Audit 290926

Title: Note 1 – Basis of Presentation Accounting Policies: Note 2 – Basis of Accounting Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in Subpart E of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: EES has elected not to use the 10% de minimis indirect cost rate as allowed under Uniform Guidance. The above accompanying schedule of expenditures of federal and state awards (the “Schedule”) includes the federal and state grant activity of Educational Enrichment Systems, Inc. (“EES”) under programs of the federal and state government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the 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”), and the Audit Guide issued by the California Department of Education and California Department of Social Services. Because the Schedule presents only a selected portion of the operations of EES, it is not intended to and does not present the financial position, changes in net assets, or cash flows of EES.

Title: Note 3 – Restatement of Previously Issued Schedule of Expenditures of Federal and State Awards Accounting Policies: Note 2 – Basis of Accounting Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in Subpart E of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: EES has elected not to use the 10% de minimis indirect cost rate as allowed under Uniform Guidance. The schedule of expenditures of federal and state awards for the year ended June 30, 2022, has been revised to include federal expenditures for Federal Assistance Listing Number 93.575 in the amount of $841,371. The required revision was due to incorrect information provided by the grantor who had categorized these funds as state awards and not federal awards. The total expenditures of federal awards changed from $1,279,753 to $2,121,124.