Audit 290654

Accounting Policies: NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Bear Creek Community Charter School (the School) located in Bear Creek Township, Pennsylvania, operates a charter school under an approved charter received from the Wilkes-Barre Area School District, acting pursuant to authority conferred under the Public School Code of 1949, as amended by Act 22 of 1997, the Charter School Law, 24 P.S. sections 17-1701-A et seq. REPORTING ENTITY Consistent with guidance contained in Statement No. 61 of the Governmental Accounting Standards Board (GASB), The Financial Reporting Entity: Omnibus- an amendment of GASB Statement No. 14, the criteria used by the School to evaluate the possible inclusion of related entities (Authorities, Boards, Councils, etc.) within its reporting entity are financial accountability and the nature and significance of the relationship. In determining financial accountability in a given case, the School reviews the applicability of the following criteria: The School is financially accountable for: • Organizations that make up the School’s legal entity. • Legally separate organizations if School officials appoint a majority of the organization’s governing body and the School is able to impose its will on the organization or if there is a potential for the organization to provide specific financial benefits to, or impose specific burdens on, the School as defined below. Impose Its Will – If the School can significantly influence the programs, projects or activities of, or the level of services performed or provided by the organization. Financial Benefit or Burden – If the School (1) is entitled to the organization’s resources or (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide support to the organization or (3) is obligated in some manner for the debt of the organization. • Organizations that are fiscally dependent on the School. Fiscal dependency is established if the organization is unable to adopt its own budget, levy taxes or set rates or charges, or issue bonded debt without the approval of the School. As defined, the Bear Creek Foundation, Inc. is a component unit of the Bear Creek Community Charter School (the primary government) and is considered a part of the reporting entity. The Bear Creek Foundation, Inc. is a legally separate organization that owns property which is leased to the Bear Creek Community Charter School. The School is also a co-borrower on the debt of the Bear Creek Foundation, Inc. resulting in financial benefit and burden. These financial statements present only the data of the Bear Creek Community Charter School (the primary government) and do not include the data of the Bear Creek Foundation, Inc. (component unit). Reporting in conformity with generally accepted accounting principles would require the inclusion of the Bear Creek Foundation, Inc. (component unit) in the Bear Creek Community Charter School (primary government) thus these financial statements do not conform to generally accepted accounting principles. Requests for financial statements of the Bear Creek Foundation, Inc. should be addressed to the Treasurer, Bear Creek Foundation, Inc., 1900 Bear Creek Boulevard, Bear Creek Township, PA 18702. B. BASIS OF ACCOUNTING This financial statement has been prepared on the modified basis of accounting except for the National School Lunch Program which uses the full accrual method. C. INVENTORY OF MATERIALS, SUPPLIES AND EQUIPMENT Materials, supplies and equipment of all federal funds except the National School Lunch Programs Inventories are expended on a first-in, first-out basis as the foodstuffs and supplies are consumed in providing meals and services. De Minimis Rate Used: N Rate Explanation: The Auditee did not us the de minimis cost rate.