Conflue nc e Ac ade my, Inc . Audito r Co mmunic a tio ns And Re - - PowerPoint PPT Presentation

Audito r Co mmunic a tio ns And Re sults Of T he Annua l Audit

fo r the ye a r e nde d

June 30, 2017

Conflue nc e Ac ade my, Inc .

Co nflue nc e Ac a de my, I nc .

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• r Bo a rd And Ma na g e me nt Use Only

Bo a rd o f Dire c to rs Co nflue nc e Ac a de my, I nc . a nd F rie nds o f Co nflue nc e Ac a de my

• St. L
• uis, Misso uri

De a r L a die s a nd Ge ntle me n: We a re ple a se d to ha ve the o ppo rtunity to me e t with yo u to disc uss the re sults o f o ur a udit e ng a g e me nt o f Co nflue nc e Ac a de my, I nc . inc luding Co nflue nc e Ac a de my L E A, Gra nd Ce nte r Arts Ac a de my L E A a nd F rie nds o f Co nflue nc e Ac a de my fo r the ye a r e nde d June 30, 2017. T he a c c o mpa nying re po rt pre se nts info rma tio n re g a rding the sc o pe o f o ur a udits a nd o the r ma tte rs, whic h summa rize the re sults o f o ur a udit e ng a g e me nt. We tha nk yo u fo r the o ppo rtunity to b e o f c o ntinue d se rvic e to Co nflue nc e Ac a de my, I nc . We ha ve re c e ive d e xc e lle nt c o o pe ra tio n a nd a ssista nc e fro m ma na g e me nt a nd sta ff, b o th with re spe c t to a c c e ss to re c o rds, suppo rting do c ume nta tio n a nd re spo nse s to inquirie s. No limita tio ns we re impo se d o n o ur a udit pro c e dure s o r the e xte nt o f o ur a udit.

Co nflue nc e Ac a de my, I nc .

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T a b le Of Co nte nts

Page

E ng a g e me nt T e a m 1 Audito r Co mmunic a tio ns 2 - 10 Are a s T ha t Pro vide Oppo rtunity F

• r I

mpro ve me nt 11 Prio r Ye a r Oppo rtunitie s F

• r I

mpro ve me nt 12 Da ta Ana lysis: Summa ry o f Pro c e dure s 13 Be nfo rd’ s L a w 14 E me rg ing T e c hnic a l T

• pic s

15 - 18 I nde pe nde nt Audito rs’ Re po rt On Additio na l I nfo rma tio n 19 Appe ndix A - Ma na g e me nt Re pre se nta tio n L e tte rs

Co nflue nc e Ac a de my, I nc .

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E ng a g e me nt T e a m

Jeff Winter Engagement Partner Brandi Lawyer and Pat Miller Engagement Managers Alyssa Ward Engagement Supervisor Emily Kraenzle Engagement Staff

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns

Bo a rd o f Dire c to rs Co nflue nc e Ac a de my, I nc . a nd F rie nds o f Co nflue nc e Ac a de my

