odyssey charter school palm bay, florida rpts/2017... · 2019-11-03 · odyssey charter school (a...
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Odyssey Charter School (A charter school under
Odyssey Charter School, Inc. ) (A Charter School and Component Unit
of the School Board of Brevard County, Florida)
Palm Bay, Florida
Financial Statements and Independent Auditors' Report
June 30, 2017
TABLE OF CONTENTS
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Independent Auditors' Repmi .... . 0 ••••••••• • 0 • • • • • • • • • • • • 2-3 Management's Discussion and Analysis
(Required Supplementary Inforrnation) . . . . . . . . . . . . . . . . . . . . 4-8
Basic Financial Statements: Government--vvide Financial Statements:
Statement of Net Position .. . . . . .. 0 •• ••• • •• •• •••••• • ••
Statement of Activities ..... . ..... .. . . .. .. ......... . . . Fund Financial Statements:
Balance Sheet - Governmental Fu nds . .... . .. . . . . .. 0 •• • •
Reconciliation of th e Govenm1ental Fund Balance Sheet to the Statement of Net Position .. . ... .. . . . .. .. . .
Statement of Revenues, Expen ditures and Changes in Ftmd Balance - Govenm1ental Funds .... 0 •• •••• • ••• • •
Reconciliation of the Statemen t of Revenues, Expenditures and Changes in Fu nd Balance of Govemmental Funds to the Statem ent of Activities .. . .. .
Notes to the Basic Financial Statem.ents .... . .. .. . . . . .. . .. .
Required Supplementary Information: Budgetary comparison schedules ..... ..... .. . .. . . .... . . .
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 ..... . ....... ... ... .. . . . ... . .. ... . ....... .
Management Letter ... . .. . ..... . ... .. .... . ... . ..... . . .
9 10
11
12
13
14 15-28
29-32
33-34
35-36
Odyssey Charter School (A charter school under Odyssey Charter School, Inc. )
WfL# 6507
Leslie Maloney, President Thomas Cole, Vice President Jessicah Nichols, Secretary Amanda Larson, Treasurer Sonja White, Boar·d Member Nick Holpfer, Board Member
1755 Eldron Blvd S.E. Palm Bay, FL 32909
2016-2017
BOARD OF DIRECTORS
SCHOOL ADMINISTRATION
Dr. Monica Knight, Jr. /Sr. High Site Administrator Wendi Nolder, Elementary Site Administrator
CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors Odyssey Charter School Palm Bay, Florida
INDEPENDENT AUDITORS' REPORT
We have audi ted the accompanying financial statements of the governmental activities and each major fund of Odyssey Cha11er School (the "School"), a charter schoo l under Odyssey Charter School , Inc. , wh ich is a component unit of the School Board of Brevard County, as of, and for the year ended June 30, 2017, and the re lated notes to the financial statements which col lectively comprise the School's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the U nited States of America; this includes the des ign, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fra ud or error.
Auditor's Responsibility
Our responsibility is to express opm1ons on these financial statements based on our audit. We conducted our audit in accordance with auditing standards genera lly accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financ ial statements a re free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor' s judgment, including the assessment of the ri sks of material misstatement of the financial statements, whether due to fraud or error. ln making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity ' s internal control. Accordingly, we express no such opinion. An audit a lso inc ludes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our aud it opinions.
396 Alhambra Circle. Suite 900. Coral Gables. FL 33134 • Tel : 305.446.3022 • Fax: 305.446.6319 www.hlbgravier.com
Ht.B Gravte~, llP •S a n~bef ol llll lmemal•onal A world·wtde organ.1at101'1 o1 accotlflhng hrms and busu\llu iMMsers
Opinions
In our opinion, the financial statements referred to above present fairly, in all materia l respects, the respective financial position of the governmental activities and each major fund of Odyssey Charter School as of June 30, 2017, and the respective changes in financial position for the year then ended in accordance with accounting principles general ly accepted in the United States of America.
Oth er Matters
As described in Note I, the accompanying financial statements referred to above present only the financial position of Odyssey Charter School as of June 30, 2017, and the respective changes in financial position for the yea_r then ended, and is not intended to be a complete presentation of Odyssey Charter School, Inc. These financial statements do not purport to and do not present fairly the financial pos ition of Odyssey Chatter School, Inc. as of June 30, 2017 and its changes in financial pos ition for the year then ended in confonnity w ith accounting principles generally accepted in the United States of America.
Other R eporting Required by Government A uditing Sta11dards In accordance with Government Auditing Standards, we have also issued our rep011 dated August 28, 20 17, on our consideration of the School's internal control over financial repmting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that repmt is to describe the scope of our testing of internal control over financ ial repmting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial rep01ting or on compliance. That report is an integral patt of an audit performed in accordance with Government Auditing Standards in considering the School's internal control over financial repmting and compliance.
Required Supplementmy Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 4 through 8 and 29 through 32 be presented to supplement the basic financial statements. Such information, although not a patt of the basic financial statements, is required by the Govemmental Accounting Standards Board, who considers it to be an essential patt of financial repmting for placing the basic financ ia l statements in an appropti ate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the infonnation because the limited procedures do not provide us w ith sufficient evidence to express an opinion or provide any assurance.
Coral Gables, Florida August 28, 2017
f/J!? .JJ/w~~ W CERTIFIED PUBLIC ACCOUNTANTS
Management' s Discussion and Analysis Odyssey Chruier School
(A Charter School Under Odyssey Charter School, Inc. ) June 30, 20 17
The corporate officers of Odyssey Chatier School have prepared this nanative overview and analysis ofthe school's financial activities for the year ended June 30,2017.
Financial Highlights
1. The net position of the School at June 30,2017 was $3,973,605. 2 . At yeru·-end, the School had cun ent assets on hand of $3,702,289 3. The School had a11 increase in net position of $134,018 for the year ended June 30, 2017. 4 . The unassigned fund balance at year end was $1,579,270.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the School's basic fmancial statements. The School's financial statements for the year ended June 30, 2017 are presented in accordance with GASB Codification Section 2200. The financial statements have three components: 1) government-wide financial statements, 2) fimd fmancial statements, and 3) notes to the fmru1cial statements. This repmi also contains other required supplementary infonnation in addition to the basic financial statements themselves.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the School 's finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the School's assets, defened outflows of resources, liabilities and defen ed inflows of resomces. The difference between the four is repmied as net position. Over time increases or decreases in net position may serve as an indicator of whether the fmancial position of the School is improving or deteriorating.
The Statement of Activities presents information on how the School 's net position changed during the fiscal yeru·. All changes in net position are reported when the underlying event occm·s without regard to the timing of related cash flows. Accordingly, revenues and expenses are repo1i ed in this statement for some items that will only result in cash flows in futme fiscal yeru·s.
The govemment-wide financial statements can be found on pages 9 - 10 of this repmi.
Fund F inancial Statements
A "fund" is a collection of related accounts grouped to maintain control over resources that have been segregated for specific activities, projects, or objectives. The School like other state and local govenm1ents uses fund accounting to ensure and report compliru1ce with fmance-related legal requirements.
4
All of the funds of the School are govemmental funds. Government Funds are used to account for essentially the same functions reported as govenm1ental activities in the government-wide financial statements. Govemment Fund fmancial statements, however, focus on near-term inflows and outflows of spendable resources, as well as on the balances of spendable resources which are available at the end of the fiscal year. Such infom1ation may be used to evaluate a govenunent's requirements for near-term financing.
The B oard of the School adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with the School 's budget.
The basic governmental fund financial statements can be found on pages 11 - 14 of this rep01i.
