do not express anopinion on the effectiveness of the Charter School’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of acontrol over compliance does not allow management or employees, in the normalcourse of performing their assigned functions, to prevent, or detect and correct,noncompliance with a type of compliance requirement of a state program on a timelybasis. A material weakness in internal control over compliance is a deficiency, orcombination of deficiencies, in internal control over compliance, such that there is areasonable possibility that material noncompliance with a type of compliancerequirement of a state program will not be prevented, or detected and corrected, on atimely basis. A significant deficiency in internal control over compliance is a deficiency,or a combination of deficiencies, in internal control over compliance with a type ofcompliance requirement of a state program that is less severe than a material weaknessin internal control over compliance, yet important enough to merit attention by thosecharged with governance.

87

K-2Page 3

Our consideration of internal control over compliance was for the limited purposedescribed in the first paragraph of this section and was not designed to identify alldeficiencies in internal control over compliance that might be material weaknesses orsignificant deficiencies. We did not identify any deficiencies in internal control overcompliance that we consider to be material weaknesses. However, materialweaknesses may exist that have not been identified.

Restriction on Use

This report is intended solely for the information and use of management, the auditcommittee, Riverbank Charter School of Excellence Board of Trustees, others within theentity, and the New Jersey Department of Education and other federal and stateawarding agencies and pass-through entities and is not intended to be and should notbe used by anyone other than those specified parties.


October 23, 2014

88

K-3

Schedule

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89

K-4

Schedule

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90

K-5Page 1

K-5 Notes to the Schedules of Expenditures of Awards and Financial AssistanceRIVERBANK CHARTER SCHOOL OF EXCELLENCE

Notes to the Schedules of Expenditures Of Awards and Financial AssistanceJune 30, 2014

NOTE 1. GENERAL

The accompanying schedules of expenditures of federal awards and state financialassistance include federal and state award activity of the Board of Trustees, RiverbankCharter School of Excellence. The Board of Trustees is defined in Note 1 to the board’sbasic financial statements. All federal and state awards received directly from federaland state agencies, as well as federal awards and state financial assistance passedthrough other government agencies is included on the schedule of expenditures offederal awards and state financial assistance.

NOTE 2. BASIS OF ACCOUNTING

The accompanying schedules of expenditures of awards and financial assistance arepresented on the budgetary basis of accounting with the exception of programs recordedin the food service fund, which are presented using the accrual basis of accounting.These bases of accounting are described in Note 1 to the board’s basic financialstatements. The information in this schedule is presented in accordance with therequirements of U.S. OMB Circular A-133, Audits of States, Local Governments, andNon-Profit Organizations and New Jersey OMB’s Circular 04-04, Single Audit Policy forRecipients of Federal Grants, State Grants and State Aid. Therefore, some amountspresented in this schedule may differ from amounts presented in, or used in thepresentation of, the basic financial statements. This does not apply to charter schools asdistricts are not permitted to defer the June payments to charter schools.

NOTE 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS

The basic financial statements present the general fund and special revenue fund on aGAAP basis. Budgetary comparison statements or schedules (RSI) are presented for thegeneral fund and special revenue fund to demonstrate finance-related legal compliancein which certain revenue is permitted by law or grant agreement to be recognized in theaudit year, whereas for GAAP reporting, revenue is not recognized until the subsequentyear or when expenditures have been made.

The general fund is presented in the accompanying schedules on the modified accrualbasis with the exception of the revenue recognition of the one or more deferred Junestate aid payments in the current budget year, which is mandated pursuant to N.J.S.A.18A:22-44.2. For GAAP purposes payments are not recognized until the subsequent

91

K-5Page 2

RIVERBANK CHARTER SCHOOL OF EXCELLENCENotes to the Schedules of Expenditures Of Awards and Financial Assistance

June 30, 2014

NOTE 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS (CONTINUED)

budget year due to the state deferral and recording of the one or more June state aidpayments in the subsequent year. The special revenue fund is presented in theaccompanying schedules on the grant accounting budgetary basis which recognizesencumbrances as expenditures and also recognizes the related revenues, whereas theGAAP basis does not. The special revenue fund also recognizes the one or more Junestate aid payment in the current budget year, consistent with N.J.S.A. 18A:22-4.2.

