(CIAL AND COMPLIANCE REPORT 7 George Edward Grigsby CERTIFIED PUBLIC ACCOUNTANT P.O. Box 1824 Stafford, TX 77497-1824 info. gegcpa@gmail.com MARCH 1, 2018ENERGIZED FOR STEM ACADEMY, INC. ‘Table of Contents REPORT NAME PAGE CERTIFICATE OF THE BOARD. INDEPENDENT AUDITOR'S REPORT. GENERAL-PURPOS! FINANCIAL STATEMENTS . ‘STATEMENT OF FINANCIAL POSITION... STATEMENT OF ACTIVITIES wos ‘STATEMENT OF CASH FLOWS... NOTES TO FINANCIAL STATEMENT ‘SPECIFIC-PURPOSE FINANCIAL STATEMENTS: SCHEDULE OF EXPENSES. ‘SCHEDULE OF CAPITAL ASSETS CAMPUS # 321.... SCHEDULE OF CAPITAL ASSETS CAMPUS #390, ‘SCHEDULE OF CAPITAL ASSETS CAMPUS #455. SCHEDULE OF CAPITAL ASSETS CAMPUS #4589..... BUDGETARY COMPARISON FOR CAMPUS #342... BUDGETARY COMPARISON FOR CAMPUS #350... BUDGETARY COMPARISON FOR CAMPUS #364, COMPLIANCE AND INTERNAL CONTROL... ‘SCHEDULE OF FINDINGS AND QUESTIONED COSTS.CERTIFICATION OF THE BOARD Name of charter Holder: Energized for STEM Academy, Inc. Name of School: Energized for STEM Academy, HISD Campus Number: 300 We, the undersigned, certify that the attached Annual Financial and Compliance Report of Energized for STEM Academy, Inc. was reviewed and v APPROVED DISAPPROVED for the year ended July 31, 2017 at a meeting of the governing body of said Charter Holder on the KX dayof_More 2018. wad of Board Secretary 7 Signature of Board PresidentP.O. Box 1824 Stafford, TX 77497-1824 (281) 879-4442 281) 879-4443 Fax gegcpa@gmail.com lie it Wek of ecu INDEPENDENT AUDITOR’S REPORT ‘The Board of Directors and Management Energized for STEM Academy, Inc. Report on the Financial Statements I have audited the accompanying financial statements of Energized for STEM Academy, Inc. (ESTEM) (a non-profit organization), which comprise the statement of financial position as of July 31, 2017, and the related statements of activities and cash flows 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 the 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 My responsibility is to express an opinion on these financial statements based on my audit, I conducted my audit ii accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Goverament Auditing Standards issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 the 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. 2Accordingly, I 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, Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ESTEM as of July 31, 2017, 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/Other Information. My audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying Supplementary Schedules are presented for purposes of additional analysis as required by the Texas Education Agency and are not a required part of the 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 my opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated March 1, 2018, on my consideration of ESTEM’s internal control over financial reporting and on my 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 my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 ESTEM’s internal control over financial reporting and compliance. ee Rie tcit ano CPA Stafford, TX March 1, 2018GENERAL-PURPOSE FINANCIAL STATEMENTSENERGIZED FOR STEM ACADEMY, INC. STATEMENT OF FINANCIAL POSITION July 31, 2017 Statement of Financial Position Current Assets: Cash and Cash Equivalents Accounts Receivable Due from HISD Due from related parties Total Current Assets Property and Equipment, Net Other Assets Total Assets Current Liabilities: Accounts Payable and Accrued Expenses Salaries and wages payable Accrued Rent payable Due to Related Parti Due to HISD Deferred Revenues Total Liabilities ~Current Net Assets Unrestricted Temporarily Restricted Total Net Assets (Deficit) Total Liabilities and Net Assets See the accompanying notes to the financial statements $ $ $ 1,684,182 104,000 589,324 3,027,025 5,404,531 110,754 5,575,285 100,500 246,372 507,067 128,080 2,873,905 3,855,924 74,996 1,644,367 1,719,361ENERGIZED FOR STEM ACADEMY, INC. STATEMENT OF ACTIVITIES For the year ended July 31, 2017 ‘Temporarily Unrestricted Restricted ‘Total Revenues and other support: