WaterfordMontessoriAcademy
WaterfordTownship,Michigan
AuditedFinancialStatements June30,2015
CONTENTS IndependentAuditor’sReport IndependentAuditor’sReportonInternalControloverFinancialReporting andonComplianceandOtherMattersBasedonanAuditofFinancial StatementsPerformedinAccordancewithGovernmentAuditingStandards Management’sDiscussionandAnalysis BasicFinancialStatements StatementofNetPosition StatementofActivities CombinedBalanceSheet–AllGovernmentalFunds ReconciliationofTotalGovernmentalFundBalance toNetPositionofGovernmentalActivities StatementofRevenues,ExpendituresandChangesin FundBalance–AllGovernmentalFunds ReconciliationoftheStatementofRevenues,Expenditures andChangesinFundBalanceofGovernmentalFundsto theStatementofActivities NotestoFinancialStatements SupplementalInformation BudgetaryComparisonSchedule–GeneralFund ScheduleofRevenues–GeneralFund ScheduleofExpenditures–GeneralFund
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David M. Croskey, CPA Thomas B. Lanni, CPA Carolyn A. Jones, CPA, CFP® MST Clifton F. Powell Jr., CPA, CFP®, PFS Roger J. DeJong, CPA Patrick M. Sweeney, CPA Leonard A. Geronemus, CPA, PFS
INDEPENDENTAUDITOR’SREPORT TotheBoardofDirectors ofWaterfordMontessoriAcademy We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregateremainingfundinformationofWaterfordMontessoriAcademy,asofandfortheyearended June30,2015, andtherelatednotes tothefinancialstatements,which collectivelycomprise WaterfordMontessoriAcademy’sbasic financialstatementsaslistedinthetableofcontents. Management’sResponsibilityfortheFinancialStatements Managementisresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewith accountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthedesign,implementation,and maintenanceofinternalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefree frommaterialmisstatement,whetherduetofraudorerror. Auditor’sResponsibility Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedourauditin accordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthestandardsapplicableto financialauditscontained inGovernmentAuditingStandards,issuedbytheComptroller GeneraloftheUnited States. Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancial statementsarefreefrommaterialmisstatement. audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial An statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of materialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,the auditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationofthefinancialstatementsin ordertodesignauditproceduresthataretheappropriateinthecircumstances,butnotforthepurposeofexpressingan 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 estimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,therespectivefinancial position of governmental activities, each major fund, and the aggregate remaining fund information of Waterford Montessori Academy, as of June 30, 2015, and the respective changes in financial position thereof for the year then endedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica. 44725 Grand River Avenue Ɣ Suite 204 2505 NW Boca Raton Blvd. Ɣ Suite 202 345 Diversion Street Ɣ Suite 400 Novi, Michigan 48375 Boca Raton, Florida 33431-6652 Rochester, Michigan 48307 Phone: 248.659.5300 Phone: 248.659.5300 Phone: 561.241.1040 Fax: 248.659.5305 Fax: 248.659.5305 Fax: 561.368.4641
www.croskeylanni.com
OtherMatters RequiredSupplementaryInformation AccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequirethatthemanagement’sdiscussionand analysisandbudgetarycomparisoninformationonpagesv–xand17bepresentedtosupplementthebasicfinancial statements.Suchinformation,althoughnotapartofthebasicfinancialstatements,isrequiredbytheGovernmental AccountingStandardsBoard,whoconsidersittobeanessentialpartoffinancialreportingforplacingthebasicfinancial statementsinanappropriateoperational,economic,orhistoricalcontext.Wehaveappliedcertainlimitedprocedures 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,andotherknowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressan opinionorprovideanyassuranceontheinformationbecausethelimitedproceduresdonotprovideuswithsufficient evidencetoexpressanopinionorprovideanyassurance. OtherInformation Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise WaterfordMontessoriAcademy’sbasicfinancialstatements.Theintroductorysection,combiningandindividualnonͲ major fund financial statements, statistical section, and schedules of revenues and expenditures are presented for purposesofadditionalanalysisandarenotarequiredpartofthebasicfinancialstatements. ThecombiningandindividualnonͲmajorfundfinancialstatementsandschedulesofrevenuesandexpendituresarethe responsibilityofmanagementandwerederivedfromandrelatedirectlytotheunderlyingaccountingandotherrecords usedtopreparethebasicfinancialstatements.Suchinformationhasbeensubjectedtotheauditingproceduresapplied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling suchinformationdirectlytotheunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatements ortothebasicfinancialstatementsthemselves,andotheradditionalproceduresinaccordancewithauditingstandards generally accepted in the United States of America. In our opinion, the combining and individual nonͲmajor fund financialstatementsandschedulesofrevenuesandexpendituresarefairlystated,inallmaterialrespects,inrelationto thebasicfinancialstatementsasawhole. Theintroductoryandstatisticalsectionshavenotbeensubjectedtotheauditingproceduresappliedintheauditofthe basicfinancialstatementsand,accordingly,wedonotexpressanopinionorprovideanyassuranceonthem. OtherReportingRequiredbyGovernmentAuditingStandards In accordance with Government Auditing Standards, we have also issued our report dated October 14, 2015, on our consideration of Waterford Montessori Academy’s internal control over financial reporting and on our tests of its compliancewithcertainprovisionsoflaws,regulations,contractsandgrantagreementsanothermatters.Thepurpose ofthatreportistodescribethescopeofourtestingofinternalcontroloverfinancialreportingandcomplianceandthe resultsofthattesting,andnottoprovideanopiniononinternalcontroloverfinancialreportingoroncompliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering WaterfordMontessoriAcademy’sinternalcontroloverfinancialreportingandcompliance. CroskeyLanni,PC October14,2015 Rochester,Michigan
