EWING MARION KAUFFMAN SCHOOL, INC. KANSAS CITY, MISSOURI FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS' REPORT FOR THE YEAR ENDED JUNE 30, 2016
EWING MARION KAUFFMAN SCHOOL, INC. TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT... 1 FINANCIAL STATEMENTS: Statement of Financial Position... 3 Statement of Activities... 4 Statement of Cash Flows... 5 NOTES TO FINANCIAL STATEMENTS... 6 SUPPLEMENTARY INFORMATION: Balance Sheet - Governmental Funds... 11 Statement of Revenues, Expenditures and Change in Fund Balance - Governmental Funds... 12 Schedule of Revenues by Source... 13 Comparison of Revenues by Source... 14 Schedule of Expenditures by Object... 15 Selected Trends... 16 Schedule of Selected Statistics... 17 Schedule of Expenditures of Federal Awards... 19 INTERNAL CONTROL AND COMPLIANCE: Report on the Administration's Assertions About Compliance with Specified Requirements of Missouri Laws and Regulations... 21 Schedule of State Findings... 22 Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards... 23 Independent Auditors Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance... 25 Schedule of Findings and Questioned Costs... 27 Summary Schedule of Prior Audit Findings... 28 - i -
WESTBROOK & CO., P.C. Certified Public Accountants 749 Driskill Drive Richmond, MO 64085 18 North Folger Carrollton, MO 64633 INDEPENDENT AUDITORS' REPORT To the Governing Board Ewing Marion Kauffman School, Inc. Report on the Financial Statements We have audited the accompanying financial statements of Ewing Marion Kauffman School, Inc. (a nonprofit organization) which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements. 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 United States of America; this includes the design, 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 fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 risks of material misstatement of the financial statements, whether due to fraud or error. In 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 of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ewing Marion Kauffman School, Inc. as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Member, American Institute of Certified Public Accountants; Missouri Society of Certified Public Accountants Telephone: Richmond: (816) 776-3584 KC Line: (816) 470-3584 Carrollton: (660) 542-0102 Fax: Richmond: (816) 470-7100 Carrollton: (660) 542-3959
Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information, as listed in the table of contents, including the schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 27, 2016, on our consideration of the School s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School s internal control over financial reporting and compliance. Richmond, Missouri September 27, 2016-2 -
EWING MARION KAUFFMAN SCHOOL, INC. STATEMENT OF FINANCIAL POSITION JUNE 30, 2016 ASSETS Cash and cash equivalents $ 3,468,908 Government funds receivable 163,128 Other receivables 46,023 Prepaid expenses 191,271 Property and equipment, net 95,659 Total assets $ 3,964,989 LIABILITIES AND NET ASSETS Liabilities: Accounts payable $ 229,911 Accrued personnel costs 282,910 Total liabilities 512,821 Net assets: Unrestricted 3,448,168 Temporarily restricted 4,000 Total net assets 3,452,168 Total liabilities and net assets $ 3,964,989 See accompanying notes to the financial statements. - 3 -
EWING MARION KAUFFMAN SCHOOL, INC. STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 Temporarily Unrestricted Restricted Total SUPPORT AND REVENUE: Contributions and grants $ 3,914,388 $ 303,500 $ 4,217,888 Government grants and contracts 8,000,613-8,000,613 Fees and services 48,731-48,731 Other revenue 2,331-2,331 Total support and revenue 11,966,063 303,500 12,269,563 Net assets released from restrictions 299,500 (299,500) - Total support, revenue and reclassifications 12,265,563 4,000 12,269,563 EXPENSES: Instruction 4,191,061-4,191,061 Student services 430,065-430,065 Instructional staff support 639,210-639,210 General administration and central services 410,561-410,561 Building administration 1,997,629-1,997,629 Operation of plant 2,454,262-2,454,262 Transportation 843,967-843,967 Food service 804,313-804,313 Total expenses 11,771,068-11,771,068 Change in Net Assets 494,495 4,000 498,495 Net assets, beginning of year 2,953,673-2,953,673 Net assets, end of year $ 3,448,168 $ 4,000 $ 3,452,168 See accompanying notes to the financial statements. - 4 -