Local Support: 5700 Other Revenues from Local $63,898 s : S 63898 State Program Revenues: 5812 HISD Grants and Fees : 56525 36525 5812 HS Allotments 67482 67482 5812 ASPIRE Grant 80065 30/065 5812 HISD- ADA Fee 6534600 6,534,600 ‘Total State Programs Revenues E 6738672 6738672 Federal Program Revenues: 5929 ‘Title I, Part A - Regular Grant z 330827 300,827 ‘Title I, Part A LEP : 7,980 7,980 5929 JROTC -Salaries Reimbursement 125384 125384 ‘Total State Program Revenues : 465,191 465,191 ‘Total Revenues and Support 63,898 7,203,863 7,267,761 Net Assets Released From Restrictions: Satisfaction of Program Restrictions 6255185 _(6,255,185) : ‘Total Revenues and Other Support 6319083 948,678 7,267,761 Expenses: u Instruction 3,587,683 : 3,587,683 13 Curriculum Dev and Instructional Staff Dev. : : : 23 School Leadership 609,917 : 609,917 30 Support Services - Students 120418 - 120418 38 Health Services 7 7 z 34 Student Transportation 101.443 : 101,443, 35 Food Services E - : 36 Cocurricular/ Extracurricular Activities 64.969 - 64,969 41 General Administration 699,745 = 699,745 51 Facilities Maintenance and Operations 896,913 7 895,913, 52 Security and Monitoring Services 183,89 u ‘Total Expense 6,264,981 6264981 Change in Net Assets 54102 948 678 1,002,780 Net Assets (Deficits) at Beginning of Year 20892 695,589 716.581 [Net Assets (Deficits) at End of Year $7494 $_1544,367 $_1.719361 See accompanying notes to financial statements.ENERGIZED FOR STEM ACADEMY, INC, STATEMENT OF CASH FLOWS: Year ended July 31, 2017 Cash flows from operating activities Foundation School Program Receipts $ 6,534,600 Other State Grants and Fees 132,973 Federal Grants Receipts 338,715 Local Support Receipts 63,898 Payments to charter school personnel for services rendered (6,276,615) Payments to vendlors for goods and services rendored (2,717,100 Net cash used in operating activities __1,076A71 Cash flows from investing activiti Purchase of property and equipment = Increase in amount due from related parties (946,207) Net cash provided by investing activities (946,207) Cash flows from financing activities : Net increase in cash 130,264 Cash at beginning of year Cash at end of the year Reconciliation of changes in net assets to net cash Provided by operating activities: Change in net assets $ 1,002,780 Depreciation and amortization expense (Increase) decrease in operation assets: Receivable from HISD grants (689,324) Increase (decrease) in operating liabilities: Accounts payable (287,639) Accrued salaries and wages (176) Accrued Rent payable 156,847 Amount due to management (127,426) Due to HISD 128,080 Deferred revenues 793,329 Net cash used in operating activities $ 1076471ENERGIZED FOR STEM ACADEMY, INC. NOTES TO FINANCIAL STATEMENT July 31, 2017 (1) Summary of Significant Policies The general-purpose financial statements of Energized for STEM Academy, Inc. (“ESTEM") Charter Holder (the corporation) were prepared in conformity with accounting principles generally accepted in the United States. The Financial Accounting Standards Board is the accepted standard setting body for establishing not-for-profit accounting and financial reporting principles. Corporate Operations Energized for STEM Academy, Inc. (ESTEM) was registered as a Texas Corporation on May 22, 2008, and started operations in July 2008. ESTEM operates as a charter schoo! through the Houston Independent School District (HISD) and is funded through an annual agreement with HISD. ESTEM is recognized as an exempt organization for federal income taxes under section 501 (c) (8) of the Internal Revenue Code, effective July 14, 2008. ESTEM operated 4 Alternative Education Campuses (AEC) and was funded through HISD contracts identified as ESTEM Central and ESTEM West. Reporting Entity ‘The corporation is a not-for-profit organization incorporated in the State of Texas in May 2008, and exempt from federal income taxes pursuant to Section 501(c)(8) of the Internal Revenue Code. The corporation is governed by a Board of Directors comprised of three members. The Board of Directors is selected pursuant to the bylaws of the