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David M. Croskey, CPA Thomas B. Lanni, CPA Carolyn A. Jones, CPA, CFP® MST Clifton F. Powell Jr., CPA, CFP®, PFS Roger J. DeJong, CPA Patrick M. Sweeney, CPA Leonard A. Geronemus, CPA, PFS
INDEPENDENTAUDITOR’SREPORTONINTERNALCONTROLOVERFINANCIALREPORTINGANDON COMPLIANCEANDOTHERMATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMED INACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS
TotheBoardofDirectors ofWaterfordMontessoriAcademy Wehaveaudited,inaccordancewiththeauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthe standardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbytheComptrollerGeneral of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Waterford Montessori Academy, as of and for the year ended June 30, 2015, and the relatednotestothefinancialstatements,whichcollectivelycompriseWaterfordMontessoriAcademy’sbasicfinancial statements,andhaveissuedourreportthereondatedOctober14,2015. InternalControlOverFinancialReporting In planning and performing our audit of the financial statements, we considered Waterford Montessori Academy’s internalcontroloverfinancialreporting(internalcontrol)todeterminetheauditproceduresthatareappropriateinthe circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressinganopinionontheeffectivenessofWaterfordMontessoriAcademy’sinternalcontrol.Accordingly,wedonot expressanopinionontheeffectivenessofWaterfordMontessoriAcademy’sinternalcontrol. deficiency in internal control exists when the design or operation of a control does not allow management or A 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,suchthatthereisareasonablepossibilitythatamaterialmisstatementoftheentity’sfinancialstatementswill notbeprevented,ordetectedandcorrectedonatimelybasis.Asignificantdeficiencyisadeficiency,oracombination ofdeficiencies,ininternalcontrolthatislessseverethanamaterialweakness,yetimportantenoughtomeritattention bythosechargedwithgovernance. Ourconsiderationofinternalcontrolwasforthelimitedpurposedescribedinthefirstparagraphofthissectionandwas notdesignedtoidentifyalldeficienciesininternalcontrolthatmightbematerialweaknessesor,significantdeficiencies. Giventheselimitations,duringourauditwedidnotidentifyanydeficienciesininternalcontrolthatweconsidertobe materialweaknesses.However,materialweaknessesmayexistthathavenotbeenidentified. 44725 Grand River Avenue Ɣ Suite 204 2505 NW Boca Raton Blvd. Ɣ Suite 202 345 Diversion Street Ɣ Suite 400 Novi, Michigan 48375 Boca Raton, Florida 33431-6652 Rochester, Michigan 48307 Phone: 248.659.5300 Phone: 248.659.5300 Phone: 561.241.1040 Fax: 248.659.5305 Fax: 248.659.5305 Fax: 561.368.4641
www.croskeylanni.com
ComplianceandOtherMatters As part of obtaining reasonable assurance about whether Waterford Montessori Academy’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 determinationoffinancialstatementamounts.However,providinganopiniononcompliancewiththoseprovisionswas notanobjectiveofouraudit,andaccordingly,wedonotexpresssuchanopinion.Theresultsofourtestsdisclosedno instancesofnoncomplianceorothermattersthatarerequiredtobereportedunderGovernmentAuditingStandards. PurposeofthisReport 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 entity’s internal control or on compliance.ThisreportisanintegralpartofanauditperformedinaccordancewithGovernmentAuditingStandardsin consideringtheentity’sinternalcontrolandcompliance.Accordingly,thiscommunicationisnotsuitableforanyother purpose. October14,2015 Rochester,Michigan
CroskeyLanni,PC
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WaterfordMontessoriAcademy Management’sDiscussionandAnalysis ThissectionofWaterfordMontessoriAcademy’s(Academy)annualfinancialreportpresentsourdiscussionandanalysisof thepublicschoolacademy’sfinancialperformanceduringthefiscalyearthatendedonJune30,2015.Pleasereaditin conjunctionwiththeAcademy’sfinancialstatements,whichimmediatelyfollowthissection FinancialHighlights x The year ending June 30, 2015, was the Academy’s second year of operation. The Academy recorded excess revenuesof$256,917,bringingitscumulativefundbalanceto$346,593.TheAcademy’sfundbalanceis23%oftotal revenues,and29%ofstaterevenues. x TheAcademy’sJune30,2015,netpositionimprovedto$480,960,from$190,863atthecloseoftheprioryear. x TheAcademyimproveditsenrollmentto161students,from94intheprioryear. x TheAcademyoperateditsinstructionalprograminfullandwithinbudgetthroughouttheschoolyear. OverviewoftheFinancialStatements This annual report consists of three parts – management’s discussion and analysis (this section), the basic financial statements, and required supplemental information. The basic financial statements include two kinds of statements thatpresentdifferentviewsoftheAcademy. The first two statements are AcademyͲwide financial statements that provide both shortͲterm and longͲterm informationabouttheAcademy’soverallfinancialstatus. The remaining statements are fund financial statements that focus on individual parts of the Academy, reporting the Academy’soperationsinmoredetailthantheAcademyͲwidestatements. ThegovernmentalfundstatementstellhowbasicserviceslikeregulareducationwerefinancedintheshortͲtermaswell aswhatremainsforfuturespending. FiduciaryfundstatementsprovideinformationaboutthefinancialrelationshipsinwhichtheAcademyactssolelyasan agentforthebenefitofothers. Thefinancialstatementsalsoincludenotesthatexplainsomeoftheinformationinthestatementsandprovidemore detaileddata.Thestatementsarefollowedbyasectionofrequiredsupplementalinformationthatfurtherexplainsand supportsthefinancialstatementswithacomparisonoftheAcademy’sbudgetfortheyear.FigureAͲ1showshowthe variouspartsoftheannualreportarearrangedandrelatedtooneanother.
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WaterfordMontessoriAcademy Management’sDiscussionandAnalysis(Continued)
FigureAͲ1OrganizationofWaterfordMontessoriAcademyAnnualFinancialReport
Management’s Discussionand Analysis
BasicFinancial Statements
DistrictͲwide Financial Statements
Fund Financial Statements
Required Supplementary Information
Notesto Financial Statements
Summary
Detail
FigureAͲ2summarizesthemajorfeaturesoftheAcademy’sfinancialstatements,includingtheportionoftheAcademy’s activities they cover and the types of information they contain. The remainder of this overview section of management’sdiscussionandanalysishighlightsthestructureandcontentsofeachofthestatements.
