AVOYELLES PUBLIC CHARTER SCHOOL,INC TABLE OF CONTENTS

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2 AVOYELLES PUBLIC CHARTER SCHOOL,INC TABLE OF CONTENTS page No. INDEPENDENT AUDITO RS'REPO RT REPO RT O N CO M PLIANCE-'_AND O N INTERNAL CO NTRO L STRUCTURE OVER FINANCIAL REPO RTING BASED O N AN AUDIT O F FINANCIAl-STATEM ENTS PERFO RM ED IN ACCO RDANCE W ITH G O VERNM ENT AUDITING STANDA STATEM ENT O F FINANCIAL PO SITION STATEM ENT O F ACTIVITIES STATEM ENT O F CASH FLOW STATEM ENT O F FUNCTIO NAL EXPENSES NO TES TO FINANCIAL STATEM ENTS APPENDIX A -OTHER REPO RTS REQ UIRED BY O FFICE O F MANAGEMENT AND BUDGET (OMB)CIRCULAR A-133 REPO RT O N SCHEDULE O F EXPENDITURES O F FEDERAL AW ARDS SCHEDULE O F EXPENDITURES O F FEDERAL AW ARDS NO TES TO SCHEDULE O F EXPENDITURES O F FEDERA L AW ARDS REPO RT O N CO M PLIANCE W ITH REQ UIREM ENTS APPLICABLE!TO EACH M AJO R PRO G RA M AND INTERNAL CO NTRO L OVER CO M PLIANCE IN ACCO RDANCE W ITH O M B C IRCULAR A-133 SC HEDULE O F AUDIT RESULTS,FINDING S,AND Q UESTIO NED CO STS CO RRECTIVE ACTIO N PLAN FO R CURRENT YEAR AUDIT FINDING S

3 D ucote~ C ompany Certified Public A ccounlants A loysia C.D ucote,ci'a,pc loan S.Ducote,CPA,PC INDEPENDENT AUD TORS'REPORT To the Board ofdirectors Avoye les Public CharterSchool,Inc. M ansura,louisiana W e have audited the accom panying statem entoffinancialposition ofthe Avoyeles Public CharterSchool, Inc.(a nonprofitorganization)as ofjune 3,21,and the rebated statements ofactivities and cash flows for the yearthen ended.these financialstatem ents are the responsibility ofthe O rganization's m anagem ent. O urresponsibility is to express an opinion on these financialstatem ents based on ouraudit. W e conducted ourauditin accordance with genera ly accepted auditing standards,g overnm entaudifin. q Standards,issued by the Com ptro lerg eneralofthe United States. Those standards require thatwe plan and perform the auditto obtain reasonable assurance aboutwhetherthe financialstatem ents are free of m aterialm isstatem ent. An auditincludes exam ining,on a testbasis,evidence supporting the am ounts and disclosures In the financialstatem ents.an auditalso includes assessing the accounting principles used and significant estim ates m ade by m anagem ent, as w el as evaluating the overal financial statem ent presentation.w e believe thatourauditprovides a reasonable basis forouropinion. In ouropinion,the financialstatem ents referred to above presentfairly,in alm aterialrespects,the financial position ofthe Avoyeles Public CharterSchool,Inc.as ofjune 3,21,and the changes in its netassets and cash flows forthe yearthen ended in conformity with generaly accepted accounting principles. In accordance with GovernmentAuditin.q Standards,we have also issued a reportdated December2,21, on ourconsideration ofavoyeles Public CharterSchool,Inc.'s intern alcontrolstructure and on ourtests ofits com pliance with certain laws,regulations,and grants. This reportis an integralpartofan auditperform ed in accordance with Governm entaudifin.q Standards and should be read in conjunction with lhis reportin considering the results ofouraudit. M arksvile,louisiana Decem ber American Instituteof Cetl(fied PublicAccountants ~M embers~ Society of l,ouisiana Certified I'ublicA ccounmms 219 North Washington ~postoffice Box 39 *M arl~ville,louisiana 71351~(318) ~b'a~(318)

