Summary

Financial Statements

We found that the Charter School’s general purpose financial statements fairly presented, in all material respects, its financial position as of June 30, 1997, and the results of its operations for the fiscal year then ended. (See paragraphs 11 through 14.)

Compliance Matters

The results of our tests of compliance indicated that, with respect to the items tested, the Charter School had generally complied with the significant provisions of laws, administrative rules, regulations, contracts and grants, and other guidelines governing those programs, activities, and functions and classes of transactions within the scope of audit, except as follows: (See paragraphs 16 through 22.)

• Charter School records indicated that the Board of the Bethel Empowerment Foundation, Inc., held 12 meetings during the 1996-97 fiscal year. Charter School records did not indicate that the Board meetings were advertised or that reasonable notice of the meetings was otherwise provided. Additionally, we noted that the minutes were not signed by the secretary to the Board and the Board Chairman documenting the Board’s acceptance. (See paragraphs 17 and 18.)
• The Charter School received Federal reimbursements for school lunches during the audit period totaling $7,020. Title 7, Section 210.10, Code of Federal Regulations, requires a participating school food authority to serve meals which meet certain minimum meal pattern requirements. Charter School records provided for our review did not evidence that meals served met the minimum meal pattern requirements during the 1996-97 fiscal year. In consultation with the Florida Department of Education, Charter School personnel are in the process of implementing procedures to document compliance with the Federal minimum meal pattern requirements during the 1997-98 fiscal year. (See paragraphs 19 through 21.)
• The charter school contract between the Leon County District School Board and The Bethel Empowerment Foundation, Inc., provides that the Charter School shall operate as a public employer for the purposes of retirement. We noted that during the 1996-97 fiscal year the Charter School did not make contributions to the Florida Retirement System for its covered employees. Rather, we were informed that the Board intends to enter into agreements with its 1996-97 fiscal year covered employees to compensate the individuals in an amount equal to the Florida Retirement System contributions. (See paragraph 22.)

Internal Control

School personnel have established and implemented procedures which generally provide for internal control of School operations; however, our examination of the Charter School’s internal control and its operation disclosed a certain deficiency which we considered to be a "reportable condition." Although the reportable condition noted is not considered to be a material weakness in the Charter School’s internal control, this condition should be promptly addressed by Charter School management. The specific deficiency noted was as follows: (See paragraphs 23 through 28.)

• Established procedures and practices provide guidance for employees in carrying out their duties and responsibilities and in conducting the day-to-day operations of the Charter School. Charter School personnel indicated that formal operating procedures and practices had not been developed and reduced to writing. Such procedures and practices may be beneficial to address such matters as budget preparation and amendment; management reporting; accounting system and functions; accountability and control of tangible personal property; the receipt and deposit of funds; record retention and filing; and the acquisition of goods and services. The effective implementation of these enhanced procedures may preclude future financial and record keeping difficulties such as those experienced during the 1996-97 fiscal year which included the payment of $3,539.12 in tax penalties to the Internal Revenue Service for the late payment of withholding taxes; eight payments totaling $10,374.63 for which invoices supporting the disbursements could not be located; and deficit unreserved fund balances reported in the General and the Special Revenue – School Food Service Funds at June 30, 1997, totaling $1,394.57 and $9,518.45, respectively. (See paragraphs 26 through 28.)