CAMINO NUEVO CHARTER ACADEMY Early Childhood Center Camino Nuevo Charter Academy #1 – Burlington Camino Nuevo Charter Academy #2 – Kayne Siart Camino Nuevo Charter Academy #3 – Jose A. Castellanos/ Jane B. Eisner Camino Nuevo Charter Academy #4 – Sandra Cisneros Learning Academy Camino Nuevo High School #1 – Miramar High School Camino Nuevo High School #2 – Dalzell Lance High School Independent Auditor’s Report and Financial Statements For the Year Ended June 30, 2016
CAMINO NUEVO CHARTER ACADEMY TABLE OF CONTENTS June 30, 2016 Independent Auditor's Report ..................................................................................................................... 1 Statement of Financial Position .................................................................................................................. 3 Statement of Activities ................................................................................................................................ 5 Statement of Cash Flows ............................................................................................................................ 7 Statement of Functional Expenses .............................................................................................................. 9 Notes to the Financial Statements ............................................................................................................. 10 Local Education Agency Organization Structure ..................................................................................... 22 Schedule of Instructional Time ................................................................................................................. 24 Schedule of Average Daily Attendance .................................................................................................... 25 Reconciliation of Annual Financial Report with Audited Financial Statements ...................................... 26 Schedule of Expenditures of Federal Awards ........................................................................................... 27 Notes to Supplementary Information ........................................................................................................ 28 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.................................................................................................................................... 29 Independent Auditor's Report on Compliance for Each Major Program; and Report on Internal Control Over Compliance Required by the Uniform Guidance............................................................................. 31 Independent Auditor's Report on State Compliance ................................................................................. 33 Schedule of Findings and Questioned Costs............................................................................................. 35 Status of Prior Year Findings and Questioned Costs ................................................................................ 37
INDEPENDENT AUDITOR’S REPORT
Board of Directors Camino Nuevo Charter Academy Los Angeles, CA Report on the Financial Statements We have audited the accompanying financial statements of Camino Nuevo Charter Academy (CNCA), a California nonprofit public benefit corporation, which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, cash flows and functional expenses for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an 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 estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
-1-
Board of Directors Camino Nuevo Charter Academy
Opinion In our opinion, the financial statements referred to on page one present fairly, in all material respects, the financial position of CNCA as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Supplementary Information Our audit was conducted for the purpose of forming an opinion on CNCA’s financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The accompanying supplementary schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated October 17, 2016 on our consideration of CNCA’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering CNCA’s internal control over financial reporting and compliance.
VICENTI, LLOYD & STUTZMAN LLP Glendora, CA October 17, 2016 -2-
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF FINANCIAL POSITION June 30, 2016
Early Childhood
1st page CNCA #1
Center
CNCA #2
CNCA #3
Total
ASSETS CURRENT ASSETS: Cash and cash equivalents
$
Accounts receivable Due from others Prepaid expenses and other assets Total current assets
286,730 $
3,985,041 $
1,907,560 $
2,214,074 $
8,393,405
8,313
462,749
350,515
494,688
-
-
-
1,794
1,316,265 1,794
13,161
52,384
10,039
30,954
106,538
308,204
4,500,174
2,268,114
2,741,510
9,818,002
-
-
-
2,728,867
2,728,867
-
-
-
2,728,867
2,728,867 12,579,941
NON-CURRENT ASSETS: Notes receivable Total non-current assets PROPERTY, PLANT AND EQUIPMENT: Land
-
-
12,579,941
-
Construction in progress
-
53,462
-
-
53,462
3,983
104,692
25,116,171
101,962
25,326,808
Leasehold improvements
19,166
728,800
252,181
-
1,000,147
Equipment and computers
25,361
517,585
746,104
120,992
1,410,042
Furniture
30,271
118,161
109,244
2,470
260,146
(48,474)
(1,093,858)
(1,233,638)
(40,785)
(2,416,755)
30,307
428,842
37,570,003
184,639
38,213,791
Buildings
Accumulated depreciation Total property, plant and equipment Total assets
$
338,511 $
4,929,016 $
39,838,117 $
5,655,016 $ 50,760,660
LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable
25,596
264,636
172,996
Accrued liabilities
12,756
84,351
87,593
88,872
273,572
-
-
-
1,214
1,214
Due to others Current portion long-term debt Total current liabilities
204,009 $
667,237
-
-
353,482
-
353,482
38,352
348,987
614,071
294,095
1,295,505
-
-
12,140,114
-
12,140,114
38,352
348,987
12,754,185
294,095
13,435,619
247,808
3,888,885
1,776,496
2,143,065
8,056,254
30,307
428,842
25,076,407
2,913,506
28,449,062
NON-CURRENT LIABILITIES: Loans payable Total liabilities NET ASSETS: Unrestricted Undesignated Property, plant and equipment, net related debt
22,044
221,239
191,433
247,155
681,871
Total unrestricted
300,159
4,538,966
27,044,336
5,303,726
37,187,187
Temporarily restricted
-
41,063
39,596
57,195
137,854
300,159
4,580,029
27,083,932
5,360,921
37,325,041
338,511 $
4,929,016 $
39,838,117 $
5,655,016 $ 50,760,660
Designated/deferred maintenance
Total net assets Total liabilities and net assets
$
The accompanying notes are an integral part of these financial statements.
-3-
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF FINANCIAL POSITION (continued) June 30, 2016
1st page Total
Home Support CNCA #4
CNHS #1
CNHS #2
Office
Total
ASSETS CURRENT ASSETS: Cash and cash equivalents
$
Accounts receivable Due from others Prepaid expenses and other assets Total current assets
8,393,405 $ 1,178,293 $
2,764,777 $
670,970 $
227,778 $
13,235,223
1,316,265
336,386
153,089
314,251
-
1,794
-
-
-
1,178
2,119,991 2,972
106,538
6,926
4,555
52,914
93,676
264,609
9,818,002
1,521,605
2,922,421
1,038,135
322,632
15,622,795
2,728,867
-
-
-
-
2,728,867
2,728,867
-
-
-
-
2,728,867 16,120,693
NON-CURRENT ASSETS: Notes receivable Total non-current assets PROPERTY, PLANT AND EQUIPMENT: Land Construction in progress Buildings
12,579,941
-
-
-
3,540,752
53,462
-
-
-
-
53,462
25,326,808
20,852
21,875,667
69,109
299,419
47,591,855
Leasehold improvements
1,000,147
4,979
-
506,876
374,965
1,886,967
Equipment and computers
1,410,042
187,621
4,322
722,297
177,697
2,501,979
Furniture
260,146
Accumulated depreciation Total property, plant and equipment
15,639
2,659
278,444
(2,416,755)
(30,148)
-
(1,642,738)
(663,237)
(280,459)
(5,033,337)
38,213,791
183,304
20,237,251
650,684
4,115,033
63,400,063
$ 50,760,660 $ 1,704,909 $
Total assets
-
23,159,672 $ 1,688,819 $ 4,437,665 $
81,751,725
LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable
$
Accrued liabilities Due to others Current portion long-term debt Total current liabilities
667,237
201,694
428,763
154,862
273,572
97,459
45,437
99,715
189,466
202,298 $
1,654,854 705,649
1,214
-
-
-
-
1,214
353,482
-
268,198
-
-
621,680
1,295,505
299,153
742,398
254,577
391,764
2,983,397
12,140,114
-
10,148,913
-
-
22,289,027
13,435,619
299,153
10,891,311
254,577
391,764
25,272,424
8,056,254
977,691
2,294,113
618,838
(226,339)
11,720,557
28,449,062
183,304
9,820,140
650,684
4,115,033
43,218,223
NON-CURRENT LIABILITIES: Loans payable Total liabilities NET ASSETS: Unrestricted Undesignated Property, plant and equipment, net related debt
681,871
197,832
133,577
131,870
157,207
1,302,357
Total unrestricted
37,187,187
1,358,827
12,247,830
1,401,392
4,045,901
56,241,137
Temporarily restricted
137,854
46,929
20,531
32,850
-
238,164
37,325,041
1,405,756
12,268,361
1,434,242
4,045,901
56,479,301
Designated/deferred maintenance
Total net assets Total liabilities and net assets
$ 50,760,660 $ 1,704,909 $
23,159,672 $ 1,688,819 $ 4,437,665 $
The accompanying notes are an integral part of these financial statements.