• St. L
• uis, Misso uri

We ha ve a udite d the b a sic fina nc ia l sta te me nts o f Co nflue nc e Ac a de my, I nc . (the Ac a de my), whic h inc lude s se pa ra te a udits fo r Co nflue nc e Ac a de my L E A, Gra nd Ce nte r Arts Ac a de my L E A (GCAA), a nd F rie nds o f Co nflue nc e Ac a de my, a ll fo r the ye a r e nde d June 30, 2017. Our a udits we re pe rfo rme d in a c c o rda nc e with a uditing sta nda rds g e ne ra lly a c c e pte d in the Unite d Sta te s o f Ame ric a a nd, e xc e pt fo r F rie nds o f Co nflue nc e Ac a de my, the sta nda rds a pplic a b le to fina nc ia l a udits c o nta ine d in Go ve rnme nt Auditing Sta nda rds issue d b y the Co mptro lle r Ge ne ra l o f the Unite d Sta te s. T ho se sta nda rds re quire tha t we pla n a nd pe rfo rm the a udit to o b ta in re a so na b le a ssura nc e a b o ut whe the r the fina nc ia l sta te me nts a re fre e fro m ma te ria l missta te me nt a nd pre se nte d in a c c o rda nc e with a c c o unting princ iple s g e ne ra lly a c c e pte d in the Unite d Sta te s o f Ame ric a . Our a udits invo lve d pe rfo rming pro c e dure s to o b ta in e vide nc e suppo rting the a mo unts a nd disc lo sure s in the fina nc ia l sta te me nts. We a lso e va lua te d the a ppro pria te ne ss o f a c c o unting po lic ie s use d b y the Ac a de my a nd the re a so na b le ne ss o f sig nific a nt a c c o unting e stima te s ma de b y the Ac a de my’ s ma na g e me nt, a s we ll a s e va lua te d the o ve ra ll pre se nta tio n o f the fina nc ia l sta te me nts. Auditing sta nda rds re quire the a udito r to e nsure tha t tho se c ha rg e d with c o rpo ra te g o ve rna nc e re c e ive a dditio na l info rma tio n re g a rding the sc o pe a nd re sults o f the a udits tha t ma y a ssist the g o ve rning b o dy in o ve rse e ing the fina nc ia l re po rting a nd disc lo sure pro c e ss fo r whic h ma na g e me nt is re spo nsible . T he fo llo wing se c tio n de sc rib e s ma tte rs whic h a re re q uire d to b e re po rte d to yo u. T his info rma tio n is inte nde d so le ly fo r the use o f the Bo a rd o f Dire c to rs o f Co nflue nc e Ac a de my, I nc . a nd is no t inte nde d to b e a nd sho uld no t b e use d b y a nyo ne o the r tha n the se spe c ifie d pa rtie s.

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Auditor s’ Re sponsibility Unde r U.S. Ge ne r ally Ac c e pte d Auditing Standards

Our re spo nsib ility, a s de sc rib e d b y pro fe ssio na l sta nda rds, is to e xpre ss o pinio ns a b o ut whe the r the fina nc ia l sta te me nts pre pa re d b y ma na g e me nt with o ur a ssista nc e a re fa irly pre se nte d, in a ll ma te ria l re spe c ts, in c o nfo rmity with U.S. g e ne ra lly a c c e pte d a c c o unting princ iple s a nd tha t Co nflue nc e Ac a de my, I nc . a nd a ll re la te d e ntitle s (the Ac a de my) ha s c o mplie d in a ll ma te ria l re spe c ts with the a pplic a b le c o mplia nc e re q uire me nts o f its ma jo r fe de ra l pro g ra ms. Our a udit o f the fina nc ia l sta te me nts do e s no t re lie ve yo u o r ma na g e me nt o f re spo nsib ility fo r the a c c ura c y

• f the fina nc ia l sta te me nts.

As pa rt o f o ur a udit, we c o nside re d the inte rna l c o ntro l o f the Ac a de my. Suc h c o nside ra tio ns we re so le ly fo r the purpo se o f de te rmining o ur a udit pro c e dure s a nd no t to pro vide a ny a ssura nc e c o nc e rning suc h inte rna l c o ntro l. Re po rts issue d b y Rub inBro wn L L P:



Gra nd Ce nte r Arts Ac a de my, L E A

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An unmo difie d o pinio n o n the fina nc ia l sta te me nts o f Gra nd Ce nte r Arts Ac a de my, L E A.



An e mpha sis o f ma tte r re la te d to sub sta ntia l do ub t a b o ut the L E A’ s a b ility to c o ntinue a s a g o ing c o nc e rn.



Our I nde pe nde nt Audito rs’ Re po rt o n inte rna l c o ntro l

• ve r fina nc ia l re po rting a nd o n c o mplia nc e a nd o the r

ma tte rs b a se d o n a n a udit o f fina nc ia l sta te me nts pe rfo rme d in a c c o rda nc e with Go ve rnme nt Auditing Sta nda rds.



An unmo difie d o pinio n o n c o mplia nc e with re q uire me nts a pplic a b le to ma jo r fe de ra l pro g ra ms a nd

• ur re po rt o n inte rna l c o ntro l o ve r c o mplia nc e in

a c c o rda nc e with Unifo rm Guida nc e .



An unmo difie d o pinio n o n sta te c o mplia nc e re q uire me nts re la ting to a tte nda nc e a nd b udg e ts.

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F rie nds o f Co nflue nc e Ac a de my

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An unmo difie d o pinio n o n the fina nc ia l sta te me nts o f F rie nds o f Co nflue nc e Ac a de my.