FigureAͲ2MajorFeaturesoftheAcademyͲWideandFundFinancialStatements
Scope
AcademyͲwidestatements Entireacademy(except fiduciaryfunds)
Requiredfinancial statements
*Statementofnet position *Statementofactivities
Accountingbasisand measurementfocus
Accrualaccountingand economicresourcesfocus
Typeofasset/liability information
Allassetsandliabilities, bothfinancialandcapital, shortͲtermandlongͲterm
Typeofinflow/outflow information
Allrevenuesandexpenses duringyear,regardlessof whencashisreceivedor paid
FundFinancialStatements Governmentalfunds Fiduciaryfunds Allactivitiesoftheacademy Instancesinwhichthe thatarenotfiduciary academyadministers resourcesonbehalfof someoneelse,suchas studentactivitiesmonies Statementoffiduciarynet *Balancesheet assets *Statementofrevenue, expendituresandchanges infundbalances Accrualaccountingand Modifiedaccrual economicresourcesfocus accountingandcurrent financialresourcesfocus Allassetsandliabilities, Generallyassetsexpected tobeusedupandliabilities bothshortͲtermandlongͲ thatcomedueduringthe term,theacademy’sfunds yearorsoonthereafter;no donotcurrentlycontain capitalassetsorlongͲterm capitalassets,although liabilitiesincluded theycan Alladditionsand Revenuesforwhichcashis receivedduringorsoon deductionsduringtheyear, aftertheendoftheyear, regardlessofwhencashis expenditureswhengoods receivedorpaid orserviceshavebeen receivedandtherelated liabilityisdueandpayable
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WaterfordMontessoriAcademy Management’sDiscussionandAnalysis(Continued) AcademyͲwidestatements TheAcademyͲwidestatementsreportinformationabouttheAcademyasawholeusingaccountingmethodssimilarto thoseusedbyprivateͲsectorcompanies.ThestatementofnetpositionincludesalloftheAcademy’sassets,deferred outflows, liabilities, and deferred inflows. All of the current year’s revenues and expenses are accounted for in the statementofactivitiesregardlessofwhencashisreceivedorpaid. The two AcademyͲwide statements report the Academy’s net position and how it has changed. Net position – the differencebetweentheAcademy’sassets,deferredoutflows,liabilitiesanddeferredinflows,areonewaytomeasure theAcademy’sfinancialhealthorposition. x Overtime,increasesordecreasesintheAcademy’snetpositionisanindicatorofwhetheritsfinancialpositionis improvingordeteriorating,respectively. x ToassesstheoverallhealthoftheAcademy,thereadershould consideradditionalnonͲfinancialfactorssuchas changes in the Academy’s enrollment, the condition of school buildings and other facilities, and the Academy’s abilitytobecompetitivewithotherpublicschoolacademiesandareaschooldistricts. Fundfinancialstatements The fund financial statements provide more detailed information about the Academy’s funds, focusing on its more significantor“major”funds– not the Academyas awhole. Fundsareaccounting devicestheAcademyuses tokeep trackofspecificsourcesoffundingandspendingonparticularprograms: Governmental activities – The Academy’s basic services are included in the general fund, such as regular and specialeducationandadministration.Statefoundationaidfinancesmostoftheseactivities. TheAcademyhastwokindsoffunds: Governmentalfunds–MostoftheAcademy’sbasicservicesareincludedingovernmentalfundswhichgenerally focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balancesleftatyearͲendthatareavailableforspending.Consequently,thegovernmentalfundsstatementsprovidea detailed shortͲterm view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the Academy’s programs. Because this information does not encompass the additionallongͲtermfocusoftheAcademyͲwidestatements,weprovideadditionalinformationwiththegovernmental fundsstatementthatexplainstherelationship(ordifferences)betweenthem. Fiduciary funds – The Academy is the fiduciary for assets that belong to others, such as the student activities funds.TheAcademyisresponsibleforensuringthattheassetsreportedinthesefundsareusedonlyfortheirintended purposesandusedbythosetowhomtheassetsbelong.WeexcludetheseactivitiesfromtheacademyͲwidefinancial statementsbecausetheAcademycannotusetheseassetstofinanceitsoperations.
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WaterfordMontessoriAcademy Management’sDiscussionandAnalysis(Continued) FinancialanalysisoftheAcademyasawhole NetpositionͲtheAcademy’scombinednetpositionwas$480,960onJune30,2015.SeeFigureAͲ3. Generalfundtotalrevenueswere$1,500,486.Staterevenuesaccountedfor79%oftotalrevenues.Ninetyninepercent of those state revenues are attributable to the state aid foundation allowance. Federal revenues were 11% of total revenues, with 92% of federal funds coming through the Charter Schools Program State Educational Agency grant program (“CSP grant”), administered by the State of Michigan. Local sourcesaccounted for 10% of revenues, most of whichwerepreschoolandlatchkeyrevenues. TheAcademy’sstrongnetpositionisaproductofitsfundbalance,investmentincapitalassetsthroughtheCSPgrant, andattentivefinancialmanagement. Academygovernmentalactivities TheoverallhealthoftheAcademy’sfinancesremainsonsolidgroundandmanagementanticipatesnodegradationofits standing in the coming fiscal year. The immediate economic constraints faced by all schools will challenge the maintenanceoftheAcademy’sfinancialreserves,butmanagementanticipatesnosubstantialchange.TheAcademy’s managementwillcontinuetoseekoutcostssavingstoavoidprogramreductionsanduseoffinancialreserves.
FigureAͲ3 WaterfordMontessoriAcademy'sNetPosition 2015
2014
Currentassetsanddeferredoutflows Capitalassets,net
$418,220 134,367
$169,717 101,187
Totalassetsanddeferredoutflows
552,587
270,904
Currentliabilitiesanddeferredinflows
71,627
80,041
NetPosition: Netinvestmentincapitalassets Unrestricted
134,367 346,593
101,187 89,676
Totalnetposition
$480,960
$190,863
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WaterfordMontessoriAcademy Management’sDiscussionandAnalysis(Continued)
FigureAͲ4 ChangesinWaterfordMontessoriAcademy'sNetPosition
2015
2014
Revenues: Programrevenues: Federalandstatecategoricalgrants Chargesforservice
$170,427 131,398
$133,788 Ͳ
Totalprogramrevenues
301,825
133,788
1,176,462 22,199 1,198,661
680,602 111,979 792,581
1,500,486
926,369
564,411 612,194 33,784
308,240 417,055 10,211
Totalexpenses
1,210,389
735,506
Changeinnetposition
$290,097
$190,863
Generalrevenues: StateaidͲunrestricted Other Totalgeneralrevenues Totalrevenues Expenses: Instruction Supportservices Unallocateddepreciation
FinancialanalysisoftheAcademy’sfunds AstheAcademycompleteditssecondyear,itsgovernmentalfund(general)reportedafundbalanceof$346,593.The Academy’sgeneralfundfundbalancewas23%oftotalrevenues. TheAcademyhasnolongtermdebt. Generalfundbudgetaryhighlights Overthecourseoftheyear,theAcademyfounditnecessarytoreviseitsgeneralfundoperatingbudgetonlyonceto staywithinitsbudgetaryplan. TheAcademy’sinitialbudgetforthegeneralfundanticipatedrevenueswouldexceedexpendituresandotherfinancing sourcesorusesbyonly$42,366,theactualresultsfortheyearshowedexcessrevenuesof$256,917.Actualrevenues were$72,326morethanbudgetedandactualexpenditureswere$142,225lessthanbudgeted.