corporation and has the authority to make decisions, appoint the chief executive officer of the corporation, and significantly influence operations, The Board of Directors has the primary accountability for the fiscal affairs of the corporation. Since the corporation received funding from local, state, and federal government sources, it must comply with the requirements of the entities providing those funds. ESTEM Central and ESTEM West The purpose of the Energized for Science, Technology, Engineering, and Mathematics Academy (ESTEM Central and ESTEM West) is to increase studentachievement in Houston Independent School District by engaging and exposing students to innovative science and math instruction. Campus Locations ‘The charter holder operates 2 campuses Central campus located at 9220 Jutland ‘Street and West campus located at 6107 Bissonnet Street in Houston, Texas. Basis of Presentation The School's financial statements have been prepared in conformity with generally accepted accounting, principles as applied to non-profit organizations in conjunction with the Texas Education Agency’s Financial Accountability System Resource Guide. The accompanying financial statements have been prepared using the accrual basis of accounting in accordance with accounting, principles generally accepted in the United States of America. Accordingly, management made certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts as revenues and expenses during the reporting period. Actual results could differ from those estimates.“ Net Assets Net assets and revenues, expenses, gains and losses are classified based on the existence and nature or absence of donor-imposed_ restrictions. Restricted revenues whose restrictions are met in the same year as received are shown as unrestricted revenues. Accordingly, net assets of the organization and changes therein are classified and reported as follows: Unrestricted net assets - net assets that are not subject to donor imposed stipulations. ‘Temporarily restricted - net assets subject to donor-imposed stipulations that may or will be met, either by actions of the corporation, the charter school and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictiPermanently restricted net assets ~ net assets required to be maintained in. perpetuity with only the income to be used for ESTEM’s activities due to donor-imposed restrictions. Cash and Cash Equivalents For purposes of the statement of cash flows, ESTEM considers all highly liquid investment instruments purchased with original maturities of three months or less to be cash equivalents. Property, Equipment, and Depreciation Property and equipment are stated at cost. The School capitalization policy is and above. Depreciation and amortization of property and equipment are calculated using the straight-line method over the estimated useful lives of the assets, which range from three to twenty years. Donations of property and equipment are recorded at fair value at the date of donation. Z HISD agrees to provide (a) district adopted state textbooks at no cost; and (b) student desk and other appropriate furnishings as currently available at no cost. All title to HISD furnished supplies, equipment, furniture, materials and/or textbooks shall remain the sole property of HISD. Deferred Revenues ESTEM records the quarterly advances of ADA funds received from HISD as deferred revenues (unearned income). As income is earned, it is removed from deferred revenue and recorded as Foundation School Program revenues. Contributions ESTEM records unconditional contributions, including promises to give, as revenue when received. Conditional contributions are recognized as revenue when the conditions on which they depend have been substantially met. Contributions are recorded net of estimates of uncollectible amounts’ ESTEM reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities and changes in net assets as net assets released from restrictions. 