Notes to Financial Statements
The n otes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
Th e n otes to the financial statements can be found on pages 15 - 28 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a charter school's financial position. In the case of the School, net position was $3,973,605 at the close of the fiscal y ear. A surrui1ary of the School' s net position as of June 30, 2017 and 2016 is as follows :
2017 2016
Cash $ 1,704,385 $ 1,027,367 Restricted cash held by trustee 1,594,271 Accounts receivable 2,523 75,889
Deposits receivable 155,344 11 6,912
Due from other agencies 245,766 298,162
Due from cha1t er school 40,000 190,000 Capital Assets, net 12,272,935 7,463,894
Total Assets 16,015,224 9,172,224
Deferred Outflows
Accrued Liabilities 373,404 236,725
Long term debt 11,668,215 5,095,912
Total Liabilities 12,041,619 5,332,637
Deferred Inflows
Net P.osition: Net investment in capital assets 604,720 2,557,982
Restricted by bond 1,594,271
Unrestricted 1,774,614 1,281,605
Total Net Position $ 3,973,605 $ 3,839,587
At the end of the year, the School is able to report positive balances in total net position.
5
A stmunary and analysis of the School's revenues and expenses for the year ended June 30,2017 and 2016 is as follows:
2017 2016
REVENUES
Program Revenues
Capital outlay funding $ 448, 163 $ 385,229
Federal sources 595,405 583,861 Federal Lunch program 497,830 447,475 Charges for services 701,838 548,750
General Revenues FTE nonspecific revenues 7,879,019 6,857,506 Other revenues 198,689 101,675
Total Revenues 10,320,944 8,924,496 EXPENSES Component Urut Activities:
Instruction 5,083,118 4,241,108 Student suppo11 services 93,129 97,106 Instructional development 432,680 270,854 Instructional media 1,867 13,348 Instruction-related technology 171,351 250,091 Instruction staff training 47,804 32,310 School administration 1,686,834 1,513,575
Fiscal Services 129,664 126,580 Food services 524,557 478,736 Pupil transportation 336,460 382,907 Community services 148,730 259,799 Operation of Plant 1,083,446 952,212 Maintenance ofPlant 128,573 89,439
Interest ~
3 18,713 207,988
Total Expenses 10,186,926 8,916,053
Increase in Net Position 134,018 8,443
Net Position at Beginning of Year 3,839,587 3,831 ,1 44
Net Position at End of Year $ 3,973,605 $ 3,839,587
The School 's revenue increased by $1,396,448 in the cunent year and expenses increased by $1,270,873 as a result of an increase in student enrollment of approximately 137 students. The School had an increase in its net position of$ 134,01 8 for the year.
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUND
As noted earlier, the School uses fund accotmting to ensure and demonsh·ate compliance with fmance-related legal requirements.
6
Governmental F unds
The focus of the School 's governmental funds is to provide infom1ation on near-tenn inflows, outflows, and balances of spendable resources. Such infonnation is useful in assessing the School 's financing requirements. In pru.1icular, the unassigned fund balance may serve as a useful measure of a govenunent's net resources available for spending at the end of the fiscal year.
Most of the School 's operations are funded in the General Fund. The majority of the General Fund revenues are distributed to the School by the District tlu·ough the Florida Education Finance Program (FEFP), which uses fonnulas to distribute state funds and an ru.nount of local prope1iy taxes (i.e. , required local effo11) established each year by the Florida Legislature.
At the end of the fiscal year, the School's governmental general fund repo11ed ending ftmd balance of $1,734,614. The ftmd balance unassigned and available for spending at the School 's discretion is $1,579,270. These funds will be available for the School's future operations.
Achievements 2016-2017
Accomplishments :fi:om the last year are many for Odyssey Chru1er School, including having 6 teachers recognized as Florida High Impact Teachers and being awarded the Gold Award of Distinction (Odyssey Elementru·y) and Silver Award (Odyssey Jr/Sr High) fi"om the US Depariment of Agriculture for our emphasis on physical well-being and healthy practices. Odyssey Chru1er School was the only "A" school in the City of Palm Bay in 2016 and was honored by the East Coast Technical Assistance Center (ECTAC) for ' Exceeding Expectations' on State Assessments in 2016. In 2017, Odyssey Elementary School remained the highest performing school in the city. In 2017, Odyssey Chru1er Jr/Sr High was named one of Florida's top high schools by US News and World Report. In May 2017, Odyssey Chru.1er School became a "Green Apple" school and was re-accredited under the system of Green Apple School Management. Finally, OCS, Inc., is now the proud owner of a 95,000 squru·e-foot school facility called the Wyoming Campus.
Capita l Assets
The School's investment in capital assets as of June 30, 2017 ammmts to $12,272,935 (net of accumulated depreciation). This investment in capital assets includes building and improvements, vehicles, fumiture, fixtures and computer equipment. As of June 30, 2017, the School had long term debt totaling $11 ,668,215 relating to capital assets.
Requ ests for Information
This frnru1cial repm1 is intended to provide a general overview of the finances of the Char1er School. Requests for additional information may be addressed to Green Apple School Mar1agement, LLC, 1900 S. Harbor City Blvd, Suite 120, Melbourne, FL 32901.
7
Governmental F und Budget Analysis and Highlights
Prior to the start of the School's fiscal year, the Board of the Charter School adopted an arumal budget. A budgetary comparison statement has been provided for total govenm1ental funds (general fund, capital projects fund and non-major governmental funds) to demonstrate com.pliance with the School's budget.
REVENUES Program Revenues Capital outlay Federal sources Federal lunch program Local sources Charges for services
General Revenues FTE Nonspecific Revenues Other Revenues
Total Revenues
EXPENDITURES Component Unit Activities:
Instruction Student Suppmt Services Instructional development Instructional media Instruction-related technology Instruction staff training School administration Fiscal Services Food services Pupil transportation Conununity services Operation of Plant Maintenance of Plant Interest
Total Current Expenditures (before capital outlay and debt service)
Capital outlay Debt service principal
Total Expenditures
Original Budget
$ 348,000 552,450 480,000 105,000
7,767,095 289,041
9,541,586
4,276,441 73 ,575
377,825 6,000
182,900 47,270
1,542,802 130,750 475,000
349,282 107,648 821,892 114,160 202,500
8,708,045
158,450 I 08,500
$ 8,974,995
Final Budget
$ 448,250 595,400 497,850 145,000 555,650
7,878,975 198,500
10,319,625
4,874,600 93, 147
432,675 2,000
171,350 47,800
1,671, 175 130,000 506,925
257,150 148,400 855,650 128,575 318,000
9,637,447
184,000 4,940,000
$ 14,761,447
Actual
$ 448,163 595,405 497,830 145,162 556,676
7,879,0 19 198,689
10,320,944
4,874,689 93 ,129
432,680 1,867
171,351 47,804
1,671,169 129,664 506,909 257,145 148,409 855,538 128,573 318,713
9,637,640
183,798 4,940,785
$ 14,762,223
Most variances occmTed as a result of the Budget adopted being more conservative than actual results for the year.
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Odyssey Charter School (A charter school under Odyssey Charter School, Inc.)
Statement ofNet Position June 30,2017
Assets Current assets: Cash Restricted cash held by trustee Accounts receivable Due from other agencies Deposits receivable and prepaid expenses
Due from other charter schools
Land Capital assets, depreciable Less: accumulated deprec iation
Total Assets
Deferred Outflows of Resources
Liabilities Current liabilities: Salaries and wages payable Accounts payable and accrued expenses Accrued interest Cap ital lease obligation payab le within one year Notes payable within one year
Long-term debt: Notes payable Cap ital lease ob ligation Bonds payable
Total Liabilities
Deferr ed Inflows of Resources
Net position Net investment in capital assets Restricted by bond Unrestricted
Total Net Position
The accompanying notes are an integral
pa1i of this financial statement.
