algiers charter schools association inc. (acsa)file/00016444.pdfschedule 1: general fund...

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ALGIERS CHARTER SCHOOLS ASSOCIATION

FCVANCI4L REPORT

For the Year Ended June 30, 2009

Under provisions of state law, this report is a public document.Acopyofthe report has been submitted to the entity an6 other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and. where appropriate, at the office of the parish clerk of court.

Release Date y /oc/ / / " iP ikU


TABLE OFCONTENTS Page

FINANCIAL SECTION

Independent Auditor's Report 1

Required Supplementary Information - Part I

Management's Discussion and Analysis 3

Basic Financial Statements

Govermnent-Wide Financial Statements: Statement of Net Assets 6 Statement of Activities 7

Fund Financial Statements: Govemmental Funds:

Balance Sheet 8 Reconciliation ofthe Balance Sheet to the Statement of Net Assets 9 Statement of Revenues, Expenditures, and Changes in Fund Balances 10 Reconciliation ofthe Statement of Revenues, Expenditures, and Changes

in Fund Balances to the Statement of Activities 11

Notes to Financial Statements 12

Required Supplementary Information - Part n

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Harte School Fund Budget and Actual 22

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Karr School Fund Budget and Actual 23

SINGLE AUDIT SECTION

Independent Auditor's Reports and Information Required by the Single Audit Act and Government Auditing Standards

Independent Auditor's Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit ofFinancial Statements Perforaied m Accordance y/ith Govemment Auditing Standards 24


TABLE OF CONTENTS (CONTINUED)

SINGLE AUDTT SECTION (CONTINUED) Page

Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Federal Award Program and on Intemal Control Over Compliance in Accordance with OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards 26

Schedule of Expenditures of Federal Awards 28

Notes to Schedule of Expenditures of Federal Awards 29

Schedule of Findings and Questioned Costs 30

Summary Schedule of Prior Audit Findings and Questioned Costs 32

PERFORMANCE STATISTICAL DATA

Schedules Required by State Law

Independent Accountant's Report on Applying Agreed-Upon Procedures 33 Schedule 1: General Fund Instructional and Support Expenditures and

Certain Local Revenue Sources for the Year Ended June 30, 2007 36 Schedule 2: Education Levels of Public School Staff 37 Schedule 3: Number and Type of Public Schools 38 Schedule 4: Experience of Public Principals, Assistant Principals, and

Full Time Classroom Teachers 39 Schedule 5: Public School Staff Data 40 Schedule 6: Class Size Characteristics 41 Schedule 7: Louisiana Educational Assessment Program (LEAP) for the

21'* Century 42 Schedule 8: Graduation Exit Exam for the 21'* Century 43 Schedule 9: Integrated Louisiana Educational Assessment

Program (iLEAP) 44

Dedicated Millage Report Required by Orleans Parish School Board

Independent Accountant's Report on Applying Agreed-Upon Procedures 46

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REBOWE & COMPANY CERTIFIED PUBLIC ACCOUNTANTS

CONSULTANTS A PROFESSIONAL CORPORATION

3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe,com

EVDEPENDENT A U D i r O R ' S R E P O R T

Board of Directors of Algiers Charter Schools Association New Orleans, Louisiana

We have audited the accompanying financial statements of the govemmental activities, each major fimd, and the aggregate remaining fund information of Algiers Charter Schools Association ("ACSA") (A Nonprofit Organization and a component unit of Orleans Parish School Board), as of and for the year ended June 30, 2009, which collectively comprise ACSA's basic financial statements as listed in the table of contents. These financial statements are the responsibility of ACSA's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We beUeve that our audit provides a reasonable basis for our opinion.

In our opinion, the fmancial statements referred to above present fairly, in all material respects, the respective financial position of the govemmental activities, each major fimd, and the aggregate remaining fimd information of ACSA as of June 30, 2009, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2009 on our consideration of ACSA's intemal control over financial reporting and on our tests of its compUance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the intemal control over fmancial reporting or on compliance. That

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report is an integral part of an audit performed in accordance with Govemment Auditing Standards and should be considered in assessing the results of our audit.

The Management's Discussion and Analysis and budgetary comparisons on pages 3 through 5 and 22 and 23, respectively, are not a required part of the basic financial statements but are supplementary information required by the Govemmental Accounting Standard Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise ACSA's basic financial statements. The accompanying Schedule of Expenditures of Federal Awards on page 29 is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Govemments, and Non-Profit Organizations, and is not a required part of the basic fmancial statements of ACSA. The Schedule of Expenditures of Federal Awards has been subjected to the auditing procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

December 31,2009

MANAGEMENT'S DISCXISSION AND ANALYSIS

ALGIERS CHARTER SCHOOLS ASSOCIATION Management Discussion and Analysis

For the Year Ended June 30,2009

Algiers Charter Schools Association ("ACSA") management's discussion and analysis is intended to assist the reader in focusing on significant financial issues, provide an overview of the fmancial activity of the two schools which it operates, identify ACSA's financial position and its ability to address the next and subsequent years' challenges. It also identifies any material deviations fi-om the fmancial plan and identifies individual school issues or concems. This is a requirement of the Govenmiental Accounting Standards Board m their Statement No. 34 Basic Financial Statements - and Management's Discussion and Analysis —for State and Local Govemments and is intended to provide the fmancial resuhs for the year ended June 30, 2009. The following is an illustration of how these financial reports are presented.

GASB 34 requires the presentation of two basic types of financial statements: Government-Wide Financial Statements and Fund Financial Statements.

Govemment-Wide Financial Statements

The govenunent-vride financial statements provide a perspective of ACSA as a whole. These statements use the fiiU accmal basis of accounting similar to private sector companies. There are two govemment-wide statements: the Statement of Net Assets and the Statement of Activities.

The Statement of Net Assets combines and consolidates govemmental fimds' current fmancial resources with capital assets and long-term obligations, regardless of whether they are currently available or not.

Consistent with the fiill accmal basis method of accounting the Statement of Activities accounts for current year revenues and expenses regardless of when cash is received or paid. The intent of this statement is to summarize and simplify the user's analysis ofthe costs of various school services.

Fund Financial Statements

The fiind statements are similar to financial presentations of typical govemmental agencies focusing on ACSA's Major Funds. The fijnd statements are reported using the modified accmal accounting method. Under this basis of accounting, revenues are recorded when received except where they are measurable and available and therefore represent resources that may be appropriated. Expenditures are accounted for in the period that goods and services are used in school programs. In addition, capital asset purchases are expensed and not recorded as assets. Fund types include the General Fxmd, Special Revenue fiinds and a Fiduciary Fund. The General Fund is used primarily to account for the general education requirements of the ACSA. Its revenues are derived from state and federal grants. The Special Revenue fimds are used to account for specific revenues that are legally restricted to expenditures for a particular purpose. The Fiduciary Fund accounts for assets held by the ACSA in a trustee capacity as an agent for various student groups and parents.

TABLE 1 NET ASSETS

ASSETS Current and other assets Capital assets, net

Total Assets LIABZLITIES

Current Uabilities Non-current liabilities

Total Liabilities

NET ASSETS Invested in coital assets, net of related debt

Unrestricted

Total Net Assets

$

$

7,688,360 1,510,653

9,199,013

2,252,085 14,970

2,267,055

1,510,653

5,421,305

6,931,958

TABLE 2 CHANGES IN NET ASSETS

REVENUE Program Revenues:

Charges for Services $ 81,613 (Operating grants and contributions 4,668,573

General Revenues: 0 Minimum Foundation Program 11,666,589 Contributions and donations 1,000 Interest and investment earnings 32,953

EXPENSE Instmction:

Regular Special Education aher Special Programs

Support Services: Student services Instructional staff support General administration School adminisUtition Business Services Operation and maintenance

Total Revenues

of plant Student transportation services Central Services Food service

Increase in Net Assets

Net Assets, Beginning of Year

Net Assets, End of Year

Total Expenses

16,450,728

5,972,273 1,425,979

208,095 1,038,701

0 649,221

1,614,468 261,697

1,100,450 436,332

1,386,539 692,625 977,727 438,881

16,202,988

247,740 6,684,218

$ 6,931,958

Minimum Foundation Program A significant portion of state fimdmg to ACSA is the Minimum Foundation Program (MFP). The MFP is fimding from the state and local govemment for each student and is established annually. ACSA's MFP fiinding was $11,666,589 for tiie 2008-2009 school year.

Titie I Grant This grant is a federally fiinded grant that is passed through the State Board of Education to help local schools improve the teaching and learning of children failing, or most at-risk of failing, to meet challenging state academic standards. As of June 30, 2009, $1,933,645 was expended and received.

Economic Factors and Next Year's Budget

In the 2009/2010 school year, ACSA expects a projected combined enrollment of 1,465 students for Alice M. Harte Elementary and Edna Karr Senior High.

The majority of revenues are from the MFP. The projected MFP fimding for the 2009/2010 school year, which is based on student count, should total approximately $11.4 million. Based on mformation received from the state, ACSA anticipates receiving federal grants for the 2009/2010 school year totalmg $2.1 million. ACSA will budget expenses accordmg to the projected revenues however ACSA expects to make adjustments as the actual revenues change. ACSA plans to have little or no surplus at Jime 30, 2010. ACSA anticipates that while they will have to expend these funds throughout the year, they will be seeking reimbursement durmg the school year as opposed to claims at the end ofthe year.

Contacting ACSA's Financial Management

While this fmancial report is designed to provide fiill and complete disclosure ofthe fmancial condition and operations of ACSA, citizens groups, taxpayers, parents, students, other parish officials, investors or creditors may need further details. To obtain such details, please contact Algiers Charter Schools Association, 3712 MacArthur, Suite lOOA, New Orleans, LA 70114, or by calling (504) 302-7000 during regular office hours, Monday through Friday, 9:00 a.m. to 5:00 p.m.. Central Standard Time, or e-mail at Stuart.Gay{gtheacsa.org.