4 D ucote~ C ompany Cerlified Public A ccountants A Ioysia C.D ucote,cpa,pc Joan $.Ducote,CPA,PC REPO RT O N CO M PLIANCE AND O N INTERNAL CONTRO L STRUCTURE O VER FINANCIAL REPO RTING BASED O N AN AUDIT O F FINANCIAL STATEM ENTS PERFO RM ED IN A CCO RDANCE W ITH G OVERNM ENT AUDITING STANDA RDS Board ofdirectors Avoye les Public C harterschool,inc. M ensura,louisiana W e have audited the statem entoffinancialposition ofthe Avoyeles Public CharterSchool,Inc.(a nonprofit organization)asofjune 3,21,and the related statementsofactivitiesand cash flows forthe yearthen ended, and have issued our ru pe rt thereon dated Decem ber 2, 21. W e conducted our audit in accordance w ith genera ly accepted auditing standards and the standards applicable to financialaudits contained in G overnm entaudịtin. q Standards,issued by the Com ptrolerg eneralofthe United States. C om pliance A s partofobtaining reasonable assurance aboutw hetherthe Avoyelles Public CharterSchool,Inc.'s financial statem ents are free ofm aterialm isstatem ent,we perform ed tests ofits com pliance with certain previsions of law s,regulations,contra cts and grants,noncom pliance with which could have a directand m aterialefecton the determ ination offinancialstatem entam ounts. How ever,providing an opinion on com pliance w ith those provisionswas notan objective ofourauditand,accordingly,we do notexpress such an opinion. The results of our tests disclosed one instance of noncom pliance that is required to be reported under as presented in the schedule ofauditresults,findings and questioned costs InternalControloverFinancialReporting In planning and perform ing our audit,w e considered the Avoyeles Public Charter School, Inc.'s internal controloverfinancialreporting in orderto determ ine ourauditing procedures forthe purpose ofexpressing ouropinion on the generalpurpose financialstatem ents and notto provide assurance on the internalcontrol over financial reporting. O ur consideration of the internal control over financial reporting w ould not necessarily disclose a l m a ters in the internal control over financial reporting that m ight be m ateria~ w eaknesses. A m aterialw eakness is a co ndition in which the design oroperation ofone orm ore ofthe internalcontrolcom ponents does notreduce to a relatively low levelthe risk thatm isstatem ents in am ounts thaiwould be m aterialin relation to the generalpurpose financialstatem ents being audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing their assigned functions.w e noted no m atters involving the intern alcontroloverfinancialreporting and its operation thatwe considerto be m aterialw eaknesses. This reportis intended solely forthe inform ation and use ofthe Board ofdirectors and the m anagem entof the Avoyefies Public Charter School, Inc.,State of Louisiana and Federalgranting agencies,and the Legislative Auditorofthe State oflouisiana,and is notintended to be and should notbe used by anyone otherthan these specified parties. M arksvile,louisiana D ecem ber2.21 American hl~lituteof Certified PublicAccountants 219 North Washington ~PostOfficeltox 39 ~M arksville,ixjuisiana 71351*(318) ~Fax (318) ~Members* Society of lxmisia~la Certified PublicAccountants

5 AVOYELLES PUBLIC C HARTER SCHO O L,IN C M ansura,louisiana Statem entoffinancialposition June 3,21 A SSETS C urrentassets: Cash and interest-bearing accounts Accounts receivable -grants Totalcurrentassets Restricted assets: Cash and interest-bearing accounts Totalrestricted assets Property and equipm ent: Land Buildings M achinery and equipm ent Construction in progress Less accum ulated depreciation Netproperty and equipm ent Totalassets $234, ,353 1,373,375 1,467 19~ ,646,657 ~2978,Z~ =..~ $ 197L296.~ LIA B ILITIES A ND NET ASSETS Currentliabilities: Acco unts payable Accrued expenses Notespayable (currentportion) Totalcurrentliabilities Long-term liabilities: Notes payable Totallong-term liabilities Totalliabilities Netassets (unrestricted) Netassets -unrestricted Netassets -tem porarily restricted Totalnetassets $22,78 67, , , ,78 Totalliabilities and netassets See accom panying notes to financialstatem ents