-4-
81,751,725
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF ACTIVITIES For the Year Ended June 30, 2016
Early Childhood CNCA #1 Center
CNCA #2
CNCA #3
1st page Total
UNRESTRICTED NET ASSETS REVENUES: State revenue: State aid Other state revenue Federal revenue: Grants and entitlements Local revenue: In-lieu property tax revenue Contributions Interest income Other revenue
$
- $ 3,907,475 $ 470,651 1,280,459
3,802,697 $ 5,177,297 $ 12,887,469 838,157 1,348,864 3,938,131
16,327
1,050,482
616,305
1,000,667
2,683,781
21,352 178,804
1,041,577 49,014 270,285
1,051,969 1,182,717 109,678
1,430,060 32,822 13,872 95,549
3,523,606 1,285,905 13,872 654,316
687,134
7,599,292
7,601,523
9,099,131
24,987,080
-
-
-
-
-
687,134
7,599,292
7,601,523
9,099,131
24,987,080
EXPENSES: Program services Management and general Fundraising
543,956 64,724 -
6,354,236 803,924 -
5,896,115 691,670 -
7,502,233 1,005,354 -
20,296,540 2,565,672 -
Total expenses
608,680
7,158,160
6,587,785
8,507,587
22,862,212
78,454
441,132
1,013,738
591,544
2,124,868
TEMPORARILY RESTRICTED NET ASSETS Other state revenue Net assets released from restriction -
41,063 -
39,596 -
57,195 -
137,854 -
Change in temporarily restricted net assets
-
41,063
39,596
57,195
137,854
78,454 221,705
482,195 4,097,834
1,053,334 26,030,598
648,739 4,712,182
2,262,722 35,062,319
Total unrestricted revenues Net assets released from restriction Total unrestricted revenues and net assets released from restriction
Change in unrestricted net assets
Change in total net assets Net assets at beginning of the year Net assets at end of the year
$
300,159 $ 4,580,029 $ 27,083,932 $ 5,360,921 $ 37,325,041
The accompanying notes are an integral part of these financial statements.
-5-
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF ACTIVITIES (continued) For the Year Ended June 30, 2016
1st page Total
CNCA #4
CNHS #1
Home Support Office
CNHS #2
Total
UNRESTRICTED NET ASSETS REVENUES: State revenue: State aid Other state revenue Federal revenue: Grants and entitlements Local revenue: In-lieu property tax revenue Contributions Interest income Other revenue
$ 12,887,469 $ 4,141,206 $ 2,559,354 $ 3,804,089 $ 3,938,131 947,937 373,882 932,125
- $ 23,392,118 6,192,075
2,683,781
683,754
386,176
550,393
-
4,304,104
3,523,606 1,285,905 13,872 654,316
1,156,391 35,241 54,583
582,493 43,902 32,445
848,977 40,984 60,734
741,042 75,327 100,977
6,111,467 2,147,074 89,199 903,055
24,987,080
7,019,112
3,978,252
6,237,302
917,346
43,139,092
-
-
-
-
11,300
11,300
24,987,080
7,019,112
3,978,252
6,237,302
928,646
43,150,392
20,296,540 2,565,672 -
6,247,708 779,612 -
3,540,987 614,237 -
4,799,479 670,442 -
485,309 394,894 264,348
35,370,023 5,024,857 264,348
Total expenses
22,862,212
7,027,320
4,155,224
5,469,921
1,144,551
40,659,228
Change in unrestricted net assets
2,124,868
Total unrestricted revenues Net assets released from restriction Total unrestricted revenues and net assets released from restriction EXPENSES: Program services Management and general Fundraising
TEMPORARILY RESTRICTED NET ASSETS Other state revenue 137,854 Net assets released from restriction Change in temporarily restricted net assets Change in total net assets Net assets at beginning of the year Net assets at end of the year
(8,208)
(176,972)
767,381
(215,905)
2,491,164
46,929 -
20,531 -
32,850 -
(11,300)
238,164 (11,300)
137,854
46,929
2,262,722 35,062,319
38,721 1,367,035
20,531 (156,441) 12,424,802
32,850
(11,300)
226,864
800,231 634,011
(227,205) 4,273,106
2,718,028 53,761,273
$ 37,325,041 $ 1,405,756 $ 12,268,361 $ 1,434,242 $ 4,045,901 $ 56,479,301
The accompanying notes are an integral part of these financial statements.
-6-
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF CASH FLOWS For the Year Ended June 30, 2016
Early Childhood Center CASH FLOWS from OPERATING ACTIVITIES: Change in net assets Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation (Increase) decrease in operating assets: Accounts receivable Due from others Prepaid expenses and other assets Increase (decrease) in operating liabilities: Accounts payable and accrued liabilities Due to others
$
Net cash provided (used) by operating activities
CNCA #1
78,454 $
CNCA #2
482,195 $
1st page Total
CNCA #3
1,053,334 $
648,739 $
2,262,722
3,110
56,799
532,441
22,514
614,864
(1,728) (571)
(19,643) 3,107 4,395
134,495 (1,429)
(171,763) (1,388) 7,030
(58,639) 1,719 9,425
13,038 -
(216,917) -
(1,423,601) -
(71,839) (11,384)
(1,699,319) (11,384)
92,303
309,936
421,909
1,119,388
295,240
CASH FLOWS from INVESTING ACTIVITIES: Purchase of property, plant and equipment
-
(126,093)
(2,735,209)
(125,248)
(2,986,550)
Net cash provided (used) by investing activities
-
(126,093)
(2,735,209)
(125,248)
(2,986,550)
CASH FLOWS from FINANCING ACTIVITIES: Payments of Prop 1D funding
-
-
Repayment of debt
-
-
(3,199,719)
-
(3,199,719)
-
-
(3,199,719)
-
(3,199,719)
92,303 194,427
183,843 3,801,198
(5,639,688) 7,547,248
296,661 1,917,413
(5,066,881) 13,460,286
Net cash provided (used) by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
$
286,730 $
3,985,041 $
SUPPLEMENTAL CASH FLOW DISCLOSURE: Cash paid for interest
$
- $
- $
-
-
1,907,560 $ 2,214,074 $
-
$
The accompanying notes are an integral part of these financial statements.