BASIC FEVANCIAL STATEMENTS

ALGIERS CHARTER SCHOOLS ASSOCIATION STATEMENT OF NET ASSETS

June 30,2009

ASSETS

Cash and cash equivalents Receivables: Intergovemmental Otiier

Prepaid expenses Deposits Invested in capital assets, net of related debt

Total assets

Govemmental Activities

$ 2,650,601

4,969,455 5,084

61,120 2,100

1,510,653

9,199,013

LIABILITIES

Accounts payable Accmed expenses Due to pooled cash, net Due to other govemments Long-term liabilities

Due within one year Due in more than one year

Total liabilities

NET ASSETS Invested in capital assets, net of related debt Unrestricted

Total net assets

345,211 1,446,815

159,270 51,026

249,763 14,970

2,267,055

1,510,653 5,421,305

$ 6,931,958

The notes to the financial statements are an integral part of this statement.

ALGIERS CHARTER SCHOOLS ASSOCIATION STATEMENT OF ACTIVTriES For the Year Ended June 30,2009

Program Revenues

Net (Expense) Revenue and Changes in Net Assets

Functions/P rogram s

Governmental Activities: Instruction:

Regular Special Education Other Special Programs

Support Services Student Services Instructional staff support General administration School Administration Business Services Plant Services Student transportation services Central Services Food Services

Total governmental activities

Charges for Expenses Services

$ 5,972,273 $ 1,425,979

208,095 1,038,701

649,221 1,614,468

261,697 1,100,450

436,332 1,386,539

692.625 977,727 438,881 81,613

$ 16,202,988 $ 81,613

General Revenues:

Operating

$

$

Grants

1,605,315 81,945 9.711

1,054,315

158.768 922,783

38,983 233,782

10,168 49,308 24,863 36,888

441,744

4,668,573

Govemmental

S

s

Activities

(4,366,958) (1,344,034)

(198,384) 15,614

(490,453) (691,685) (222,714) (866,668) (426,164)

(1.337.231) (667.762) (940,839)

84,476

(11,452,802)

Grants and contributions not restricted to specific purposes: Minimum Foundation Program Contributions & donations Interest Income

Total general revenues

Change in net assets

Net assets, beginning of year (as restated)

Net assets, ending of year -L

11,666,589 1,000

32,953

11,700,542

247,740

6,684,218

6,931,958


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ALGIERS CHARTER SCHOOLS ASSOCIATION RECONCH.IATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE

STATEMENT OF NET ASSETS June 30,2009

Amounts reported for goverrunental activities in the Statement of Net Assets are different because:

Fund Balances, Total Govemmental Funds at June 30, 2009

Cost of capital assets at Jime 30, 2009 Less accumulated depreciation as of June 30, 2009

Long-term liabilities at Jime 30, 2009 Compensated absences payable (264,733)

Net Assets at June 30, 2009 $ 6,931,958

2,410,855 (900,202)

$ 5,686,038

1,510,653


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ALGIERS CHARTER SCHOOLS ASSOCIATION RECONCILIATION OF THE STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCE -GOVERNMENTAL FUNDS TO THE STATEMENT OF ACnVITIES


Amounts reported for govemmental activities in the Statement of Activities are different becj

Total net change in fimd balances - Govemmental Fimds $ 582,039

Govemmental Funds report capital outlays as expenditures.

However, in the Statement of Activities the cost of those assets is allocated over their estimated usefiil lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

Capital outiays 387,684 Depreciation expense (457,250) (69,566)

Jn the Statement of Activities, certain operating expenses are measured by the amounts eamed during the year. In the govemmental fiinds, however, expenditures for these items are measm'ed by the amount of financial resources used (amounts actually paid).

Compensated absences eamed exceeded the amounts used by (264,733)

Change in Net Assets of Governmental Activities $ 247,740


11

(THIS PAGE LEFT BLANK INTENTIONALLY)

ALGIERS CHARTER SCHOOLS ASSOCIATION NOTES TO FINANCIAL STATEMENTS

June 30, 2009

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The fmancial statements of Algiers Charter Schools Association ("ACSA") have been prepared in conformity with generally accepted accounting principles (GAAP). The Govemmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing govemmental accounting and financial reporting principles. The more significant accounting policies are described below.

1. REPORTING ENTITY

The Orleans Parish School Board ("OPSB") authorized by the Charter School Demonstration Programs Law and approved by the State Board of Elementary and Secondary Education ("BESE"), granted to ACSA, a nonprofit organization organized under the laws ofthe State of Louisiana and exempt from taxation under Section 501(c)(3) of the Intemal Revenue Code, charters to operate one high school and one elementary school. The charters are valid for an initial period of five (5) years commencing on November 1, 2005 and ending on August 1,2010.

As authorized by the operating agreement between OPSB and ACSA, ACSA operates the following schools:

Alice M. Harte Elementary Edna Karr Senior High

Although the schools listed above are the responsibility of ACSA, ACSA is recognized as a component unit of OPSB, as defined by Govemment Accounting Standards Board Statement No. 14, as amended by Statement No. 39. The accompanying financial statements present information only on the fimds mamtained by ACSA and do not present information on the OPSB.

In addition to the two (2) schools operated under the charter agreement with OPSB, ACSA operates seven (7) schools under a charter agreement with BESE. These seven (7) schools, Algiers Technology Academy, Martin Behrman Elementary, Dwight D. Eisenhower Elementary, William J. Fischer Elementary, McDonogh #32 Elementary, Harriet R. Tubman Elementary, and O. Perry Walker Senior High, are reported separately. Because the Central Office provides services to all nine (9) charter schools, these fiinds are allocated between the two entities based on the attendance ofthe various schools.

2. GOVERNMENT-WIDE AND FUND FINANICAL STATEMENTS

The govenmient-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) display information about the reporting entity as a whole, except for the fiduciary activities of ACSA. For the most part, the effect of interfimd activity has been removed from these statements.

12

ALGIERS CHARTER SCHOOLS ASSOCIATION NOTES TO FINANCIAL STATEMENTS (CONTINUED)

June 30,2009

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2. GOVERNMENT-WIDE AND FUND FINANCL\L STATEMENTS (CONTINUED)

The statement of activities demonstrates the degree to which the direct expenses of a given fimction or segment is offset by program revenues. Dhect expenses are those that are clearly identifiable with a specific fimction or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given fimction or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular fimction or segment. OPSB fiinding and other items not meeting the definition of program revenues are reported as general revenues.

The fimd financial statements are used by ACSA to maintain its financial records during the year. Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain ACSA fiinctions and activities. ACSA reports the following fiind types:

Governmental fimds:

The General Fund is ACSA's primary operating fimd. It accounts for all financial resources of the general government, except those required to be accounted for in another fimd.

Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for a particular purpose. ACSA reports a special revenue fimd for each school under its operation.

3. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FESIANCL^L STATEMENT PRESENTATION

The govemment-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fimd financial statements (except agency fimds which do not have a measurement focus). Revenues are recorded when eamed and expenses are recorded when a Uability is incurred, regardless ofthe timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Govemmental fimd financial statements are reported using the current financial resources measurement focus and the modified accmal basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities

13


June 30,2009


3. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCL^ STATEMENT PRESENTATION (CONTINUED)

ofthe current period. For this purpose, ACSA considers revenues to be available if they are collected within 60 days after the fiscal year. Expenditures generally are recorded when a liability is incurred, as under accmal accounting.

The focus of fund fmancial statements is on major fimds rather than reporting fiinds by type. Each major fimd is presented in a separate column. At June 30, 2009, the general fimd and all special revenue fimds were major fimds.

When both restricted and unrestricted resources are available for use, it is ACSA's policy to use restricted resources first, then unrestricted resources as they are needed.

4. BUDGETARY ACCOUNTING

Budget Policies - Prior to the beginnmg of each year, an annual operating budget is prepared on the modified accrual basis for the General and Special Revenue Funds, the only fimd types having legally adopted annual budgets.

The Director, in consultation with the staff, prepares ACSA's annual operating budget. The budget is based on the expected OPSB allocated revenues and other projected revenues for pupil expenditures. The Director presents the budget to ACSA's Board of Directors for review and revision. Finally, at an open meeting of the Board, the proposed budget is presented. The Board adopts the operating budget.

If, during the course of the fiscal year, it becomes evident that the estimated revenues, expenditures or ending fimd balance may vary, then the Director shall mform ACSA's Board of such variances. Based on the infonnation submitted, the Board of Directors of ACSA will adopt an amended budget and will seek ways to generate additional revenues, if necessary.

All appropriations lapse at fiscal year end.

The budget data is reflected in the Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, (see pages 22 to 23).

14

ALGIERS CHARTER SCHOOLS ASSOCIATION NOTES TO FINANCL\L STATEMENTS (CONTINUED)

June 30,2009


5. CASH AND CASH EQUIVALENTS

Cash includes the amounts in demand deposits and interest - bearing demand deposits. Cash equivalents include amounts in tune deposits with original maturities of ninety (90) days or less.

6. INTERFUND TRANSACTIONS

During the course of operations, numerous transactions occur between individual fimds that may result in amounts owed between fimds. Those related to goods and services type transactions are classified as "due to and from pooled cash". Short-term interfimd loans are reported as "mterfiind receivables and payables". Long-term interfimd loans (noncurrent portion) are reported as "advances from and to other fimds". Interfimd receivables and payables between fimds within govemmental activities are eliminated in the statement of net assets.

7. CAPITAL ASSETS

Capital assets are reported in the govenmient-wide financial statements. Capital assets are defined by ACSA as assets with an initial individual cost of more than $1,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fan market value at the date of donation.

Depreciation on all cqjital assets is calculated on the straight-line method over the followmg estunated usefiil lives:

Asset Description Asset Life

Building and Improvements 20 to 50 Office Equipment 4 to 10

In the fimd financial statements, capital assets used in govemmental fimd operations are accounted for as property expenditures ofthe govemmental fimd upon acquishion.

The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets' lives are not capitalized.

If the charter agreement of ACSA is revoked or ACSA otherwise ceases to operate, all assets purchased with any public fimds become the property ofthe OPSB.

15


June 30, 2009


8. COMPENSATED ABSENCES

ACSA compensates employees entitled to paid leave using thefr base hourly rate, excluding shift premiums and overtime compensation, if any.

Paid time off- All employees will earn two days of paid tune off per month, up to ten (10) paid days off accmed in the year for 11-month, 10-month, 9.75-month and 9.5-month employees and up to 24 days off accmed in the year for 12-month employees. ACSA employees have the right to carry over no more than fifteen (15) paid days off into the succeeding school year.

9. FUNDING SOURCES

ACSA receives its support primarily from the Louisiana State Department of Education and the United States Department of Education.