9
Governmental Activities
$ 1,704,385 1,594,271
2,523 245,766 155,344
3,702,289
40,000
2,097,867 14,378,059 (4,202,991) 12,272,935 16,015,224
276,133 81,657 15,614 34,787 80,590
488,781
87,004 54,453
11 ,411,381 12,041,619
604,720 1,594,271 1,774,614
$ 3,973,605
Odyssey Charter Schoo l
(A charter school under Odyssey Charter School, lnc.)
Statement of Activities
For the year ended June 30, 20 17
FUNCTIONS
Governmental activities:
Instruction
Student Support Services
fnstructional development
Instructional staff training
Instructional media
Instructional related technology
School administration
Fiscal services
Food services
Pupil transportation services
Operation of plant
Maintenance of plant
Community Services
fnterest
Total governmental activities
Charges fo r
Expenses Sen rices
$ 5,083,11 8 $ 153,108
93,129
432,680 214,682
47,804
1,867
171,351
1,686,834
129,664
524,557 145,162
336,460
1,083,446 28,750
128,573
148,730 160,136
318,713
10,186,926 701,838
General revenue.s:
FTE nonspecific revenues
Interest and other revenue
Change in net position
Net position, beginning
Net position, ending
The accompanying notes are an integral part of this financial statement.
10
Program Revenues
Operating Capital
Grants and Grants and
Contributions Contributions
$ 573,1 65 $
2,311
15,489
497,830
4,440
448, 163
1,093,235 448,163
Net (Expense)
Revenue
and Changes
in Net Position
$ ( 4,3 56,845)
(93, 129)
(217,998)
( 45,493)
(1 ,867)
(155,862)
( I ,686,834)
(129,664)
118,435
(332,020)
(606,533)
(128,573)
11,406
(318,713)
(7,943,690)
7,879,019
I 98,689
134,018
3,839,587
$ 3,973,605
Odyssey Charter School (A charter school under Odyssey Charter School, Inc.) Balance Sheet - Gorernmental Funds June 30, 20 17
General Fund
Assets Cash Restricted cash held by trustee Accounts receivable Due fi:om other agencies Deposits receivable and prepaid expenses Due to I from funds
Total Assets
Deferred Outflows of Resources
Liabilities Salaries and wages payable Accounts payable and accrued expenses Accrued interest Due to I from funds
Total Liabilities
Deferred Inflows ofResources
Fund balance Nonspendable, not in spendable form Restricted by bonds Unassigned
Total Liabilities, Deferred Inflows of Resources and Fund Balance
The accompanying notes are an integral part of this financial statement.
$ 1,704,385
2,523
155,344 245,766
2,108,018
276,133 81,657 15,614
373,404
155,344
I ,579,270 1,734,614
$ 2,108,018
Special Revenue Del Service Capital Projects Total Go1·emmental Fund Fund Fund Funds
$ $ $ $ 1,704,385 825,885 768,386 1,59-1,271
2,523 245,766 245,766
155,344 245,766
825,885 1,014,152 3,9-18,055
276,133 81,657 15,614
245,766 245,766 245,766 619,170
155,344 825,885 768,386 1,594,271
1,579,270 825,885 768,386 3,328,885
$ $ 825,885 $ 1,014,152 $ 3,948,055
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Odyssey Charter School (A charter school under Odyssey Cha1ter School, Inc.) Reconciliation of the Governmental Fund Balance Sheet to the Statement ofNet Position For the year ended June 30, 2017
Total Fund Balance - Governmental Funds
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets of $16,4 75,926 net of accumulated depreciation of $4,202,991 used in goverru11ental activities are not financial resources and therefore are not reported in the fund.
Long term debt is not due and payable in the current period and, therefore, is not rep01ted in the governmental funds.
Long tenn receivables from related parties in govemmental activities are not financial resources and therefore are not reported in the govenunental funds.
Total Net Position - Governmental Activities
The accompanying notes are an integral part of this financial statement.
12
$ 3,328,885
12,272,935
(11,552,838)
40,000
$ 4,088,982
Odyssey Charter School (A charter school under Odyssey Charter School, lnc.) Statement of Revenues, Expenditures, and Changes in Fund Balance-Go\"enunental Funds For the year ended June 30, 2017
Special Debt Service Capital Projects Total General Fund
Revenue Fund Governmental Fund Fund Ennds Revenues:
State capital outlay funding $ $ $ $ 4~8, 163 $ 448,163 State passed through local 7,879,019 7,879,019 Federal sources 595,405 595,405 Federal lunch program 497,830 497,830 Charges for services 556,676 145,162 701,838 Other revenue 198.689 198.689
Total Revenues 8,634,38~ 1,238,397 448,163 1 0,320,9~4
Expenditures: Current
Instruction 4,430,065 444,624 4,874,689 Student support services 57,857 35,272 93,129 Instructional development 432,680 432,680 Instructional staff training services 15,272 32,532 47,804 Instructional media 1,867 1,867 Instructional related technology 155,862 15,489 171,351 School administration 1,671,169 1,671,169 Fiscal services 129,664 129,664 Food services 506,909 506,909 Pupil transportation services 252,705 4,440 257,145 Operation of plant 407,3 75 448,163 855,538 Maintenance of plant 128,573 128,573 Community services 148,409 148,409
Capital Outlay: Other capital outlay 183,798 100,193 5,074,336 5,358,327
Debt Service: Repayment of Principal on Loans and Leases 4,940,785 4,940,785 Interest 318,7 13 318.713
Total Expenditures I 3.274.794 1.139.459 5.074.336 448.163 I 9,936.75?
Excess (deficit) of revenues over expenditures ( 4,640,4 10) 98,938 (5,074,336) (9,615,808)
Other financing sources: Proceeds from bond issuance 11,411,381 I1,41 1,381 Transfers in and (out) funds for capial projects (768,386) 768,386 Proceeds from capital lease 101,707 101,707 Collections of long term receivables 150,000 150,000 Transfers in and (out) 98,938 (98,938) Refmance of mortgage payable with bond funds 4,742,774 (4,742,774)
Net change in fund balance 453,009 825,885 768,386 2,047,280
Fund Balance at beginning of year 1,281,605 I ,281,605
Fund Balance at end of year $ 1,734,614 $ $ 825,885 $ 768,386 $ 3,328,885
The accompanying notes are an integral part of this financial statement.
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Odyssey Charter School (A charter school under Odyssey Charter School, Inc.) Reconci liation of the Statement of Revenues, Expenditures and Changes in Fund Balance
of Governmental Funds to the Statement of Activities For the year ended June 30, 2017
Net Change in Fund Balance - Governmental Funds
Amounts reported for governmental activities in the statement of activities are different because:
Govenunental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Tllis is the amount by which capital outlays of $5,327,364 (net of r etirements) exceeded depreciation expense of $5 18,323 (net of retirements).
The proceeds fi-om debt issuance provide curTent financ ial resources to governmental funds, but issuing debt increases long-tenn liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. This is the amount by wllich repayments of $4,940,785 differed from proceeds of $11 ,5 13,088 in the current period.
Increase in long tem1 receivables is an expenditure in the govenunental funds, but a decrease or collections of such receivables reduces long-term assets in the statement of net position. This is the amount by which increase in long-tenn receivables of $0 differed from collections in the current period of$150,000.
Change in Net Position of Governmental Activities
The accompanying notes are an integral part ofthis financial statement.
14
$ 2,047,280
4,809,041
(6,572,303)
(150,000) $ 134,018
Odyssey Charter School (A Charter School under Odyssey Charter School, Inc. ) Notes to Financial Statements June 30, 2017
Note 1 - Summary of Significant Accounting Policies
Reporting Entitv Odyssey Charter School (the "School"), is a not-for-profit corporation organized pursuant to Chapter 617, Florida Statutes, the Florida Not-for-Profit Corporation Act. The governing body of the School is the board of directors of the not-for-profit corporation, which is composed of six members. The School operates under a charier granted by the sponsoring district, the District School Board of Brevard County (the "Distlicf') . The cunent charter expires on June 30, 2027 and is renewable by mutual written agreement between the School and the District. Dming the tem1 of the chmier, the District may tem1inate the chruier if good cause is shown. The School is considered a component unit of such District. The School is located in Palm Bay, Florida for students :fi:om kindergruien tlu·ough tenth grades and is funded by the District. These financial statements are for the year ended June 30, 2017, when 1,155 students were emolled for the school year.