-7-
-
-
$
8,393,405
-
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF CASH FLOWS (continued) For the Year Ended June 30, 2016
1st page Total CASH FLOWS from OPERATING ACTIVITIES: Change in net assets Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation (Increase) decrease in operating assets: Accounts receivable Due from others Prepaid expenses and other assets Increase (decrease) in operating liabilities: Accounts payable and accrued liabilities Due to others
$
CNCA #4
2,262,722 $
CNHS #1
38,721 $
Home Support Office
CNHS #2
(156,441) $
800,231 $
Total
(227,205) $ 2,718,028
614,864
24,107
547,756
60,853
45,184
(58,639) 1,719 9,425
(166,464) 7,846
(93,316) 2,169
12,919 1,570
105,816 (1,078) (4,667)
(1,699,319) (11,384)
50,635 -
363,998 (4,804)
(8,087) -
128,395 -
(1,164,378) (16,188)
Net cash provided (used) by operating activities
1,119,388
(45,155)
659,362
867,486
46,445
2,647,526
CASH FLOWS from INVESTING ACTIVITIES: Purchase of property, plant and equipment
(2,986,550)
(177,254)
-
(481,950)
(29,521)
(3,675,275)
(2,986,550)
(177,254)
-
(481,950)
(29,521)
(3,675,275)
Net cash provided (used) by investing activities CASH FLOWS from FINANCING ACTIVITIES: Payments of Prop 1D funding
-
Proceeds from notes payable Net cash provided (used) by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
-
(3,199,719)
-
(5,066,881) 13,460,286 $
-
(3,199,719)
8,393,405 $
(222,409) 1,400,702
(262,938) (262,938) 396,424 2,368,353
1,178,293 $ 2,764,777 $
1,292,764 (199,684) 641 16,343
-
-
(262,938)
-
-
(3,199,719)
-
-
(3,462,657)
385,536 285,434
16,924 210,854
(4,490,406) 17,725,629
670,970 $
227,778 $ 13,235,223
SUPPLEMENTAL CASH FLOW DISCLOSURE: Cash paid for interest
$
- $
- $
194,844 $
- $
The accompanying notes are an integral part of these financial statements.
-8-
- $
194,844
CAMINO NUEVO CHARTER ACADEMY STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2016
Salaries and wages Pension expense Other employee benefits Payroll taxes Legal expenses Accounting expenses Other fees for services Advertising and promotion expenses Instructional materials Printing and postage expenses Information technology expenses Occupancy expenses Travel expenses Interest expense Depreciation expense Insurance expense Other expenses Total
Program
Management and
Services
General
Fundraising
Total Expenses
$
18,918,570 $ 2,008,972 1,871,760 588,003 2,886,914 36,994 4,282,800 33,207 3,314,214 1,270,172 158,417
1,118,590 $ 103,258 124,560 55,362 266,009 465,520 231,627 133,294 17,925 88,140 552,534 194,844 22,592 272,308 1,378,294
184,435 $ 21,850 28,153 2,987 465 5,452 21,006
20,221,595 2,134,080 2,024,473 643,365 266,009 465,520 3,121,528 36,994 4,416,094 18,390 33,207 3,407,806 552,534 194,844 1,292,764 272,308 1,557,717
$
35,370,023 $
5,024,857 $
264,348 $
40,659,228
The accompanying notes are an integral part of these financial statements.
-9-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities – CNCA is a not-for-profit benefit corporation under the laws of the State of California. CNCA is designed to meet the educational needs of largely Latino community neighborhoods, west of downtown Los Angeles, in the greater McArthur Park communities. CNCA was established as an alternative to existing traditional public schools in the neighborhoods in which conditions of over-crowding and year-round schedules existed. An early childhood education center and six charter schools operating as of June 30, 2016, as follows: Early Childhood Center Camino Nuevo Charter Academy #1 – Burlington Campus (CNCA #1) Camino Nuevo Charter Academy #2 – Kayne Siart Campus (CNCA #2) Camino Nuevo Charter Academy #3 – Jose A. Castellanos/Jane B. Eisner Campuses (CNCA #3) Camino Nuevo Charter Academy #4 – Sandra Cisneros Learning Academy Campus (CNCA #4) Camino Nuevo High School #1 – Miramar High School (CNHS#1) Camino Nuevo High School #2 – Dalzell Lance High School (CNHS #2) The charters may be revoked by the Los Angeles Unified School District for material violations of the charters, failure to meet pupil outcomes identified in the charters, failure to meet generally accepted standards of fiscal management, or violation of any provision of the law. Cash and Cash Equivalents – CNCA defines its cash and cash equivalents to include only cash on hand, demand deposits, and liquid investments with original maturities of three months or less. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures. Accordingly, actual results could differ from those estimates. Basis of Accounting – The financial statements have been prepared on the accrual method of accounting and accordingly reflect all significant receivables and liabilities. Functional Allocation of Expenses – Costs of providing CNCA’s programs and other activities have been presented in the Statement of Functional Expenses. During the year, such costs are accumulated into separate groupings as either direct or indirect. Indirect or shared costs are allocated among program and support services by a method that best measures the relative degree of benefit. Basis of Presentation – The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States as prescribed by the Financial Accounting Standards Board. Net Asset Classes – CNCA is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. -10-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Net assets of CNCA are defined as:
Unrestricted: All resources over which the governing board has discretionary control to use in carrying on the general operations of CNCA. Temporarily restricted: These net assets are restricted by donors to be used for specific purposes. At June 30, 2016 CNCA had $238,164 of temporarily restricted net assets. Permanently restricted: These net assets are permanently restricted by donors and cannot be used by CNCA. CNCA does not currently have any permanently restricted net assets.