EWING MARION KAUFFMAN SCHOOL, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 494,495 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 62,623 (Increase) decrease in: Government funds receivable 85,043 Other receivables 25,107 Prepaid expenses (93,951) Increase (decrease) in: Accounts payable (169,528) Accrued personnel costs (13,233) Cash provided by operating activities 390,556 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (22,608) NET INCREASE IN CASH 367,948 CASH AND CASH EQUIVALENTS, beginning 3,096,960 CASH AND CASH EQUIVALENTS, ending $ 3,464,908 See accompanying notes to the financial statements. - 5 -
NOTE A - BUSINESS ACTIVITY EWING MARION KAUFFMAN SCHOOL, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Ewing Marion Kauffman School, Inc. (the School), incorporated February 2010. It is a not-for-profit corporation that is organized under the laws of the State of Missouri. The School is a tuition-free public charter school in Kansas City, Missouri for students in grades five through twelve. In the current year, the School served only grades five through nine. The mission of the School is to prepare students to excel academically, graduate from college, and apply their unique talents in the world to create economically independent and personally fulfilling lives. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents: For purposes of the statement of cash flows, the School considers all unrestricted highly-liquid investments with an initial maturity of three months or less to be cash equivalents. Government Funds Receivable: The receivable is due from government agencies and is considered fully collectible. Accordingly, no allowance for doubtful accounts is required. If accounts become uncollectible, they are charged to operations when that determination is made. Property and Equipment: All purchased property and equipment are valued at historical cost. A capitalization threshold of $1,000 is used to report capital assets. Depreciation is provided over the assets estimated useful lives using the straight-line method of depreciation. The range of useful lives by type of asset is a follows: Furniture 5 years Data processing equipment 3 years Other equipment 3 years Vehicles 5 years Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Paid Time Off and Vacation: Time off for vacation, sickness and personal leave are considered as expenditures in the year awarded. All employees are eligible for up to six days of paid time off after 30 days of employment. These days may be used at the employees will during the fiscal year; however, it may not be carried over from one year to the next. In addition to paid time off, 12-month employees are also awarded upon hire 10 days of vacation that must be used in the summer months when school is not in session. Vacation days cannot be carried over after summer break. Subsequent Events: Management has evaluated subsequent events through September 27, 2016, the date the financial statements were available to be issued. - 6 -
EWING MARION KAUFFMAN SCHOOL, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes: The School is exempt from Federal income tax under Section 501(c)(3) of the Internal Revenue Code and comparable state law as charitable organizations whereby only unrelated business income, as defined by Section 509(a)(2) of the Code, is subject to federal income tax. The School currently has no unrelated business income. Accordingly, no provision for income taxes has been recorded. The School has adopted provisions of FASB standard on Accounting for Uncertainty in Income Taxes (ASC 740-10-25). The School does not believe there are any material uncertain tax provisions and, accordingly, they will not recognize any liability for unrecorded tax benefits. For the year ended June 30, 2016, there were no interest or penalties recorded in the financial statements. The School s Forms 990, Return on Organization Exempt from Income Taxes, for the years ended June 30, 2016, 2015, and 2014 are subject to IRS examinations, generally three years after they were filed. In-Kind Contributions and Contributed Services: In-kind contributions are reflected as contributions at their fair value at date of donation and are reported as unrestricted support unless explicit donor stipulations specify how donated assets must be used. The School recognizes the fair value of contributed services received if such services a) create or enhance nonfinancial assets or b) require specialized skills that are provided by individuals possessing those skills and would typically need to be purchased if not contributed. Recognition of Donor Restrictions: Contributions are recognized when the donor makes an unconditional promise to give to the School. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. If a restriction is fulfilled in the same time period in which the contribution is received, the School reports that support as unrestricted. NOTE C - CASH AND CASH EQUIVALENTS At June 30, 2016, the bank balance of the School s deposits totaled $3,521,020, which was invested in securities issued or guaranteed by the U.S. Government and its agencies under a repurchase agreement. NOTE D - GOVERNMENT FUNDS RECEIVABLE Government funds receivable at June 30, 2016 consist of $163,128 for state and federal programs. NOTE E - RETIREMENT PLAN The School contributes to The Public School Retirement System of the School District of Kansas City, Missouri a cost-sharing multiple-employer defined benefit pension plan. Participation is mandatory for employees of the Kansas City, Missouri Public School District, the Kansas City Public Library, and the Public School Retirement System. The Retirement System provides service and disability retirement benefits to full-time employees and optional benefits to members' beneficiaries. Positions covered by The Retirement System are also covered by Social Security. The Retirement System is administered by a twelve member Board of Trustees. The Retirement System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: The Public School Retirement System of the School District of Kansas City, Missouri, 4600 Paseo Blvd, Kansas City, Missouri, 64110, or by calling 1-816-472-5800. - 7 -
NOTE E - RETIREMENT PLAN (continued) EWING MARION KAUFFMAN SCHOOL, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 The Retirement System members were required to contribute 8.5% for July through December 2015 and 9% for January through June 2016, of their annual covered salary and the School is required to contribute a matching amount. The contribution requirements of members and the School are established, and may be amended, by the Board of Trustees. The School s contributions to the system for the year ended June 30, 2016 were $328,990, equal to the required contributions. The School also has a defined contribution plan that provides benefits to associates who meet the plan s eligibility requirements. The School s matching contributions to the plan were $66,300 during the year ended June 30, 2016. NOTE F - INSURANCE The School is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; injuries to employees; and natural disasters. The School maintains commercial insurance to protect the School from such risks. NOTE G - OPERATING LEASES On December 14, 2012, the School entered into a lease agreement for a new school building it currently occupies. Quarterly lease payments began March 1, 2013 and continue through December 1, 2027 and are based on the outstanding bond payment schedule. As security for the obligations of the School under this lease, the Ewing Marion Kauffman Foundation has executed a lease guaranty. On June 20, 2014, the School entered into a postage machine lease agreement. The non-cancellable lease is for 60 months. The lease is payable in equal monthly installments of $597. On June 20, 2014, the School entered into a copier agreement. The non-cancellable lease is for 48 months. The lease is payable in equal monthly installments of $509. On July 25, 2014, the School entered into a second copier lease agreement. The non-cancellable lease is for 26 months. The lease is payable in equal quarterly installments of $10,411. On November 25, 2015, the School entered into a third copier agreement. The non-cancellable lease is for 48 months. The lease is payable in equal monthly installments of $1,408. The future minimum lease payments under these leases are as follows: Year ending June 30, Equipment Building Total 2017 $ 50,995 $ 1,464,112 $ 1,515,107 2018 30,173 1,464,112 1,494,285 2019 30,173 1,464,112 1,494,285 2020 7,041 1,464,112 1,471,153 2021-1,464,112 1,464,112 Thereafter - 9,511,945 9,511,945 Total $ 118,382 $ 16,832,505 $ 16,950,887 Lease expense under the above leases for the year ended June 30, 2016 was $964,886. - 8 -