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WaterfordMontessoriAcademy Management’sDiscussionandAnalysis(Continued) Capitalassetanddebtadministration Capitalassets BytheendoftheyearendedJune30,2015,theAcademyhadinvested$134,367incapitalassetsconsistingoffurniture andequipment,netofaccumulateddepreciation.MoredetailedinformationaboutcapitalassetscanbefoundinNote5 tothefinancialstatements.Totaldepreciationexpensefortheyearwas$33,784. TheAcademy’scapitalassetsareasfollows: FigureAͲ5 WaterfordMontessoriAcademy'sCapitalAssets
Furniture Equipment Totalcost Lessaccumulateddepreciation Netbookvalue
Balance June30,2015
Balance June30,2014
$152,356 26,006
$109,445 1,953
178,362
111,398
43,995
10,211
$134,367
$101,187
FactorsbearingontheAcademy’sfuture At the time these financial statements were prepared and audited, the Academy was not aware of any existing circumstancesthatcouldsignificantlyaffectitsfinancialhealthinthefuture. ContactingtheAcademy’sfinancialmanagement Thisfinancialreportisdesignedtoprovideourstudents,parentsandcreditorswithageneraloverviewoftheAcademy’s financesandtodemonstratetheAcademy’saccountabilityforthemoneyitreceives.Ifyouhavequestionsaboutthis report or need additional information, contact the Academy’s office at 4860 Midland Avenue, Waterford, Michigan, 48329.
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WATERFORDMONTESSORIACADEMY
STATEMENTOFNETPOSITION JUNE30,2015 SeeIndependentAuditor’sReport
ASSETSANDDEFERREDOUTFLOWS CurrentAssets Cashandcashequivalents Accountsreceivable Duefromothergovernmentalunits Prepaidexpenses
$191,539 900 224,226 1,555
Totalcurrentassets
418,220
CapitalAssetsͲNetofAccumulatedDepreciation
134,367
Totalassetsanddeferredoutflows
$552,587
LIABILITIES,DEFERREDINFLOWSANDNETPOSITION CurrentLiabilities Notespayable Otheraccruedexpenses
$17,737 53,890
Totalcurrentliabilities
71,627
NetPosition Netinvestmentincapitalassets Unrestricted
134,367 346,593
Totalnetposition
480,960
Totalliabilities,deferredinflowsandnetposition
$552,587
Seeaccompanyingnotestofinancialstatements Ͳ1Ͳ
WATERFORDMONTESSORIACADEMY STATEMENTOFACTIVITIES FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
Expenses
Chargesfor Services
Operating Grants
Net(Expense) Revenuesand Changesin NetAssets Government Type Activities
ProgramRevenues
Functions Instruction Basicprograms Addedneeds Supportservices Pupilsupportservices Instructionalstaffsupportservices Generaladministration Schooladministration Businesssupportservices Operationsandmaintenance Centralsupportservices Unallocateddepreciation
$549,649 14,762
$131,398 Ͳ
$154,099 12,229
$(264,152) (2,533)
20,341 58,793 210,158 50,300 2,900 255,923 13,779 33,784
Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ
Ͳ 4,099 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ
(20,341) (54,694) (210,158) (50,300) (2,900) (255,923) (13,779) (33,784)
Totalprimarygovernment
$1,210,389
$131,398
$170,427
(908,564)
GeneralPurposeRevenues StateschoolaidͲunrestricted Miscellaneousrevenues Totalgeneralpurposerevenues
1,176,462 22,199 1,198,661
Changeinnetposition
290,097
NetpositionͲJuly1,2014
190,863
NetpositionͲJune30,2015
$480,960
Seeaccompanyingnotestofinancialstatements Ͳ2Ͳ
WATERFORDMONTESSORIACADEMY COMBINEDBALANCESHEET–ALLGOVERNMENTALFUNDS JUNE30,2015 SeeIndependentAuditor’sReport ASSETS
Cashandcashequivalents Accountsreceivable Duefromothergovernmentalunits Prepaidexpenses
$191,539 900 224,226 1,555
Totalassets
$418,220
LIABILITIESANDFUNDBALANCE Liabilities Notespayable Otheraccruedexpenses
$17,737 53,890
Totalliabilities
71,627
FundBalance Nonspendable Unassigned
1,555 345,038
Totalfundbalance
346,593
Totalliabilitiesand fundbalance
$418,220
Seeaccompanyingnotestofinancialstatements Ͳ3Ͳ
WATERFORDMONTESSORIACADEMY RECONCILIATIONOFTOTALGOVERNMENTALFUNDBALANCETONETPOSITION OFGOVERNMENTALACTIVITIES JUNE30,2015 SeeIndependentAuditor’sReport Amountsreportedforgovernmentalactivitiesinthestatementofnetpositionaredifferentbecause:
TotalGovernmentalFundBalances
$346,593
Capitalassetsusedingovernmentalactivitiesarenotfinancialresourcesand, therefore,arenotreportedinthefunds.Thecostoftheassetsis$178,362 andtheaccumulateddepreciationis$43,995.