Basis of presentation The School's accounting policies conform to accotmting principles generally accepted in the United States as applicable to state and local governments. The Governmental Accounting Standards Board ("GASB") is the accepted standard setting body for establishing govenunental accounting and financial repmiing principles.
Government-wide and Ftmd Financial Statements Government-wide Financial Statements The government-wide financial statements include the statement of net pos1t10n and the statement of activities. These statements repmi information about the School as a whole. Any internal interfund activity has been eliminated from these fmancial statements. Both statements repmi only govemmental activities as the School does not engage in any business type activities.
The statement of activities repmi s the expenses of a given function offset by program revenues directly connected with the :ft.mctional program. A :ft.mction is an assembly of sinular activities and may include po1iions of a :ft.md or stmunm·ize more than one fund to capture the expenses and program revenues associated with a distinct functional activity. Program revenues include: (1) charges for services which report fees; (2) operating grants such as the National School Lunch Program, Federal grants, and other state allocations; and (3) capital grants specific to capital outlay. Other revenue somces not properly included with program revenues are reported as general revenues.
Defen·ed Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section fo r defe1Ted outflows of resources. This separate financial statement element, defened outflows of resources, represents a consumption of net position that applies to a :ft.1ture period and so will not be recognized as an outflow of resources ( expense/expendihu·e) until then. The School does not have any items that qualify for repmiing in tills category.
15
Odyssey Charter School (A Charter School under Odyssey Cha1ier School, Inc. ) Notes to Financial Statements June 30, 2017
Note 1- Summa11' of Significant Accounting Policies (continued)
Deferred Outflows/Inflows of Resources (continued)
In addition to liabilities, the statement of financial position will sometimes repmi a separate section for defe1Ted inflows of resources. Tllis separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The School does not have any items that qualify for repo1iing in this category.
Fund Financial Statements Fund financial statements are provided for governmental funds. The operations of the funds are accOtmted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, equity, revenues and expenditures. Major individual govenm1ental funds are reported as separate columns in the fund financial statements:
General Fund - is the School's primary operating fund. It accounts for all financial resources of the school, except those required to be accounted for in another fund. Debt Service Fund - accounts for the resomces accumulated and payments made for principal and interest on long-term debt of the School. Special Revenue Fund - accounts for specific revenue, such as federal grants and capital outlay funding that are legally restricted to expenditmes for particular purposes. Capital Projects Fund- is used to account for the resources restricted for the acquisition or construction of specific capital assets from the bond proceeds and capital outlay funding that are legally restricted to expenditures for particular purposes.
Measmement Focus and Basis of Accotmting The financial statements of the School are prepared in accordance with generally accepted accounting principles (GAAP). The School's reporting entity applies all relevant Govenunental Accounting Standards Board (GASB) Codification of Accounting and Financial Reporting Guidance.
The govemment-wide statements rep011 uses the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
The School recognizes assets of non-exchange transactions in the period when the tmderlying transaction occms, when an enforceable legal claim has arisen, or when all eligibility requirements are met. Revenues are recognized, on the modified accrual basis, when they are measmable and available. Non-exchange transactions occm when the school provides (or receives) value to (from) another party without receiving (or giving) equal or nearly equal value in retum. Most donations are examples of non-exchange transactions. Revenues from grants and donations are recognized on the accrual basis, in the fiscal year in which all eligibility requirements have been satisfied.
16
Odyssey Charter School (A Chcuier School w1der Odyssey Charter School, Inc. ) Notes to Financial Statements June 30, 2017
Note 1-Summary of Significant Accounting Policies (continued)
Goven1mental fund financial statements repmi using the cunent fmancial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they are both measurable and available. "Measurable" means the amount of the transaction can be determined. Available means collectible within the current period or soon enough thereafter to pay liabilities of the cmTent period. The School considers revenues to be available if they cu·e collected within 60 days of the end of the fiscal year. Florida Education Finance Program (FEFP) revenues are recognized when received. A one-year availability period is used for revenue recognition for all other govemrnental fund revenues. Charges for services and fees are recognized when cash is collected as an1ounts are not measurable. When grant terms provide that the expenditme of ft.mds is the prime factor for detennining eligibility for federal, state, and other grant ft.mds, revenue is recognized at the time the expenditure is made. Expenditures are recorded when the related ft.md liability is incmred, except for long-term debt principal and interest which are repo1ied as expenditures in the yecu· due.
Budgets and Budgetarv Accounting In compliance with Florida Statutes, the Board of Directors adopts an annual budget using the modified accrual basis of accounting. During the fiscal year, expenditures were controlled at the object level (e.g. salaries and benefits, pmchased services, materials and supplies and capital outlay) within each activity (e.g. instruction, pupil personnel services and school administration). Revisions to the ammal budget are approved by the Bocu·d.
Cash All deposits are held in major bcu'lks and high grade investments. The School has not adopted a fom1al investment policy. Cash a11d cash equivalents include all highly liquid investments with a matmity of three months or less.
Due from Other Govemments or A2:encies Amounts due to the School by other governments or agencies are for grants or programs under which the services have been provided by the School.
Long - Term Debt In the gove1nment-wide fmancial statements, long-term debt and other long-term obligations are repmied as liabilities in the applicable governmental activities statement of net position. Bond premiums and discOtmts are defened and amortized over the life of the bonds using the effective interest method. Bond payable is repmied net of the applicable bond premium or discount. Bond issuance costs are recognized as an expense in the period incun-ed. In the fund financial statements, governmental fund types report the face amount of debt issued as other fmancing sources.
17
Odyssey Charter School (A Charier School under Odyssey Charter School, Inc.) Notes to Financial Statements June 30, 2017
Note 1- Summary of Significant Accounting Policies (continued)
Capital Assets The School's properiy, plant and equipment with useful lives of more than one year are stated at historical cost and comprehensively rep011ed in the statement of net position in the govenm1entwide fmancial statements. Donated capital assets are recorded at their estimated fair market value on the date donated. The School generally capitalizes assets with a cost of$2,000 or more. Building improvements, additions and other capital outlays that significantly extend the useful life of an asset are capitalized. The costs of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets are depreciated using the straight-line method. When capital assets are disposed, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations. Estimated useful lives, in years, for depreciable assets are as follows:
Building and improvements Vellicles
5-39 Years 10 Years
Software, Fumiture, equipment, and library 3-10 Years Revenue Sources Revenues for operations will be received primarily from the District pursuant to the funding provisions included in the School's chmier. In accordance with the funding provisions of the charter and Section 1002.33, Florida Statutes, the School will rep011 the number of full-time equivalent (FTE) students and related data to the District. Under the provisions of Section 1 0 11. 62, Florida Statutes, the District reports the number of the full-time equivalent (FTE) students and related data to the Florida Depmiment of Education (FDOE) for funding through the FEFP. Ftmding for the School is adjusted during the year to reflect the revised calculations by the FDOE under the FEFP and the actual weighted full-time equivalent sh1dents repot1ed by the Sch ool dming the designated full-time equivalent student smvey periods. After review and verification of FTE repmis and suppmiing documentation, the FDOE may adjust subsequent fiscal period allocations of FEFP funding for prior year errors disclosed by its review as well as to prevent statewide allocations from exceeding the amount authorized by the Legislatme. Normally, such adjustments are treated as reductions of revenue in the year the adjustment is made.
In addition, the School receives state funds through the District under chm1er school capital outlay funding pursuant to Section 1013.62, Florida Stah1tes. Funds are based on a capital outlay plan submitted to the District and are to be used for lease of school facilities.