102) Gifts of property and equipment are reported as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Operating Revenues Revenues from HISD are a flow-through from the State of Texas: however HISD retains five percent (5%) of the State funding for administrative support. School funds are earned (a) based on reported attendance and (b) project-by-project approved reimbursable expenses. Revenues for (a) are recognized as earned and billed based on the Average Daily Attendance (ADA). The billing rates per enrolled student are stipulated in the agreement. HISD's support per student (ADA billing) is per school year, which is estimated at 180 school days. These anticipated allotments are disbursed in advance quarterly with the final settlement on or before the (a) end of the school year; and (b) reimbursable expenses are recognized as earned when the related program expenditures are incurred. These reimbursable expenses are project specific. Consequently, the use of these funds are temporarily restricted and released from restriction as the projects are completed. Should the cumulative attendance rate fall below 96% for any of the three campuses, HISD has the option of implementing a revised payment schedule based on the actual cumulative attendance rate. Related Organizations Related organizations are excluded from the financial reporting entity because ESTEM’s accountability does not extend beyond its own actions. Audited financial statements are available from the respective organizations, Related organizations are described as follows: Energized for Excellence Academy (EEA) and Inspired for Excellence Academy (IEA) are charter schools and have been organized by the same individuals. EEA share board members while IRA and ESTEM have the same board of directors. EEA and IEA maintain separate books and records, and separate bank accounts, from those of ESTEM. Title to all property owned EEA and IEA are recorded in their respective names. Educational Learning and Enrichment Center, Inc. (ELEC) is a for-profit ‘organization owned by the School's Founder and Head of Schools. a(3) Related Party Transactions From time to time non-interest bearing advances are made between these related organizations based on cash flow needs. The advances and repayments are approved by the Board. ‘The amount due from affiliates are the amounts due from ELEC and Inspired in the amount of $1,161,032 and $287,675, respectively, for operating expense reimbursements. Management believes the related entity receivables are 100% collectible at July 31, 2017; therefore, no allowance for bad debt has been recorded. See Note 12 for disposition of amounts due from related parties. The board chairman of EEA (a related entity), served as legal counsel and management consultant for ESTEM. There is a written agreement. The legal counsel/consultant was paid $41,500. There were no unpaid or outstanding fees at July 31, 2017. (4) Property and Equipment Property and equipment at July 31, 2017 is as follows: Land Improvements $ 303,909 Building and Improvements 203,432 Leasehold Improvements 469.238 Furniture and fixtures 439,708 Total $ 1.416.287 Less accumulated depreciation & Amortization (1,245,533) Net property and equipment $170,754 Depreciation and amortization of property and equipment for the year ended July 31, 2017 was $0. (5) Operating Leases ESTEM West utilizes space leased by EEA at 6107 Bissonnet Street. Future minimum lease payments related to operating leases are detailed as follows: Total rental expense for the year ended July 31, 2017 was $159,847. (6) Legal Issues ESTEM had no outstanding legal claims. R(7) Commitments and Contingencies ESTEM receives pass-through funds from HISD that are governed by various statues and regulations, State program funding is based primarily on student attendance; data submitted to HISD and is subject to audit and adjustments. The programs administered by ESTEM have complex compliance requirements, and should State or Federal auditors discover areas of noncompliance, charter school funds may be subject to refund. (8) Concentrations of credit Risk Arising from Cash Deposits in Excess of Insured Limits ESTEM maintains its cash accounts in one financial institution located in Houston. ‘The accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 each. At July 31, 2017, $1,434,182 of ESTEM’s cash balances were not fully insured. (9) Health Care Coverage During the year ended July 31, 2017, eligible employees of the charter school, who elected to participate, were covered by a Health Insurance Plan (the Plan). Employees become eligible upon completion of their probationary period (90 days) and pay $139.69 towards the cost of their health care premiums. Employees may enroll family members and pay the required premiums. Premiums were paid to licensed insurers. (10) Income Taxes No provision for federal income taxes has been made due to the tax-exempt status of ESTEM under Internal Revenue Code 501 (c)(8). ESTEM has also been classified as an entity that is not a private foundation within the meaning of Section 509(a) and. qualifies for deductible contributions as provided in Section 170(b)(1)(A)(ti. ESTEM's Forms 990, Return of Organization Exempt from Income Tax, for the years ending 2015, 2016 and 2017 are subject to examination by the IRS, generally for three years after they are filed. (11) Management Fee ESTEM computes and records management fees and related management expenses based upon a schedule of fees and management cost that have been approved by ESTEM’s Board of Directors. (12) Subsequent Events ‘The date through which subsequent events have been evaluated is March 1, 2018, which is the date the financial statements were available to be issued. 3BSUPPLEMENTAL DATA“ENERGIZED FOR STEM ACADEMY, INC. SCHEDULE OF EXPENSES For the year ended July 31, 2017 Object Code Campus321 Campus 485 Campus390_ Campus 459 Total 6100 Payroll Costs S 800,888 $ 1036825 $ 1,019,403 § 687,755 $ 3,544,871 Professional and Contracted 6200 Services 422,022 601,366 329,483 327,956 1.680.827 6300 ——-Suppliesand Materials 39.089 73.41 85,225 60,688 258,473 6400 Other Operating Costs 89,792 314,936 193,338 182,744 780,810 Total Expenses S$ 1351,7 _ § 2,026,598 $ 1.627.449 $ 1.259.143 § 6,266,981 15ENERGIZED FOR STEM ACADEMY, INC. SCHEDULE OF CAPITAL ASSETS CAMPUS # 321 July 31, 2017 Ownership Interest Local State Federal Total 1520 Land and Improvements s - 8 8 - $ - 1531 Building and Building Equipment 7 - . 1539 Furniture and equipment - na75 - n975 1520 Leasehold Improvements Total Property and Equipment _$ - $175 $ “ 3 16 ‘1520 1531 1539 1520 ENERGIZED FOR STEM ACADEMY, INC. SCHEDULE OF CAPITAL ASSETS CAMPUS #390, Land and Improvements Building and Building Equipment Furniture and equipment Leasehold Improvements Total Property and Equipment July 31, 2017 Ownership Interest Local State _-Federal__ Total s - $ 16638 § = S$ 166.361 - 11352 - m.352 - 183,926 - 183.924 ___2714606 $ wvENERGIZED FOR STEM ACADEMY, INC. SCHEDULE OF CAPITAL ASSETS CAMPUS #455 July 31, 2017 Ownership Interest Local State Federal Total 1520 Land and improvements $ od S$ 137,548 $ - S$ 137.548 1531 Building and Building Equipment - 92,080 : 92,080 1539 Furniture and equipment Z 148.037 _ 148,037 1520 Leasehold improvements 188.744 188,744 Total Property and Equipment $56 $ = $566,409 18ENERGIZED FOR STEM ACADEMY, INC. SCHEDULE OF CAPITAL ASSETS CAMPUS #459, July 31, 2017 1520 Land and improvements $ es 2S Sas - 1531 Building and Building Equipment - - = : 1539 Furniture and equipment 5 44,860 - 44,860 1520 Leasehold Improvements 7 - Total Property and Equipment _$ = _$ 46860 = $4660 19ENERGIZED FOR STEM ACADEMY, INC. BUDGETARY COMPARISON FOR CAMPUS #321 For the year ended July 31, 2017 Budgeted Amounts Actual Original Final _Amounts _ Revenue and other support: Local Support: 5700 Other revenues from Local Sources _$ 30,000 _$. $_wo51 $1449 ‘Total Property and Equipment 30,000 27,051 1449 State Program Revenue: 5700 Schulumberger : - a _ 5812 ASPIRE Grant 17,000 16,500 5812 HISD- ADA Fee 1,000,000 983,949 ‘Total Property and Equipment 1,017,000 1,000,449 Federal Program Revenue: 5929 Title J, Part A -Regular - Schoolwide 54,166 54,165 53,534 631 5929 ‘Title Ill, Part A - LEP 720 m0 eB ‘Total Federal Program Revenue 54,885 54,254 ea ‘Total Revenues and Other Support 1,120,081 1,100,385 1,081,754 18,631 Expenses: 11 Instruction 650,000 520,500 513,902 6,598 12 Instructional Resources and Media Services 7,500 : 13. Curriculum Development and Instructional : Staff Development 15,000 é 21 Instructional Leadership 50,000 E 23 School Leadership 350,000 355,000 353,433, 1,567 30 Support Services 75,000 73,250 ne 1409 31 Guid. Counseling and Eval. Services 6500 : 38 Health Services 8,650, a 34 Student (Pupil) Transportation 17,500 16,500 15,980 520 35 Food Services 4,750 . 