Summary

Summary of Report on Financial Statements

The Orange Avenue 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 Orange Avenue Charter School, Inc.

Summary of 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 below.

Summary of Audit Findings

Public Meetings

School records indicate that the Board of the Orange Avenue Charter School, Inc., held 25 meetings during the 1997-98 fiscal year. School records, however, did not include minutes for 7 of these meetings, contrary to the requirements of Section 286.011, Florida Statutes. We recommend that the School maintain minutes of all public meetings for public inspection.

Employee Fingerprinting

During the 1997-98 fiscal year, the School employed 27 individuals as teachers, teacher aides, and substitute teachers and 6 individuals as receptionists and maintenance workers. Our review of School personnel files disclosed that documentation was not maintained to evidence that 26 of the 33 employees were fingerprinted in accordance with Section 231.02(2)(a), Florida Statutes. 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 compliance with law.

Procedures and Practices

We noted numerous financial and record keeping difficulties during the 1997-98 fiscal year. School personnel indicated that formal operating procedures and practices had not been developed and reduced to writing. We recognize that the School had limited staff and that the areas to be covered by established practices are much more limited than in a larger organization. Accordingly, we have discussed with School personnel specific areas in which developing and documenting procedures and practices may enhance the effectiveness and efficiency of the School’s internal control over operations and may preclude future financial and record keeping difficulties such as those experienced during the 1997-98 fiscal year. Examples of these financial and record keeping difficulties included bank overdrafts, vendor payments for which supporting documentation was not maintained, and payment of penalties for the late payment of withholding taxes to the Internal Revenue Service.

Other Questioned Transactions

During the course of our audit of the School, we became aware of various allegations regarding questionable transactions involving the former principal. The Board voted to terminate the former principal’s employment contract on April 13, 1998. School personnel indicated that they have reported the allegations involving the former principal to a local law enforcement agency for investigation. As of October 26, 1998, the investigation by the law enforcement agency was still pending. We recommend the School obtain documentation to support the School purpose of the questioned expenditures described in this audit report or seek repayment from the former principal.

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 affected, 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 Treasurer’s written response to the audit findings and recommendations included in audit report No. 13388 is presented as Exhibit E.