6 AVOYELLES PUBLIC CHARTER SCHOO L,INC i ansura,louisiana Statem entofactivities ForPeriod Ended June 3.21 Public SupportRevenues and O thersupport Unrestricted grants in aid -state Restricted grants in aid -federaland state Studentfees Donations -unrestricted M isce laneous revenue Inkind revenue Interestearned Totalpublic supportrevenues and othersupport Expenses: Adm inistrative expenses Program expenses Inkind expenses Totalexpenses ncrease (decrease)inunrestricted netassets Unrestricted netassets atbeginning ofperiod $1,66, ,32 27,236 22,675 31,992 11, ,38,19 143,699 95, Unrestricted netassets atend ofperiod See accom panying notes to financialstatem ents 4

7 AVOYELLES PUBLIC CHARTER SCHOO L,INC M ansura,louisiana Statem entofcash Flow s Forthe Period Ended June 3.21 Cash flow s from operating activities: Increase in netassets Adjustments to reconcile changes in netassets to netcash provided by operating activities: Depreciation (Increase)decrease in operating assets: Accounts receivable Increase (decrease)inoperating liabilities: Accounts payable Accrued expenses O therliabilities Netcash provided (used)by operating activities C ash flow s from Investing activities: Paym ents forpurchasesofproperty and equipm ent Netcash flowsprovided (used)by investing activities C ash flow s from financing activities Increase in notes payable Netcash provided (used)by financing activities Netincrease (decrease)in cash and cashequivalents Beginning cash and cash equivalents $ (15,379) (227,742) 67,278 (543,8) _ (54,775) (_796.98) (796,98) , Ending cash and cash equivalents See accom panying notes to financialstatem ents 5

8 AVOYELLES PU BLIC C HA RTER SC HO O L,INC M ansura,louisiana Statem entoffunctionalexpenses Forthe Period Ended June 3,21 A dm inistrative Expenses Program Expenses Total Expenses: Salaries Payro ltaxes Em ployee group insurance benefits Retirem entfund contribution Transportation Advertising Depreciation expense Dues and fees Insurance Repairs and m aintenance Audit/Accounting services O therprofessionalservices M isce laneous expense Bank charges and fees Purchased educationalserv ices M aterials and supplies Books and periodicals Telephone and postage Utilities Travel Food service m anagem ent Interestexpense $9,191 1,339 5,775 8,836 O 12 1,87 1,958 O 14,697 3,99 3,5 3,11 O 664 $455,235 6,6 33,797 63,163 1,8 29,672 4,699 11,325 O 16, ,66 77,8 39,331 15,41 78, $545,426 7,939 39,572 71,999 1, ,672 1,87 15,657 11,325 14,697 16,317 2,911 3,999 24,66 8,58 39,331 3,11 15, ,5t Totalexpenses $95~195_ $1~93v894 See accom panying notes to financialstatem ents 6

9 AVOYELLES PUBLIC CHARTER SCHO OL,INC Notes to FinancialStatem ents June 3,21 N OTE A -SUM M ARY O F SIGNIFICA NT ACCOUNTING POLICIES The Avoyeles Public Charter School,Inc.was granted a charterby the State Board ofelem entary and Secondary Education in 1999 to provide a stim ulating environm entto academ icaly chalenged elem entary schoolchildren. The Sch~~~inc~rp~rates firrn p~~icies ~fdiscipline w ith parental~nd c~m m unity inv~~vem ent so thatstudents w ilm asteressentialacadem ic and life skils.the Avoye les Public CharterSchool,Inc.is a Type 2 CharterSchoolgoverned by a board ofdirectors. The Avoyeles Public CharterSchool,Inc.is a nonprofitorganization exemptfrom federaland state incom e tax undersection51(c)(3)ofthe United StatesInternalRevenue Code. _Basis ofaccounting The accom panying financial statem ents have been prepared on the accrual basis of accounting in accordance w ith genera ly accepted accounting principles. Avoye les Public Charter School, Inc. receives its grant support prim arily from the Louisiana State Departm entofeducation. Contributions of donated noncash assets are recorded at their fair values in the period received. Contributions ofdonated services thatcreate orenhance nonfinancialassets orthatrequire specialized skils are provided by individuals possessing those skils,and would typicaly need to be purchased ifnotprovided by donation,are recorded attheirfairvalues in the period received. A lcontributions are considered to be available forunrestricted use unless specificaly restricted by the donor. Am ounts received thatare designated forfuture periods orrestricted by the donorforspecific purposes are reported as tem porarily restricted orperm anently restricted supportthatincreases those netassetclasses. W hen a tem porary restriction expires,tem porarily restricted netassets are reclassified to unrestricted net assets and reported in the statem entofactivities as netassets released from restrictions. The Avoyeles Public CharterSchool,Inc.had no tem porarily orperm anently restricted netassets as ofjune 3,21. The Schoolconsiders a lunrestricted,highly liquid investm ents with an initialm aturity ofless then three m onths as cash and cash equivalents.