96 Cocurricular/ Extracurricular Activities 25,000 21,000 20,324 676 41 General Administration 150,750 140,000 136,859 341 51 Plant Maintenance and Operations 250,000 200,000 194714 5,286 52 Security and Monitoring Services 48,500 45,000 44,738 262 Total Expenses 1,656,150 1351791 19,459 Change in Net Assets $_ (636109) _$ 270865) _$_Q7007) _S (828) 205700 5700 5812 5812 5929 5929 un R 2B a 23 30 31 33 ENERGIZED FOR STEM ACADEMY, INC. BUDGETARY COMPARISON FOR CAMPUS #390 For the year ended July 31, 2017 Revenue and other support: Local Support: Other revenues from Local Sources ‘Total Property and Equipment State Program Revenue: Schulumberger ASPIRE Grant HISD- ADA Fee ‘Total Property and Equipment Federal Program Revenue: Title 1, Part A -Regular CA Federal Revenues Distributed by HISD ‘Total Federal Program Revenue Total Revenues and Other Support Expenses: Instruction Instructional Resources and Media Services Curriculum Development and Instructional Staff Development Instructional Leadership School Leadership Support Services Guid. Counseling and Eval. Services Health Services Student (Pupil) Transportation Food Services Cocurricular/ Extracurricular Activities General Administration Plant Maintenance and Operations Security and Monitoring Services Total Expenses Change in Net Assots Budgeted Amounts Actual Original Final Amounts 4898, 4898 2,500 2410 15,000 14532 2850000 2012275 —2.367,500_ 97,2381 97,231 97,139 3,630, 3,630 3,630 100,861 100,861 2,474,861 2,138,361 2,134,884 1,300,000 950,000 947,308 7,500 15,000 50,000 250,000 220,000 213,195 5,000 2,700 2,638 6,500 8,650 5,100 4872 4.500 4,089 200,000 197,943 200,000 216,052 45,000 41351 2,220,150 1,627,300 1,627 Ass $ 254711 $511,061 _$ 507,436 21 Variance from Final Budget 102 102 an 2.087 (16,052) 3,619 148) $3,625ENERGIZED FOR STEM ACADEMY, INC. BUDGETARY COMPARISON FOR CAMPUS #455 For the year ended July 31, 2017 Variance Budgeted Amounts Actual from Final Final Amounts Budget Revenue and other support: Local Support: 5700 Other revenues from Local Sources 27,051 1449 ‘Total Property and Equipment 27,051 1449 State Program Revenue: 5812 High School Allotment - 50,204 50,204 - 5812 ASPIREGrant 17,000 16,500 5812. HISD- ADA Fee 2.01 1,981,009 Total Property and Equipment 2,077,204 2,047,713 Federal Program Revenue: j 5929 ‘Title I, Part A -Regular - Schoolwide 54,166 136,800 136,517 283 5929 ‘Title IN, Part A-LEP ‘Total Federal Program Revenue 136,800 136517 283 ‘Total Revenues and Other Support 2,149,916 2,242,504 2.211.281 31,203, Expenses: 11 Instruction 1,107,916 1,050,000 1,083,174 6826 12 Instructional Resoures and Media Services, 3,500 z 13. Curriculum Developmeitt and Instructional Staff Development 12,000 : 21 Instructional Leadership 50,000 a 23 School Leadership 325,000 320,600 315,475 5125 30 Support Services 65,000 50,000 46,064 3,936 31 Guid, Counseling and Eval. Services 6500 z 33 Health Services 5,500 s 34 Student Pupil) Transportation 60,000 81,300 79047 2,258 35 Food Services 1750 ‘ : 36 Cocurricular/Extracurricular Activities 37,500 37,500 36,720 780 41 General Administration 175,250 175,250 170,92 5,058 51 Plant Maintenance and Operations 250,000 278243 4757 52 Security and Monitoring Services 50,000 ‘Total Expenses 2,149,916 2,026,599 28,051 ‘Change in Net Assets $_wase_ $3,172 2ENERGIZED FOR STEM ACADEMY, INC. BUDGETARY COMPARISON FOR CAMPUS #459 For the year ended July 31, 2017 459 Variance Budgeted Amounts Actual from Final Original Final Amounts Budget Revenue and other support: Local Support: 5700 Other revenues from Local Sources 6.500 5,000 4898 102 Total Property and Equipment 6,500, 5,000 4898 102 