Irrevocable promises to give and outright contributions are recorded as revenue on the accmal basis as they are received, and allowances are provided for promises to give estimated to be uncollectible. Promises to give and contributions are principally received from corporate, foundation, and individual donors around the United States. Both promises to give and contributions are considered available for unrestricted use unless specifically restricted by donors. Irrevocable promises to give which relate to a subsequent year are recorded as receivables and temporarily restricted net assets in the year the commitment is received. Contributions whose donor restrictions are met in the same reporting period are reported as unrestricted support. ACSA uses the direct write-off method of writing off uncollectible receivables.

Contributions of donated non-cash assets are recorded at their fair values in the period received. Contributions of donated services that create or enhance non-financial assets or that require specialized skills provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received.

All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for fijture periods or restricted by the donor for specific purposes are reported as temporarily restricted or permanently restricted support that increases those net asset classes. When a temporary restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities as net assets released from restrictions.

16


June 30,2009


10. DEFFERED REVENUE

Grant fimds are considered to be eamed when qualifying expenditures are made and all other grant requirements have been met and, accordingly, when such fimds are received, they are recorded as deferred revenue until eamed.

11. EQUITY CLASSIFICATIONS

In the govemment-wide financial statements, equity is classified as net assets euid displayed in three components:

a. Invested in capital assets - consists of capital assets including resfricted capital assets, net of accumulated depreciation.

b.Restricted net assets - consists of net assets with constraints placed on the use either by (1) extemal groups such as creditors,- grantors, contributors, or laws or regulations of other govemments; or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net assets - all other net assets that do not meet the definition of "restricted" or "invested m capital assets, net of related debt".

12. ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accountmg principles generally accepted in the United States of America requires management to make certain estimates and assumptions. Those estimates affect the reported amounts of assets and liabilities and disclosure of assets and Uabilities at the date of the financial statements. They may also affect the reported amounts of the govemment-wide fmancial statements during the reporting period. Actual results could differ from these estimates.

NOTE B - CASH AND CASH EQUFV^ALENTS

Deposits

ACSA had the following cash as of June 30, 2009:

Total Govemmental fimds: Unrestricted

Demand deposits $ 1,103,362 Time deposits 1.547^39

Total Deposits S 2.650.601

17


June 30,2009

NOTE B - CASH AND CASH EQUIVALENTS (CONTINUED)

Custodial credit risk is the risk that, in the event of a bank failure, ACSA's deposits might not be recovered. ACSA does not have a deposit policy for custodial credit risk. At June 30, 2009, ACSA's deposit bank balances of $1,216,356 were entirely secured by federal deposit insurance and pledged securities held by ACSA's agent in ACSA's name.

NOTE C - RETIREMENT FLANS

ACSA offers eligible employees the opportunity to participate in the Teachers' Retirement System (TRS), a state retirement plan, for those employees who are eligible to participate. TRS issues a separate fmancial report that includes fmancial statements and requfred supplementary information. This report may be obtained by.writing or calling the plan.

Teachers' Retirement System of Louisiana Post Office Box 94123 Baton Rouge, LA 70804-9123 (225) 925-6446

1. Plan Description—All teachers and administrative employees of ACSA are covered by defined benefit contributory pension plans administered and controlled by a separate Board of Tmstees. The Board of Tmstees admimsters plans which are cost-sharing multiple-employer public employee retirement systems.

Teachers and administrative employees belong to the Teachers' Regular Plan. Benefits are established by State statute.

TRS provides retirement benefits as well as death and disability benefits. Death and disability benefits vest after 5 years of credited service. Normal retirement is at age 60 with 10 years of service or 20 years of service regardless of age for the Teachers' Regular plan members. Retirement benefits are based upon the employee's age, their last three years of compensation and the number of years that the employee was contributing to TRS.

The percentage formula is applied to the average of the highest three successive annual salaries. The benefit is payable for life with eight available annuity payment plans. The plans also provide various death and disability benefits, whereby the disabled employee or surviving spouse is entitled to receive amounts determined as defined by the plan.

18

ALGIERS CHARTER SCHOOLS ASSOCLVTION NOTES TO FINANCIAL STATEMENTS (CONTINUED)

June 30, 2009

NOTE C - RETIREMENT PLANS (CONTINUED)

2. Contributions Required and Made—Covered employees and ACSA are required by State statute to contribute fixed percentages of employees' gross earnings to the pension plans. Current contribution rates for the plans are as follows:

Teachers' Regular

Employee

8.00%

Employer

16.6%

ACSA's contributions were $1,309,173 for die year ended June 30, 2009.

NOTE D - INTERFUND RECEIVABLES AND PAYABLES

ACSA uses a pooled cash account to track interfimd receivables and payables. Due to/from pooled cash balances at June 30, 2009 are as follows:

Due To Pooled Cash Amount Due From Pooled Cash Amount

General Fund General Fund SR HarteSR KarrSR

Total

$4,433,443 76,988

2,375,111 2,502.165

$ 9.387.707

Harte Kan

$ 3,923,896 5304.541

% 9.228.437

The above due to/from other fimds were short-term receivables or payables resulting from the normal course of ACSA's operations.

The total due to and due from pooled cash do not reconcile because ofthe general fimd allocation described in Note A. The elimination of the due to/due from pooled cash results in a "Due to Pooled Cash" balance of $159,270. This amount is offset by an equal "Due from Pooled Cash" on the not-for-profit financial statements.

19


June 30,2009

NOTE E - CAPITAL ASSETS

A summary of changes m govemmental fund type capital assets for the year ended June 30, 2009.

Additions

$ 387,684

387.684

5,415 451.835

457,250

(-69.566)

$ r69.566^

Reductior

$

-

$

IS June 30, 2009

$ 151,169 2,259,686

2,410.855

38,420 861,782

900.202

1,510,653

$1.510,6.^3

Governmental Activities Capital assets being depreciated: Building and improvements $ 151,169 Office equipment 1.872.002

Total capital assets being depreciated 2.023,171

Less accumulated depreciation for: Building and improvements 33,005 Office equipment 409.947

Total accumulated depreciation 442,952

Total capital assets being depreciated, net 1.580,219

Govemmental Activities Capital assets, net $1.580.219

Depreciation expense was charged to functions/programs of ACSA as follows:

Instmction: Regular Programs $ 735 Special Education 3,681

Support services: Student services $ 4,169 Instmctional staff support 106,303 General administration 29,596 School administration 2,973 Business services 99,061 Plant services 50,310 Central services 160,097 Food services 325

Total depreciation expense - govemmental activities S 457.250

20


June 30, 2009

NOTE F - CHANGES IN LONG-TERM DEBT

The following is a summary of the changes to general long-term obligations for the year ended June 30, 2009:

Compensated Absences

Balance at June 30, 2008 $

Additions 543,994

Deductions - payments and retirements (219261)

Balance at June 30, 2009 $ 264.733

NOTE G - CONTINGENT LIABILITIES

Amounts received or receivable from grantor agencies are subject to audit and adjustment by such grantor agencies, principally the Federal govenmient Any disallowed claims, including amounts aheady collected, may constitute a liability ofthe applicable fiinds.

NOTE H - RISK MANAGEMENT

ACSA is exposed to various risks of loss related to thefts of, damage to, and destmction of assets, enors and omissions, injuries to employees, employee health and natural disasters. These risks are covered by commercial insurance purchased from independent third parties.

NOTE I - CORRECTION OF AN ERROR

ACSA financial statements as of June 30, 2008 contained the following enor: overstatement of revenues by $1,492,034. Fund balances as of July 1, 2008 have been reduced by that amount to conect the enor.

21

REQUIRED SUPPLEMENTARY INFORMATION

ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN

FUND BALANCE - BUDGET AND ACTUAL HARTE SCHOOL FUND


Revenues

State public school fimding Other state funding Federal grants School food reimbursement Donations and contributions Other revenue

Total Revenues

Expenditures Salaries and benefits Professional and technical services Property services Other services Supplies and utilities Property Other

Total Expenditures

Excess of Revenues Over Expenditures

Fund Balances, Beginning of Year

Fund Balances, End of Year

Budgeted Amounts

Original

$ 4,961,280 -

1,164,708 287,948

25,000 -

6,438,936

4,894,146 233,874 182,418 716,325 221,449 91,974 18.655

6,358,841

80,095

3,279,241

$ 3,359,336

Final

$ 4,961,280 -

1,164,708 287,948

25,000 -

6,438,936

4,894,146 233,874 182,418 716,325 221,449

91,974 18,655

6,358,841

80,095

3,279,241

$ 3,359,336

Actual Amounts

$ 5,032,118 159,247

1,525,259 190,314

77 180,588

7,087,603

4,724,909 119,635 364,764 626,172 388,422

91,630 120,811

6.436,343

651,260

3,279,241

$ 3,930,501

Variance with Final Budget -

Positive (Negative)

S 70,838 159,247 360,551 (97,634) (24,923) 180,588

648,667

(169,237) (114,239) 182,346 (90,153) 166,973

(344) 102,156

77,502

571,165

_

$ 571,165

22

ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN

FUND BALANCE - BUDGET AND ACTUAL KARR SCHOOL FUND


Revenues

State public school funding Other state funding Federal grants School food reimbursement Donations and contributions Other revenue

Total Revenues

Expenditures Salaries and benefits Professional and technical services Property services Other services SuppUes and utilities Property Other

Total Expenditures

Excess of Revenues Over Expenditures

Fund Balances, Beginning of Year

Fund Balances, End of Year

Budgeted Amounts

Original

$ 6,217,104 -

1,253,149 200,813 25.000

-

7,696,066

5.741,770 246.784 355,384 686,182 306,120

32,020 65,841

7,434,101

261,965

4.036,573

$ 4,298,538

Final

$ 6,217,104 -

1,253,149 200,813

25,000 -

7.696,066

5,741,770 246,784 355,384 686,182 306,120

32,020 65,841

7,434,101

261,965

4,036,573

$ 4,298,538

Actual Amounts

S 6,634,471 117,362

2,168,489 123,039

-174,450

9,217,811

5,447,951 263,838 514,755 802,464 701,392 296,054 170,233

8,196.687

1,021,124

4,036,573

$ 5,057,697

Variance with Final Budget -

Positive (Negative)

$ 417,367 117,362 915,340 (77,774) (25,000) 174,450

1,521.745

(293,819) 17,054

159.371 116,282 395,272 264,034 104,392

762,586

759,159

_

$ 759,159

23

SINGLE AUDIT SECTION



3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Wetaine, LA 700Q9 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDABBS

Board of Directors of Algiers Charter Schools Association

We have audited the fmancial statements ofthe governmental activities, each major fund, and the aggregate remaining fUnd information of Algiers Charter Schools Association ("ACSA") as of and for the year ended June 30, 2009, which collectively comprise ACSA's basic financial statements and have issued our report thereon dated December 31, 2009. We conducted our audit in accordance v ith auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards^ issued by the Comptroller General ofthe United States.