10 AVOYELLES PUBLIC CHARTER SCHOOL,INC Notes to FinancialStatements (continued) June 3,21 NOTE A -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property and equipm entare capitalized atcost. Itis the School's policy to capitalize expenditures forthese items in excess of$1,. Lesseramounts are expensed. Furniture and equipmentare being depreciated overestim ated usefullives offive to ten years using a straight-line m ethod. Property and equipm entare being depreciated evertheirestim ated usefullives using the straight-line m ethod,using the fotlow ing ~ives: Furniture & fixtures M achinery & equipm ent Buildings 5-7 years 5-1 years 4 years NOTE B - CASH A ND CASH EQ UIVALENTS AtJune 3,21,the Schoolhascash and cash equivalents(book balances)totaling $243,93 asfolows Dem and deposits Tim e deposits $ 233,277 9,816 Total These deposits are stated atcost,which approximates market. Understate law,these deposits (orthe resulting bankbalances)mustbe securedby federaldepositinsurance orthe pledge ofsecuritiesowned by the fiscalagentbank. The m arketvalue ofthe pledged securities plus the federaldepositinsurance m ustat a ltim es equalthe am ounton depositwith the fiscalagent.these securities are held in the nam e ofthe pledging fiscalagentbank in a holding orcustodialbank thatis m utualy acceptable to both parties. AtJune 3,21,the schoolhas $313,554 in deposits (colected bank balances).these deposits ere secured from risk by $19,784 offederaldepositinsurance. The remaining balance of$23,77 was not secured by the pledge ofsecurities. Subsequentto June 3,21,securities were pledged againstthese deposits in an am ountsuficientto coverthe uninsured balance offunds on depositw ith the localbank.

11 AVO YELLES PUBLIC CHARTER SCHOOL,INC, Notes to FinancialStatem ents (continued) June 3,21 NO TE C -G RA NTS RECEIVABLE G rants and contracts receivable are deem ed to be fuly colectible by m anagem entand are com prised ofthe fo lowing am ounts due atjune 3,21: United States Departm entofeducation G oals 2 United States Departm entofeducation Title I United States Departm entofeducation Title II United States Departm entofeducation Title Vl United States Departm entofeducation Class Size Reduction United States Departm entofagriculture NationalSchoolLunch Program Louisiana State Board ofelem entary and Secondary Education - 1'~YearCharterG rant Totalgrants receivable $ 8,934 76,86 1,751 1,345 11,725 5,558 4,15 _ 3 $11,326 NOTE D - FIXED ASSETS A sum m ary offixed assets is as folows: Balance June 3,2 Ạdditions Balance Retirem ents June 3,21 Land Buildings M achinery and equipm ent Construction in progress $ 64, ,785 $ 1,373,375 9, ,462 $ 784,785 $ 64,353 1,373,375 1, , ,581,765 1,646,657 Accum ulated depreciation $( 29,672).$ ( 29,78) Netfixed assets ~1,616,877 NOTE E - CO NSTRUCTIO N IN PRO G RESS AtJune 3,21,construction was underw ay fora m ulti-purpose facility forthe Avoye les Public Charter School,Inc. C onstruction ofthe facility w as substantia ly com pleted in August21. AtJune 3,21 construction costs totaled $198,462 outofan estimated totalprojectcostof$2,.