State Program Revenue: 5700 Schulumberger 2,500 2,500 2410 90 5812 ASPIREGrant 15,000 15,000 14,533 467 5812 HISD ADA Fee 1,750,000 1,600,000 1,557,367 42,633 ‘Total Property and Equipment _1,767500_ 1617500 1574310 43,190 Federal Program Revenue: 5929 ‘Title I, Part A -Regular - Schoolwide 97,231 7231 43.545 53,686 5929 ‘Title II, Part. A- LEP 3.630 3,630 3,630 ‘ Total Federal Program Revenue 100861 100,861 47175 _—*58,686 Total Reversgiestel Soe apport e_1S7ES61 T2361 oe 1626083 ESTE Expenses: 11__ Instruction 750,000 730,000 72.775 7225 12 Instructional Resources and Media Services 7,500 : 13 Curriculum Development and Instructional 3 Staff Development 15,000 : 21 Instructional Leadership 50,000 : 23 School Leadership 100,200 90,000 88,213 1787 30 Support Services 5,000 2,700 2,638 2 31 Guid, Counseling and Eval. Services 6500 - 33 Health Services 8,550 - 34 Student (Pupil) Transportation 3,500 1,500 1.543 (43) 35 Food Services 730 = 36 Cocurricular/Extracurricular Activities 4,500 4,000 3,836 164 41 General Administration 225,000 200,000 194,750 5,250 51 Plant Maintenance and Operations 150,750 210,000 207,904 2,096 52 Security and Monitoring Services 48,500 41,500 40,21 41379 Total Expenses 1375850 1,261,780 17,920 Change in Net Assets 499.001 43661 _S__364003_ $79,058 23P.O, Box 1824 Stafford, TX 77497-1824 (281) 879-4442 (281) 879-4443 Fax info.gegepa@gmail.com COMPLIANCE AND INTERNAL, CONTROL, 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 The Board of Directors Energized for STEM Academy, Inc. Thave audited the financial statements of Energized for STEM Academy, Inc. (ESTEM) (a nonprofit organization) as of and for the year ended July 31, 2017, and have issued my report thereon dated March 1, 2018. I conducted my 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. Internal Control over Financial Reporting In planning and performing my audit, I considered ESTEM's internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the effectiveness of the ESTEM 's internal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of the Organization's internal control over financial reporting. A control deficiency 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 misstatements ona timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the organization’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the organization’s financial 24statements that is more than inconsequential will not be prevented or detected by the organization’ internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the organization's internal control. My consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I consider to be material weaknesses, as defined above, Compliance and Other Matters As part of obtaining reasonable assurance about whether ESTEM’s financial statement are free of material misstatement, I 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 my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances on noncompliance or other matters that are required to be reported under Government Auditing Standards, This report is intended solely for the information and use of management, the Board of Directors, others within the entity, The Houston Independent School District, the Texas Education Agency, and federal awarding agencies and pass through entities and is not intended to be and should not be used by anyone other than the specified parties. eee George Edward Grigsby, CPA Stafford, Texas March 1, 2018 25ENERGIZED FOR STEM ACADEMY, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS, For the year ending July 31, 2017 L Summary of Auditor's Results + Type of auditor's report issued: 1 ed. + Significant deficiencies identified that were not considered to be material ‘weaknesses: None. + Material weaknesses identified: None. + Noncompliance material to the financial statements noted: None. ‘+ Significant deficiencies identified: None. Federal Awards: Auditee did not mect the $750,000 threshold for a single Audit. + The dollar threshold used to distinguish between Type A and Type B programs: $750,000. IL. Findings related to the Financial Statements None. 26