Designation of Net Assets – Designated net assets represent those portions of net assets segregated for a specific purpose in accordance with board policy. CNCA’s board established a policy which designated part of the fund balance (1% of total expenses) to a deferred maintenance fund. This policy was implemented in anticipation of increased vendor repair and maintenance expenses expected to be incurred due to the age of CNCA’s various buildings sites. Receivables – Accounts receivable primarily represent amounts due from federal and state governments as of June 30, 2016. Management believes that all receivables are fully collectible, therefore no provisions for uncollectible accounts were recorded. Property, Plant and Equipment – Property, plant and equipment are stated at cost if purchased or at estimated fair market value if donated. Depreciation is provided on a straight-line basis over the estimated useful lives of the asset. CNCA capitalizes all expenditures for land, buildings and equipment in excess of $1,000. Depreciation expense was $1,292,764 for the year ended June 30, 2016. Contributed Assets & Services – Contributions of donated non-cash assets are recorded at fair value in the period received. Contributions of donated services that create or enhance non-financial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at fair values in the period received. Property Taxes – Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on September 1 and are payable in two installments on or before November 1 and February 1. Unsecured property taxes are not a lien against real property and are payable in one installment on or before August 31. The County bills and collects property taxes for all taxing agencies within the County and distributes these collections to the various agencies. The sponsor agency of the CNCA is required by law to provide in-lieu property tax payments on a monthly basis, from August through July. The amount paid per month is based upon an allocation per student, with a specific percentage to be paid each month. Compensated Absences – Accumulated unpaid employee vacation benefits are recognized as a liability of CNCA. The current portion of the liability, if material, is recognized at year-end. The entire compensated absences liability is included in accrued liabilities on the statement of financial position. Employees of CNCA are paid for days or hours worked based upon Board approved schedules which -11-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES include vacation. Sick leave is accumulated with a 30 day maximum for each eligible employee. Sick leave with pay is provided when employees are absent for health reasons. Revenue Recognition – Amounts received from the California Department of Education are recognized as revenue by CNCA based on the average daily attendance (ADA) of students. Revenue that is restricted is recorded as an increase in unrestricted net assets if the restriction expires in the reporting period in which the revenue is recognized. All other restricted revenues are reported as increases in temporarily restricted net assets. Contributions and Grants – All contributions and grants are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are restricted to specific use or future periods are reported as temporarily restricted. When the restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. CNCA also receives a portion of its total revenue and support under various grants which pay CNCA based on reimbursable costs as defined by the grants. Reimbursements recorded under these grants are subject to audit by the granting agency. Management believes that no material adjustments will result from subsequent audits of reimbursed costs reflected in the accompanying financial statements. Income Taxes – CNCA is a non-profit entity exempt from the payment of income taxes under Internal Revenue Code Section 501(c)(3) and California Revenue and Taxation Code Section 23701d. Accordingly, no provision has been made for income taxes. Management has determined that all income tax positions are more likely than not of being sustained upon potential audit or examination; therefore, no disclosures of uncertain income tax positions are required. CNCA files informational returns in the U.S. federal jurisdiction, and the state of California. The statute of limitations for federal and California state purposes is generally three and four years, respectively. Allocations Between Charter Schools – For the year ended June 30, 2016, CNCA has chosen to identify each charter school separately within the basic financial statements. In cases where specific identification of each charter’s activities was not possible, items were allocated according to Average Daily Attendance (ADA). Related Entity – In June 2012, the Grupo Nuevo Los Angeles (Grupo Nuevo) Corporation was formed as a nonprofit, public benefit corporation, organized under the California Nonprofit Public Benefit Corporation Law for charitable purposes. Grupo Nuevo was formed for the benefit of and to carry out the purposes of CNCA. Grupo Nuevo’s board is appointed by CNCA. Grupo Nuevo is a .01% member of Fifteenth and Ardmore Properties LLC which constitutes all of the financial activity of Grupo Nuevo in 2016. The financial activity of Grupo Nuevo is immaterial to the financial statements of CNCA and as such, has not been consolidated into the operations of CNCA. Effective July 1, 2016 Pueblo Nuevo Development (PND) merged with Grupo Nuevo. All PND assets and liabilities will become assets and liabilities of Grupo Nuevo and PND as a legal entity will be dissolved.
-12-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Evaluation of Subsequent Events – CNCA has evaluated subsequent events through October 17, 2016, the date these financial statements were available to be issued. NOTE 2: CONCENTRATION OF CREDIT RISK Custodial credit risk is the risk that in the event of a bank failure, CNCA’s deposits may not be returned to it. CNCA maintains bank accounts with one institution, certain of which are interest bearing. Accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At times, cash in these accounts exceeds the insured amounts. CNCA has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash and cash equivalents. CNCA maintains cash in the Los Angeles County Treasury (the County). The County pools these funds with those of other educational organizations in the county and invests the cash. These pooled funds are carried at costs which approximates market value. Interest earned is deposited quarterly into participating funds. Any investment losses are proportionately shared by all funds in the pool. The County is authorized to deposit cash and invest excess funds by California Government Code Section 53648 et. seq. The funds maintained by the County are either secured by federal depository insurance or collateralized. The fair value of CNCA’s deposits in this pool as of June 30, 2016, as provided by the pool sponsor was approximately $10,102,592. NOTE 3: RELATED PARTY TRANSACTIONS Pueblo Nuevo Development Pueblo Nuevo Development (PND) is a non-profit community development corporation. Since 1999, PND has acquired and renovated properties to serve as schools for CNCA. CNCA obtained land to be used for a high school facility. During the 2005-06 year, PND and CNCA negotiated an agreement for a high school facility for Camino Nuevo High School (CNHS #2) students. CNCA entered into a ground lease with PND for $1 per year for 40 years. PND constructed a high school facility on this property and leased these facilities to CNCA (Note 5). New Markets Tax Credit In June 2012, CNCA facilitated $3,233,613 of long-term financing through the federal New Markets Tax Credit (NMTC) program. CNCA loaned $3,233,613 to ExED 9 Investment Fund LLC (ExED LLC). The loan bears interest at .05% and requires monthly interest payments commencing July 1, 2012 until July 1, 2019. Commencing August 1, 2019, the loan requires $20,000 monthly payments of principal and interest until January 1, 2031 when all principal and interest becomes due and payable. The outstanding balance at June 30, 2016 was $ 2,728,867. ExED LLC used the proceeds from the loan to make qualified low-income community investments pursuant to NMTC laws. ExED LLC made the investments in the form of loans to Fifteenth and -13-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 3: RELATED PARTY TRANSACTIONS Ardmore Investments, LLC (Investments LLC) which used the loan proceeds in the acquisition and rehabilitation of leasehold properties to be used as a charter middle school and a community center. Investments LLC leased the properties to CNCA #3, which commenced occupancy in December 2012. Grupo Nuevo and Fifteenth and Ardmore Properties LLC As described in Note 1, in June 2012, Grupo Nuevo was formed for the benefit of and to carry out the purposes of CNCA. Grupo Nuevo is a .01% member of Fifteenth and Ardmore Properties LLC. NOTE 4: HOME SUPPORT OFFICE The CNCA Home Support Office provides business management and oversight services to support the educational mission of the organization. The CNCA Home Support Office charges an indirect rate calculated by a percentage of government revenue to cover the costs related to the six charter schools and one preschool program under the Camino Nuevo organizational umbrella. The service level provided to the program entities varies based on programmatic scope. The following indirect rates were used:
Early Childhood Center CNCA #1 CNCA #2 CNCA #3 CNCA #4 CNHS #1 CNHS #2
10% 10% 10% 10% 10% 10% 10%
NOTE 5: COMMITMENT AND CONTINGENCIES CNCA has entered into multiple lease agreements with PND and with unrelated parties for various facilities. CNCA is responsible for the related property taxes on these facilities. The lease agreements are described below. PND The Early Childhood Center leases facilities from PND (a related party). The lease requires monthly payments of $11,071 and expires in June 2017. CNCA #1 leases two school sites from PND (a related party). The leases require monthly payments of $12,366 and $20,517. The original leases expired in July 2010 and CNCA signed an agreement to extend the leases to January 2017. In addition, the Burlington Campus leases a dance studio which requires monthly payments of $5,536 and expires in June 2017.