NOTE H - PROPERTY AND EQUIPMENT EWING MARION KAUFFMAN SCHOOL, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Furniture $ 81,357 Data processing equipment 125,635 Other equipment 10,627 Vehicle 21,920 239,539 Accumulated depreciation (143,880) $ 95,659 Depreciation expense for the year ended June 30, 2016 was $62,623 which was allocated to the related functions; instruction $59,143 and operation of plant $3,480. NOTE I - CLAIMS AND ADJUSTMENTS The School participates in a number of federal and state programs that are fully or partially funded by grants received from other governmental units. Disbursements financed by grants are subject to audit by the appropriate grantor government. As of June 30, 2016, significant amounts of grants disbursements have not been audited by grantor governments, but the School believes that disallowed disbursements, if any, based on subsequent audits will not have a material effect on the overall financial position of the School. NOTE J - RELATED PARTY TRANSACTIONS The School has received operating grants since its inception from Ewing Marion Kauffman Foundation (Foundation). For the year ended June 30, 2016, the total unrestricted grants received from the Foundation were $3,504,894. In addition, the School participates in the Foundation s self-insurance health plan for which it submits monthly premium payments. The School has also received restricted grants for $40,000 for professional development and $263,500 for staff accomplishments. At June 30, 2016, there was still $4,000 remaining funds to be spent related to professional development. This has been reported as temporarily restricted funds. The Foundation also contributed management services to the School during the year. These in-kind services were valued at $366,348. - 9 -
SUPPLEMENTARY INFORMATION - 10 -
EWING MARION KAUFFMAN SCHOOL, INC. BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2016 ASSETS GOVERNMENTAL FUNDS SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTALS Cash and cash equivalents $ 3,468,908 $ - $ - $ 3,468,908 Government funds receivable 163,128 - - 163,128 Other receivables 46,023 - - 46,023 Prepaid expenses 191,271 - - 191,271 Total assets $ 3,869,330 $ - $ - $ 3,869,330 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 229,911 $ - $ - $ 229,911 Accrued personnel costs 282,910 - - 282,910 Total liabilities 512,821 - - 512,821 Fund Balances: Restricted 4,000 - - 4,000 Unassigned 3,352,509 - - 3,352,509 Total fund balances 3,356,509 - - 3,356,509 Total liabilities and fund balances $ 3,869,330 $ - $ - $ 3,869,330-11 -
EWING MARION KAUFFMAN SCHOOL, INC. STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE - GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2016 SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTALS REVENUES: Local $ 4,615,135 $ 207,711 $ - $ 4,822,846 State 3,402,302 3,244,842-6,647,144 Federal 710,177 89,396-799,573 Total Revenues 8,727,614 3,541,949-12,269,563 EXPENDITURES: Instruction 654,279 3,536,782 8,547 4,199,608 Student services 365,755 5,167-370,922 Instructional staff support 639,210 - - 639,210 General administration and central services 410,561 - - 410,561 Building administration 1,997,629-3,216 2,000,845 Operation of plant 2,450,782-10,845 2,461,627 Transportation 843,967 - - 843,967 Food service 804,313 - - 804,313 Total Expenditures 8,166,496 3,541,949 22,608 11,731,053 Revenues Over (Under) Expenditures 561,118 - (22,608) 538,510 Other Financing Sources (Uses): Transfers (22,608) - 22,608 - Net change in fund balance 538,510 - - 538,510 Fund balance, beginning 2,817,999 - - 2,817,999 Fund balance, ending $ 3,356,509 $ - $ - $ 3,356,509-12 -
EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF REVENUES BY SOURCE FOR THE YEAR ENDED JUNE 30, 2016 SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTALS LOCAL: Sales tax $ 346,185 $ 207,711 $ - $ 553,896 Earnings on investments 2,331 - - 2,331 Food service 21,226 - - 21,226 Student activities 27,505 - - 27,505 Contributions and grant revenue 4,217,888 - - 4,217,888 Total Local 4,615,135 207,711-4,822,846 STATE: Basic formula 3,075,902 3,244,842-6,320,744 Transportation 115,480 - - 115,480 Basic formula - classroom trust fund 197,831 - - 197,831 Food service 3,210 - - 3,210 Other state revenue 9,879 - - 9,879 Total State 3,402,302 3,244,842-6,647,144 FEDERAL: Individuals with Disabilities - 89,396-89,396 Food service 375,834 - - 375,834 Title I 277,179 - - 277,179 Title II, A 57,164 - - 57,164 Total Federal 710,177 89,396-799,573 Total Revenues $ 8,727,614 $ 3,541,949 $ - $ 12,269,563-13 -