Finally, the School may also receive Federal awards for the enhancement of various educational programs. Federal awards are generally received based on applications submitted to and approved by various granting agencies. For Federal awards in which a claim to these grant proceeds is based on incurring eligible expen ditures, revenue is recognized to the extent that eligible expenditures have been incurred. Any excess amounts are recorded as deferr-ed revenues until expended. Additionally, other revenues may be derived from various fundraising activities and certain other programs.
18
Odyssey Charter School (A Charter School under Odyssey Charter School, Inc. ) Notes to Financial Statements Itme 30, 2017
Note 1- Summary of Significant Accounting Policies (continued)
Inter-fund Transfers Outstanding balances between funds are rep01ied as "due to/from" other funds. Inter-fund transfers are made to move any excess or sh011age of funds derived from the National School Lunch Program from the Non-major Govenm1ental Ftmd to the General Fund. Inter-fund transfers are also made to move fi.mds from the General Fund to the Debt Service and Capital Proj ects Fund in order to fund scheduled debt service and capital project expenditures.
Char12:es for Services The School charges sh1dents for various instruction and curriculum development programs including music, tutoring, food, and art programs. These activities are receded in the general fund since the fees charged are only supplement the programs and the cost of such programs substantially exceed the fees.
Compensated Absences The School grants a specific number of sick days. Full time salary employees are entitled to one day per month to up to ten days of active work during the ten-month period. Full-time hourly employees are entitled to four days of paid leave annually. In the event that available time is not used by the end of the benefit year, employees will not be able to "rollover" unused days for use in future years. There is no termination payment for accumulated unused sick days.
GASB Codification Section C60, Accounting for Compensated Absences, provides that compensated absences that are contingent on a specific event that is outside the control of the employer and employee should be accounted for in the period those events take place. Accordingly, these fmancial statements do not include an accrual for sick days available to be used in fi.1ture benefits years.
The School also provides certain days to be used for specific personal matters such as family death and j ury duty. Because the use of such days is contingent upon those events taking place and such events are out of the control of both the employer and the employee, there is no accrual for such days.
Income Taxes Odyssey Charter School, Inc. qualifies as a tax-exempt organization under Internal Revenue Code Section 501 ( c )(3 ), and is, therefore, exempt from income tax. Accordingly, no tax provision has been made in the accompanying fmancial statements.
Subsequent Events In accordance with GASB Codification Section 2250.1 06, the School has evaluated subsequent events and transactions for potential recognition or disclosure through August 28, 2017, which is the date the fmancial statements were available to be issued.
19
Odyssey Charter School (A Charter School under Odyssey Charter School, Inc.) Notes to Financial Statements June 30, 2017
Note 1- Summary of Significant Accounting Policies (continued)
Order of Fund Balance Spending Policv The School's policy is to apply expenditures against non-spendable fund balance, restricted fund balance, conm1itted fund balance, assigned fund balance, and unassigned fund balance at the end of the fiscal year by adjusting journal entries. First Non-spendable fi.md balances are deternuned. Then restricted fund balances for specific purposes are determined (not including non-spendable amotmts). Then any remaining fi.md balance amounts for the non-general fi.mds are classified as restricted fi.md balance. It is possible for the non-general fi.mds to have negative unassigned fi.md balance when non-spendable ammmts plus the restricted fi.md balances for specific purposes an1otmts exceed the positive fund bal ance for the non-general fi.md.
Restricted Assets Restricted assets include cash and cash equivalents that are related to the amounts that the School is required to segregate in connection with the issuance of bonds, including sinking fi.md and reserve requirements, as well as amounts segregated for capital projects of the School. The Indenture of Trust requires the establishment of the Funds for the bonds and accounts within such funds, all of which shall be special trust funds and accounts held by Trustee. At June 30, 201 7 the composition of restricted balances is as follows:
Odvssev Charter School Debt Service Fund Interest fund-Series 2017 A $
Interest fund-Series 20 17B Sinking Fund Total Debt Service Fund s
Reserve for Ca[lital Projec ts Funds held by Trustee $
Total Rese rves for Capital Projects s
Net position and Fund balance classifications
Government-wide financial statements
637,03 1 12,856
175,998 825,885
768,386 768,386
Odvssev Preuaratorv Academv
$ 195,462 3,945
54,002 s 253,409
$ 255,591 s 255,591
Equity is classified as net position and displayed in three (3) components:
Total
$ 832,494 16,800
230,000 s 1,079,294
$ 1,023,977 s 1,023,977
a) Net investment in capital assets - consists of capital assets net of accumulated depreciation and reduced by the outstanding balances of any borrowings that are attributable to the acquisition or improvement of those assets.
b) Restricted net position - consists of net position with constraints placed on their use either by extemal groups such as creditors, grantors, contributors or laws or regulations of other governments.
c) Umestricted net position - all other net position that do not meet the definition of "restricted" or "net investment in capital assets."
20
Odyssey Charter School (A Charter School under Odyssey Charter School, Inc. ) Notes to Financial Statements June 30, 2017
Note 1-Summary of Significant Accounting Policies (continued)
Fundfinancial statements Under GASB Codification Section 1800.142, Fund Balance Reporting and Governmental Fund Type Definitions. Tllis Statement defines the different types of fund balances that a govemmental entity must use for fmancial reporting purposes. GASB requires the fi.md balance amounts to be properly repmied witllin one of the fund balance categories list below:
a) Nonspendable - includes amounts that cannot be spent because they are either not in spendable fonn or legally or contractually required to be maintained intact. Consists of fi.md balance associated with inventories, prepaid expenses, long-term loans and notes receivable, and prope1iy held for resale (unless the proceeds are restricted, committed, or assigned).
b) Restricted - fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, extemal resource providers, or through enabling legislation. Restricted fi.md balance of the School relate to the bond issues.
c) Committed - fi.md balance classification includes amounts that can be used only for the specific purposes detennined by a fom1al action of the School's Board of Directors. There are no committed fund balances at year end.
d) Assigned - fund balance classification are intended to be used by the School's management for specific purposes but do not meet the criteria to be classified as restricted or committed. There are no assigned fund balances at year end.
e) Unassigned - pmiion of the fi.md balance that has not been restricted, committed or assigned for a specific purpose. This is the residual classification for the School's general fund.
Use ofEstimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the repmied amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and repmied amounts of revenues and expenditures during the repmiing period. Actual results could differ from those estimates.
21
Ody ssey Cha rter School (A Charter School under Odyssey Charter School, Inc. ) Notes to Financial Statements June 30, 2017
Note 2 -Capital Assets
Th e following schedule provides a stm1mary of ch anges in capital assets, acquired substantially with p ublic funds, for the year ended ltme 30, 2017:
Balance Balance 711 /2016 Additions Retirements 6/30/2017
Capital Assets not depreciated: Land $ 1,083,000 $ 1,01 4,867 $ $ 2,097,867
Capital Assets being depreciated: Building and improvements 7,753,325 4,096,997 11,850,322 Vehicles 784,245 784,245 Furniture and equipment 1,506,933 255,353 (39,853) 1,722,433 Computer Software 2 1,0 59 2 1,059
11,148,562 5,367,217 (39,853) 16,475,926
Less: Accumulated Depreciation
Building and improvements (2,244,4 73) (239,245) (2,483,718)
Vehicles (368,847) (77,631) (446,478)
Furniture and equipment ( 1,063 ,849) (226,229) 30,963 (1 ,259, 115)
Computer Software (7,499) (6,181) (13,680)
(3,684,668) (549,286) 30,963 ( 4,202,991)
Cap ital Assets, net $ 7,463,894 $ 4,817,93 1 $ (8.890) $ 12,272,935
For the fiscal year ended June 30, 2017, depreciation expense is allocated in the Statement of Activities by function as follows:
Instruction $ 208,429 School Administration 15,665 Food Services 17,648 Pupil Transportation 79,3 15 Operation of Plant 227,908 Community Service 321
$ 549,286
22
Odyssey Charter School (A Charter School tmder Odyssey Cha1ier School, Inc. ) Notes to Financial Statements June 30, 2017
Note 3 -Management Agreement
The School uses a professional charter school management company to provide management and administrative services to the School including, but not limited to, facility design, staffing recommendations, human resource coordination, regulatory compliance, legal and corporate upkeep, maintenance of the books and records, bookkeeping, budgeting and financial repo1iing. Beginning January 1, 20 13, the School contracted with Green Apple School Management, LLC. The agreement with Green Apple School Management, LLC is for a period of five years through December 31, 2017 unless te1minated, modified or renewed by the parties. The agreement between the School and the management company both called for a fee of $700 per full tin1e equivalent (FTE) student for the school year ended June 30, 2017. During the year ended June 30, 201 7, the School incuned $810,600 in management fees . Green Apple School Management, LLC is located at 1900 S. Harbor City Blvd, Suite 120, Melbourne, FL 32901. The managing member is Constance 0 1iiz.