Intemal Control Over Financial Reporting

In planning and performing our audit, we considered ACSA's intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of ACSA's intemal control over financial reportmg. Accordingly, we do not express an opinion on the effectiveness of ACSA's mtemal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects ACSA's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of ACSA's financial statements that is more than inconsequential will not be prevented or detected by ACSA's intemal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote Likelihood that a material misstatement ofthe financial statements will not be prevented or detected by ACSA's intemal control.

24

http://www.rebowe.com

Our consideration of the intemal control over fmancial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the intemal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we consider the significant deficiency. Item 09-1, to be a material weakness.

Compliance and Other Matters

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

This report is intended solely for the information and use of ACSA's Finance Committee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, state fiinding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statue 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31,2009

25



3501 N. Causeway Bfvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL AWARDS PROGRAM AND INTERNAL CONTROL

OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

Boardof Directors of Algiers Charter Schools Association

Compliance

We have audited the compliance of Algiers Charter Schools Association ("ACSA") with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2009. ACSA's major federal programs are identified in the summary of auditor's results section ofthe accompanying Schedule of Findmgs and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of ACSA's management. Our responsibility is to express an opmion on ACSA's compliance based on our audit.

We conducted our audit of compliance m accordance with auditing standards generally accepted in the United States of America; the standards ^plicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Govemments, and Non-Profit Organizations. Those standards and OMB Cu-cular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about ACSA's compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opmion. Our audit does not provide a legal determination on ACSA's compliance with those requu-ements.

In our opinion, ACSA complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009.

26


Intemal Control Over Compliance

The management of ACSA is responsible for establishing and maintaining effective intemal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered ACSA's intemal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for expressing an opinion on the effectiveness of ACSA's internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of ACSA's intemal control over compliance.

A control deficiency in an entity's intemal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned fiinctions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's intemal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's intemal control.

Our consideration of intemal control over compliance was for the limited purpose described in the fu-st paragraph of this section and would not necessarily identify all deficiencies in intemal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in intemal control over compliance that we consider to be material weaknesses, as defined above.

ACSA's response to the findings identified in our audit is described in the accompanying schedule of findmgs and questioned costs. We did not audit ACSA's response and, accordingly, we express no opmion on it.

This report is intended for the information and use of Algiers Charter Schools Association's Finance Committee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, state fiinding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31, 2009

27

A L G I E R S C H A R T E R S C H O O L S A S S O C I A T I O N

S C H E D U L E O F E X P E N D I T U R E S O F F E D E R A L A W A R D S

F o r the Yea r Ended J u n e 3 0 , 2 0 0 9

Federal Grantor/Pass-Throagh Gran tor/Program Title

Federal CFDA

Number Disbursements/ Eipenditures

U.S. Department of Education Passed-Through State Department of Education:

ESEA of 1965, Title I, Part A

IDEA, Part B

Emergency Management System

ESEA of 1965, Title IV, Part A

Charter Schools

21st Century

ESEA of 1965, Title V, Part A

ESEA of 1965, Title H, Part A

Passed-Through Louisiana Endowment for the Humanities: Teaching American History

TOTAL U.S. DEPARTMENT OF EDUCATION

U.S. Department of Agriculture Passed-Through State Department of Agriculture:

National School Lunch Program Free and Reduced Price Meals

84.010

84.027

84.184

84.186

84.282

84.287

84.298

84.367

$ 1,933,645

91,535

10,796

21,196

726,095

207.356

125,802

352,373

84.215

10.555

TOTAL U.S. DEPARTMENT OF AGRICULTURE

TOTAL FEDERAL ASSISTANCE

80.620

3,549,418

394,967

394,967

3,944.385

The accompanying footnotes to Schedule of Expenditures of Federal Awards are an integral part of this schedule.

28

ALGIERS CHARTER SCHOOLS ASSOCIATION FOOTNOTES TO THE SCHEDULE OF EXPENDITURES

OF FEDERAL AWARDS Year Ended June 30,2009


1. BASIC OF PRESENTATION

The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of ACSA and is presented on the accmal basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, "Audits of States, Lx)cal Govemments, and Non-Profit Organizations".

2. ACCRUED AND DEFERRED REIMBURSEMENT

Various reimbursement procedures are used for federal awards received by ACSA. Consequently, timing differences between expenditures and program reimbursements can exist at the beginnmg and end ofthe year.

3. PAYMENTS TO SUBRECIPIENTS

There were no payments to subrecipients for the year ended June 30, 2009.

29

ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Year Ended June 30,2009

A. SUMMARY OF AUDIT RESULTS

1. The independent auditors' report expresses an unqualified opinion on the financial statements ofthe Algiers Charter Schools Association.

2. One (1) control deficiency disclosed during the audit of the fmancial statements is reported in the Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit ofFinancial Statements Performed in Accordance With Government Auditing Standards. The control deficiency identified is considered to be a material weakness.

3. No instances of noncompliance material to the financial statements of Algiers Charter Schools Association is reported in the Independent Auditors' Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditins Standards.

4. No significant deficiencies relating to the audit of the major federal award programs are reported in the Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Federal Award Program and on Intemal Control Over Compliance in Accordance with OMB Circular A-133.

5. The auditors' report on compliance with requirements ^plicable to major federal award programs for Algiers Charter Schools Association expresses an unqualified opinion.

6. The auditors' report disclosed no findings that were required to be reported in accordance with Section 510(a) of OMB Circular A-133.

7. A management letter was not issued for the year ended June 30, 2009.

8. The programs tested as major programs were: CFDA No.

ESEA of 1965, Title I, Part A 84.010 Charter Schools 84.282

ESEA of 1965, Title H, Part A 84.367

9. The threshold for distinguishing between type A and type B programs was $300,000.

10. Algiers Charter Schools Association was determined to be a high-risk auditee.

30

ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF FEVDINGS AND QUESTIONED COSTS (CONTINUED)


B. FINDINGS RELATED TO THE FINANCIAL STATEMENTS

Finding 09-1

Observation:

Our review of the client prepared June 30, 2009 unadjusted trial balance revealed that total federal financial assistance did not agree to the amount requested for reimbursement. As a result, material audit adjustments were required to properly state revenues in the current year financial statements.

Recommendation:

We recommend that ACSA develop and implement intemal control procedures as it relates to revenues to ensure that revenues are recorded in the proper period.

Management's Corrective Action Plan:

We will implement the followmg procedures to ensure we properly record and monitor revenue:

• Monthly grant tracking will be reconciled by the Director of Budget and Revenue between the general ledger and the submitted claims.

• Receivables will only be recorded when claims are made. • Govemmental clarnis will be confirmed through signed receipts in order to

effectively communicate with the Local Education Agency (LEA) and follow up email will be sent to the Special Revenue department to confirm receipt.

• Claims not reimbursed beyond 30 days will be added to an aged receivable schedule and followed up on by the controller or his/her designee through written conununication.

• Journal entries in the general ledger for payroll/benefits will include individual file numbers in order to easily distinguish allocation and applicable employees to be claimed.

Contact

Stuart Gay, Chief Financial Officer, (504) 302-7000.

C. FINDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARD PROGRAMS

There were no findings required to be reported in this section.

31

ALGIERS CHARTER SCHOOLS ASSOCIATION SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

AND QUESTIONED COSTS Year Ended June 30,2009

A. FINDINGS RELATED TO THE FINANCIAL STATEMENTS

Finding 2008-01 - Begmning Net Assets Resolved

B. FINDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARD

PROGRAMS

There were no fmdings required to be reported in this section.

C. MANAGEMENT LETTER

A management letter was not issued for the year ended June 30, 2008.

32


CONSULTANTS A PROFESSiONAL CORPORATION

3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com

INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES

Board of Dkectors of Algiers Charter Schools Association New Orleans, Louisiana

We have performed the procediu:es uacluded in the Louisiana Goverrunental Audit Guide and enumerated below, which were agreed to by the management of Algiers Charter Schools Association ("ACSA") and the Legislative Auditor, State of Louisiana, solely to assist the users m evaluating management's assertions about the performance and statistical data accompanying the annual financial statements of ACSA and to determme whether the specified schedules are fi:ee of obvious errors and omissions as provided by the Board of Elementary and Secondary Education (BESE) Bulletin. ACSA is responsible for the performance and statistical data. This agreed-upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified users of this report. Consequently, we make no representation regarding the sufficiency ofthe procedures described below either for the purpose for which this report has been requested or for any other purpose.

Our procedures and findings are as follows:

General Fund Instmctional and Support Expenditures and Certain Local Revenue Sources (Schedule 1)

1. We selected a random sample of 25 transactions and reviewed supporting documentation to determine if the sampled expenditures/revenues are classified correctly and are reported in the proper amounts for each ofthe following amounts reported on the schedule:

Total General Fund Instmctional Expenditures, Total General Fund Equipment Expenditures, Total Local Taxation Revenue, Total Local Earnings on Investment m Real Property, Total State Revenue m Lieu of Taxes, Nonpublic Textbook Revenue, and Nonpublic Transportation Revenue.

33


Education Levels of Public School Staff (Schedule 2)

2. We reconciled the total number of full-time classroom teachers per the schedule "Experience of Public Principals, Assistant Prmcipals, and Full-time Classroom Teachers" (Schedule 4) to the combined total number of fiill-time classroom teachers per this schedule and to school board supporting payroll records as of October 1, 2008.

3. We reconciled the combined total of principals and assistant principals per the schedule "Experience of Public Principals, Assistant Principals, and Full-time Classroom Teachers" (Schedule 4) to the combined total of principals and assistant principals per this schedule.

4. We obtained a list of principals, assistant principals, and fiiU-time teachers by classification as of October 1, 2008 and as reported on the schedule. We traced a random sample of 25 teachers to the individual's personnel file and determined that the individual's education level was properly classified on the schedule.