EWING MARION KAUFFMAN SCHOOL, INC. COMPARISON OF REVENUES BY SOURCE FOR THE YEARS ENDED JUNE 30, 2016, 2015 AND 2014 2016 2015 2014 Local $ 4,822,846 $ 4,673,965 $ 6,595,023 State 6,647,144 5,123,757 3,192,973 Federal 799,573 739,539 536,453 $ 12,269,563 $ 10,537,261 $ 10,324,449 70% 64% 60% 54% 50% 45% 48% 40% 39% 2016 30% 31% 2015 2014 20% 10% 7% 7% 5% 0% Local State Federal - 14 -
EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF EXPENDITURES BY OBJECT FOR THE YEARS ENDED JUNE 30, 2016, 2015 AND 2014 SPECIAL CAPITAL GENERAL REVENUE PROJECTS 2016 2015 2014 FUND FUND FUND TOTALS TOTALS TOTALS Salaries $ 1,477,192 $ 2,820,645 $ - $ 4,297,837 $ 3,090,741 $ 2,176,044 Employee benefits 359,933 721,304-1,081,237 807,425 588,794 Purchased services 5,296,523 - - 5,296,523 5,385,233 5,221,553 Supplies 1,032,848 - - 1,032,848 839,924 603,675 Capital outlay - - 22,608 22,608 108,092 12,625 $ 8,166,496 $ 3,541,949 $ 22,608 $ 11,731,053 $ 10,231,415 $ 8,602,691 70% 60% 50% 40% 30% 20% 10% 0% 46% 45% 39% 31% Salaries and employee benefits 53% 61% 9% 8% Purchased services Supplies Capital outlay 7% 0% 0% 1% 2016 2015 2014 Note: The above graphs do not include expenditures for capital improvements. - 15 -
EWING MARION KAUFFMAN SCHOOL, INC. SELECTED TRENDS FOR THE YEARS ENDED JUNE 30, 2012 THROUGH 2016 General and Special Revenue Funds 2012 2013 2014 2015 2016 Total Fund Balances $ 1,157,552 $ 790,395 $ 2,512,153 $ 2,817,999 $ 3,356,509 Total Expenditures 2,380,795 4,146,325 8,590,066 10,123,323 11,708,445 Reserve Ratio 48.62% 19.06% 29.24% 27.84% 28.67% Average Daily Attendance 91.41 169.99 341.83 508.37 656.83 60% 50% 40% 30% 20% 10% Reserve Ratio 0% 2012 2013 2014 2015 2016 Average Daily Attendance 700 600 500 400 300 200 100-2012 2013 2014 2015 2016-16 -
County District Number: 048-924 1. CALENDAR EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF SELECTED STATISTICS FOR THE YEAR ENDED JUNE 30, 2016 A. Standard Day Length (SDL) - The total number of hours between the starting time of the first class and the dismissal time of the last class, minus the time allowed for lunch and one passing time, and minus Channel One time. Reported with 4 decimal places. Grades 5-9 7.0000 B. The number of hours classes were in session and pupils were under the direction of teachers during this school year was: Grades 5-8 1,185.17 Grade 9 1,175.50 C. The number of days classes were in session and pupils were under the direction of teachers during this school year was: Grades 5-8 182 Grade 9 180 2. AVERAGE DAILY ATTENDANCE (ADA) Grades 5-9 656.83 3. SEPTEMBER MEMBERSHIP September Membership FTE Count 688.00 4. FREE AND REDUCED PRICE LUNCH FTE COUNT (Section 163.011(6), RSMo) State FTE Total Free: 504.00 Reduced: 90.00 5. FINANCE A. An insurance policy as required by Section 160.405, RSMo., was purchased for the School. True B. The School's deposits were secured during the year as required by Section 110.010 and 110.020, RSMo. True C. The School maintained a separate bank account for its Debt Service Fund in accordance with Section 165.011, RSMo. N/A D. Salaries reported for educators in the October Core Data cycle are supported by payroll/contract records. True - 17 -
5. FINANCE (continued) EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF SELECTED STATISTICS FOR THE YEAR ENDED JUNE 30, 2016 E. If a $162,326 or 7% x SAT x WADA transfer was made in excess of adjusted expenditures, did the Board approve a resolution to make the transfer, which identified the specific projects to be funded by the transfer and an expected expenditure date for the projects to be undertaken? N/A F. The School published a summary of the prior year s audit report within thirty days of the receipt of the audit pursuant to Section 165.121, RSMo. True G. The School has a professional development committee plan adopted by the Board with the professional development committee plan identifying the expenditure of seventy-five percent (75%) of one percent (1%) of the current year basic formula apportionment. N/A H. The amount spent for approved professional development committee plan activities was: 6. TRANSPORTATION (Section 163.161, RSMo.) N/A A. The School s transportation allowable costs substantially conform to 5 CSR 30-261.040, Allowable Costs for State Transportation Aid. True B. The School s transportation ridership records are maintained in a manner as to accurately disclose in all material respects the average number