Note 4 - Transactions with School District and Other Divisions of Odyssey Charter School, Inc.
Odyssey Charter School charges Odyssey Preparatory Academy, a charier school under Odyssey Charter School Inc. a11 assessment for use of shared utilities, transpmiation and personnel. In addition, the School made several non-interest bear·ing advances to affiliates. The following schedule provides a summary of changes in long-te1m receivables for the year ended Jtme 30, 20 17.
Balance Balance July 01, 2016 Advances ReEayments June30, 2017
Long-term receivables Odyssey Prepartory Academy $ 40,000 $ $ $ 40,000 Oasis Prepartory Academy 150,000 150,000
$ 190.000 $ $ 150.000 $ 40.000
Pursuant to the Chari er School contract with the School District, the District withholds an administrative fee of 2% of the qualifying revenues of the School. For the year ended June 30, 2017, administrative fees withheld by the School District totaled $34,006.
Note 5- Long Term Debt
Mmigage payable The School entered into a loan agreement with a fmancial institution to acquire and improve its facility and to acquire certain vehicles, furniture and equipment. The loan was for a maximum amount of $5,400,000 evidenced by a promissory note dated July 10, 2009, divided into two amounts, the first for $4,436,326 (Tranche A) and the second for $963,674 (Tranche B).
23
Odyssey Cha1·ter School (A Charter Schooltmder Odyssey Charter School, Inc.) Notes to Financial Statements June 30, 201 7
Note 5 - Long Term Debt (continued)
Under the original tenns of the loan agreement and the promissory note, the loan shall bear interest at an interest rate of six percent (6%). On December 5th, 20 14 the note was modified to reflect the change in interest rate to be no less than five percent (5%) nor greater than twelve (12%). Effective July 5, 2015 the interest rate was changed to the average yield on the Five Year U.S. Treasury Securities plus 2.29% with a floor rate of 4.0% and a ceiling of 12.0%. Interest rate on this facility as of June 30, 2017 stood at 4.0%. Payments of principal and interest are due on the outstanding principal balance of the loan, based on the facility' s remaining 30-year amortization schedule with all unpaid principal and interest due at maturity on July 8, 201 9. All other terms of the original and first amendment remained the san1e.
The loan was collateralized by a mmigage on the real prope1iy and by its pledged revenues, which includes all revenues collected by the School from the Florida Depa1iment of Education, the District, and all other sources. In addition, the loan was collateralized by all personal property related to or used in the operations at the School. The loan was paid in full on April 2 7, 2017 via the issuance of bonds.
Revenue Bond On April27, 2017, Educational Facilities Revenue Bonds, Series 2017A and 2017B- Capital Trust Agency (the "Issuer") issued Educational Facilities Revenue Bonds (Odyssey Chruier School Project), Series 2017A, in the aggregate principal amount of $15,585,000 (the "Series 2017 A Bonds"). Odyssey Chruier School, Inc. issued Taxable Educational Facilities Revenue Bonds (Odyssey Chruier School Projects) Series 2017B, in the aggregate principal amount of $395,000 (the "Series 20 17B Bonds"). The bonds were used to (i) finance or refmance the costs of acquiring, constructing, and equipping certain chmier school facilities (collectively, the "Facility") for the School located within Brevard County, Florida., the land on which the School will be located (the "Site"), a11d improvements thereto (collectively the "Project"), (ii) fund a debt service reserve account for the Series 2017 Bonds, (iii) fund capitalized interest with respect to the Series 2017 A Bonds, and (iv) pay ce11ain costs of issuance of the Series 2017 Bonds. The Series 2017 A Bonds are subject to mandatory and optional redemption prior to maturity. The Series 2017B are subject to mandatory redemption prior to matmity. The bond funds were prim arily utilized for the acquisition of one of th e School's cunent site located at 1350 Wyoming Drive, Palm Bay, Florida m1d to refinance the facilities located at 1755 Eldron Boulevard, S.E. Palm Bay, Florida. The remaining funds were used for bond issuance costs and vmious capital proj ects at both sites. The sites are shared between the School and Odyssey Preparatory Academy where each school records their pro rata share of the bonds as of the date of issuance (76.5% for the School and 23.5% for Odyssey Preparatory Academy).
24
Odyssey Charter School (A Charter School under Odyssey Charter School, Inc. ) Notes to Financial Statements Jtme 30, 2017
Note 5- Long Term Debt (continued)
Interest is payable aru1ually on July 1. Th e bonds are secured by an Indenture of Trust dated as of April 1, 2017 between the Issuer and U.S. Bank National Association (the "Trustee") pursuant to a resolution of the Issuer adopted on March 21, 2017. These bonds are subject to interest rates ranging from 4.750% to 6.000%. The bonds were issued at par.
The bonds contain restrictive covenants related to debt service coverage ratio, days cash on hand requirements, sh1dent enrollment and reporting requirements.
Revenue bond debt service requirements to mahlrity are as follows:
Series 2017A Bonds:
Year Ending June 30,
2018
2019
2020
2021
2022
2023-2027
2028-2032
2033-2037
2038-2042
2043-2047
2048
Ser-ies 2017B Bonds:
Year Ending June 30,
2018
2019
2020
Principal
$ $ $ 75,000
$ 255,000
$ 265,000
$ 1,540,000
$ 1,975,000
$ 2,580,000
$ 3,390,000
$ 4,455,000
$ 1,050,000
Principal
$ $ 230,000
$ 165,000
25
Interest
$ 564,246
$ 832,494
$ 830,713
$ 822,875
$ 810,525
$ 3,845,168
$ 3,411,557
$ 2,804,618
$ 2,000,247
$ 928,262
$ 28,875
Interest
$ 16,063
$ 16,800
$ 4,950
Odyssey Charter School (A Charter School under Odyssey Charter School, Inc. ) Notes to Financial Statements Jtme 30, 2017
Not e 5 - Long Term Debt (continued)
Loan Pavable On August 29, 2013 the School obtained financing in the amount of $200,182 to acquire two school buses. The tenus of the loan agreement called for ftve consecutive ammal payments of principal and interest necessary to fully amortize the loan. The facility bears an interest rate of 3.75% fixed and matures on September 6, 2018. On August 4, 2015, the School obtained additional financing in the amotmt of $196,586 to acquire two additional school buses. The ten11S of the loan agreement called for sixty consecutive monthly payments of principal and interest based on a 5 year straight ammiization schedule. The facility bears an interest rate of 4.25% with the first payment commencing on September 11, 2015 and a maturity date of August 11 , 2020. The cunent balance ofboth facilities as of June 30, 2016 amounted to $ 167,594.