Number and Tvpe of Public Schools (Schedule 3)

5. We obtained a list of schools by type as reported on the schedule. We compared the list to the schools and grade levels as reported on the Title 1 Grants to Local Educational Agencies (CFDA 84.010) application and/or tiie National School Lunch Program (CFDA 10.555) application).

Experience of Public Principals. Assistant Principals, and Full-time Classroom Teachers (Schedule 4)

6. We obtained a list of principals, assistant principals, and fiill-time teachers by classification as of October 1, 2008 and as reported on the schedule and traced the same sample used in procedure 4 to the individual's personnel file and determined that the individual's experience was properly classified on the schedule.

Public Staff Data (Schedule 5)

7. We obtamed a list of all classroom teachers mcluding their base salary, extra compensation, and ROTC or rehned retiree status as well as full-time equivalent as reported on the schedule and traced a random sample of 25 teachers to the individual's personnel file and determined that the individual's salary, extra compensation, and fiill-time equivalents were properly included on the schedule.

8. We recalculated the average salaries and full-tune equivalents reported in the schedule.

Class Size Characteristics (Schedule 6)

9. We obtained a list of classes by school, school type, and class size as reported on the schedule and reconciled school type classifications to Schedule 3 data, as obtained m procedure 5. We then traced a random sample of 10 classes to the October 1, 2008 roll books for those classes and determmed that the class was properly classified on the schedule.

34

Louisiana Educational Assessment Program (LEAP) for the 21^ Centurv (Schedule 7)

10. We obtained test scores as provided by the testing authority and reconciled scores as reported by the testing authority to scores reported in the schedule by ACSA.

The Graduation Exit Exam for the 21^ Century (Schedule 8)

11. We obtained test scores as provided by the testmg authority and reconciled scores as reported by the testing authority to scores reported in the schedule by ACSA.

Integrated Louisiana Educational Assessment Program (/LEAP) (Schedule 9)

12. We obtained test scores as provided by the testing authority and reconciled the scores as reported by the testing authority to the scores reported m the schedule by ACSA.

No exceptions were found as a result of applymg the above procedures.

We were not engaged to and did not perform an examination, the objective of which would be the expression of an opinion on management's assertions. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the mformation and use of management of Algiers Charter Schools Association, the Louisiana Department of Education, the Louisiana Legislature, and the Legislative Auditor, State of Louisiana, and is not mtended to be and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31, 2009

35

ALGIERS CHARTER SCHOOLS ASSOCIATION General Fund Instructional and Support Expenditures

and Certain Local Revenue Sources For the Year Ended June 30,2009

Schedule 1

General Fund Ipstructiopal and Eouipment Eiptoditurcs

General Fund Instructional Expenditures:

Teacher and Student Interaction Activities:

Classroom Teacher Salaries

Other Ins&uctional Staff Activities

Employee Benefits

Purchased Professional and Technical Services

Instructional Materials and Supplies

Less: Instructional Equipment

Total Teacher and Student Interaction Activities

Other Instructional Activities

$ 4,123,656

530,766

1.130,440

83,213

116,211

$ 5.984^86

22.604

Pupil Support Aaivities

Less: Equipment for Pupil Support Activities

Net Pupil Support Activities

449,309

449,309

Instructional Staff Services

Less: Equipment for Instructional Staff Services

Net Instructional Staff Services

521.352

521352

School Administration

Less: Equipment for School Administration

Net School Administration

880,266

880,266

Total General Fund Instructional Expenditures

Total General Fund Equipment Expenditures

Certain Local Revenue Sonrces

$ 7,857.817

Note. Algiers Charter Schools Association, Inc. receives local revenues from the Orleans Parish School Board. ACSA does not receive a detailed schedule ofthe source of these revenues. This section is not applicable to charter schools.

36

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Schedule 3

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Number

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3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009 Ptione (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com



We have performed the procedures described below, which were agreed to by the management of Algiers Charter Schools Association ("ACSA"), the Orleans Parish School Board ("OPSB") and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluating management's assertions about the use of Dedicated Millages and to determine whether the specified data is free of obvious errors and omissions as provided by ACSA. The School System is responsible for documenting the use of Dedicated Millages. This agreed-upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified users of this report. Consequently, we make no representation regarding the sufficiency of die procedures described below either for the purpose for which this report has been requested or for any other purpose.


1. We obtained a schedule from ACSA of its expenditures for each purpose for the fiscal year.

Dedicated Millage:

Purpose A - School Books, Materials, and Supplies.

Purpose B - Early Childhood, Discipline, and Dropout Programs.

Purpose C - Employee Salary, Benefits, and Incentives.

Purpose D - Air Conditioning, Asbestos Removal, and Facilities.

2, We traced the expenditures to the General Ledger.

No exceptions were found as a result of applying the above procedures.

46



This report is intended solely for the information and use of management of ACSA, the Louisiana Department of Education, the Louisiana Legislature, and the Legislative Auditor, State of Louisiana, and is not intended to be and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document

December 31,2009

47

ALGIERS CHARTER SCHOOLS ASSOCLVTION

FINANCIAL STATEMENTS

For the Year Ended June 30, 2009

TABLE OF CONTENTS (CONTINUED)

Page

INDEPENDENT AUDFTOR'S REPORT 1

FINANCIAL STATEMENTS Statement ofFinancial Position 3 Statement of Activities 4 Statement of Cash Flows 5 Statement of Functional Expenses 6 Notes to Financial Statements 7

SUPPLEMENTAL INFORMATION

Schedule ofFinancial Position by School 13 Scheduleof Activities by School 15 Schedule of Functional Expenses by School 17

SCHEDULES REQUIRED BY STATE LAW (PERFORMANCE STATISTICAL DATA)

Independent Accountant's Report on Applying Agreed-Upon Procedures 18 Schedule 1: General Fund Instructional and Support Expenditures and

Certam Local Revenue Sources forthe Year Ended June 30, 2008 21 Schedule 2: Education Levels of Public School Staff 22 Schedule 3: Number and Type of Public Schools 23 Schedule 4: Experience of Public Principals, Assistant Principals, and

Full Time Classroom Teachers 24 Schedule 5: Public School Staff Data 25 Schedule 6: Class Size Characteristics 26 Schedule 7: Louisiana Educational Assessment Program (LEAP) for the

21"* Century 27 Schedule 8: Graduation Exit Exam for the 21^ Century 28 Schedule 9: Integrated Louisiana Educational Assessment

Program (iLEAP) 29

DEDICATED MILLAGE REPORT REQUIRED BY ORLEANS PARISH SCHOOL BOARD (PERFORMANCE STATISTICAL DATA)

Independent Accountant's Report on Applying Agreed-Upon Procedures 31

TABLE OF CONTENTS (CONTINUED) Page

OMB CIRCULAR A-133 COMPLIANCE AND GOVERNMENT AUDITING STANDARDS REPORTS

Independent Auditor's Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit ofFinancial Statements Perfonned in Accordance with Govemment Auditing Standards 33

Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Federal Awards Program and on Intemal Control Over Compliance in Accordance with OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards 35

Schedule of Expenditures of Federal Awards 37 Notes to Schedule of Expenditures of Federal Awards 39 Schedule of Findings and Questioned Costs 40 Summary Schedule of Prior Audit Findings and Questioned Costs 42

^^ANcULS|;cnoiv



3501 N. Causeway Blvd. • Suite 810 • RO. Box 6952 • Metairie, LA 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com

INDEPENDENT AUDITOR'S R E P O R T


We have audited the accompanying Statements ofFinancial Position of Algiers Charter Schools Association ("ACSA") (a nonprofit organization), and the related Statements of Activities, Cash Flows, and Functional Expenses for the years ended June 30, 2009 and 2008. These financial statements are the responsibility ofthe ACSA's management. Our responsibility is to express opinions on these financial statements based on our audits.

We conducted our audits in accordance with U.S. generally accepted auditmg standards and the standards applicable to financial audits contained m Govemment Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amotmts and disclosures in the financial statements. An audit also mcludes assessing the accoimting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ACSA as of June 30, 2009 and 2008, and the changes in net assets and cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

In accordance with Govemment Auditing Standards, we have also issued our report dated December 31, 2009 on our consideration of ACSA's kitemal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of mtemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the mtemal control over financial reportmg or on compliance. That report is an integral part of an audit performed in accordance with Govemment Auditing Standards and should be read in conjunction with this report in considering the results of our audit.


Our audit was conducted for the purpose of forming an opmion on the basic financial statements of ACSA taken as a whole. The accompanying combining and individual school financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanymg Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Govemments, and Non-Profit Organizations, and is also not a required part ofthe basic financial statements of ACSA. Such information has been subjected to the auditmg procedures applied m the audit ofthe basic financial statements and, in our opinion, are fairly stated m all material respects in relation to the basic fmancial statements taken as a whole.

December 31, 2009

BASIC FINANCL4L STATEMENTS

ALGIERS CHARTER SCHOOLS ASSOCIATION STATEMENTS OF FINANCIAL POSITION

June 30,2009 and 2008

2009 2008 ASSETS

Current Assets: Cash and cash equivalents Manual checks receivable Intergovernmental receivables Other receivables Prepaid expenses Due from pooled cash, net

Total Current Assets

Other Assets:

Deposits 6,700 6,700

Total Other Assets 6,700 6,700

$ 5,899,881 -

11,411,716 (3,898)

129,152 159,270

17,596,121

$ 4,539,592 9,649

11,645,123 2,067,903

275,988 -

18,538,255

Non-Current Assets: Property and equipment (net of accumulated depreciation) 3,398,640 3,958,285

Total Assets $ 21,001,461 $ 22,503,240

LIABHITIES AND NET ASSETS

Current Liabilities: Accounts payable and accmed expenses $ 4,702,020 $ 3,477,677 Due to.other govemments 155,539 130,026 Deferred revenue - 22,446

Due to pooled cash, net -_ 1,437,755

Total Current Liabilities 4,857,559 5,067,904

Net Assets: Reserved for capital assets 3,398,640 3,958,285

Unrestricted, as restated 12,745,262 13,477,051

Total Net Assets 16,143,902 17,435,336

Total Liabihties and Net Assets $ 21,001,461 $ 22,503,240 The notes to the financial statements are an integral part of this statement.