-14-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 5: COMMITMENT AND CONTINGENCIES In June 2012, CNCA entered into a lease agreement with PND (a related party) for additional space for CNCA #3 at the Jane B. Eisner facilities. The lease term commenced following the occupancy of the facility by CNCA in November 2012. The lease term is for a period of 13 years, expiring in 2025 with one five-year option to extend the lease. The initial monthly lease payment is $20,333. The Home Support Office leases its site from PND (a related party). The lease requires monthly payments of $7,833 and expires in April 2019. The Home Support Office also leases a soccer field from PND which requires monthly lease payments of $2,000 and expires in 2020. The lease has two fiveyear options to extend. CNHS #2 leases its school site from PND (a related party). The lease requires monthly payments according to a payment schedule included in the lease agreement. The lease term ends January 1, 2024 and has two five-year options to extend. Unrelated Parties CNCA #3 - In June 2010, CNCA signed a facility use agreement with LAUSD for use of property located at 1723 W. Cordova Street, Los Angeles, California. The agreement commenced in August 2010 and carries a term that coincides with CNCA #3’s charter. The agreement does not require CNCA to pay a lease amount for the use of the property, but instead CNCA pays regulatory fees and police service fees for the maintenance of the facility and other services. These fees are negotiated annually and therefore cannot be determined for future years. The regulatory and police service fees paid to LAUSD for CNCA #3 for the year ended June 30, 2016 were $164,382. CNCA #4 - In June 2011, CNCA signed a facility use agreement with LAUSD for use of property located at 1018 Mohawk Street, Los Angeles, California. The agreement commenced in August 2011 and carries a term that coincides with CNCA #4’s charter. The agreement does not require CNCA to pay a lease amount for the use of the property, but instead CNCA pays regulatory fees and police service fees for the maintenance of the facility and other services. These fees are negotiated annually and therefore cannot be determined for future years. The regulatory and police service fees paid to LAUSD for CNCA #4 for the year ended June 30, 2016 were $210,167. CNHS #1 - In July 2013, CNCA signed a joint use agreement with LAUSD for use of property located at 1217 Miramar Street, Los Angeles, California. The agreement term is 40 years and ends June 30, 2053. The agreement requires monthly lease payments of $27,758. The lease amounts paid to LAUSD for CNHS #1 for the year ended June 30, 2016 were $335,765.
-15-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 5: COMMITMENT AND CONTINGENCIES Future minimum rental payments at June 30, 2016 are as follows:
Year Ending June 30,
Unrelated
Related
Total
2017 2018 2019 2020 2021 Thereafter
$
333,096 $ 1,360,719 $ 1,693,815 333,096 931,610 1,264,706 333,096 1,008,347 1,341,443 333,096 1,010,784 1,343,880 333,096 997,946 1,331,042 11,325,264 3,211,984 14,537,248
Total
$
12,990,744 $ 8,521,390 $ 21,512,134
For the year ended June 30, 2016, aggregate rent expense including property taxes was $1,885,480, of which $1,549,715 was related to facilities leased from PND. NOTE 6: EMPLOYEE RETIREMENT Multi-employer Defined Benefit Pension Plans Qualified employees are covered under multi-employer defined benefit pension plans maintained by agencies of the State of California. The risks of participating in this multi-employer defined benefit pension plan are different from singleemployer plans because: (a) assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers, (b) the required member, employer, and state contribution rates are set by the California Legislature, and (c) if CNCA chooses to stop participating in the multi-employer plan, it may be required to pay a withdrawal liability to the plan. CNCA has no plans to withdraw from this multi-employer plan. State Teachers’ Retirement System (STRS) Plan Description CNCA contributes to the State Teachers’ Retirement System (STRS), a cost-sharing multi-employer public employee retirement system defined benefit pension plan administered by STRS. Plan information for STRS is not publicly available. The plan provides retirement, disability and survivor benefits to beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the State Teachers’ Retirement Law. According to the most recently available Comprehensive Annual Financial Report and Actuarial Valuation Report for the year ended June 30, 2015, total STRS plan net assets are $181 billion, the total actuarial present value of accumulated plan benefits is $242 -16-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 6: EMPLOYEE RETIREMENT billion, contributions from all employers totaled $2.55 billion, and the plan is 68.5% funded. CNCA did not contribute more than 5% of the total contributions to the plan. Copies of the STRS annual financial reports may be obtained from STRS, 7667 Folsom Boulevard, Sacramento, CA 95826 and www.calstrs.com. Funding Policy Active plan members hired before December 31, 2012 are required to contribute 9.20% of their salary and those hired after are required to contribute 8.56% of their salary. CNCA is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers’ Retirement Board. Under the 2014 funding plan, employer contributions on compensation creditable to the program will increase every year for the next seven years, up to 19.10% in 2020–21. The required employer contribution rate for year ended June 30, 2016 was 10.73% of annual payroll. The contribution requirements of the plan members are established and may be amended by State statute. CNCA’s contributions to STRS for the past three years were as follows: Year Ended June 30, 2014 2015 2016
STRS Required Contribution $ $ $
STRS Percent Contributed
946,059 1,119,443 1,534,165
100% 100% 100%
Public Employees’ Retirement System (PERS) Plan Description CNCA contributes to the School Employer Pool under the California Public Employees’ Retirement System (CalPERS), a cost-sharing multi-employer public employee retirement system defined benefit pension plan administered by CalPERS. Plan information for PERS is not publicly available. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the Public Employees’ Retirement Law. According to the most recently available Actuarial Valuation Report for the year ended June 30, 2015, the School Employer Pool total plan assets are $56.8 billion, the total actuarial present value of accumulated plan benefits is $86 billion, contributions from all employers totaled $1.3 billion, and the plan is 77.5% funded. CNCA did not contribute more than 5% of the total contributions to the plan.
