2022-001 Custodial Credit RiskCondition and criteria: The Association is permitted by the State of South Carolina to have its depositsheld at financial institutions to the extent that they do not exceed the FDIC limitof $250,000. All bank accounts with balances exceeding depository insurancelimits must be adequately collateralized. At June 30, 2022, the Association wasunder collateralized.Cause: The Association maintains operating accounts at a bank and during the year, andat year-end, its deposits exceeded $250,000 in that banking institution.Effect: The Association is required to maintain sufficient collateral for all of its depositsthrough arrangements with its financial institutions. By not maintainingsufficient collateral, the Association is at risk of losing excess deposits.Auditor?s Recommendation: The Association should make arrangements to satisfactorily collateralize itsdeposits in order to remain in compliance with state law.Auditee?s Response: The Association will arrange with its bank for its accounts to be managed so asto provide adequate insurance coverage and collateralization.
2022-02 Internal Control over Financial Reporting - AdjustmentsCondition: During the audit process, numerous adjustments were made to the Association?sfinancial records, so as to appropriately present the financial statements inaccordance with governmental accounting requirements and the specificpresentation requirements of the South Carolina Department of Education(?SCDOE?).The Association?s independent auditors may assist in the preparation of accuratefinancial statements but are not considered a part of the Association?s internalcontrol process under audit standards.Criteria: Professional standards issued by the Auditing Standards Board and presentationrequirements of the SCDOE.Cause: The Association?s education management organization provides accountingsupport and also provides management support for the Association?s state andfederal programs. The organization records the underlying financial transactionsfor state and federal funding sources so as to track the receipt and relatedexpenditure of such state and federal funding. The integrity of this systemappears strong. Governmental accounting standards require that receipts andexpenditures be recorded by program in a manner allowing analysis of thefinancial status of each program. The SCDOE has established specific, detailedpresentation requirements for the financial statements of charter schools. TheAssociation experienced difficulties in providing the financial records for auditpurposes in a format which would readily and accurately meet thosegovernmental and SCDOE presentation requirements.Effect: As a result of this condition, it was necessary for the external auditors to makenumerous, significant adjustments to the Association?s accounting records sothat the financial statements would be presented in accordance withgovernmental accounting standards and SCDOE presentation requirements.Recommendation: The Association should ensure that the accounting software utilized by itseducation management organization will enable efficient and accurate recordingof transactions within the account framework required by the SCDOE.Response: The Association is committed to continuing to improve its accounting andfinancial reporting capacity. The education management company has beenmoving to an accounting system that will streamline reporting and providegreater flexibility to analyze data. This will enable reporting within the SCDOEaccount framework.
2022-001 Custodial Credit RiskCondition and criteria: The Association is permitted by the State of South Carolina to have its depositsheld at financial institutions to the extent that they do not exceed the FDIC limitof $250,000. All bank accounts with balances exceeding depository insurancelimits must be adequately collateralized. At June 30, 2022, the Association wasunder collateralized.Cause: The Association maintains operating accounts at a bank and during the year, andat year-end, its deposits exceeded $250,000 in that banking institution.Effect: The Association is required to maintain sufficient collateral for all of its depositsthrough arrangements with its financial institutions. By not maintainingsufficient collateral, the Association is at risk of losing excess deposits.Auditor?s Recommendation: The Association should make arrangements to satisfactorily collateralize itsdeposits in order to remain in compliance with state law.Auditee?s Response: The Association will arrange with its bank for its accounts to be managed so asto provide adequate insurance coverage and collateralization.
2022-001 Custodial Credit RiskCondition and criteria: The Association is permitted by the State of South Carolina to have its depositsheld at financial institutions to the extent that they do not exceed the FDIC limitof $250,000. All bank accounts with balances exceeding depository insurancelimits must be adequately collateralized. At June 30, 2022, the Association wasunder collateralized.Cause: The Association maintains operating accounts at a bank and during the year, andat year-end, its deposits exceeded $250,000 in that banking institution.Effect: The Association is required to maintain sufficient collateral for all of its depositsthrough arrangements with its financial institutions. By not maintainingsufficient collateral, the Association is at risk of losing excess deposits.Auditor?s Recommendation: The Association should make arrangements to satisfactorily collateralize itsdeposits in order to remain in compliance with state law.Auditee?s Response: The Association will arrange with its bank for its accounts to be managed so asto provide adequate insurance coverage and collateralization.
2022-02 Internal Control over Financial Reporting - AdjustmentsCondition: During the audit process, numerous adjustments were made to the Association?sfinancial records, so as to appropriately present the financial statements inaccordance with governmental accounting requirements and the specificpresentation requirements of the South Carolina Department of Education(?SCDOE?).The Association?s independent auditors may assist in the preparation of accuratefinancial statements but are not considered a part of the Association?s internalcontrol process under audit standards.Criteria: Professional standards issued by the Auditing Standards Board and presentationrequirements of the SCDOE.Cause: The Association?s education management organization provides accountingsupport and also provides management support for the Association?s state andfederal programs. The organization records the underlying financial transactionsfor state and federal funding sources so as to track the receipt and relatedexpenditure of such state and federal funding. The integrity of this systemappears strong. Governmental accounting standards require that receipts andexpenditures be recorded by program in a manner allowing analysis of thefinancial status of each program. The SCDOE has established specific, detailedpresentation requirements for the financial statements of charter schools. TheAssociation experienced difficulties in providing the financial records for auditpurposes in a format which would readily and accurately meet thosegovernmental and SCDOE presentation requirements.Effect: As a result of this condition, it was necessary for the external auditors to makenumerous, significant adjustments to the Association?s accounting records sothat the financial statements would be presented in accordance withgovernmental accounting standards and SCDOE presentation requirements.Recommendation: The Association should ensure that the accounting software utilized by itseducation management organization will enable efficient and accurate recordingof transactions within the account framework required by the SCDOE.Response: The Association is committed to continuing to improve its accounting andfinancial reporting capacity. The education management company has beenmoving to an accounting system that will streamline reporting and providegreater flexibility to analyze data. This will enable reporting within the SCDOEaccount framework.
2022-001 Custodial Credit RiskCondition and criteria: The Association is permitted by the State of South Carolina to have its depositsheld at financial institutions to the extent that they do not exceed the FDIC limitof $250,000. All bank accounts with balances exceeding depository insurancelimits must be adequately collateralized. At June 30, 2022, the Association wasunder collateralized.Cause: The Association maintains operating accounts at a bank and during the year, andat year-end, its deposits exceeded $250,000 in that banking institution.Effect: The Association is required to maintain sufficient collateral for all of its depositsthrough arrangements with its financial institutions. By not maintainingsufficient collateral, the Association is at risk of losing excess deposits.Auditor?s Recommendation: The Association should make arrangements to satisfactorily collateralize itsdeposits in order to remain in compliance with state law.Auditee?s Response: The Association will arrange with its bank for its accounts to be managed so asto provide adequate insurance coverage and collateralization.