12 AVO YELLES PUBLIC CHARTER SCHO O L,INC Notes to FinancialStatem ents (continued) June 3,21 NOTE E - LO NG -TERM NOTE PAYA BLE By resolution ofthe Board ofdirectors on February 22,2,the Avoye les Public CharterSchool,Inc. authorized the incurrence ofindebtedness in the principalamountof $1,6, forthe purpose of providing the cost of building an educationalfacility. The Board of Directors entered into a security agreementwith the United States DepartmentofAgriculIure (USDA) RuralDevelopmentDivision to borrow $1,6, atan Interestrate of5.125% payable overtwenty-five years. Drawdowns totaling $1,546,5 had been received as ofjune 3,2twith the remaining balance of$53,5 expected to be drawn dow n by April22. Future debtservice requirem ents are as fo lows FiscalYearEnded Principal Interest Total $ 6,18 37,764 39,746 41,831 44,26.1,43,525 $ 95,654 8,88 78,826 76,741 74,546 82,578 $ 11, , , , ,572 2,233,13 Totals NO TE F - NET A SSETS Restricted Restricted netassets representthose portions ofnotassets notappropriable forexpenses legally segregated fora specific future use. NOTE G - RETIREM ENT SYSTEM S Substantia ly allem ployees ofthe Schoolare m em bers oftwo statew ide retirem entsystem s. In general, professionalemployees (such as teachers and principals)are members ofthe Teachers'Retirement System oflouisiana;otherem ployees,such as custodialpersonnel,are m em bers ofthe Louisiana School Em ployees'retirem ent System. These system s are cost sharing,m ultiple-em ployer defined benefit pension plans adm inistered by separate boards oftrustees. Pertinentinform ation relative to each plan follow s: A.Teachers'Retirem entsystem oflouisiana (TRS Plan Description. The TRS consists ofthree m em bership plans:regularplan,plan A,and Plan B,The TRS provides retirem entbenefits as we las disability and survivorbenefits. Ten years of service credit is required to becom e vested for retirem ent benefits and five years to becom e vested fordisability and surv ivorbenefits. Benefits are established and am ended by state statute. The TRS issues a publicly available financial report and includes financial statem ents and required supplem entary inform ation forthe TRS. Thatreportm ay be obtained by w riting to the Teachers'Retirem ent System of Louisiana, Post O fice Box 94123, Baton Rouge, Louisiana ,orby caling (225)

13 AVOYELLES PUBLIC CHARTER SCHOOL,INC Notes to FinancialStatem ents (continued) June 3,21 NOTE G - RETIREMENT SYSTEMS (continued) Funding Policy. Plan m em bers are required to contribute 8. percent,9.1 percent,and 5. percentoftheirannualcovered salary forthe RegularPlan,Plan A,and Plan B,respectively. The Schoolis required to contribute atan actuaria ly determ ined rate. The currentrate is 15.2 percent ofannualcovered payro lfora lthree m em bership plans. M em bercontributions and em ployers contributions forthe TRS are established by state law and rates are established by the Public Retirem entsystem s'actuarialcom m ittee. The School's em ployercontribution forthe TRS,as provided by state law,are funded by the State oflouisiana through annualappropriations and by rem ittances from the School. The School's contributions to the TRS forlhe yearending June 3,21,were $13,483,equalto the required contributions foreach year. B.Louisiana SchoolEm alovees'retirem entsystem (LSERS~ Plan Description. The LSERS provides retirem ent benefits as w ellas disability and survivor benefits. Ten years ofservice creditis required to becom e vested forretirem entbenefits and five years to becom e vested fordisability and survivorbenefits. Benefits are established and am ended by state statute. The LSERS issues a publicly available financialreportthatincludes financialstatem ents and required supplem entary inform ation forthe LSERS, Thatreportm ay be obtained by writing to the Louisiana SchoolEm ployees'retirem ent System,PostO fice Box 44516,Baton Rouge,Louisiana 784,orby caling (225) Funding Policy. Plan m em bers are required to contribute 6.35 percentoftheirannualcovered salary,and the schoolboard is required to contribute atan actuarialy determ ined rate. The current rate is 6. percent of annualcovered payro l. M em ber contributions and em ployer contributions forthe LSERS are established by state law,and rates are established by the Public Retirem entsystem s'actuarialcom m ittee. The School's em ployercontribution forthe LSERS is funded by the State oflouisiana through annualappropriations. The School's contributions to the LSERS forthe years ending June 3,21,were $519,equalto the required contributions foreach year. NOTE H - CO M PENSATED ABSENCES The schoolhas the folowing policy relating to annualleave The schoolalow s each em ployee ten days ofannualleave each schoolyear.annualleave can be accum ulated w ithoutlim itation. Upon term ination,retirem entordeath,unused accum ulated annual leave benefits are notpaid to the em ployee. However,under Teachers Retirem ent System of Louisiana and Louisiana SchoolEm ployees Retirem entsystem,alunpaid personalleave is used in the retirem entbenefitcom putation as earn ed service. 3_1