-17-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 6: EMPLOYEE RETIREMENT Copies of the CalPERS’ annual financial reports may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814 and www.calpers.ca.gov. Funding Policy Active plan members brought into membership prior to January 1, 2013 are required to contribute 7.0% of their salary while new members after January 1, 2013 are required to contribute 6.0% of their salary. CNCA is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the CalPERS Board of Administration. The required employer contribution rate for year ended June 30, 2016 was 11.847%. The contribution requirements of the plan members are established and may be amended by State statute. Contributions to PERS CNCA's contributions to PERS for each of the last three years were as follows: Year Ended June 30, 2014 2015 2016
PERS Required Contribution $ $ $
PERS Percent Contributed
349,120 460,821 599,915
100% 100% 100%
NOTE 7: PROPOSITION 55 In April 2011, CNCA entered into a Memorandum of Understanding (MOU) and Funding Agreement with the State Allocation Board and the California School Finance Authority (individually or collectively referred to as the “State”) for Charter School Facility Program (CSFP) funding to purchase and/or construct a real property as a permanent school facility (the Project) for CNCA #2. The Project has been submitted for final funding approval and apportionment determination. The Project was approved in October 2013 and the State will provide grant funding for 50% of the approved costs for the Project. The final apportionment amount will be reduced by any advance apportionment amounts received by CNCA #2 as well as any lump sum contribution by the State. CNCA #2 will be required to pay back the State the 50% of the final apportionment funding. Payment to the State will commence one full year after the Project is opened and operating its educational program. The loan will have a 30year term and will require an interest rate prescribed in Section 17078.57(a)(1)(D) and (E) of the Education Code. As of June 30, 2016, CNCA #2 has received all of the State apportionment which totaled $29,557,192. CNCA #2 has recorded debt related to this funding of $12,493,596 on the statement of financial position. -18-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 7: PROPOSITION 55 Future payments of Proposition 55 are as follows: Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter
$
353,482 360,552 367,763 375,118 382,621 10,654,060
Total
$
12,493,596
NOTE 8: PROPOSITION 1D In April 2011, CNCA entered into an MOU and Funding Agreement with the State Allocation Board and the California School Finance Authority (individually or collectively referred to as the “State”) for Charter School Facility Program (CSFP) funding to purchase and/or construct a real property as a permanent school facility (the HS Project) for CNHS #1. The Project was submitted by LAUSD for final approval final apportionment determination and was approved in July 2013. The State provided grant funding for 50% of the approved costs for the Project. The final apportionment amount is reduced by any advance apportionment amounts received by CNHS #1 as well as any lump sum contribution by the State. CNHS #1 is required to pay back the State the 50% of the final apportionment funding. The Project opened in July 2013 and began operating its educational program. The loan has a 30-year term and will require an interest rate prescribed in Section 17078.57(a)(1)(D) and (E) of the Education Code. As of June 30, 2016, CNHS #1 received all of the State apportionment which totaled $21,875,667. In connection with this funding agreement, CNHS #1 entered into a separate agreement with LAUSD to obtain the CSFP funding and transfer that funding to LAUSD in exchange for a long-term lease of an existing high school campus. The long term agreement is described in Note 5. Although the funds were remitted to LAUSD, CNHS #1 is expected to repay the 50% of the final apportionment funding to the state. CNHS #1 has recorded debt related to this funding of $10,937,833, the balance at June 30, 2016 is $10,417,111.
-19-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 8: PROPOSITION 1D Future payments of Proposition 1D are as follows: Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter
$
268,198 273,562 279,033 284,614 290,306 9,021,398
Total
$
10,417,111
NOTE 9: LONG-TERM DEBT In January 2012, CNCA #2 entered into a $2,000,000 promissory note with Pacific Charter School Development, Inc. For up to one year, CNCA #2 may draw down upon the principal amount of the note for purposes of paying costs associated with development of the CNCA #2 Project under Proposition 55 as described in Note 7. The note is a non-interest bearing loan and matures on the earlier of (i) January 1, 2016, (ii) payee’s exercise of its call option, (iii) the sale of the property, and (iv) the abandonment of the development of the facilities by CNCA #2. The note was paid during the year ended June 30, 2016. In June 2015, CNCA #2 entered into an unsecured $1,200,000 promissory note with Excellent Education Development. The note has interest rate of 1.5% per annum and matures on October 1, 2015. The note was paid during the year ended June 30, 2016. NOTE 10: CONTINGENCIES CNCA has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate disallowances under terms of the grants, it is believed that any required reimbursement would not be material. NOTE 11: SUBSEQUENT EVENT Corporate Restructuring The PND board voted to execute a merger between PND and CNCA and to grant assets and liabilities to Grupo Nuevo. Effective July 1, 2016, PND granted all assets and liabilities to Grupo Nuevo and PND as a legal entity will be dissolved.
-20-
CAMINO NUEVO CHARTER ACADEMY NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30, 2016
NOTE 11: SUBSEQUENT EVENT Line of Credit In July 2016 CNCA renewed a revolving line of credit with Wells Fargo Bank for $2,000,000 with an annual interest rate equal to the greater of a floating interest rate equal to the Index plus 1% or the Floor Rate of 5%. The line of credit is available until July 1, 2017.