134,367
NetPositionofGovernmentalActivities
$480,960
Seeaccompanyingnotestofinancialstatements Ͳ4Ͳ
WATERFORDMONTESSORIACADEMY STATEMENTOFREVENUES,EXPENDITURES ANDCHANGESINFUNDBALANCE–ALLGOVERNMENTALFUNDS FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
Revenues Localsources Statesources Federalsources
$153,644 1,183,503 163,339
Totalgovernmentalfundrevenues
1,500,486
Expenditures Instruction Basicprogram Addedneeds Supportservices Pupilsupportservices Instructionalstaffsupportservices Generaladministration Schooladministration Businesssupportservices Operationsandmaintenance Centralsupportservices Capitaloutlay
549,649 14,762 20,341 58,793 210,158 50,300 2,900 255,923 13,779 66,964
Totalgovernmentalfundexpenditures
1,243,569
Excess(deficiency)ofrevenues overexpenditures
256,917
FundbalanceͲJuly1,2014
89,676
FundbalanceͲJune30,2015
$346,593
Seeaccompanyingnotestofinancialstatements Ͳ5Ͳ
WATERFORDMONTESSORIACADEMY RECONCILIATIONOFTHESTATEMENTOFREVENUES,EXPENDITURESANDCHANGESIN FUNDBALANCEOFGOVERNMENTALFUNDSTOTHESTATEMENTOFACTIVITIES FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport Amountsreportedforgovernmentalactivitiesinthestatementofactivitiesaredifferentbecause:
NetChangeinFundBalancesͲTotalGovernmentalFunds
$256,917
Governmentalfundsreportcapitaloutlaysasexpenditures.However, inthestatementofactivities,assetsarecapitalizedandthecostis allocatedovertheirestimatedusefullivesandreportedasdepreciation andamortizationexpense.Thisistheamountbywhichcapitaloutlays exceededdepreciationandamortizationinthecurrentperiod
Capitaloutlay Depreciationandamortizationexpense
$66,964 (33,784)
ChangeinNetPositionofGovernmentalActivities
33,180
$290,097
Seeaccompanyingnotestofinancialstatements Ͳ6Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTS FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE1–SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES TheaccountingpoliciesofWaterfordMontessoriAcademy(the“Academy”)conformtogenerallyacceptedaccounting principlesapplicabletopublicschoolacademies.Thefollowingisasummaryofthesignificantaccountingpolicies: ReportingEntity WaterfordMontessoriAcademywasformedasapublicschoolacademypursuanttotheMichiganSchoolCodeof1976, asamendedbyActNo.362ofthePublicActsof1993andActNo.416ofthePublicActsof1994.TheAcademyfiled articles of incorporation as a nonprofit corporation pursuant to the provisions of the Michigan Nonprofit Corporation Actof1982,asamended,onMarch5,2012,andbeganoperationinJuly2013. InJuly2013,theAcademyenteredintoafiveͲyearcontractwithSaginawValleyStateUniversity'sBoardofTrusteesto charterapublicschoolacademy.ThecontractrequirestheAcademytoactexclusivelyasagovernmentalagencyand notundertakeanyactioninconsistentwithitsstatusasanentityauthorizedtoreceivestateschoolaidfundspursuant totheStateconstitution.TheUniversity'sBoardofTrusteesisthefiscalagentfortheAcademyandisresponsiblefor overseeingtheAcademy'scompliancewiththecontractandallapplicablelaws.TheAcademypaysSaginawValleyState University'sBoardofTrusteesthreepercentofStateaidasadministrativefees.Totaladministrativefeespaidforthe yearendedJune30,2015wereapproximately$34,700. In July 2013, the Academy entered into an agreement with American Montessori Solutions, Inc., "AMS". Under the terms of this agreement, AMS will provide a variety of services including payroll, and human resource services. The Academy is obligated to pay AMS 11 percent of its state aid revenue for services. The total paid for these services amountedtoapproximately$128,000fortheyearendedJune30,2015. The accompanying financial statements have been prepared in accordance with criteria established by the Governmental Accounting Standards Board for determining the various governmental organizations to be included in the reporting entity. These criteria include significant operational or financial relationships with the public school Academy.Basedonapplicationofcriteria,theAcademydoesnotcontaincomponentunits. FundFinancialStatements Fund financial statements report detailed information about the Academy. The focus of governmental fund financial statementsisonmajorfundsratherthanreportingfundsbytype.Eachmajorfundispresentedinaseparatecolumn. NonͲmajorfundsareaggregatedandpresentedinasinglecolumn.
Ͳ7Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESͲContinued BasisofPresentation–FundAccounting TheaccountsoftheAcademyareorganizedonthebasisoffunds.Theoperationsofafundareaccountedforwitha separate set of selfͲbalancing accounts that comprise its assets, liabilities, fund balance, revenue and expenditures. Governmentresourcesareallocatedtoandaccountedforinindividualfundsbasedonthepurposesforwhichtheyare tobespentandthemeansbywhichspendingactivitiesarecontrolled.Thevariousfundsaregrouped,inthecombined financialstatementsinthisreport,intogenericfundtypesintwobroadfundcategories. GovernmentalFunds Agovernmentalfundisafundthroughwhichmostacademyfunctionstypicallyarefinanced.Theacquisition,useand balancesoftheAcademy’sexpendablefinancialresourcesandtherelatedcurrentliabilitiesareaccountedforthrougha governmentalfund. GeneralFundͲThegeneralfundisusedtorecordthegeneraloperationsoftheAcademypertainingtoeducationand thoseoperationsnotprovidedforinotherfunds.Includedarealltransactionsrelatedtotheapprovedcurrentoperating budget. SpecialRevenueFundͲThespecialrevenuefund,whichtheAcademydoesnotcurrentlymaintain,isusedtoaccount forthefoodserviceprogramoperations.Thespecialrevenuefundisasubsidiaryoperationandisanobligationofthe general fund. Therefore any shortfall in the special revenue fund will be covered by an operating transfer from the generalfund.Thespecialrevenuefunddoesnotmaintainitsownassetsandliabilities;accordingly,nobalancesheetis presentedforthisfund. DebtServiceFundͲThedebtservicefund,whichtheAcademydoesnotcurrentlymaintain,isusedtorecordcertain revenueandthepaymentofinterest,principalandotherexpendituresonlongͲtermdebt. CapitalProjectsFundͲThecapitalprojectsfund,whichtheAcademydoesnotcurrentlymaintain,accountsforfinancial resourcestobeusedfortheacquisition,construction,orimprovementofcapitalfacilities. FiduciaryFundͲThefiduciaryfund,whichtheAcademydoesnotcurrentlymaintain,isusedtoaccountforassetsheld bytheAcademyinatrusteecapacityorasanagent.Thefiduciaryfundiscustodialinnatureanddoesnotinvolvethe measurementofresultsofoperations. Activity(Agency)FundͲTheActivity(Agency)Fund,whichtheAcademydoesnotcurrentlymaintain,isusedtorecord thetransactionsofastudentgroupforschoolandschoolͲrelatedpurposes. Governmentalandagencyfundsutilizethemodifiedaccrualbasisofaccounting.Modificationsinsuchmethodfromthe accrualbasisareasfollows:
