Summary

The First Collier County Charter School, Inc., began operating in fiscal year 1997-98 pursuant to approval of the collier County District School Board. On June 4, 1998, the Collier County District School Board (District) took action to terminate the School's Charter as of September 3, 1998. Subsequently, the School ceased to function as an ongoing operation, management of the School has been disbanded, and no financial statements were prepared by management for the fiscal year ended June 30, 1998. Accordingly, our ability to obtain information and representations from management relating to certain actions and/or transactions of the School was limited due either to a lack of records or the availability of School personnel. Specific instances are noted in the findings below. Additionally, since the School has been disbanded, our findings do not contain recommendations for management.

Summary of Findings

We performed specific agreed-upon procedures related to the First Collier County Charter School, Inc. (School), as of and for the fiscal year ended June 30, 1998, and also, including certain transactions through December 15, 1998. The procedures and associated findings are as follows:

• Procedure.   Based on information provided from the Collier County District School Board’s (District) records, determine if amounts remitted by the District were deposited into the bank accounts of the School.

Finding:   District records indicate that $469,058 was remitted to the School during the 1997-98 fiscal year. Records made available for our review indicated that these funds were deposited into the School’s bank accounts.

• Procedure.  Determine if disbursements from the School’s bank accounts were supported by canceled checks, invoices, and other appropriate documentation indicating an appropriate School purpose, and that such disbursements were approved by School management.

Finding:  We selected 60 checks to determine if documentation was available to support the disbursements from the School’s bank accounts. Three of the selected checks were missing and there was no documentation presented for our review to evidence that the checks had been issued. For the remaining 57 checks totaling $34,488.43, although requested, we were not provided with the canceled checks for 3 of the disbursements made in June 1998 totaling $8,676.81, nor invoices, billings, or other support for 16 of the disbursements totaling $6,858.85. Bank statements (including canceled checks) for periods subsequent to June 1998 were not provided for our review. Although in most instances the payees on the canceled checks made available to us appeared to be businesses or persons who could have been doing valid business with the School, in the absence of documentation supporting these disbursements the School’s records did not evidence the purpose of these disbursements. Generally, approval of purchases by School management was evidenced only by the signature on the check. In most instances, the records did not evidence signatures for acceptance of goods or services. In a letter dated January 14, 1999, to the School’s President, District personnel requested that any remaining documents that relate to the School program, including but not limited to banks statements, bank reconciliations, vouchers, supporting documentation for disbursements correspondence, etc., be provided to the District.

• Procedure. Determine if records maintained by the School and transferred to the District evidenced that personnel background checks were completed as required by Section 231.02, Florida Statutes.

Finding: Section 231.02, Florida Statutes, requires background checks for employees who will have direct contact with students. Records made available to us indicated that there were at least 24 individuals employed by the School who would be expected to have direct contact with students and for whom background checks would be required. Records provided for our review indicated that background checks were performed for 7 employees; however, School records did not evidence that background checks were performed for the remaining 17 employees.

• Procedure. From records maintained by the School and transferred to the District, determine if the School determined that teachers were deemed qualified as required by Sections 231.15 and 231.17, Florida Statutes.

Finding: We reviewed the personnel records of 14 individuals who served in instructional functions during the 1997-98 fiscal year. Records provided for our review did not include valid teaching certificates or other documentation evidencing the basis upon which 8 of the individuals were determined to be qualified or that the individuals’ qualifications were verified by School staff.

• Procedure. Determine if records supporting student attendance at the School were transferred to the District.

Finding: We were informed by District personnel that personnel at the District’s Golden Terrace Elementary School maintained student attendance for the School and, in turn, reported Full-Time Equivalent (FTE) student information to the District.

• Procedure. Determine if unencumbered funds of the School and District property and improvements, furnishings, and equipment purchased with public funds were transferred to the District, as required by Section 228.056(10)(e), Florida Statutes.

Finding: School records made available to us indicated that approximately $4,700 (bank balance less outstanding checks) remained in the School bank account at June 30, 1998. Also, the District gave the School the authority to sell a school bus that had been previously bought from the Collier County District School Board for $5,000. However, records made available to us did not indicate the disposition of the school bus. District records indicate that a check in the amount of $3,623.08 was received from the School on December 15, 1998. However, records supporting transactions subsequent to June 30, 1998, were not made available for our review. In our audit report on the Collier County District School Board for the fiscal year ended June 30, 1998, report No. 13361, we have recommended that the District continue its efforts to recover the unencumbered funds and determine the disposition of the school bus.

• Procedure.  Determine if withholding and payroll taxes, along with any required Florida Retirement System (FRS) contributions, were properly remitted.

Finding:  School records made available for our review indicated that Federal income tax and social security taxes withheld from employee salaries and matching social security taxes for the quarters ended September 30, 1997, December 31, 1997, and March 31, 1998, were remitted to the Internal Revenue Service. Although the School provided evidence that an Employer’s Quarterly Federal Tax Return (Form 941) for the quarter ended June 30, 1998, had been completed and a check issued on June 12, 1998, for the amount ($8,513.19) of the taxes due, we were not provided with the canceled check for this payment.

We also noted that the withholding and payroll taxes were not timely remitted. Unless an entity’s tax liability is less than $500 per quarter, it is required to remit withholding and payroll taxes monthly. The monthly remittance is due by the fifteenth of the following month. Although the School’s quarterly tax liability exceeded $500, remittances were made quarterly rather than monthly. The three remittances for which we were provided documentation were remitted approximately one month after the end of each quarter for which the Form 941 related. Under these conditions, the School’s withholding and payroll tax remittances may be subject to late penalties.

Finding:  The "Addendum to Annual Contract of Employment for Instructional Personnel of First Collier County Charter School, Inc." provided that the School shall be a public employer and teachers will be eligible to participate in the FRS. School records made available for our review did not indicate that any contributions had been sent to the FRS by the School on behalf of any employee.

As previously noted, the School has been disbanded. There was no written response to the findings for report No. 13409.