3

ALGIERS CHARTER SCHOOLS ASSOCIATION STATEMENTS OF ACTIVITIES

For the Years Ended June 30, 2009 and 2008

2009 2008 UNRESTRICTED NET ASSETS

Public Support and Other Revenues Unrestricted grants in aid - State Restricted grants in aid - Federal and State Donations - unrestricted Minimum Foundation Program Miscellaneous revenue

Total Public Support and Other Revenues

Expenses Program services:

Instmctional Supporting services:

Management and general

Total Expenses

$ 1,598,644 $ 2,178,035 14,335,283

2,439 26,899,394

815,609

15,142,569

241,179

28,211,480 224,321

43,651,369

22,654,786

22,288,017

44,942,803

45,997,584

18,121,131

18,292,367

36,413,498

Decrease in Unrestricted Net Assets

Net assets at beginning of fiscal year, as restated

Net assets at end of fiscal year

(1,291,434)

17,435,336

9,584,086

7,851,250

$ 16,143,902 $ 17,435,336


ALGIERS CHARTER SCHOOLS ASSOCIATION STATEMENTS OF CASH FLOWS

For the Years Ended Jane 30, 2009 and 2008

2009 2008 Cash Flows from Operating Activities

Increase/(decrease) in net assets Adjustments to reconcile decrease in net assets to net

Cash provided by operating activities Depreciation

(Increase)/decrease in assets: Accounts receivable Prepaid insurance Deposits

Increase/(decrease) in Uabilities: Accounts payable and other accmed expenses Deferred revenues Due to other fimd

Net cash provided by operating activities

Cash Flows from Investing Activities Purchase of property and equipment

Net cash used in investing activities

$ (1,291,434) $ 9,584,086

1,114,111

2,314,857

146,836

1.914,755

(554,466)

1,003,292

(9,306,802)

(146,837)

1,249,856 960,266

(22,446) (202,061)

(1,597,025) 660,597

2,552,541

(4,388,355)

(554,466) (4,388,355)

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents. Beginning of Year

Cash and cash equivalents, End of Year

1,360,289

4,539,592

(1,835,814)

6,375,406

$ 5,899,881 $ 4,539,592


5

ALGIERS CHARTER SCHOOLS ASSOCIATION STATEMENTS OF FUNCTIONAL EXPENSES

For the Years Ended June 30,2009 and 2008 (Totals Only)

Expenses:

Salaries and benefits Professional services Travel Supplies Utilities Rent Insurance Repairs and maintenance Transportation Food service management Other

PROGRAM

SERVICES

Instructional

$ 19,041,970 315,233 507,488

2,016,695 --

185,515 4,537

--

583,348

$ 22,654,786

SUPPORT

SERVICES Management

and General

$ 10,431,516 1,143,457

342,060 723,383

1,016,898 151,749 291,127 499,976

2,330,646 1,473,852 3,883,353

$ 22,288,017

Total Expenses

$ 29,473,486 1,458,690

849,548 2,740,078 1,016,898

151,749 476,642 504,513

2,330.646 1,473,852 4,466,701

$ 44,942,803

2008

$ 24,766,703 1,323,699

882,156 1,885,166

530,921 185,417 189,556 537,217

2,086,436 1,265,145 2,761,082

$36,413,498


(THIS PAGE LEFT BLANK INTE^mONALLY)

ALGIERS C H A R T E R SCHOOLS ASSOCIATION NOTES T O FINANCIAL STATEMENTS

For the Years Ended J u n e 30,2009 and 2008


Organization

Algiers Charter Schools Association ("ACSA") was incorporated m October 2005 for the purpose of operating charter schools in New Orleans. The State Board of Elementary and Secondary Education ('"BESE") has granted ACSA seven (7) Type 5 charters to operate AJgiers Technology Academy, Martin Behrman Elementary, Dwight D. Eisenhower Elementary, William J. Fischer Elementary, McDonogh #32 Elementary, Harriet R. Tubman Elementary, and O. Perry Walker Senior high. The charters are valid until June 30, 2010. All ACSA schools are govemed by the ACSA Board of Directors.

In addition to the seven (7) schools operated under the charter agreement with BESE, ACSA operates two (2) schools under a charter agreement with Orleans Parish School Board. These two (2) schools, Alice M. Harte Elementary and Edna Karr Senior High, are reported separately. Because the Central Office provides services to all nine (9) charter schools, these fimds are allocated between the two entities based on the attendance ofthe various schools.

Basis of Accounting

The financial statements have been prepared on the accrual basis of accounting m accordance with accounting principles generally accepted in the United States of America.

Functional Expenses

The cost of program and supporting services has been reported on a functional basis. This requires the allocation of certam costs based on total program costs and estimates made by management.

Income Tax Status

ACSA is a tax-exempt organization under Intemal Revenue Code Section 501 (c)(3) and, as such, is not subject to income tax.

Public Support and Revenue

ACSA receives its support primarily fi"om the Louisiana State Department of Education and the United States Department of Education.

Irrevocable promises to give and outright contributions are recorded as revenue on the accrual basis as they are received, and allowances are provided for promises to give estimated to be uncollectible. Promises to give and contributions are principally received fi-om corporate, foundation, and individual donors around the United States. Both promises to give and

ALGIERS C H A R T E R SCHOOLS ASSOCIATION NOTES T O FINANCIAL STATEMENTS (CONTINUED)



contributions are considered available for unrestricted use unless specifically restricted by donors. Irrevocable promises to give which relate to a subsequent year are recorded as receivables and temporarily restricted net assets m the year the commitment is received. Contributions whose donor restrictions are met in the same reportmg period are reported as unrestricted support. ACSA uses the du-ect write-off method of writing off uncollectible receivables.

Contributions of donated non-cash assets are recorded at their fair values in the period received. Contributions of donated services that create or enhance non-financial assets or that requhe specialized skills provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at their fan values m the period received.

All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for fiiture periods or restricted by the donor for specific purposes are reported as temporarily restricted or permanently restricted support that mcreases those net asset classes. When a temporary restriction expires, temporarily restricted net assets are reclassified to uiu-estricted net assets and reported in the statement of activities as net assets released fi-om restrictions.

Deferred Revenue

Grant fijnds are considered to be eamed when qualifying expenditures are made and all other grant requirements have been met and, accordingly, when such funds are received, they are recorded as deferred revenue until eamed.

Estimates

The preparation of fmancial statements m conformity with generally accepted accounting principles requires management to make esthnates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual amounts could differ from those estimates.

Cash and Cash Equivalents

Cash mcludes the amotmts in demand deposits and interest - bearing deposits. Cash equivalents include amounts m tune deposits with original maturities of ninety (90) days or less.

Compensated Absences

ACSA compensates employees entitled to paid leave using then base hourly rate, excludmg shift premiums and overtime compensation, if any.

ALGIERS C H A R T E R SCHOOLS ASSOCIATION N O T E S T O FINANCIAL STATEMENTS (CONTINUED)



Paid time off- All employees will earn two days of paid tune off per month, up to ten (10) paid days off accmed in the year for 11-month, lO-month, 9.75-month and 9.5-month employees and up to 24 days off accmed tn the year for 12-month employees. ACSA employees have the right to carry over no more than fifteen (15) paid days off into the succeeding school year.

Basis of Presentation

ACSA follows the provisions of Statement of Fmancial Accounting Standards ("SFAS") No. 117, Financial Statements of Not-for-Profit Organizations, which establishes extemal financial reportmg for not-for-profit organizations which mcludes three basic financial statements and the classification of resources into three separate classes of net assets, as follows:

• Unrestricted - Net assets which are free of donor-imposed restrictions; all revenues, expenses, gams, and losses that are not changes m permanentiy or temporarily restricted net assets.

• Temporarily Restricted - Net assets whose use by ACSA is lunited by donor-unposed stipulations that either expire by the passage of time or that can be fulfilled or removed by actions of ACSA pursuant to such stipulations.

• Permanentiy Restricted - Net assets whose use by ACSA is lunited by donor-imposed stipulations that neither expne wdth the passage of time nor can be fulfilled and removed by actions of ACSA.

Property and Equipment

Property and equipment are c^italized at cost. It is ACSA's poUcy to capitalize expenditures for these items m excess of $1,000. Lesser amoimts are expensed as incurred. Property and equipment are bemg depreciated over their estimated usefiil lives using the straight-line method using the following lives:

Office Equipment 4 - 1 0 years Buildings and Improvements 20 - 50 years

Subsequent Events

Subsequent events have been evaluated though December 31, 2009, the date the financial statements were available to be issued.

ALGIERS C H A R T E R SCHOOLS ASSOCIATION NOTES T O FINANCIAL STATEMENTS (CONTINUED)

For the Years Ended June 30,2009 and 2008

NOTE B - CASH AND CASH EQUIVALENTS AND INVESTMENTS

ACSA had the following cash as of June 30, 2009 and 2008

2009 2008 Demand Deposits Time Deposits

$ 2,456,027 3,443,854

$ 71,330 4.468,262

^4.539.592

Custodial credit risk is the risk that, m the event of a bank failure, ACSA*s deposits might not be recovered. At June 30, 2009 and 2008, ACSA's demand deposit bank balances of $2,707,374 and $1,210,649, respectively, were entirely secured by federal deposit msurance and pledged securities held by ACSA's agent m ACSA's name,

NOTE C - INTERFUND RECEIVABLES AND PAYABLES

ACSA uses a pooled cash account to track mterfiind receivables and payables. Due to/from pooled cash balances at June 30, 2009 are as follows:

Due To Pooled Cash Amount

Central Office ATA Central Office SR ATASR Behrman SR Eisenhower SR Fischer SR McDonogh SR Tubman SR Walker SR

Total

$ 9,867,987 224,926 171,359 905,920

2,151,484 1,711,013 1,296,751 1,441,917 1,472,927 1.941,139

$ 2L185.423

Due From Pooled Cash

Behrman Eisenhower Fischer McDonogh Tubman Walker

Amoimt

3,735,357 4,834,469 2,271,422

794,494 1,763,873 7.945,078

Total

The above due to/from other fimds were short-term receivables or payables resulting from the normal course of ASCA's operations.

The total due to and due from pooled cash do not reconcile because ofthe general fund allocation described m Note A. The elunination ofthe due to/due from pooled cash results m a "Due from Pooled Cash" balance of $159,270. This amount is offset by an equal "Due to Pooled Cash" on the govenmiental financial statements which includes Harte and Karr schools.