Future debt service requiJ.-ements related to the loan agreement are as follows as of June 30, 2017:
Note Payable Year ending Principal
2018 $ 80,590 2019 $ 40,803 2020 $ 42,571
2021 $ 3,630
Capital Leases The School leases celiain office, kitchen and transportation equipment under capital leases with annual payments totaling approxin1ately $98,752 through 2021. The assets and liabilities under the capital leases are recorded at the lower of the present value of the future minimum lease payments or the fair value of the assets. Minirumn future lease payments under such leases are as follows:
Year ending Payments
20 18 $ 37,370
2019 30,915 2020 28,509
2021 1,958 Total future minimum payments 98,752
Less: amount r epresenting interest (9,512)
Present value of lease payments $ 89,240
Total interest expense as of June 30,2017 was $318,713.
26
Odyssey Charter School (A Charter School under Odyssey Cha1ier School, Inc. ) Notes to Financial Statements June 30, 2017
Note 5- Long Term Debt (continued)
The follovving schedule provides a sm1m1ary of changes in long-tem1 debt for the year ended June 30, 2017:
Balance Balance 7/ 112016 Repayments Advances 6/30/2017
Bonds Payable $ $ $ 11 ,411,38 1 $ 11,411,381 Mmigage Payable 4,828,3 12 (4,828,3 12) Notes Payable 245,059 (77,465) 167,594 Capital leases 22,541 (35,008) 101,707 89,240
Total Long Te1111 Debt $ 5,095,912 $ (4,940,785) $ 11,513,088 $ 11 ,668,215
Note 6- Deposits Policy and Credit Risk
It is the School's policy to maintain its cash and cash equivalents in major banks and in high grade investments. As of Jtme 30, 2017, the can-ying amOtmt of the School 's deposits was $3,298,656 and the respective bank balances totaled $3,244,205.
Deposits at FDIC-insured institutions are insured up to $250,000 per depositor, per financial institution. The School is a chari er school under Odyssey Charier School, Inc. , which also operates other charier schools. All bank accounts me opened under the account ownership of Odyssey Charier School, Inc. , therefore, bank balances at times may potentially be in excess of FDIC coverage. As of June 30, 2017, bank balances in potential excess of FDIC coverage totaled approximately $3,200,000.
Note 7 - Commitments, Contingencies and Concentrations
Facility lease On July 1, 2013, the School entered into a lease agreement with Palm Bay Charier Schools, Inc. for a facility house its upper campus. The lease agreement is set to expire on June 30, 2017 and may be renewed. Initial fixed annual payments under this agreement (based on $725 per full time equivalent students (FTE) at the location and ar·e approximately $271,150 and may be adjusted mmually by good faith negotiation, plus ce1iain additional property expenses including repairs, maintenance and insurance. Rent expense as of June 30, 2017 amounted to $294,229. On April 25, 2017 prior to the lease expiration date, the leased premises was purchased by the School with the funds from the bond issuance.
27
Odyssey Charter· School (A Chruter School under Odyssey Charter School, Inc. ) Notes to Financial Statements June 30, 2017
Note 7- Commitments , Contingencies and Concentrations (con tinu ed)
Contin!!encies and Concenh·ations The School receives substantially all of its funding from the District under the Florida Education Finance Program (FEFP), which is based in prut on a computation of the number of full-time equivalent (FTE) students attending different instructional programs. The accuracy of FTE student data submitted by individual schools and used in the FEFP computations is subject to audit by the state and, if found to be in error, could result in refunds to the state or in decreases to future ft.mding allocations. Additionally, the School receives various fonns of federal, state and local funding which are subject to fmancial and compliance audits. It is the opinion of management that the amount of nmding, if any, which may be remitted back to the state due to errors in the FTE student data or the amount of grant expenditures which may be disallowed by grru1tor agencies would not be material to the financial position of the School.
Note 8- Risk Management
The School is exposed to various risks of loss related to t011s, thefts of, damage to and destruction of assets, enors and omissions and natural disasters for which the School carries COIID11ercial insurance. Settlement amounts have not exceeded insurance coverage in the past. In addition, there were no reductions in insurance coverage from those in the prior year.
Note 9- Defined Contribution Retirement Plan
The School sponsors a defined contribution plan for all full-time employees working 35 hours or more a week and who have been employed for at least one year. The plan permits voluntary contributions from employees, based on a salary reduction agreement, and provides for employer matching contributions up to 3% of the employee's compensation, after one year of employment. The School contributed to the Plan $36,178 for the year ended June 30, 2017.
28
REQUIRED SUPPLEMENTARY INFORMATION
Odyssey Chatier School (A charter school under Odyssey Charter School, Inc.) Statement of Revenues, Expenditures, and Changes in Fund Balance - General fund For the l:ear ended June 30, 2017
General Fund Original Budget F inal Budget Actual
REVENUES State passed through local $ 7,767,095 $ 7,878,975 s 7,879,019 Charges for services 555,650 556,676 Other revenues 289,041 198,500 198,689
Total Revenues 8,056,136 8,633,125 8,634,384 EXPENDITURES Current:
Instruction 4,276,44 1 4,430,100 4,430,065 Student s uppo1i services 68,410 57,875 57,857 Instructional deve lopment 377,815 432,675 432,680 Instructional Staff Training services 15,250 15,272 Instructional media services 6,000 2,000 1,867 Instructional related technology 150,220 ] 55,850 ] 55,862 School administration 1,542,802 1,671, 175 1,671,169 Fiscal services 130,750 130,000 129,664 Pupil transportation services 349,282 252,700 252,705 Operation ofplant 821,892 407,400 407,375 Maintenance of plant 11 4,160 128,575 128,573 Community services 107,648 148,400 148,409
Total current expenditures 7,945,430 7,832,000 7,831,498 Excess of revenues
Over current expenditures 110,706 801,125 802,886
Debt service:
Repayment of principal 108,500 4,940,000 4,940,785 Interest 202,500 3 18,000 318,7 13
Capital outlay: Other capital outlay 158,450 184,000 183,798
Total capital outlay and Debt service expenditures 469,450 5,442,000 5,443,296
Total expenditures 8,4 14,880 13,274,000 13,274,794 Excess ofrevenues
Over expenditures (358,744) ( 4,640,875) ( 4,640,41 0) Other fmancing sources: Proceeds from capital lease 100,000 101,707 Collections of long term receivables 30,000 150,000 150,000 Transfer in and (out) 100,000 98,938 Refinance of mortgage payable with bond funds 4,741,000 4,742,774
Net change in fund balance (328,744) 451,125 453,009 Fund balance at beginning of year 1,281,605 1,281,605 1,281,605
Fund balance at end of year $ 952,861 $ I ,732.730 $ 1.734.614
Notes to Budgetaa Comgarison Schedule An annual budget is adopted on the modified accrual basis of accounting, consistent with generally accepted accounting principles. Amendments to the budget can only be made with the approval ofthe Board of Directors.
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Odyssey Chati er School (A charter school under Odyssey Charter School, Inc.) Statement of Revenues, Expenditures, and Changes in Fund Balance - Special Revenue Fund
For the z:ear ended June 3 0, 2017 SQecial Revenue Fund
Original Budget Final Budget Actual
REVENUES Federal sources $ 552,450 $ 595,400 $ 595,405
Federal lunch program 480,000 497,850 497,830 Charges for services 105,000 145,000 145,162
Total Revenues 1,137,450 1,238,250 1,238,397
EXPENDITURES Current:
Instruction 467,336 444,500 444,624
Student support services 5,165 35,272 35,272
Instructional Staff Training services 47,270 32,550 32,532
Instructional related technology 32,680 ] 5,500 15,489
Food services 475,000 506,925 506,909
Pupil transpmiation services 4,450 4,440
Total cunent expenditures 1,027,451 1,039,197 1,039,266
Excess of revenues Over current expenditures 109,999 199,053 199,13 1
Cap'ita l outlay: Other capital outlay 100,250 100,193
Total capital outlay and D ebt service expenditures 100,250 100,193
Total expenditures 1,027,451 1,139,447 1,139,459
Excess of revenues Over expenditures 109,999 98,803 98,938
Other financing sources: Transfer in and (out) (109,999) (98,803) (98,938)
Net change in fund balance Fund balance at beginning of year
Fund balance at end of year $ $ $
Notes to Budgeta[y Comgarison Schedule An annual budget is adopted on the modified accrual basis of accounting, consistent with generally accepted accounting principles. Amendments to the budget can only be made with the approval ofthe Board of Directors.