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Co nflue nc e Ac a de my, L E A

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An unmo difie d o pinio n o n the fina nc ia l sta te me nts o f Co nflue nc e Ac a de my, L E A.

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Auditor s’ Re sponsibility Unde r U.S. Ge ne r ally Ac c e pte d Auditing Standards (Continue d)

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Re po rts issue d b y Rub inBro wn L L P (Co ntinue d):

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Our I nde pe nde nt Audito rs’ Re po rt o n inte rna l c o ntro l

• ve r fina nc ia l re po rting a nd o n c o mplia nc e a nd o the r

ma tte rs b a se d o n a n a udit o f fina nc ia l sta te me nts pe rfo rme d in a c c o rda nc e with Go ve rnme nt Auditing Sta nda rds.



An unmo difie d o pinio n o n c o mplia nc e with re q uire me nts a pplic a b le to ma jo r fe de ra l pro g ra ms a nd

• ur re po rt o n inte rna l c o ntro l o ve r c o mplia nc e in

a c c o rda nc e with Unifo rm Guida nc e .



An unmo difie d o pinio n o n sta te c o mplia nc e re q uire me nts re la ting to tra nspo rta tio n sta tute s, a tte nda nc e , a nd b udg e ts.

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Co nflue nc e Ac a de my, I nc . (Co nso lida te d)

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An unmo difie d o pinio n o n the c o nso lida te d fina nc ia l sta te me nt o f Co nflue nc e Ac a de my, I nc .



An I nde pe nde nt Ac c o unta nts’ Re po rt a tte sting to c e rta in de b t c o ve na nts re la te d to the Ac a de my, a s de fine d in the L

• a n a nd T

rust Ag re e me nt.



F

• rm 990 ta x re turn.

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Othe r Infor mation In Doc ume nts Containing Audite d F inanc ial State me nts

T

• o ur kno wle dg e , the 2017 a udite d fina nc ia l sta te me nts a re

no t inc lude d within a ny o the r do c ume nt.

Planne d Sc ope And T iming Of T he Audit

We pe rfo rme d the a udit a c c o rding to the pla nne d sc o pe a nd timing tha t wa s pre vio usly c o mmunic a te d to yo u a nd in the e ng a g e me nt le tte r, da te d Ma y 10, 2017, re g a rding the na ture , timing a nd e xte nt o f o ur a udit pro c e dure s.

Qualitative Aspe c ts Of Ac c ounting Pr ac tic e s

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Sig nific a nt a c c o unting po lic ie s a re de sc rib e d in No te 1 fo r e a c h sta te me nt a udite d.



During 2017, Ac c o unting Sta nda rd 2015-03, I nte re st – I mputa tio n o f I nte re st (Sub to pic 835-30) :Simplifying the Pre se nta tio n o f De b t I ssua nc e Co sts wa s imple me nte d.



Aside fro m this, no ne w a c c o unting po lic ie s we re a do pte d a nd the a pplic a tio n o f e xisting po lic ie s wa s no t c ha ng e d.



We no te d no tra nsa c tio ns e nte re d into during the ye a r fo r whic h the re wa s a la c k o f a utho rita tive g uida nc e o r c o nse nsus.



No sig nific a nt tra nsa c tio ns ha ve b e e n re c o g nize d in a diffe re nt pe rio d tha n whe n the tra nsa c tio ns o c c urre d.

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Manage me nt Judgme nts And Ac c ounting E stimate s

T he pre pa ra tio n o f the fina nc ia l sta te me nts re q uire s the use o f a c c o unting e stima te s. Ce rta in e stima te s a re pa rtic ula rly se nsitive due to the ir sig nific a nc e to the fina nc ia l sta te me nts a nd the po ssib ility tha t future e ve nts ma y diffe r sig nific a ntly fro m ma na g e me nt’ s e xpe c ta tio ns. We e va lua te d the ke y fa c to rs a nd a ssumptio ns use d to de ve lo p the e stima te s no te d a t rig ht in de te rmining tha t the se a mo unts a re re a so na b le in re la tio n to the fina nc ia l sta te me nts ta ke n a s a who le . T he mo st no ta b le e stima te s a ffe c ting the fina nc ia l sta te me nts a re :

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De pre c ia tio n o n c a pita l a sse ts