10


For the Years Ended June 30,2009 and 2008

NOTE D - PROPERTY AND EQUIPMEIVr

Property and equipment at June 30, 2009 and 2008 consists ofthe following:

2009 2008 Fumiture, fixtures, and equipment $ 5,558,211 $ 5,003,745 Buildmgs & building hnprovements 33,507 33,507 Less: accumulated depreciation (2,193,078) (1.078.967)

Property and equipment, net $ 3.398.640 $ 3.958.285

Depreciation expense for ACSA for the years ended June 30, 2009 and 2008 was $1,114,111 and $1,003,292, respectively.

Durmg the years ended June 30, 2009 and 2008, ACSA acquired $554,466 and $4,388,355 m property and equipment, respectively.

NOTE E - RETIREMENT PLANS

ACSA offers eligible employees the opportunity to participate m the Teachers' Retirement System (TRS), a state retirement plan, for those employees who are eligible to participate. TRS issues a separate financial report that includes financial statements and requhed supplementary mformation. This report may be obtained by writing or callmg the plan.

Teachers' Retu-ement System of Louisiana Post Office Box 94123 Baton Rouge, LA 70804-9123 (225) 925-6446

1. Plan Description—^All teachers and admmistrative employees of ACSA are covered by defined benefit contributory pension plans administered and controlled by a separate Board of Tmstees. The Board of Tmstees administers plans which are cost-sharing multiple-employer public employee retirement systems.

Teachers and administrative employees belong to the Teachers' Regular Plan. Benefits are established by State statute.

TRS provides retirement benefits as well as death and disability benefits. Death and disability benefits vest after 5 years of credited service. Normal retirement is at age 60 with IQ years of service or 20 years of service regardless of age for the Teachers' Regular plan members. Retirement benefits are based upon the employee's age, their last three years of compensation and the number of years that the employee was contributmg to TRS.

11

ALGIERS C H A R T E R SCHOOLS ASSOCIATION N O T E S T O FINANCIAL STATEMENTS (CONTINUED)


NOTE E - RETIREMENT PLANS (CONTINUED)

The percentage formula is applied to the average of the highest three successive annual salaries. The benefit is payable for. life with eight available annuity payment plans. The plans also provide various death and disability benefits whereby the disabled employee or surviving spouse is entitled to receive amounts determined as defined by the plan.

2. Contributions Required and Made—Covered employees and ACSA are required by State statute to contribute fixed percentages of employees' gross eammgs to the pension plans. Current contribution rates for the plans are as follows:

Employee Employer

Teachers' Regular 8.00% 16,6%

ACSA's contributions for the years ended June 30, 2009 and 2008 were $3,405,226 and $3,017,531, respectively.

NOTE F - CONTINGENCIES

Amounts received or receivable from, grantor agencies are subject to audit and adjustment by such grantor agencies, principally the Federal govemment. Any disallowed claims, mcluding amounts already collected, may constitute a liability ofthe applicable funds.

NOTE G - RISK MANAGEMENT

ACSA is exposed to various risks of loss related to thefts of damage to, and destmction of assets, errors and omissions, mjuries to employees, employee health and natural disasters. These risks are covered by commercial insurance purchased from independent third parties,

NOTE H - CORRECTION OF AN ERROR

ACSA financial statements as of June 30, 2008, contained the followmg error: understatement of revenues by $622,152. Net assets as of July 1, 2008, have been mcreased by that amoimt to correct the error.

12

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3501 N. Causeway Blvd. • Suite 810 • RO. Box 6952 • Metairie, LA 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com



We have performed the procedures included in the Louisiana Governmental Audit Guide and enumerated below, which were agreed to by the management of Algiers Charter Schools Association ("ACSA") and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluating management's assertions about the performance and statistical data accompanying the annual financial statements of ACSA and to detemiine whether the specified schedules are free of obvious errors and omissions as provided by the Board of Elementary and Secondary Education (BESE) Bulletin. ACSA is responsible for the performance and statistical data. This agreed-upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified users of this report. Consequentiy, we make no representation regarding the sufficiency ofthe procedures described below either for Ae purpose for which this report has been requested or for any other purpose.


General Fund Instructional and Support Expenditures and Certain Local Revenue Sources (Schedule 1)

1. We selected a random sample of 25 transactions and reviewed supporting documentation to determine if the sampled expenditures/revenues are classified correctiy and are reported in the proper amounts for each ofthe following amounts reported on the schedule:

Total General Fund Instructional Expenditures, Total General Fund Equipment Expenditures, Total Local Taxation Revenue, Total Local Earnings on Investment in Real Property, Total State Revenue in Lieu of Taxes, Nonpublic Textbook Revenue, and Nonpublic Transportation Revenue.

18


Education Levels of Public School Staff (Schedule 2)

2. We reconciled the total number of full-time classroom teachers per the schedule "Experience of Public Principals, Assistant Principals, and Full-time Classroom Teachers" (Schedule 4) to the combined total number of full-time classroom teachers per this schedule and to school board supporting payroll records as of October 1, 2008.

3. We reconciled the combined total of principals and assistant principals per the schedule "Experience of Public Principals, Assistant Principals, and Full-tune Classroom Teachers" (Schedule 4) to the corabmed total of principals and assistant principals per this schedule.

4. We obtained a list of prtticipals, assistant principals, and full-time teachers by classification as of October 1, 2008 and as reported on the schedule. We traced a random sample of 25 teachers to the individuars personnel file and determined that the individual's education level was properly classified on the schedule.

Number and Type of Public Schools (Schedule 3)

5. We obtained a list of schools by type as reported on the schedule. We compared the list to the schools and grade levels as reported on the Title 1 Grants to Local Educational Agencies (CFDA 84.010) application and/or tiie National School Lunch Program (CFDA 10.555) application).

Experience of Public Principals, Assistant Principals, and Full-time Classroom Teachers (Schedule 4)

6. We obtained a list of principals, assistant principals, and full-time teachers by classification as of October 1, 2008 and as reported on the schedule and traced the same sample used in procedure 4 to the individual's personnel file and determined that the individual's experience was properly classified on the schedule.

Public Staff Data (Schedule 5)

7. We obtained a list of all classroom teachers including theu- base salary, extra compensation, and ROTC or rehired retiree status as well as full-time equivalent as reported on the schedule and traced a random sample of 25 teachers to the individuars personnel file and determined that the individual's salary, extra compensation, and full-time equivalents were properly mcluded on the schedule.

8. We recalculated the average salaries and full-time equivalents reported in the schedule.

Class Size Characteristics (Schedule 6)

9. We obtained a list of classes by school, school type, and class size as reported on the schedule and reconciled school type classifications to Schedule 3 data, as obtained m procedure 5. We then traced a random sample of 10 classes to the October I, 2008 roll books for those classes and determined that the class was properly classified on the schedule.

19

Louisiana Educational Assessment Proeram (LEAP) for the 21^ Centurv (Schedule 7)

10. We obtained test scores as provided by the testmg authority and reconciled scores as reported by the testing authority to scores reported in the schedule by ACSA.

The Graduation Exit Exam for the 21^ Centurv (Schedule 8)

11. We obtained test scores as provided by the testing authority and reconciled scores as reported by the testing authority to scores reported in the schedule by ACSA.

Integrated Louisiana Educational Assessment Program (iLEAP) (Schedule 9)

12. We obtained test scores as provided by the testmg authority and reconciled the scores as reported by the testing authority to the scores reported m the schedule by ACSA.



This report is intended solely for the information and use of management of Algiers Charter Schools Association, the Louisiana Department of Education, the Louisiana Legislature, and the Legislative Auditor, State of Louisiana, and is not intended to be and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for theu- purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31, 2009

20

A L G I E R S C H A R T E R S C H O O L S A S S O C I A T I O N

Genera l F u n d Ins t ruc t iona l a n d S u p p o r t E x p e n d i t u r e s

a n d Cer t a in Local Revenue Sources

F o r the Y e a r E n d e d J u n e 30 ,2009

Schedule 1

General Fund Instructional and Equipment Eipenditures

General Fund Instructional Expenditures;

Teacher and Student Interaction Activities:

Classroom Teacher Salaries $ 9,225,145 Other Instructional Staff Activities 1,374,985 Employee Benefits 2,602,304 Purchased Professional and Technical Services 45,442 Instructional Materials and Supplies 179,117 Less: Instructional Equipment (368)

Total Teacher and Student Interaction Activities

Other Instructional Activities

Pupil Support Activities Less: Equipment for Pupil Support Activities

Net Pupil Support Activities

Instructional Staff Services Less: Equipment for Instructional Staff Services

Net Instructional Staff Services 1,209,699

School Administration 2,797,211 Less: Equipment for School Administration -

Net School Administration

Total General Fund Instructional Expenditures

Total General Fund Equipment Expenditures

Certain Local Revenue Sources

Note: Algiers Charter Schools Association, Inc. receives local revenues from the Orleans Parish School Board passed through the Recovery School District. ACSA does not receive a detailed schedule ofthe source of these revenues. This section is not applicable to charter schools.

1,431,771

1,209,699

-

$ 13,426,625

51,230

1,431,771

$

A

2,797,211

18,916,536

368

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Note: Schools opened or closed during the fiscal year are included m this schedule.

Disclosure: We only tested schools which offered a curriculum hi^er than Kindergarten and did not exceed the twelfth grade level.

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3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com



We have performed the procedures described below, which were agreed to by the management of Algiers Charter Schools Association ("ACSA"), the Orleans Parish School Board ("OPSB") and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluating management's assertions about the use of Dedicated Millages and to determine whether the specified data is fi-ee of obvious errors and omissions as provided by ACSA. The School System is responsible for documenting the use of Dedicated Millages. This agreed-upon procedures engagement was performed in accordance v^th attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibiUty of the specified users of this report. Consequently, we make no representation regarding the sufficiency ofthe procedures described below either for the purpose for which this report has been requested or for any other purpose.


1. We obtained a schedule fi-om ACSA of its expenditures for each purpose for the fiscal year.

Dedicated Millage:

Purpose A - School Books, Materials, and Supplies.

Purpose B - Early Childhood, Discipline, and Dropout Programs.

Purpose C - Employee Salary, Benefits, and Incentives.