The net adjustment to reconcile from the budgetary basis to the GAAP basis is none forthe general fund and none for the special revenue fund. See Notes to the RequiredSupplementary Information for a reconciliation of the budgetary basis to the modifiedaccrual basis of accounting for the general and special revenue funds. Awards andfinancial assistance revenues are reported in the board’s basic financial statements on aGAAP basis as presented below:

Federal State TotalGeneral Fund -$ 694,526$ 694,526$Special Revenue Fund 30,871 - 30,871Food Service Fund 10,896 406 11,302Total Awards & Financial Assistance 41,767$ 694,932$ 736,699$

NOTE 4. RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS

Amounts reported in the accompanying schedules agree with the amounts reported in therelated federal and state financial reports.

NOTE 5. FEDERAL AND STATE LOAN OUTSTANDING

Riverbank Charter School of Excellence has no loan balances outstanding at June 30,2014.

92

K-5Page 3

RIVERBANK CHARTER SCHOOL OF EXCELLENCENotes to the Schedules of Expenditures

Of Awards and Financial AssistanceJune 30, 2014

NOTE 6. OTHER

Revenues and expenditures reported under the Food Distribution Program representcurrent year value received and current year distributions respectively. The amountreported as TPAF Pension Contributions represents the amount paid by the state onbehalf of the Charter School for the year ended June 30, 2014. TPAF Social SecurityContributions represents the amount reimbursed by the state for the employer’s share ofsocial security contributions for TPAF members for the year ended June 30, 2014.

NOTE 7. SCHOOLWIDE PROGRAM FUNDS

Schoolwide programs are not separate federal programs as defined in OMB Circular A-133; amounts used in schoolwide programs are included in the total expenditures of theprogram contributing the funds in the Schedule of Expenditures of Federal Awards.

Program TotalTitle I, Part A: Grants to Local Education Agencies 11,933$

Total 11,933$

93

K-6Page 1

K-6 Schedule of Findings and Questioned CostsRIVERBANK CHARTER SCHOOL OF EXCELLENCE

Schedule of Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2014

Section I – Summary of Auditor’s Results

Financial Statements

Type of auditors’ report issued on financial statements Unmodified

Internal control over financial reporting:

1) Material weakness(es) identified? _____ Yes __X__ No

2) Significant Deficiencies identified that are not considered to Nonebe material weaknesses? _____ Yes __X__ Reported

Noncompliance material to basic financial statementsnoted? _____ Yes __X__ No

State Awards Section

Dollar threshold used to distinguish between Type A andType B programs: $300,000

Auditee qualified as low-risk auditee? __X__ Yes _____ No

Internal control over major programs:

1) Material weakness(es) identified? ______ Yes __X__ No

2) Significant Deficiencies identified that are not considered to Nonebe material weaknesses? ______ Yes __X__ Reported

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

Any audit findings disclosed that are required to be reported inaccordance with NJOMB Circular Letter 04-04? ______ Yes __X__ No

Identification of major state programs:

GMIS Number(s) Name of State Program

____14-495-034-5120-071______ ______Local Levy – State Share __________________

___________________________ _____________________________________________

___________________________ _____________________________________________

___________________________ _____________________________________________

94

K-6Page 2

RIVERBANK CHARTER SCHOOL OF EXCELLENCESchedule of Findings and Questioned Costs


Section II – Financial Statement Findings

This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations ofprovisions of contracts and grant agreements, and abuse related to the financial statements for whichGovernment Auditing Standards requires reporting in a Circular A-133 audit. See paragraphs 13.15 and13.35.

Finding

There were no matters reported.

95

K-6Page 3

RIVERBANK CHARTER SCHOOL OF EXCELLENCESchedule of Findings and Questioned Costs


Section III – Federal Awards and State Financial AssistanceFindings and Questioned Costs

This section identifies audit findings required to be reported by NJOMB Circular Letter 04-04.

STATE AWARDS

Findings


96

K-7

RIVERBANK CHARTER SCHOOL OF EXCELLENCESummary Schedule of Prior Year Audit Findings

And Questioned Costs As Prepared by ManagementFor the Fiscal Year Ended June 30, 2014

K-7 Summary Schedule of Prior Year Audit Findings and Questioned Costs asPrepared by Management

STATUS OF PRIOR-YEAR FINDINGS

This Section identifies the status of prior-year findings related to the basic financialstatements and federal and state awards that are required to be reported in accordancewith Chapter 6.12 of Government Auditing Standards, USOMB Circular A-133(.315(a)(b)) and NJOMB’s Circular 04-04.

Finding:


97

Documents

RIVERBANK CHARTER SCHOOL OF EXCELLENCE COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL ... · 2015-08-11 · RIVERBANK CHARTER SCHOOL OF EXCELLENCE COMPREHENSIVE ANNUAL FINANCIAL REPORT