Ͳ8Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES–Continued a. Revenue that is both measurable and available for use to finance operations is recorded as revenue when earned. Revenues are considered to be available when they are collectible within the current period or soon enoughthereaftertopayliabilitiesofthecurrentperiod.Forthispurpose,theAcademyconsidersrevenuesto beavailableiftheyarecollectedwithinsixtydaysoftheendofthecurrentfiscalperiod. b. Paymentsforinventoriabletypesofsupplies,whicharenotsignificantatyearend,arerecordedasexpenditures atthetimeofpurchase. c. PrincipalandinterestofgenerallongͲtermdebtarenotrecordedasexpendituresuntiltheirduedates. d. The State of Michigan utilizes a foundation allowance funding approach, which provides for specific annual amount of revenue per student based on a stateͲwide formula. The foundation allowance is funded from a combinationofstateandlocalsources.RevenuefromstatesourcesisprimarilygovernedbytheSchoolAidAct andtheSchoolCodeofMichigan.ThestateportionofthefoundationisprovidedfromtheState’sSchoolAid Fundandisrecognizedasrevenueinaccordancewithstatelaw.AmajorportionoftheAcademy’srevenueis derivedfromthisstateaid.Assuch,theAcademyisconsideredtobeeconomicallydependentonthisaid.The Academy’sexistenceisdependentuponqualificationforsuchaid. GovernmentͲWideFinancialStatements The governmentͲwide financial statements (i.e. the statement of Net Position and the Statement of Activities) report informationonallofthenonͲfiduciaryactivitiesoftheprimarygovernment.ThegovernmentͲwidefinancialstatements are prepared using the economic resources measurement focus and the accrual basis of accounting. This approach differsfromthemannerinwhichgovernmentalfundfinancialstatementsareprepared.Therefore,governmentalfund financial statements include reconciliations with brief explanations to better identify the relationships between the governmentͲwidestatementsandthestatementsforgovernmentalfunds. ThegovernmentͲwideStatementofActivitiespresentsacomparisonbetweenexpensesandprogramrevenuesforeach segmentofthebusinessͲtypeactivitiesoftheAcademyandforeachgovernmentalprogram.Directexpensesarethose that are specifically associated with a service, program or department and are therefore clearly identifiable to a particularfunction.TheAcademydoesnotallocateindirectexpensestoprograms.Programrevenuesincludecharges paidbytherecipientsofthegoodsorservicesofferedbytheprogramsandgrantsandcontributionsthatarerestricted to meeting the operational or capital requirements of a particular program. Revenues not classified as program revenuesarepresentedasgeneralrevenues.Thecomparisonofprogramrevenuesandexpensesidentifiestheextent towhicheachprogramorfunctionisselffinancingordrawsfromthegeneralrevenuesoftheAcademy.Whenboth restrictedandunrestrictedresourcesareavailableforuse,itistheAcademy’spolicytouserestrictedresourcesfirst.
Ͳ9Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESͲContinued Netpositionshouldbereportedasrestrictedwhenconstraintsplacedonnetposition’suseiseitherexternallyimposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. The Academy first utilizes restricted resources to finance qualifying activities. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excludedfromthegovernmentͲwidefinancialstatements. CashandCashEquivalents The Academy's cash and cash equivalents are considered to be cash on hand, demand deposits and shortͲterm investmentswithmaturitiesofthreemonthsorlessfromthedateofacquisition.TheAcademyreportsitsinvestments inaccordancewithGASBStatementNo.31,AccountingandFinancialReportingforCertainInvestmentsandforExternal Investment Pools and GASB No. 40, Deposit and Investment Risk Disclosures. Under these standards, certain investmentsarevaluedatfairvalueasdetermined byquotedmarketprices orbyestimatedfairvalueswhenquoted marketpricesarenotavailable.Thestandardsalsoprovidethatcertaininvestmentsarevaluedatcost(oramortized cost) when they are of a shortͲterm duration, the rate of return is fixed, and the Academy intends to hold the investment until maturity. The Academy held no investments during the year ended June 30, 2015. State statutes authorize the Academy to invest in bonds and other direct and certain indirect obligations of the U.S. Treasury; certificates of deposit, saving accounts, deposit accounts, and or depository receipts of a bank, savings and loan association,orcreditunion,whichisamemberoftheFederalDepositInsuranceCorporation,FederalSavingsandLoan CorporationorNationalCredit Union Administration,respectively;incommercialpaperratedatthetimeofpurchase withinthethreehighestclassificationsestablishedbynotlessthantwostandardratingservicesandwhichmaturesnot morethan270daysafterthedateofpurchase.TheAcademyisalsoauthorizedtoinvestinU.S.GovernmentorFederal agency obligation repurchase agreements, bankers' acceptances of U.S. banks, and mutual funds composed of investmentsasoutlinedabove. Receivables Receivables at June 30, 2015 consist primarily of state school aid due from the State of Michigan and the federal government.AllreceivablesareexpectedtobefullycollectedinJulyandAugustof2015andareconsideredcurrentfor thepurposesofthesefinancialstatements. PrepaidAssets PaymentsmadetovendorsforservicesthatwillbenefitperiodsbeyondJune30,2015,arerecordedasprepaiditems usingtheconsumptionmethod.Acurrentassetfortheprepaidamountisrecordedatthetimeofthepurchaseandan expenditureisreportedintheyearinwhichservicesareconsumed.
Ͳ10Ͳ
WATERFORDMONTESSORIACADEMY
NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESͲContinued CapitalAssetsandDepreciation Allcapitalassetsarecapitalizedatcost(orestimatedhistoricalcost)andupdatedforadditionsorretirementsduringthe year.TheAcademyfollowsthepolicyofnotcapitalizingassetswithausefullifeoflessthanoneyear.TheAcademy doesnotpossessanyinfrastructureassets. All reported capital assets, with the exception of land, are depreciated. Improvements are depreciated over the remainingusefullivesoftherelatedcapitalassets.DepreciationiscomputedusingthestraightͲlinemethodoverthe followingusefullives: Buildingandimprovements 10–50years Furnitureandequipment 5–15years Computersandsoftware 3–10years AccruedLiabilitiesandLongͲTermObligations Allpayables,accruedliabilitiesandlongͲtermobligationsarereportedinthegovernmentͲwidefinancialstatements.In general,payablesandaccruedliabilitiesthatwillbepaidfromgovernmentalfundsarereportedonthegovernmental fund financial statements regardless of whether they will be liquidated with current resources. However, the nonͲ currentportionofcapitalleasesthatwillbepaidfromgovernmentalfundsarereportedasaliabilityinthefundfinancial statementsonlytotheextentthattheywillbepaidwithcurrent,expendable,availablefinancialresources.Ingeneral, payments made within sixty days after yearͲend are considered to have been made with current available financial resources.OtherlongͲtermobligationsthatwillbepaidfromgovernmentalfundsarenotrecognizedasaliabilityinthe fundfinancialstatementsuntildue. NetPosition Netpositionrepresentsthedifferencebetweenassetsanddeferredoutflows,andliabilitiesanddeferredinflows.Net positionisreportedasrestrictedwhentherearelimitationsimposedontheiruseeitherthroughtheenablinglegislation adoptedbytheAcademyorthroughexternalrestrictionsimposedbycreditors,grantorsorlawsofregulationsofother governments. FundEquity TheAcademyhasadoptedGASB54aspartofitsfiscalyearreporting.TheintentionoftheGASBistoprovideamore structured classification of fund balance and to improve the usefulness of fund balance reporting to the users of the Academy’sfinancialstatements.Thereportingstandardestablishesahierarchyforfundbalanceclassificationsandthe constraintsimposedonthoseresources.