of regular riders transported. True C. Based on the ridership records, the average number of students (non-disabled K-12, K-12 students with disabilities and career education) transported on a regular basis (ADT) was: Eligible ADT: 546.50 Ineligible ADT: 0.00 D. The School s transportation odometer mileage records are maintained in a manner as to accurately disclose in all material respects the eligible and ineligible miles for the year. True E. Actual odometer records show the total school-operated and contracted mileage for the year was: 168,288 Of this total, the eligible non-disabled and students with disabilities route miles and the ineligible non-route and disapproved miles (combined) was: Eligible miles: 166,576 Ineligible miles (non-route/disapproved): 1,712 F. Number of days the School operated the school transportation system during the regular school year. 182-18 -
EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2016 FEDERAL GRANTOR/ FEDERAL PASS-THROUGH GRANTOR/ CFDA PASS-THROUGH PROGRAM TITLE NUMBER GRANTOR NUMBER EXPENDITURES U.S. Department of Agriculture Passed-through Missouri Department of Elementary and Secondary Education: National School Breakfast Program 10.553 048-924 $ 148,882 National School Lunch Program 10.555 048-924 226,953 Total Child Nutrition Cluster 375,835 U.S. Department of Education Passed-through Missouri Department of Elementary and Secondary Education: Title I 84.010A 048-924 277,179 IDEA 84.027A 048-924 89,396 Title II.A 84.367A 048-924 57,165 $ 799,575 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Ewing Marion Kauffman School, Inc. under programs of the federal government for the year ended June 30, 2016. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Adminitrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of Ewing Marion Kauffman School, Inc., it is not intended to and does not present the financial position, change in net assets or cash flows of Ewing Marion Kauffman School, Inc. Note 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported in accordance with accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Ewing Marion Kauffman School, Inc has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. - 19 -
INTERNAL CONTROL AND COMPLIANCE - 20 -
WESTBROOK & CO., P.C. Certified Public Accountants 749 Driskill Drive Richmond, MO 64085 18 North Folger Carrollton, MO 64633 REPORT ON THE ADMINISTRATION S ASSERTIONS ABOUT COMPLIANCE WITH SPECIFIED REQUIREMENTS OF MISSOURI LAWS AND REGULATIONS To the Governing Board Ewing Marion Kauffman School, Inc. We have audited the administration's assertions, included in its representation letter dated September 27, 2016 that Ewing Marion Kauffman School, Inc. complied with the requirements of Missouri Laws and Regulations regarding the operation of a charter school; accurate disclosure by the School's attendance records of average daily attendance, resident membership on the last Wednesday of September, 2015 and the number of students eligible to receive free or reduced price lunches on the last Wednesday of January, 2016; and accurate disclosure by the School's pupil transportation records of the average students scheduled to be transported eligible and ineligible for state aid, the number of miles eligible and ineligible for state aid and the allowable costs for pupil transportation during the year ended June 30, 2016. As discussed in that representation letter, the administration is responsible for the School's compliance with those requirements. Our responsibility is to express an opinion on the administration's assertions about the School's compliance based on our audit. Our audit was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis evidence about the School s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our opinion does not provide a legal determination on the School's compliance with specified requirements. In our opinion, the administration's assertions that the School complied with the aforementioned requirements for the year ended June 30, 2016, are fairly stated in all material respects. We noted immaterial instances of noncompliance with the aforementioned requirements that we have reported to the administration of the School in the accompanying Schedule of State Findings. This report is intended solely for the information and use of the Governing Board, administration and the Missouri Department of Elementary and Secondary Education and is not intended to be and should not be used by anyone other than these specified parties. September 27, 2016-21 - Member, American Institute of Certified Public Accountants; Missouri Society of Certified Public Accountants Telephone: Richmond: (816) 776-3584 KC Line: (816) 470-3584 Carrollton: (660) 542-0102 Fax: Richmond: (816) 470-7100 Carrollton: (660) 542-3959
EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF STATE FINDINGS FOR THE YEAR ENDED JUNE 30, 2016 TRANSPORTATION During our audit, we noted that eligible route miles and number of pupils transported were incorrectly reported on the Application for State Transportation Aid. As a result of our audit, the Application for State Transportation Aid has been corrected. - 22 -
WESTBROOK & CO., P.C. Certified Public Accountants 749 Driskill Drive Richmond, MO 64085 18 North Folger Carrollton, MO 64633 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Governing Board Ewing Marion Kauffman School, Inc. 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 Ewing Marion Kauffman School, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated September 27, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Ewing Marion Kauffman School, Inc. s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School s internal control. Accordingly, we do not express an opinion on the effectiveness of the School s internal 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 correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal 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. Our 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. Compliance and Other Matters As part 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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. - 23 - Member, American Institute of Certified Public Accountants; Missouri Society of Certified Public Accountants Telephone: Richmond: (816) 776-3584 KC Line: (816) 470-3584 Carrollton: (660) 542-0102 Fax: Richmond: (816) 470-7100 Carrollton: (660) 542-3959
Purpose of this Report The purpose of this report 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 opinion on the effectiveness of the School s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Richmond, Missouri September 27, 2016-24 -
WESTBROOK & CO., P.C. Certified Public Accountants 749 Driskill Drive Richmond, MO 64085 18 North Folger Carrollton, MO 64633 INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE AS REQUIRED BY THE UNIFORM GUIDANCE To the Governing Board Ewing Marion Kauffman School, Inc. Report on Compliance for Each Major Federal Program We have audited Ewing Marion Kauffman School s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. The School s major federal programs are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of the School s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination on the School s compliance. Opinion on Each Major Federal Program In our opinion, the School complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. - 25 - Member, American Institute of Certified Public Accountants; Missouri Society of Certified Public Accountants Telephone: Richmond: (816) 776-3584 KC Line: (816) 470-3584 Carrollton: (660) 542-0102 Fax: Richmond: (816) 470-7100 Carrollton: (660) 542-3959
Report on Internal Control Over Compliance Management of the School is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program, and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the School s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based upon the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Richmond, Missouri September 27, 2016-26 -
EWING MARION KAUFFMAN SCHOOL, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2016 A. SUMMARY OF AUDITORS RESULTS Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major federal programs: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified? Yes X None reported Type of auditor's report issued on compliance for major fedeal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Yes X No Identification of major federal programs: Title I CFDA No. 84.010A Dollar threshold used to distinguish between type A and type B programs: $ 750,000 Auditee qualified as low-risk auditee? X Yes No B. FINDINGS - FINANCIAL STATEMENT AUDIT None C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT None - 27 -
The prior audit included no audit findings. EWING MARION KAUFFMAN SCHOOL, INC. SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2016-28 -