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F a ir va lue o f minimum le a se pa yme nts o n c a pita l le a se a g re e me nts with the L ib ra ry (Co nflue nc e ), Be a ux Arts (GCAA), a nd the Sun T he a tre (GCAA), a s we ll a s the re la te d a mo rtiza tio n e xpe nse



Allo wa nc e fo r do ub tful a c c o unts re la te d to the lo a n b e twe e n Co nflue nc e a nd GCAA

F inanc ial State me nt Disc losur e s

T he disc lo sure s a re ne utra l, c o nsiste nt a nd c le a r. Ce rta in disc lo sure s a re pa rtic ula rly se nsitive b e c a use o f the ir sig nific a nc e to the fina nc ia l sta te me nts’ use rs. T he mo st se nsitive disc lo sure s a ffe c ting the fina nc ia l sta te me nts a re : T he mo st se nsitive disc lo sure s a ffe c ting the fina nc ia l sta te me nts a re :

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Disc lo sure o n L E A No te s Re c e iva b le

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Disc lo sure o n L

• ng -T

e rm De b t

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Disc lo sure o n L e a se s (re la te d to c a pita l le a se s with the L ib ra ry, Be a ux Arts a nd the Sun T he a tre )

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Disc lo sure fo r Re tire me nt Pla n

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Disc lo sure fo r sub se q ue nt e ve nts

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Diffic ultie s E nc ounte r e d In Pe r for ming T he Audit

T he re we re no diffic ultie s e nc o unte re d in de a ling with ma na g e me nt re la te d to pe rfo rma nc e o f the a udit.

Cor r e c te d And Unc or r e c te d Misstate me nts Conflue nc e Ac ade my, L E A:

Ma na g e me nt ha s c o rre c te d a ll a udit a djustme nts c o nside re d to b e ma te ria l, e ithe r individua lly o r in the a g g re g a te , whic h c o lle c tive ly de c re a se d ne t po sitio n b y $1,867,231, re la te d so le ly to c urre nt ye a r pe nsio n e ntrie s. An unc o rre c te d missta te me nt re la te d to inte re st e xpe nse o n the c a pita l le a se wa s no te d tha t ma na g e me nt ha s de te rmine d is no t ma te ria l to the fina nc ia l sta te me nts a s a who le . Co rre c tio n o f this missta te me nt wo uld ha ve de c re a se d ne t po sitio n b y $168,361.

GCAA:

Ma na g e me nt ha s c o rre c te d a ll a udit a djustme nts c o nside re d to b e ma te ria l, e ithe r individua lly o r in the a g g re g a te , whic h c o lle c tive ly de c re a se d ne t po sitio n b y $673,416, re la te d prima rily to c urre nt ye a r pe nsio n e ntrie s. T he re we re no a c c umula te d unc o rre c te d missta te me nts re c o rde d in the c urre nt ye a r.

F rie nds:

T he re we re no ma te ria l a udit a djustme nts in the c urre nt ye a r. T he re we re no a c c umula te d unc o rre c te d missta te me nts re c o rde d in the c urre nt ye a r.

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Disagre e me nts With Manage me nt

F

• r purpo se s o f this le tte r, pro fe ssio na l sta nda rds de fine a

disa g re e me nt with ma na g e me nt a s a fina nc ia l a c c o unting , re po rting , o r a uditing ma tte r, whe the r o r no t re so lve d to o ur sa tisfa c tio n, tha t c o uld b e sig nific a nt to the fina nc ia l sta te me nts

• r the a udito rs’ re po rt. We a re ple a se d to re po rt tha t no suc h

disa g re e me nts a ro se during the c o urse o f o ur a udit.

Manage me nt Re pr e se ntations

Ple ase se e attac he d manag e me nt re pre se ntatio n le tte rs. We re q ue ste d c e rta in re pre se nta tio ns fro m ma na g e me nt tha t a re inc lude d in the a tta c he d le tte rs.