14 AVOYELLES PUBLIC CHA RTER SCHOOL,INC Notes to FinancialStatem ents (continued) June 3,21 NOTE I- DONATED SERVICES Donated laboris valued atthe m inim um wage rate in efectatthe tim e ofthe donated services. Professional time,which is donated,isvalued atthe currentm arketrate ofthe specific project.the Schoolgeneraly pays forserv ices requiring specific expertise.however,som e Board M embers end employees volunteertheirtim e and perform a variety oftasks thatassistthe O rganization with adm inistrative program s. NOTE J - SUBSEQUENT EVENTS Subsequentto June 3,21,the schoolwas approved for$4, ofqualified Zone Academy Bonds (QAZB).The QZAB financing isfora fifteen-yearterm and carriesa tax creditasanincentive to the lenderto hold these bonds.the lenderis com pensated with tax credits in lieu ofthe borrowerpaying interest. Subsequentto June 3,21,the schoolwas also approved foran additionaldirectloan from the United StatesDepartmentofAgriculture in the amountof$6,. Repaymentterm is fortwenty-five years ate rate ofinterestto be determ ined w hen financing is com pleted. 12

15 A PPENDIX A REPO RTS REQ UIRED BY OFFICE OF MANAGEMENT AND BUDGET (OMB)CIRCULAR The fo low ing pages contain reports on the Schedule of Expenditures of Federal Aw ards and on compliance with requirements eppticable to each majorprogram and intern alcontrolovercompliance in accordance with O M B CircularA

16 D ucote~ C ompany Certified PublicA ccountants Aloysia C.D ucote,ci'a,pc loan S,Ducote,CPA,PC REPO RT O N SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS To the Board ofdirectors Avoyeles Public C harterschool,inc. M ansura,louisiana W e have audited the general-purpose financialstatem ents ofthe Avoyeles Public CharterSchool,Inc.,for the yearended June 3,21,and have issued ourreportthereon dated Decem ber2,21. O uraudit was perform ed forthe purpose ofform ing an opinion on the general-purpose financialstatem ents taken as a w hole. The accom panying schedule ofexpenditures offederalaw ards is presented for purposes ofadditional analysis as required by O M B CircularA-133,and is nota required part ofthe general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the auditofthe general-purpose financialstatem ents and,in ouropinion,is fairly stated,in a lm aterialrespects,in relation to the general-purpose financialstatem ents taken as a w hole. D U CO TE & C O M arksviue,louisian Decem ber2.21 NY~t~ M PA a American/nstitdeof Certified Public Accountants 14 ~Members~ 219 No.h Washington *PostOfficeBox 39 ~M arksville,i~'misiana 71351~(318) *Fax(318) Society of Louisiana Certificd Public A ccounmnts