Ͳ11Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESͲContinued GASB54providesfortwomajortypesoffundbalances,whicharenonspendableandspendable.Nonspendablefund balancesarebalancesthatcannotbespentbecausetheyarenotexpectedtobeconvertedtocashortheyarelegallyor contractuallyrequiredtoremainintact.Thiscategorytypicallyincludesprepaiditemsandinventories. Inaddition tononspendablefund balance,GASB54hasprovidedahierarchyofspendablefundbalances,basedona hierarchyofspendingconstraints. a. Restricted fund balance – amounts constrained to specific purposes by their providers (such as grantors, bondholders,andhigherlevelsofgovernment),throughconstitutionalprovisions,orbyenablinglegislation. b. Committedfundbalance–amountsconstrainedtospecificpurposesbytheBoard;tobereportedascommitted, amounts cannot be used for any other purpose unless the Board takes action to remove or change the constraint. c. Assignedfundbalance–amountstheBoardintendstouseforaspecificpurpose;intentcanbeexpressedbythe BoardorbyanofficialorcommitteetowhichtheBoarddelegatestheauthority. d. Unassignedfundbalance–amountsthatareavailableforanypurpose;theseamountsarereportedonlyinthe generalfund. TheAcademyfollowsthepolicythatrestricted,committed,orassignedamountswillbeconsideredtohavebeenspent whenanexpenditureisincurredforpurposesforwhich bothunassignedandrestricted,committed,orassignedfund balancesareavailable. Estimates ThepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStates ofAmericarequiresmanagementtomakeestimatesandassumptionsthataffecttheamountsreportedinthefinancial statementsandaccompanyingnotes.Actualresultsmaydifferfromthoseestimates.
NOTE2ͲSTEWARDSHIP,COMPLIANCEANDACCOUNTABILITY AnnualbudgetsareadoptedonaconsistentbasiswithaccountingprinciplesgenerallyacceptedintheUnitedStatesof Americaandstatelawforthegeneralfund.Allannualappropriationslapseatfiscalyearendandencumbrancesarenot formallyrecorded.
Ͳ12Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE2ͲSTEWARDSHIP,COMPLIANCEANDACCOUNTABILITYͲContinued Thebudgetdocumentpresentsinformationbyfundandfunction.Thelegallevelofbudgetarycontroladoptedbythe governingbodyisthefunctionlevel.StatelawrequirestheAcademytohaveitsbudgetinplacebyJuly1.Expenditures inexcessofamountsbudgetedisaviolationofMichiganLaw.TheAcademyisrequiredbylawtoadoptgeneraland specialrevenuefundbudgets.DuringtheyearendedJune30,2015thebudgetwasamendedinalegallypermissible manner. An analysis of expenditures compared to amounts appropriated is included on page 17 of these financial statements.
NOTE3ͲDEPOSITSANDINVESTMENTS InterestRateRisk Inaccordancewithitsinvestmentpolicy,theAcademywillminimizeinterestraterisk,whichistheriskthatthemarket value of securities in the portfolio will fall due to changes in market interest rates, by; structuring the investment portfoliosothatsecuritiesmaturetomeetcashrequirementsforongoingoperations,therebyavoidingtheneedtosell securities in the open market; and, investing operating funds primarily in shorterͲterm securities, liquid asset funds, money market mutual funds, or similar investment pools and limiting the average maturity in accordance with the Academy'scashrequirements. CreditRisk Statelawlimitsinvestmentsincommercialpaperandcorporatebondstoaprimeorbetterratingissuedbynationally recognizedstatisticalratingorganizations(NRSROs).TheAcademyheldnoinvestmentsduringtheyearendedJune30, 2015. ConcentrationofCreditRisk The Academy will minimize concentration of credit risk, which is the risk of loss attributed to the magnitude of the Academy'sinvestmentinasingleissuer,bydiversifyingtheinvestmentportfoliosothattheimpactofpotentiallosses fromanyonetypeofsecurityorissuerwillbeminimized.TheAcademyheldnoinvestmentsduringtheyearendedJune 30,2015. CustodialCreditRiskͲDeposits Inthecaseofdeposits,thisistheriskthatintheeventofabankfailure,theAcademy'sdepositsmaynotbereturnedto it.AsofJune30,2015,noneoftheAcademy'scashwasexposedtocustodialcreditriskbecauseitwasuninsured.
Ͳ13Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE3ͲDEPOSITSANDINVESTMENTSͲContinued
CustodialCreditRiskͲInvestments
Foraninvestment,thisistheriskthat,intheeventofthefailureofthecounterparty,theAcademywillnotbeableto recoverthevalueofitsinvestmentsorcollateralsecuritiesthatareinthepossessionofanoutsideparty.
The Academy will minimize custodial credit risk, which is the risk of loss due to the failure of the security issuer or backer,by;limitinginvestmentstothetypesofsecuritiesallowedbylaw;andpreͲqualifyingthefinancialinstitutions, broker/dealers,intermediariesandadvisorswithwhichtheAcademywilldobusiness.
ForeignCurrencyRisk
TheAcademyisnotauthorizedtoinvestininvestmentswhichhavethistypeofrisk.
NOTE4ͲDUEFROMOTHERGOVERNMENTALUNITS
Amountsduefromothergovernmentalunitsconsistofthefollowing:
Statesources
$224,226
NOTE5ͲCAPITALASSETS
CapitalassetactivityoftheAcademy'sgovernmentalactivitieswasasfollows:
Disposals
Balance June30,2015
$42,911 24,053
$Ͳ Ͳ
$152,356 26,006
111,398
66,964
Ͳ
178,362
10,032 179
28,272 5,512
Ͳ Ͳ
38,304 5,691
SubͲtotal
10,211
33,784
Ͳ
43,995
Totalnetcapitalassets
$101,187
$33,180
$Ͳ
$134,367
Capitalassetssubjecttodepreciation Furniture Equipment SubͲtotal Accumulateddepreciation Furniture Equipment
Balance July1,2014
Additions
$109,445 1,953
Depreciation and amortization expense was not charged to activities as the Academy considers its assets to impact multipleactivitiesandallocationisnotpractical.