Manage me nt Consultations With Othe r Inde pe nde nt Ac c ountants

I n so me c a se s, ma na g e me nt ma y de c ide to c o nsult with o the r a c c o unta nts a b o ut a uditing a nd a c c o unting ma tte rs, simila r to

• b ta ining a “se c o nd o pinio n” o n c e rta in situa tio ns. I

f a c o nsulta tio n invo lve s a pplic a tio n o f a n a c c o unting princ iple to a n e ntity’ s fina nc ia l sta te me nts o r a de te rmina tio n o f the type o f a udito rs’ o pinio n tha t ma y b e e xpre sse d o n tho se sta te me nts,

• ur pro fe ssio na l sta nda rds re q uire the c o nsulting a c c o unta nt to

c he c k with us to de te rmine tha t the c o nsulta nt ha s a ll the re le va nt fa c ts. T

• o ur kno wle dg e , the re we re no suc h

c o nsulta tio ns with o the r a c c o unta nts.

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Othe r Audit F indings Or Issue s

T he re we re no ma tte rs o f sig nific a nt disc ussio n tha t a ffe c te d

• ur re te ntio n a s the Ac a de my’ s a udito rs.

Othe r Matte rs

Ac c o unting princ iple s g e ne ra lly a c c e pte d in the Unite d Sta te s

• f Ame ric a re q uire tha t the Ma na g e me nt’ s Disc ussio n a nd

Ana lysis b e pre se nte d to supple me nt the b a sic fina nc ia l sta te me nts. We ha ve a pplie d c e rta in limite d pro c e dure s to the re q uire d supple me nta ry info rma tio n in a c c o rda nc e with a uditing sta nda rds g e ne ra lly a c c e pte d in the Unite d Sta te s o f Ame ric a , whic h c o nsiste d o f inq uirie s o f ma na g e me nt a b o ut the me tho ds o f pre pa ring the info rma tio n a nd c o mpa ring the info rma tio n fo r c o nsiste nc y with ma na g e me nt’ s re spo nse s to

• ur inq uirie s, the b a sic fina nc ia l sta te me nts, a nd o the r

kno wle dg e we o b ta ine d during o ur a udit o f the b a sic fina nc ia l sta te me nts. We do no t e xpre ss a n o pinio n o r pro vide a ny a ssura nc e o n the info rma tio n b e c a use the limite d pro c e dure s do no t pro vide us with suffic ie nt e vide nc e to e xpre ss a n o pinio n

• r pro vide a ny a ssura nc e .

Co nflue nc e Ac a de my, I nc .

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Audito r Co mmunic a tio ns (Co ntinue d)

ARE A COMME NT S

Othe r Matte rs

With re spe c t to the supple me nta ry info rma tio n (Sc he dule o f Re ve nue s, E xpe nditure s And Cha ng e s I n F und Ba la nc e s – Budg e t T

• Ac tua l - 2007 Bo nd F

und a nd Sc he dule o f Re ve nue s By So urc e - Go ve rnme nta l F unds) a c c o mpa nying the b a sic fina nc ia l sta te me nts, we ma de c e rta in inq uirie s o f ma na g e me nt a nd e va lua te d the fo rm, c o nte nt a nd me tho ds

• f pre pa ring the info rma tio n to de te rmine tha t the info rma tio n

c o mplie s with U.S. g e ne ra lly a c c e pte d a c c o unting princ iple s, the me tho d o f pre pa ring it ha s no t c ha ng e d fro m the prio r pe rio d a nd the info rma tio n is a ppro pria te a nd c o mple te d in re la tio n to o ur a udit o f the b a sic fina nc ia l sta te me nts. We c o mpa re d a nd re c o nc ile d the supple me nta ry info rma tio n to the unde rlying a c c o unting re c o rds use d to pre pa re the b a sic fina nc ia l sta te me nts o r to the b a sic fina nc ia l sta te me nts the mse lve s.

Co nflue nc e Ac a de my, I nc .

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• r Bo a rd And Ma na g e me nt Use Only

Are a s T ha t Pro vide Oppo rtunity F

• r I

mpro ve me nt

We r e c omme nd the Boar d of Dir e c tor s imme diate ly imple me nt a c ost saving str ate gy to e liminate the e ffe c ts of e nr

• llme nt de c line s at c e r

tain sc hools of Conflue nc e L E A.