17 AVOYELLES PUBLIC CHARTER SCHO OL,INC Schedule ofexpenditures offederalaw ards Forthe Period Ended June 3,21 FederalG rantor/ Pass.Through G rantor/ Proaram Nam e Federal CFDA Num ber Identifying Num ber Program.Ẹxpenditures U.S.Departm entofagriculture Passed through Louisiana DeptofEducation Com m unity Facilities Loans and G rants NationalSchoolLunch Program N/A N/A $ 75, U,S.Departm entofeducation Passed through Louisiana DeptofEducation: G oals 2 IASA Title IProgram forlocaleducational Agencies Eisenhew erprofessionaldevelopm entg rant- Title II innovative Education Program Strategies - Title VI Class Size Reduction TS-7A 1-T1-7A 1-5-7A 1--7A 1-1-7A 8,934 76,86 1,751 1,345 11,725 TotalFederalExpenditure Aw ards See accom panying notes to the schedule 3_5

18 AVOYELLES PUBLIC CHARTER SCHO OL,INC. Notes to the Schedule ofexpenditures offederalaw ards June 3.21 NOTE 1- BA SIS O F PRESENTATION The accom panying schedule ofexpenditures offederalawards includes the federalgrantactivity ofthe Avoye les Public CharterSchool.Inc. and is presented on the m odified accrualbasis ofaccounting. The inform ation in this schedule is presented in accordance w ith the requirem ents ofo M B Circular A-133. Audits of States,LocalGovernm ents,and Non-ProfitOrganizations. Therefore,som e am ounts presented in lhls schedule m ay diferfrom am ounts presented in,orused in the preparalion of,the general-purpose financialstatem ents. NOTE 2 -SUBREClPIENTS O fthe federalexpenditures presented in the schedule,the Avoye~les Public CharterSchool,Inc.provided no federalaw ards to subrecipients. 16

19 D ucote & A cc ompany AIoysiaC.Ducote,CPA,PC Joan$.Ducote,CPA, PC REPO RT O N COM PLIANCE W ITH REQ UIREM ENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COM PLIANCE IN AC!3ORDANCE W ITH OM B CIRCULAR A-133 To the Board ofdirectors Avoye les Public CharterSchool,Inc. M ansura,louisiana Com pliance W e have audited the com pliance ofthe Avoye les Public CharterSchool,Inc.w ith the types ofcom pliance requirements descdbed in the U.S.Ofice ofmanagementand Budget(OMB)CircularA-133 Compliance Supplem entthatare applicable to each ofits m ajorfederalprograms forthe yearended June 3,21. Avoyeles Public CharterSchool,Inc.'s majorfederalprograms are identified in the sum mary ofauditor's results section ofthe accom panying schedule offindings and questioned costs. Com pliance w ith the requirem ents oflaws,regulations,contracts and grants applicable to each ofits m ajorfederalprogram s is the responsibility ofavoyeles Public CharterSchool,Inc.'s m anagem ent. O urresponsibility is to express an opinion on Avoyellas Public CharterSchool,Inc.'s com pliance based on ouraudit. W e conducted our auditofcom pliance in accordarlce w ith genera ly accepted auditing standards;the standards applicable to financialaudits contained in G overnm ent Auditing Standards, issued by the ComptrolerGeneralofthe United States;and Ofice ofmanagementand Budget(OM B)CircularA-133, Audits of State and LocalG overnm ents, and Non-Profit O rganizations. Those standards and O M B C irculara-133 require thatw e plan and perform the auditto obtain reasonable assurance aboutw hether noncom pliance w ith the types ofcom pliance requirem ents referred to above thatcould have a directand m aterialefecton a m ajorfederalprogram occurred. An auditincludes examining,on a test basis, evidence about Avoye les Public Charter School, Inc.'s compliance w ith those requirem ents, and perform ing such otherprocedures as w e considered necessary in the circum stances. W e believe thatour auditprovides a reasonable basis for ouropinion. O urauditdoes notprovide a legaldeterm ination of Avoyelles Public C harterschool,inc.'s com pliance w ith those requirem ents. In our opinion, the Avoye les Public Charter School, Inc.complied, in a lm aterial respects,w ith the requirem ents referred to above thatare applicable to each ofits m ajorfederalprograms forthe year ended June America. Instituteof Cert~ed PublicAccountonts "M embers* Society o[l,ouisiaml Certified PublicAccololtants 219 North Washington *PostOffice Box 39 ~M arksvile,louisiana 71351~(318) ~[?tx (318)