Purpose D - Ah Conditioning, Asbestos Removal, and Facilities.

2, We traced the expenditures to the General Ledger.


31


We were not engaged to and did not perform an examination, the objective of which would be the expression of an opmion on management's assertions. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is mtended solely for the information and use of management of ACSA, the Louisiana Department of Education, the Louisiana Legislature, and the Legislative Auditor, State of Louisiana, and is not intended to be and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31, 2009

32

OMB CIRCULAR A-133 COMPLIANCE AND GOVERNMENT AUDITING STANDARDS REPORTS



3501 N. Causeway Blvd. • Suite 810 • PO. Box 6952 • Metairie, U\ 70009 Phone (504) 837-9116 • Fax (504) 837-0123 • www.rebowe.com

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED

ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Directors Algiers Charter Schools Association New Orleans, Louisiana

We have audited the Statement of Fmancial Position and the related Statements of Activities, Statement of Cash Flows, and the Statement of Functional Expenses of Algiers Charter Schools Association ("ACSA"), as of and for the years ended June 30, 2009 and 2008, which collectively comprise ACSA's basic financial statements and have issued our report thereon dated December 31, 2009. We conducted our audits in accordance v/ith auditing standards generally accepted in the United States of America and the standards applicable to financial audits contamed m Govemment Auditing Standards, issued by the Comptroller General ofthe United States.

fatemal Control Over Financial Reporting

In planning and performmg our audit, we considered ACSA's mtemal control over financial reporting as a basis for designing our auditmg procedures for the piupose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of ACSA's mtemal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of ACSA's intemal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned fimctions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combmation of control deficiencies, that adversely affects ACSA's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of ACSA's financial statements that is more than inconsequential will not be prevented or detected by ACSA's mtemal control.

A material weakness is a significant deficiency, or combmation of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by ACSA's intemal control.

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Our consideration of the mtemal control over financial reporting was for the limited purpose described m the fu-st paragraph of this section and would not necessarily identify all deficiencies in the mtemal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we consider the significant deficiency, finding 09-1, to be a material weakness.

Compliance and Other Matters

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

This report is intended solely for the information and use of ACSA's Fmance Committee, management, the State of Louisiana Legislative Auditor, federal awardmg agencies, state fimdmg agencies, and pass-through entities and is not mtended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statue 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31, 2009

34



3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009 PInone (504) 837-9116 • Fax (504) 837-0123 • www.retmwe.com

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL AWARDS PROGRAM AND ON INTERNAL CONTROL OVER

COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

Board of Directors Algiers Charter Schools Association New Orleans, Louisiana

Compliance

We have audited the compliance of Algiers Charter Schools Association ("ACSA") with the types of compliance requhements described m the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30,2009. ACSA's major federal programs are identified in the summary of auditor's results section ofthe accompanying Schedule of Fmdmgs and Questioned Costs. Comphance with the requhements of laws, regulations, contracts and grants apphcable to each of its major federal programs is the responsibility of ACSA's management. Our responsibility is to express an opinion on ACSA's compliance based on our audit.

We conducted our audit of compliance m accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Govemments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompfiance with the types of compUance requirements referred to above that could have a dhect and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about ACSA's compliance with those requirements and performing such other procedures, as we considered necessary in the chcumstances. We beheve that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on ACSA's compliance with those requirements.

In our opmion, ACSA complied, m all material respects, with the requhements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009.

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http://www.retmwe.com

Intemal Control Over Compliance

The management of ACSA is responsible for establishing and maintaining effective intemal control over compliance with requhements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered ACSA's intemal control over compliance with requirements that could have a dhect and material effect on a major federal program in order to determine our auditmg procedures for the purpose of expressing our opmion on compliance, but not for expressing an opmion on the effectiveness of ACSA's intemal control over compliance. Accordingly, we do not express an opinion on the effectiveness of ACSA's intemal control over compliance.

A control deficiency in an entity's intemal control over compliance exists when the design or operation of a control does not allow management or employees, m the noraial course of performing their assigned fiinctions, to prevent or detect noncompliance with a type of compliance requhement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than mconsequential will not be prevented or detected by the entity's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that resuhs m more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's intemal control.

Our consideration of internal control over compliance was for the limited purpose described in the first paragr^h of this section and would not necessarily identify all deficiencies m mtemal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in mtemal control over compliance that we consider to be material weaknesses, as defined above.

ACSA's response to the finding identified in our audit is described in the accompanying schedule of fmdings and questioned costs. We did not audit ACSA's response and, accordingly, we express no opinion on it.

This report is intended for the mfomiation and use of Algiers Charter Schools Association's Finance Committee, management, the State of Louisiana Legislative Auditor, federal awarding agencies, state fimdmg agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

December 31,2009

36

ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Federal Grantor/Pass-Throuch Grantor/Program Title

Federal CFDA

Number Disbursements/ Expenditures

U.S. Department of ^ucation Passed-Through State Department of Education:

ESEA of 1965, Title I, Part A

IDEA, Part B

IDEA. Prc-K

Emergency Management System

ESEA, Title IV. Part A

Charter Schools

21st Century

ESEA of 1965, Title V, Part A

ESEA of 1965, Title H, Part A

Hurricane Katrina Foreign Contributions

Passed-Through Louisiana Endowment for the Humanities: Teaching American History

TOTAL U.S. DEPARTMENT OF EDUCATION

84.010

84.027

84.173

84.184

84.186

84.282

84.287

84.298

84.367

84.940

84.215

S

.s

4,580,681

1,145,558

77,049

108,64S

3,137

2,518380

227.915

186,741

484,362

23,448

125,282

9,481,201

U.S. Department of Agriculture Passed-Through State Department of Agricuhure:

National School Lunch Program Free and Reduced Price Meals 10.555

TOTAL U.S. DEPARTMENT OF AGRICULTURE

U.S. Department of Health and Human Services Passed-Through State Department of Health and Human Services:

Temporary Assistance for Needy Families (TANF)

TOTAL U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

93.558

1,492,026

224,213

224,213

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ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)

For the Year Ended Jnne 30,2008

Other Programs Passed-Through Alvin Callender Air Force Base:

Reserve OfBcer Training Corp. (ROTC) 99.999

TOTAL OTHER PROGRAMS

TOTAL FEDERAL ASSISTANCE

$

$

$

144,220

144;220

11,341,660

The accompanying footnotes to Schedule of Expenditures of Federal Awards are an integral part of this schedule.

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ALGIERS CHARTER SCHOOLS ASSOCIATION FOOTNOTES TO THE SCHEDULE OF EXPENDITURES OF

FEDERAL AWARDS Year Ended June 30,2009


1. BASIC OF PRESENTATION

The accompanying Schedule of Expenditures of Federal Awards mcludes the federal grant activity of ACSA and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, "Audits of States, Local Govemments, and Non-Profit Organizations".

2. ACCRUED AND DEFERRED REIMBURSEMENT

Varioiis reimbursement procedures are used for federal awards received by ACSA. Consequently, timing differences between expenditures and program reimbursements can exist at the beginning and end ofthe year.

3. PAYMENTS TO SUBRECIPIANTS

There were no payments to subrecipients for the year ended June 30, 2009.

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ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS


A. SUMMARY OF AUDIT RESULTS

1. The independent auditors' report expresses an unqualified opmion on the financial statements ofthe Algiers Charter Schools Association.

2. One (1) control deficiency disclosed during the audit of the financial statements is reported in the Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit ofFinancial Statements Performed in Accordance With Government Auditing Standards. The control deficiency identified is considered to be a material weakness.

3. No instances of noncompliance material to the financial statements of Algiers Charter Schools Association are reported m the Independent Auditors' Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing Standards.

4. No significant deficiencies relating to the audit ofthe major federal award programs are reported in the Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Federal Award Program and on Intemal Control Over Compliance in Accordance with OMB Circular A-133.

5. The auditors' report on compliance with requhements applicable to major federal award programs for Algiers Charter Schools Association expresses an unqualified opmion.

6. The auditors' report disclosed no findings that were requhed to be reported in accordance with Section 510(a) of OMB Circular A-i33.

7. A management letter was not issued for the year ended June 30, 2009.

8. The programs tested as major programs were: CFDA No.

ESEA of 1965, Title I, Part A 84.010 Charter Schools 84.282

9. The threshold for distmguishing between type A and type B programs was $340,250.

10. Algiers Charter Schools Association was determined to be a high-risk auditee.

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ALGIERS CHARTER SCHOOLS ASSOCIATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)


B. FINDINGS RELATED TO THE FINANCIAL STATEMENTS

Finding 09-1

Observation:

Our review of the client prepared June 30, 2009 unadjusted trial balance revealed that total federal financial assistance did not agree to the amount requested for reimbursement. As a result, material audit adjustments were requhed to properly state revenues m the current year financial statements.

Recommendation:

We recommend that ACSA develop and unplement intemal control procedures as it relates to revenues to ensure that revenues are recorded in the proper period.

Management's Corrective Action Plan:

We will unplement the following procedures to ensure we properly record and monitor revenue:

• Monthly grant tracking will be reconciled by the Director of Budget and Revenue between the general ledger and the submitted clauns.

• Receivables will only be recorded when clauns are made. • Govemmental claims will be confirmed through signed receipts m order to

effectively communicate with the Local Education Agency (LEA) and follow up email will be sent to the Special Revenue department to confuin receipt.

• Claims not reimbursed beyond 30 days will be added to an aged receivable schedule and followed up on by the controller or his/her designee through written communication.

• Journal entries in the general ledger for payroll/benefits will include mdividual file numbers m order to easily distinguish allocation and applicable employees to be claimed.

Contact:

Stuart Gay, Chief Financial OfBcer, (504) 302-7000.

C. FINDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARD PROGRAMS

There were no findmgs requhed to be reported m this section.

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ALGIERS CHARTER SCHOOLS ASSOCIATION SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS

AND QUESTIONED COSTS Year Ended June 30,2009

SECTION I - FEVDINGS RELATED TO THE FINANCIAL STATEMENTS

Finding 2008-01 - Beginnmg Net Assets Resolved

SECTION n - FEVDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARD PROGRAMS

There were no findings required to be repjorted in this section.

SECTION i n - MANAGEMENT LETTER

A management letter was not issued for the year ended June 30, 2008.

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algiers charter schools association inc. (acsa)file/00016444.pdfschedule 1: general fund...

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