Ͳ14Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE6–NOTESPAYABLE NotespayableasofJune30,2015canbesummarizedasfollows:
LoanInformation
StateAidNote13/14
StateAidNote14/15
Interest Rate
Maturity Date
3%
July,2014
3%
July,2015
Other Paidinfull IssuedtoprovidetheAcademywithoperating fundsandissecuredbyfuturestateaid paymentsandgeneralfunds.
LoanActivity
StateAidNote13/14 StateAidNote14/15
Balance July1,2014
Additions
Retirements andPayments
Balance June30,2015
$41,083 Ͳ
$Ͳ 175,000
$41,083 157,263
$Ͳ 17,737
$41,083
$175,000
$198,346
$17,737
NOTE7ͲACCRUEDEXPENSES Accruedexpensesmaybesummarizedasfollows:
PurchasedservicesͲpayrollandbenefits Universityoversightfee Other
$38,158 6,312 9,420
Totalaccruedexpenses
$53,890
Ͳ15Ͳ
WATERFORDMONTESSORIACADEMY NOTESTOFINANCIALSTATEMENTSͲContinued FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
NOTE8–OPERATINGLEASE LeaseInformation
FacilityLease
EquipmentLease
Maturity Date
Approximate Payment
June,2018
Atleast $12,0000 monthly
August,2018
$165monthly
Other Rentisdeterminedannuallybasedonatiered enrollmentschedule.Rentpaymentsarenottobe lessthan$12,000permonth.Rentpaymentforthe 2014Ͳ2015schoolyearwereapproximately$13,800 permonth. Academyalsopaysapercopychargeandforsupplies
Theapproximateamountofleaseobligationscomingdueduringthenextfouryearsareasfollows:
2016 2017 2018 2019
Facilities
Equipment
$144,000 144,000 144,000 Ͳ
$1,980 1,980 1,980 330
TotalrentexpenseincludedinthestatementofactivitiesfortheyearendedJune30,2015amountedtoapproximately $171,720.
NOTE9ͲRISKMANAGEMENT The Academy is exposed to various risks of loss related to property loss, torts, errors and omissions and employee injuries (worker’s compensation), as well as medical benefits provided to employees. The Academy has purchased commercialinsuranceforallclaims.Settledclaimsrelatingtothecommercialinsurancehavenotexceededtheamount ofinsurancecoveragesincetheAcademy’sinception.
Ͳ16Ͳ
SUPPLEMENTALINFORMATION
WATERFORDMONTESSORIACADEMY REQUIREDSUPPLEMENTALINFORMATION BUDGETARYCOMPARISONSCHEDULE–GENERALFUND FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport Original Final Budget Budget Actual
Revenues Localsources Statesources Federalsources
Variance
$132,800 1,189,360 106,000
$154,800 1,173,388 158,582
$153,644 1,183,503 163,339
$(1,156) 10,115 4,757
1,428,160
1,486,770
1,500,486
13,716
714,078 18,550
622,460 17,606
549,649 14,762
(72,811) (2,844)
12,000 12,000 186,056 83,860 13,000 298,250 27,000 21,000 Ͳ
18,500 12,000 186,575 86,380 2,700 266,186 12,500 12,821 Ͳ
20,341 58,793 210,158 50,300 2,900 255,923 13,779 Ͳ 66,964
1,841 46,793 23,583 (36,080) 200 (10,263) 1,279 (12,821) 66,964
1,385,794
1,237,728
1,243,569
5,841
Excess(deficiency)ofrevenues overexpenditures
42,366
249,042
256,917
7,875
FundbalanceͲJuly1,2014
89,676
89,676
89,676
Ͳ
FundbalanceͲJune30,2015
$ 132,042
$ 338,718
$346,593
$ 7,875
Totalgovernmentalfundrevenues Expenditures Instruction Basicprograms Addedneeds Supportservices Pupilsupportservices Instructionalstaffsupportservices Generaladministration Schooladministration Businesssupportservices Operationsandmaintenance Centralsupportservices CustodyandCareofChildren Capitaloutlay Totalgovernmental fundexpenditures
Ͳ17Ͳ
WATERFORDMONTESSORIACADEMY SCHEDULEOFREVENUES–GENERALFUND FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
LocalSources Otherlocalrevenues
$153,644
StateSources Atrisk Specialeducation Stateaid
4,099 2,942 1,176,462
Totalstatesources
1,183,503
FederalSources IDEA TitleIIA Otherprogramrevenue
9,287 4,052 150,000
Totalfederalsources
163,339
Totalgeneralfundrevenues
$1,500,486
Ͳ18Ͳ
WATERFORDMONTESSORIACADEMY SCHEDULEOFEXPENDITURES–GENERALFUND FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
BasicPrograms Purchasedservices Suppliesandmaterials NonͲdepreciablecapitalassets Otherexpenditures
$454,802 77,921 270 16,656
Totalbasicprograms
549,649
AddedNeeds Purchasedservices
14,762
PupilSupportServices Healthservices Psychologicalservices Speechpathologyandaudiology Socialworkservices
10,403 4,145 5,133 660
Totalpupilsupportservices
20,341
InstructionalStaffSupportServices Purchasedservices NonͲdepreciablecapitalassets
47,193 11,600
Totalinstructionalstaffsupportservices
58,793
GeneralAdministration Purchasedservices Managementfees Universityoversight Otherexpenditures
41,214 128,019 34,715 6,210
Totalgeneraladministration
210,158
Ͳ19Ͳ
WATERFORDMONTESSORIACADEMY SCHEDULEOFEXPENDITURES–GENERALFUNDͲCONTINUED FORTHEYEARENDEDJUNE30,2015 SeeIndependentAuditor’sReport
SchoolAdministration Purchasedservices Rentals Suppliesandmaterials Otherexpenditures
25,814 5,969 15,879 2,638
Totalschooladministration
50,300
BusinessSupportServices Otherexpenditures
2,900
OperationsandMaintenance Purchasedservices Repairsandmaintenance Rentals Otherpurchasedservices Suppliesandmaterials NonͲdepreciablecapitalassets Otherexpenditures
49,349 18,234 165,750 405 21,181 914 90
Totaloperationsandmaintenance
255,923
CentralSupportServices Purchasedservices Repairsandmaintenance Suppliesandmaterials
10,460 2,211 1,108
Totalcentralsupportservices
13,779
CapitalOutlay
66,964
Totalgeneralfundexpenditures
$1,243,569
Ͳ20Ͳ