-21-
SUPPLEMENTARY INFORMATION
-22-
CAMINO NUEVO CHARTER ACADEMY LOCAL EDUCATION AGENCY ORGANIZATION STRUCTURE For the Year Ended June 30, 2016
CNCA is a non-profit public benefit corporation. CNCA operates a home office and the following six charter schools:
Charter Name Camino Nuevo Charter Academy #1Burlington Campus (CNCA #1) Camino Nuevo Charter Academy #2Kayne Siart Campus (CNCA #2) Camino Nuevo Charter Academy #3Jose A. Castellanos/Jane B. Eisner Campuses (CNCA #3) Camino Nuevo Charter Academy #4Sandra Cisneros Learning Academy Campus (CNCA #4) Camino Nuevo High School #1Miramar High School (CNHS #1) Camino Nuevo High School #2- Dalzell Lance High School (CNHS #2)
Charter Number 0293
Sponsoring District Los Angeles Unified School District
1231
Los Angeles Unified School District
1212
Los Angeles Unified School District
1334
Los Angeles Unified School District
0635
Los Angeles Unified School District
1540
Los Angeles Unified School District
CNCA commenced operations May 2000 with Camino Nuevo Charter Academy #1- Burlington Camps (CNCA #1). Below is the charter information for each charter school identified above: Charter Name Camino Nuevo Charter Academy #1Burlington Campus (CNCA #1) Camino Nuevo Charter Academy #2Kayne Siart Campus (CNCA #2) Camino Nuevo Charter Academy #3Jose A. Castellanos/Jane B. Eisner Campuses (CNCA #3) Camino Nuevo Charter Academy #4Sandra Cisneros Learning Academy Campus (CNCA #4) Camino Nuevo High School #1Miramar High School (CNHS #1) Camino Nuevo High School #2Dalzell Lance High School (CNHS #2)
Original School Start Date August 8, 2010
Term of Charter 5 years
Charter Expiration June 30, 2020
Enrollment Average 539
August 18, 2010
5 years
June 30, 2020
545
August 18, 2010
5 years
June 30, 2020
740
September 6, 2011
5 years
June 30, 2021
509
September 1, 2004
5 years
June 30, 2019
302
August 19, 2013
5 years
June 30, 2018
440
-22-
CAMINO NUEVO CHARTER ACADEMY LOCAL EDUCATION AGENCY ORGANIZATION STRUCTURE (continued) For the Year Ended June 30, 2016 CNCA is the latest in a series of highly successful empowerment projects developed by Pueblo Nuevo Development (PND), a nonprofit community development corporation. The Executive Director of PND is also a member of the Board of Directors of CNCA. The Board of Directors and the Administrator as of the year ended June 30, 2016 were as follows: BOARD OF DIRECTORS Member Mark H. Dalzell Philip Lance Elliot Ponchick Shiho Ito Alicia Maldonado Cindy Lee Smet Patricia Artigas Samar Bloomingdale L. Michael Russell Tamara Powers Bill Siart Patti Phillips Robert Kaplan Beth Michelson Gabriel Sandoval
Office Chairman President Treasurer Secretary Member Member Member Member Member Member Member Member Member Member Member ADMINISTRATOR
Ana F. Ponce
Chief Executive Officer
-23-
3 Year Term Expires 6/30/18 6/30/18 6/30/18 6/30/18 6/30/18 6/30/16 6/30/18 6/30/16 6/30/16 4/26/17 6/30/16 6/30/16 6/30/16 6/30/18 3/7/19
CAMINO NUEVO CHARTER ACADEMY SCHEDULE OF INSTRUCTIONAL TIME For the Year Ended June 30, 2016
K-8: 2015-16 Minutes Grade Level
Requirement
Actual CNCA #1
Kindergarten
36,000
66,850
68,245
65,780
66,730
In compliance
Grade 1 Grade 2 Grade 3
50,400 50,400 50,400
64,555 64,555 64,555
65,365 65,365 65,365
63,665 63,665 63,665
63,850 63,850 63,850
In compliance In compliance In compliance
Grade 4 Grade 5 Grade 6
54,000 54,000 54,000
64,555 64,555 66,516
65,365 65,365 70,100
63,665 63,665 68,451
63,850 63,850 65,965
In compliance In compliance In compliance
Grade 7 Grade 8
54,000 54,000
66,516 66,516
70,100 70,100
68,451 68,451
65,965 65,965
In compliance In compliance
192
192
191
192
2015-16 Minutes Actual
Actual
Requirement
CNHS #1
CNHS #2
Status
64,800 64,800 64,800 64,800
66,570 66,570 66,570 66,570
68,995 68,995 68,995 68,995
In compliance In compliance In compliance In compliance
189
189
Days of Instruction
Actual CNCA #2
Actual CNCA #3
Actual CNCA #4
Status
High School:
Grade Level Grade 9 Grade 10 Grade 11 Grade 12 Days of Instruction
See auditor’s report and the notes to supplementary information.
-24-
CAMINO NUEVO CHARTER ACADEMY SCHEDULE OF AVERAGE DAILY ATTENDANCE For the Year Ended June 30, 2016
Second Period Report Classroom Total Based
Annual Report Classroom Total Based
CNCA #1 Grades K - 3 Grades 4 - 6 Grades 7 - 8
253.05 176.32 109.86
253.05 176.32 109.86
253.18 175.35 108.87
253.18 175.35 108.87
ADA Totals
539.23
539.23
537.40
537.40
CNCA #2 Grades K - 3 Grades 4 - 6 Grades 7 - 8
251.89 174.21 118.51
251.89 174.21 118.51
252.21 174.08 118.51
252.21 174.08 118.51
ADA Totals
544.61
544.61
544.80
544.80
CNCA #3 Grades K - 3 Grades 4 - 6 Grades 7 - 8
324.57 243.31 172.48
324.57 243.31 172.48
322.52 243.41 171.87
322.52 243.41 171.87
ADA Totals
740.36
740.36
737.80
737.80
CNCA #4 Grades K - 3 Grades 4 - 6 Grades 7 - 8
274.01 209.97 114.69
274.01 209.97 114.69
275.03 210.03 114.21
275.03 210.03 114.21
ADA Totals
598.67
598.67
599.27
599.27
CNHS #1 Grades 9 - 12
301.56
301.56
298.08
298.08
ADA Totals
301.56
301.56
298.08
298.08
CNHS #2 Grades 9 - 12
439.52
439.52
438.41
438.41
ADA Totals
439.52
439.52
438.41
438.41
See auditor’s report and the notes to supplementary information.
-25-
CAMINO NUEVO CHARTER ACADEMY RECONCILIATION OF ANNUAL FINANCIAL REPORT WITH AUDITED FINANCIAL STATEMENTS For the Year Ended June 30, 2016
There were no adjustments and reclassifications for the year ended June 30, 2016.
See auditor’s report and the notes to supplementary information.
-26-
CAMINO NUEVO CHARTER ACADEMY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2016
Federal Catalog Number
Program Name U.S. Department of Education Pass-Through Program From California Department of Education: No Child Left Behind: Title I, Part A, Basic Grants Low-Income and Neglected Title II, Part A - Improving Teacher Quality Title III, Limited English Proficiency Title V, PCSGP Special Education: IDEA Basic Local Assistance
84.010 84.367 84.365 84.242 84.027
Pass-Through Entity Identifying Number
03797 14341 10084 14531 13379
Early Childhood Center
$
Total: U.S. Department of Education U.S. Department of Agriculture Pass-Through Program From California Department of Education: Child Nutrition Cluster: School Breakfast Program Especially Needy Breakfast National School Lunch Program Special Supplemental Nutrition Program
10.553 10.555 10.557
13526 13396 13396
Total: U.S. Department of Agriculture
CNCA #1
CNCA #2
Total Federal CNCA #4 CNHS #1 CNHS #2 Expenditures
CNCA #3
- $ -
378,283 $ 195,693 $ 25,737 2,778 34,672 20,475 102,432 103,454
309,701 $ 248,374 $ 203,477 $ 173,466 $ 1,508,994 4,561 3,426 1,698 2,686 40,886 38,922 26,753 6,682 4,618 132,122 150,000 150,000 140,637 113,723 57,284 83,491 601,021
-
541,124
322,400
493,821
392,276
269,141
414,261
2,433,023
16,327 -
79,256 423,547 -
22,326 244,146 27,433
104,766 371,378 30,702
39,676 222,226 29,576
12,308 104,727 -
39,723 188,909 -
298,055 1,571,260 87,711
16,327
502,803
293,905
506,846
291,478
117,035
228,632
1,957,026
-
6,555
-
-
-
-
-
6,555
-
6,555
-
-
-
-
-
6,555
U.S. Department of Health and Human Services: Pass-Through Program From California Department of Education: Medicaid
93.778
N/A
Total: U.S. Department of Health and Human Services Total Federal Program Expenditures
$ 16,327 $ 1,050,482 $ 616,305 $ 1,000,667 $ 683,754 $ 386,176 $ 642,893 $ 4,396,604
Reconciliation to Federal Revenue Total Federal Program Expenditures Expenditures in excess of revenues related to federal programs: Title V, PCSGP Total Federal Revenues
$ 16,327 $ 1,050,482 $ 616,305 $ 1,000,667 $ 683,754 $ 386,176 $ 642,893 $ 4,396,604
84.242
-
-
-
-
-
$ 16,327 $ 1,050,482
$ 616,305
$ 1,000,667
$ 683,754
$ 386,176
14531
-
See auditor’s report and the notes to supplementary information.