During o ur a udit o f Co nflue nc e L E A we no te d tha t to ta l una ssig ne d fund b a la nc e ha s c o ntinue d to de c line fro m 41% o f g e ne ra l fund e xpe nditure s in 2016 to 23% o f to ta l g e ne ra l fund e xpe nditure s in 2017. E ve n mo re pre ssing is tha t unre stric te d fund b a la nc e ha s de c re a se d dra ma tic a lly in 2017 fro m $8.8 millio n in 2016 to $4.7 millio n in 2017. T his wa s prima rily a func tio n o f de c re a sing re ve nue s, inc re a se d c o sts a nd the $2.3 millio n lo a n ma de to F rie nds fo r the purc ha se o f the CPA building . Subse que nt to the 2017 fisc a l ye a r e nd it wa s no te d tha t Co nflue nc e Ac a de my L E A ha s e xpe rie nc e d de c lining e nro llme nt a t its No rth City sc ho o l lo c a tio ns a nd will e xpe rie nc e c a sh sho rtfa lls if c e rta in ste ps a re no t ta ke n by the Bo a rd. All o f this ra ise s c o nc e rns a b o ut the e ntity’ s fina nc ia l via bility. Ma na g e me nt a nd the Bo a rd sho uld c o ntinue to e va lua te Co nflue nc e Ac a de my L E A’ s o pe ra tio ns a nd c o nse rva tive ly ma na g e the fina nc ia l a c tivitie s a nd b udg e t to a vo id c o ntinue d de fic its.

Co nflue nc e Ac a de my, I nc .

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Prio r Ye a r Oppo rtunitie s F

• r I

mpro ve me nt

T he ne w Unifo rm G uid a nc e fo r fe d e ra l g ra nt a d ministra tio n ha s d e ta ile d pro c ure me nt re g ula tio n tha t a re e ffe c tive July 1, 2016. We re c o mme nd Co nflue nc e impro ve the ma inte na nc e o f the ir p ro c ure me nt file s a nd the re te ntio n o f d o c ume nta tio n re g a rd ing the so lic ita tio n o f ve nd o rs. Do c ume nta tio n sho uld e xist to sho w a d he re nc e with the Ac a d e my’ s p o lic ie s. Ana lysis a nd e xp la na tio ns fo r ve nd o r se le c tio n d e c isio ns sho uld b e c le a rly d o c ume nte d . I f the re is o nly a sing le so urc e so lutio n, d o c ume nta tio n sho uld b e re ta ine d re g a rd ing why a d d itio na l so lic ita tio ns we re no t

• b ta ine d within ve nd o r file .



No issue s we re no te d d uring the 2017 a ud it. All c o ntra c ts e nte re d into with ve nd o rs sho uld b e sig ne d a nd re ta ine d within c lie nt’ s file s.



No issue s we re no te d d uring the 2017 a ud it.

Co nflue nc e Ac a de my, I nc .

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Da ta Ana lysis: Summa ry Of Pro c e dure s



Rub inBro wn pe rfo rme d the fo llo wing a na lysis during the a udit:



Be nfo rd’ s L a w Ana lysis o n disb urse me nts during the fisc a l ye a r to se e if the pa tte rn o f disburse me nts is a s e xpe c te d



Ana lyze to p ve ndo rs b a se d o n pa yme nts ma de to tho se ve ndo rs a nd numb e r o f purc ha se s with tho se ve ndo rs during the fisc a l ye a r



I de ntify po te ntia l duplic a te a mo unts to a sing le ve ndo r



I de ntify g a ps in the c he c k se q ue nc e



Rub inBro wn no te d tha t a ll va ria nc e s fro m the a b o ve te sts ha ve b e e n pro pe rly re so lve d thro ug h disc ussio ns with ma na g e me nt.

Co nflue nc e Ac a de my, I nc .

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Be nfo rd’ s L aw was e stablishe d by F rank Be nfo rd in the 1930s. T he law e xpe c ts 30.1% o f numbe rs in a list o f financ ial transac tio ns to be g in with “1.” E ac h suc c e ssive dig it sho uld re pre se nt a pro g re ssive ly smalle r pro po rtio n. Whe n dig its stray fro m the patte rn, fraud may be to blame . As vo lume s o f data c o ntinue to g ro w, it has be c o me a valuable to o l in analyzing data se ts fo r po te ntial irre g ular ac tivity.

Be nfo rd’ s L a w

Co nflue nc e Ac a de my, I nc .