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Odyssey Chmier School (A charter school under Odyssey Cha1ier School, Inc.) Statement of Revenues, Expendih1res, and Changes in Fund Balance - Capital Projects Fund For the year ended J une 30, 20 17
Capital Projects Ftmd Original Budget Final Budget AchJal
REVENUES State capital outlay funding $ 348,000 $ 448,250 $ 448,163
Total Revenues 348,000 448,250 448,163
EXPENDITURES Current:
Operation of plant 348,000 448,250 448,163 Total current expenditures 348,000 448,250 448,163 Excess of revenues
Over CUJTent expendih1res
Total expenditures 348,000 448,250 448, 163
Excess of revenues Over expenditures
Other financing sources
Transfers in and (ou t) funds for cap ial projects 506,450 768,400 768,386
Transfers out
Net change in fund balance 506,450 768,400 768,386
Fund balance at beginning of year
Fund balance at end of year $ 506,450 $ 768,400 $ 768,386
Notes to Budgetary ComQarison Schedule An annual budget is adopted on the modified accrual basis of accounting, consistent with generally accepted accounting principles. Amendments to the budget can only be made
with the approval of the Board of Directors.
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Odyssey Charter School (A charter school under Odyssey Charter School, Inc.) Statement of Revenues, Expenditures, and Changes in Fund Balance- Debt Service fund For the l:ear ended June 30, 2017
Debt Service Fund Original Budget Final Budget Actual
REVENUES State passed through local $ £ $
Total Revenues EXPENDITURES Current:
Total current expenditures Excess of revenues
Over cunent expenditures Capital outlay:
Other capital outlay 5,074,350 5,074,336
Total capital outlay and Debt service expenditures 5,074,350 5,074,336
Total expenditures 5,074,350 5,074,336 Excess (deficit) of revenues Over expenditures (5,074,350) (5,074,336)
Other f"mancing sources: Proceeds from bond issuance 11,411,400 11,411,381 Transfers in and (out) funds for capial projects (768,375) (768,386) Refinance of mortgage payable with bond funds (4,742,775) (4,74?,774)
Net change in fund balance 825,900 825,885 Fund balance at beginning of year
Fund balance at end of year $ $ 825,900 $ 825.885
Notes to Bud!!etaa Comgarison Schedule An annual budget is adopted on the modified accrual basis of accounting, consistent with generally accepted accounting principles. Amendments to the budget can only be made with the approval of the Board ofDirectors.
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._iliiliill-.. GRAVIER, LLP CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIALO REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Directors of Odyssey Charter School Palm Bay, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the govenm1ental activities and each major fund of Odyssey Cha1ier School (the "School") as of, and for the year ended Jw1e 30, 2017, and the related notes to the financial statements, which collectively comprise the School 's basic financial statements and have issued our report thereon dated August 28, 2017.
Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the School 's internal control over financial repmiing to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the frnancial statements, but not for the purpose of expressing an opinion on the effectiveness of the School's intemal. Accordingly, we do not express an opinion on the effectiveness of the School's intemal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and conect, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in intemal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Om consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
396 Alhambra Circle. Suite 900. Coral Gables. FL 33134 • Tel : 305.446.3022 • Fax: 305.446.6319 www.hlbgravier.com
Compliance and Other Matters As prui of obtaining reasonable assurance about whether the School's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the detem1ination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit ru1d, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliru1ce or other matters that are required to be repo1ied under Government Auditing Standards.
We issued a separate management letter dated August 28, 2017 pursuant to Chapter 10.850, Rules of the Auditor General.
Purpose of tllis report The purpose of this repmi is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opirlion on the effectiveness of the entity's internal control or on compliance. Tllis repo1i is an integral pmi of an audit perfom1ed in accordance with Govermnent Auditing Standards in considering the entity's intemal control and compliance. Accordingly, this commmlication is not suitable for any other pur pose.
Coral Gables, Florida August 28, 20 17
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/It! J:!~.a1 /
CERTIFIED PUBLIC ACCOUNT ANTS
.-.ililiij~ GRAVIER, LLP CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors of Odyssey Charter School Palm Bay, Florida
MANAGEMENT LETTER
Report on the Financial Statements
We have audited the financial statements of the governmental activities and each major fund of Odyssey Cha1ier School as of and for the year ended Jtme 30, 2017 and have issued our report thereon dated August 28, 2017.
Auditor's Responsibility
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 Government Auditing Standards, issued by the Comptroller General of the United States.
Other Reports and Schedules
We have issued our Independent Auditors' Report on Intemal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosure in those reports, which are dated August 28, 2017, should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.854(1)(e)l., Rules ofthe Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding am1Ual financial audit repmi. There were no findings and reconunendations made in the preceding rumual financial audit repmi .
Financial Condition
Sections 10.854(1)(e)2, Rules of the Auditor General, requires that we report the results of our determination as to whether or not Odyssey Chruier School has met one or more of the conditions described in Section 218.503(1 ), Florida Statutes, and identification of the specific condition(s) met. In collllection with our audit, we determined that Odyssey Charier School did not meet any ofthe conditions described in Section 2 18.503(1), Florida Statutes.
Sections 10.854(1)(e)6.a and 10.855(12), Rules of the Auditor General, require that we apply financial condition assessment procedures for Odyssey Charier School. It is management's responsibility to monitor Odyssey Chruier School financial condition, and our financial condition
396 Alhambra Circle, Suite 900, Coral Gables, FL 33134 • Tel: 305.446.3022 • Fax: 305.446.6319 www.hlbgravier.com
tl.8 GfiMI!f. UP IS a l'l'lefMer ol fllll .,nernatiOI'Ial A wodd·Wtde organuauonot ICCOOOIIOQ fwms and bu$Jness idv!seu
Financial Condition (continued)
assessment was based in part on representations made by management and the review of financial information provided by same. We have applied such procedures as of the fiscal year end and no deteriorating financial condition has been noted.
Transparency
Sections 10.854(1)(e)7 and 10.855(13), Rules of the Auditor General, require that we apply appropriate procedmes to detem1ine whether Odyssey Chmter School maintains on its Web site the information specified in Section 1 002.33(9)(p ), Florida Statutes. In Cormection with our audit, we detennined that Odyssey Charter School maintained on its Web site the information specified in Section 1 002.33(9)(p ), Florida Statutes.
Other Matters
Section 10.854(1)(e)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve fmancial management. In connection with our audit, we have no findings and recommendation.
Section 10.854(1)(e)4., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occmTed, or are likely to have occurred, that have a11 effect on the financial statements that is less than material but which warrants the attention of those charged with govemance. In connection with our audit, we did not have any such findings.
Official Title
Section 10.854.(l)(e)5., Rules ofthe Auditor General, requires the name or official title ofthe entity. The official title of the entity is Odyssey Charter School.
Purpose of this Letter
Our management letter is intended solely for the infom1ation and use of the Legislative Auditing Committee, members of the Florida Senate and Florida House of Representatives, the Florida Auditor General, School Bom·d of Brevar·d County, Federal and other grar1ting agencies, the Board of Directors, and applicable management and is not intended to be and should not be used by anyone other than these specified pmiies.
Coral Gables, Florida August 28, 2017
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