-27-
(92,500)
(92,500)
$ 550,393 $ 4,304,104
CAMINO NUEVO CHARTER ACADEMY NOTES TO SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2016
NOTE 1 – PURPOSE OF SCHEDULES Schedule of Instructional Time This schedule presents information on the amount of instructional time offered by CNCA and whether CNCA complied with the provisions of California Education Code. Schedule of Average Daily Attendance Average daily attendance is a measurement of the number of pupils attending classes of CNCA. The purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of state funds are made to charter schools. This schedule provides information regarding the attendance of students at various grade levels. Reconciliation of Annual Financial Report with Audited Financial Statements This schedule provides the information necessary to reconcile the net assets of the charter schools as reported on the Annual Financial Report form to the audited financial statements. Schedule of Expenditures of Federal Awards The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of CNCA under programs of the federal governmental for the year ended June 30, 2016. The information in this Schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of operations of CNCA, it is not intended to and does not present the financial position, changes in net assets, or cash flows of CNCA. Indirect Cost Rate CNCA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
-28-
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Camino Nuevo Charter Academy Los Angeles, CA We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Camino Nuevo Charter Academy (CNCA), a nonprofit California public benefit corporation, which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, cash flows and functional expenses for the year then ended, the related notes to the financial statements, and have issued our report thereon dated October 17, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered CNCA’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of CNCA’s internal control. Accordingly, we do not express an opinion on the effectiveness of CNCA’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or 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 such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
-29-
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Compliance and Other Matters As part of obtaining reasonable assurance about whether CNCA’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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of non-compliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report 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. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
VICENTI, LLOYD & STUTZMAN LLP Glendora, CA October 17, 2016
-30-
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Board of Directors Camino Nuevo Charter Academy Los Angeles, CA Report on Compliance for Each Major Federal Program We have audited the compliance of Camino Nuevo Charter Academy (CNCA) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. CNCA’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and terms and conditions of federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of CNCA’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about CNCA’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of CNCA's compliance. Opinion on Each Major Federal Program In our opinion, CNCA complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016.
-31-
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Report on Internal Control Over Compliance Management of CNCA is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered CNCA’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance, for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of CNCA’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance such that there is a reasonable possibility, that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected and corrected on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
VICENTI, LLOYD & STUTZMAN LLP Glendora, CA October 17, 2016 -32-
INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE
Board of Directors Camino Nuevo Charter Academy Los Angeles, CA We have audited Camino Nuevo Charter Academy’s (CNCA) compliance with the types of compliance requirements described in the 2015-2016 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, published by the Education Audit Appeals Panel for the year ended June 30, 2016. CNCA’s State compliance requirements are identified in the table below. Management’s Responsibility Management is responsible for the compliance with the State laws and regulations as identified below. Auditor’s Responsibility Our responsibility is to express an opinion on CNCA’s compliance based on our audit of the types of compliance requirements referred to below. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the 2015-2016 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, published by the Education Audit Appeals Panel. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the specific areas listed below has occurred. An audit includes examining, on a test basis, evidence about CNCA’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on state compliance. Our audit does not provide a legal determination of CNCA’s compliance. Compliance Requirements Tested In connection with the audit referred to above, we selected and tested transactions and records to determine the CNCA’s compliance with the laws and regulations applicable to the following items: Description School Districts, County Offices of Education, and Charter Schools: Educator Effectiveness California Clean Energy Jobs Act After School Education and Safety Program Proper Expenditure of Education Protection Account Funds
-33-
Procedures Performed Yes Not applicable Yes Yes
INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE Description Unduplicated Local Control Funding Formula Pupil Counts Local Control and Accountability Plan Independent Study-Course Based Immunizations Charter Schools: Attendance Mode of Instruction Nonclassroom-based instructional/independent study Determination of funding for nonclassroom-based instruction Annual instructional minutes – classroom based Charter School Facility Grant Program
Procedures Performed Yes Yes Not applicable Yes Yes Yes Not applicable Not applicable Yes Yes
Opinion on State Compliance In our opinion, CNCA complied with the laws and regulations of the state programs referred to above in all material respects for the year ended June 30, 2016. Purpose of this Report The purpose of this report on state compliance is solely to describe the results of testing based on the requirements of the 2015-2016 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, published by the Education Audit Appeals Panel. Accordingly, this report is not suitable for any other purpose.
VICENTI, LLOYD & STUTZMAN LLP Glendora, CA October 17, 2016
-34-
CAMINO NUEVO CHARTER ACADEMY SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2016
SECTION I – SUMMARY OF AUDITOR’S RESULTS Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Internal control over financial reporting: Material weakness(es) identified?
Unmodified
Yes
X
No
Yes
X
None Reported
Noncompliance material to financial statements noted?
Yes
X
No
Federal Awards Internal control over major federal awards: Material weakness(es) identified?
Yes
X
No
Yes
X
None Reported
Significant deficiency(ies) identified?
Significant deficiency(ies) identified?
Type of auditor’s report issued on compliance for major federal programs: Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)?
Yes
Unmodified
X
No
Identification of Major Federal Programs: Name of Federal Program or Cluster CFDA Number(s) 10.553, 10.555, 10.557 Child Nutrition Cluster Dollar threshold used to distinguish between type A and type B programs:
$750,000
Auditee qualified as low-risk auditee?
No
X
-35-
Yes
CAMINO NUEVO CHARTER ACADEMY SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2016
All audit findings must be identified as one or more of the following twelve categories: Five Digit Code 10000 20000 30000 40000 42000 50000 60000 61000 62000 70000 71000 72000
Finding Types Attendance Inventory of Equipment Internal Control State Compliance Charter School Facilities Program Federal Compliance Miscellaneous Classroom Teacher Salaries Local Control Accountability Plan Instructional Materials Teacher Misassignments School Accountability Report Card
There were no findings and questioned costs related to the basic financial statements, federal awards or state awards for June 30, 2016.
-36-
CAMINO NUEVO CHARTER ACADEMY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2016
There were no findings and questioned costs related to the basic financial statements, federal awards or state awards for the prior year.
-37-