20 M em bers ofthe Board ofdirectors Page 2 InfernalControlOverCom pliance The m anagem ent of the Avoye les Public Charter School, Inc. is responsible for establishing and m aintaining effective internalcontrolovercom pliance with requirem ents oflaws,regulations,contracts and grants applicable to federalprogram s. In planning and perform ing our audit,we considered the Avoye les Public CharterSchool,Inc.'s internalcontrolovercom pliance w ith requirem ents thatcould have a directand m aterialefecton a m ajorfederalprogram in orderto determ ine ourauditing procedures for the purpose of expressing our opinion on com pliance;and to test and report on internalcontrolover com pliance in accordance w ith O M B CircularA-133. O urconsideration ofthe internalcontrolovercom pliance would notnecessarily disclose alm atters in the internalcontrolthatm ightbe m aterialweaknesses.a m aterialweakness is a condition in w hich the design oroperation ofone orm ore ofthe internalcontrolcom ponents does notreduce to a relatively low levelthe risk thainoncom pliance w ith applicable requirem ents oflaws,regulations,contracts and grants thatwould be materialin relation to a majorfederalprogram being audited may occurand notbe detected within a tim ely period by em ployees in the norm alcourse ofperform ing theirassigned functions. W e noted no m atters involving the internalcontrolovercom pliance and its operation thatw e considerto be m aterial w eaknesses. This reportis intended solely forthe inform ation and use ofthe Board ofd irectors and the m anagem entof the Avoye les Public Charter School,Inc.,State of Louisiana and Federalgranting agencies,and the Legislative Auditorofthe State oflouisiana and is notintended to be and should notbe used by anyone otherthan these specified padies. M arksvile,louisiana Decem ber

21 AVOYELLES PUBLIC CHARTER SCHO O L,INC. Schedule ofa uditresults,findings,and Q uestioned Costs Forthe YearEnded June 3,21 FinancialStatem ents Type ofauditors'reportissued ntem alcontroloverfinancialreporting: Materialweakness(es)identified? Reportable condition(s)identified not Considered to be materialweakness(es) Unqualified yes x no yes x no Noncom pliance m aterialto financialstatem ents noted? FederalAw ards InternalControloverm ajorprogram s: Materialweakness(es)identified? Reportable condition(s)identified not Considered to be materialweakness(es) Type ofauditors'reportissued on com pliance Formajorprograms: _~ yes x yes yes Unqualified no x no X.none reported Any auditfindings disclosed thatare required To be reported in accordance w ith CircularA-133,Section.51(a) _ yes x no dentificafion ofm aiordroqram s CFDA Num ber Nam e offederalproaram orcluste Com m unity Facilities Loans and Grants Do larthreshold used to distinguish betw een Type A and Type B program s Auditee qualifed as low-risk auditee $3, x yes no 19

22 AVOYELLES PUBLIC CHARTER SCHO O L,INC. Schedule ofaudits Results,Findings,and Questioned Costs (continued) Forthe YearEnded June 3,21 FindinpJ1-1 nan During the fiscalyearended June 3,21,the schoolhad funds on depositwith a localbank that exceeded the amountoffdic insurance coverage.pursuantto LRS 39:1225,security(pledged securities)ataltimesshould be equalto orgreaterthanthe amountofcolected fundsexceptforthat porlion ofdeposits insured.this deficiency was corrected as soon as itwas broughtto the attention ofthe bank's representative. A ~ There ere no findings related to internalcontrols orcom pliance applicable to federalawards and there are no questioned costs. 2

23 AVOYELLES PUBLIC CHARTER SCHOO L,INC. Corrective Action Plan forcurrentyearauditfindings Forthe YearEnded June 3,21 RefNo. Fin Nam e of Contact Parson Anticipated Com pletion Date Section I- InternalControland Com pliance M aterialto the FinancialStatem ents 1-1 Deposits underco lateralized Corrected Julie Durand August21 in violation oflrs 39:1225 Section II- InternalControland Com pliance M aterialto FederalAw ards N o findings noted. Section III- M anagem entlettercom m ents N o findings noted. 21