Summary

Summary of Report on Financial Statements

The Rays of Hope Charter School, Inc., has prepared its financial statements for the fiscal year ended June 30, 1998, in accordance with prescribed financial reporting standards.

Because of the unprecedented nature of the year 2000 issue, we do not provide assurance with regard to the ultimate impact of the year 2000 issue on the Rays of Hope Charter School, Inc.

Summary Report on Compliance and Internal Control

The School generally complied with significant provisions of laws, administrative rules, regulations, contracts and grants, and other guidelines. The School has established and implemented procedures which generally provide for internal control of School operations. We did note compliance and internal control findings and other matters which are summarized in the Summary of Audit Findings section below.

Summary of Audit Findings

Employee Fingerprinting

Our review disclosed that the required fingerprinting process including the related background checks had not been completed for three School employees. We recommend that the School enhance procedures to provide for the fingerprinting of all employees as required by law and that such procedures provide for the retention of appropriate documentation to evidence completion of the background review.

Public Retirement Participation

The Board of Directors of the School approved a resolution to participate in the Florida Retirement System (FRS). Our tests of FRS contributions made during the 1997-98 fiscal year disclosed that the School had not made all required contributions to the FRS. In response to our inquiry, School management indicated that actions had been taken to withdraw from the FRS during the 1997-98 fiscal year. As of October 5, 1998, the School had not received a notice of final determination on its request from the Florida Division of Retirement. We recommend that the Board of Directors continue its efforts in resolving the School’s participation in the FRS.

Procedures and Practices

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 School. School personnel indicated that operating procedures and practices for certain areas had not been developed and reduced to writing. Such procedures and practices may be beneficial to address such matters as budget preparation and amendment; accounting system and functions; accountability and control of tangible personal property; the receipt, deposit, and disbursement of funds; and the acquisition of goods and services, including the awarding of contracts. The effective implementation of the procedures and practices also would enhance internal control to provide a mechanism for planning and monitoring the School’s financial position and would assist the School in reversing the deficit unreserved fund balance of $6,126.97 reported in the General Fund at June 30, 1998.

Personnel Administration

Our review disclosed that the personnel files for two instructional employees hired during the 1997-98 fiscal year did not include valid teaching certificates or other documentation evidencing the basis upon which these employees were determined to be qualified. Additionally, our review disclosed that the personnel files did not contain transcripts or other records documenting the verification of the educational background for eight employees. We recommend that the School enhance procedures to document of record that employees who serve in an instructional capacity are certified under State law or otherwise qualified to serve in those positions.

Year 2000

Unless corrected before January 1, 2000, many computer applications will either stop working or, worse, begin producing erroneous results on or before that day. The year 2000 problem is a two-digit-year representation problem. Although the year 2000 problem’s impact on the operations of the School may be limited due to the size of the School’s operations and the limited number of computer resources effected, School management should take appropriate action to ensure that existing computer resources and any computer resources purchased in the future are year 2000 compliant.

The President’s written response to the audit findings and recommendations included in audit report No. 13355 is presented as Exhibit E.