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E me rg ing F ina nc ia l Re po rting I ssue s - F ASB

Ac c o unting Sta nda rds Upda te (ASU) 2016-14: No t-fo r-Pro fit E ntitie s: Pre se ntatio n o f F inanc ial S tate me nts o f No t-fo r-Pro fit E ntitie s. T his ASU, issue d o n Aug ust 18, 2016, re quire s c ha ng e s to the fina nc ia l sta te me nt pre se nta tio n in the fo llo wing a re a s:



I nve stme nt Re turn:



I nve stme nt re turn will b e re po rte d ne t o f e xte rna l a nd dire c t inte rna l inve stme nt e xpe nse s a nd tho se ne tte d e xpe nse s are no lo ng e r re q uire d to b e disc lo se d.



Sta te me nt o f Ca sh F lo ws:



No t-fo r-pro fits ha ve the fle xib ility to c o ntinue to use e ithe rthe dire c t o r indire c t me tho d.

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Disc lo sure o f the indire c t me tho d is no lo ng e r re q uire d if the dire c t me tho d is pre se nte d.



E xpe nse s:



E xpe nse s b y b o th the ir na tura l c la ssific a tio n a nd the ir func tio na l c la ssific a tio n will b e pre se nte d o n the fa c e o f the sta te me nt o f a c tivitie s, a s a se pa ra te sta te me nt o r in the no te s to the fina nc ia l sta te me nts.



T he me tho d use d to a llo c a te c o sts a mo ng pro g ra m a nd suppo rting a c tivitie s func tio ns is re q uire d to b e disc lo se d.



L iq uidity a nd Ava ila b ility o f Re so urc e s:



F

• r c a sh ne e ds fo r g e ne ra l e xpe nditure s within o ne

ye a r o f the sta te me nt o f fina nc ia l po sitio n da te , q ua litative info rma tio n will b e re q uire d to b e disc lo se d in the fo o tno te s o n ho w the o rg a nizatio n ma na g e s its liquid re so urc e s a va ila b le to me e t the se ne e ds.



Qua ntita tive info rma tio n o n e ithe r the state me nt o f fina nc ia l po sitio n o r in the fo o tno te s re g arding the a va ila b ility o f fina nc ia l a sse ts to me e t the se ne e ds will a lso b e re q uire d.

Co nflue nc e Ac a de my, I nc .

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E me rg ing F ina nc ia l Re po rting I ssue s - F ASB (Co ntinue d)

ASU 2014-09 - Re ve nue fro m Co ntrac ts with Custo me rs (T

• pic 606)



Co ntrib utio ns a re spe c ific a lly e xc lude d, b ut this ASU will a pply to tra nsa c tio ns with c usto me rs suc h a s:



Go ve rnme nt (a nd o the r) g ra nts a nd c o ntra c ts



T uitio n a nd fe e s



Me mb e rship due s



L ic e nse s a nd ro ya ltie s



Bifurc a tio n o f tra nsa c tio ns b e twe e n c o ntrib utio ns a nd e xc ha ng e tra nsa c tio ns



Re ve nue re c o g nitio n fo r tra nsa c tio ns wo uld b e re vie we d to :



I de ntify the c o ntra c t(s) with the c usto me r



I de ntify the pe rfo rma nc e o b lig a tio n



De te rmine the tra nsa c tio n pric e



Allo c a te the tra nsa c tio n pric e



Re c o g nize re ve nue whe n (o r a s) a pe rfo rma nc e o b lig a tio n is sa tisfie d

Co nflue nc e Ac a de my, I nc .

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Rig ht-o f-use a sse t L e a se lia bility Amo rtiza tio n e xpe nse I nte re st e xpe nse Ca sh pa id fo r princ ipa l a nd inte re st pa yme nts Rig ht-o f-use a sse t L e a se lia bility Sing le le a se e xpe nse o n a stra ig ht-line b a sis Ca sh pa id fo r le a se pa yme nts

F ina nc ing (T ype A) Sta te me nt o f F ina nc ia l Po sitio n Ope ra ting (T ype B) Sta te me nt o f Ca sh F lo ws Sta te me nt o f Ac tivitie s

ASU 2016-02 - L e ase s (T

• pic 842)



All le a se s g re a te r tha n 12 mo nths sha ll b e c la ssifie d a s:



T ype A (F ina nc ing ) - if the te rm o f the le a se is fo r a ma jo r pa rt o f the re ma ining e c o no mic life o f the unde rlying a sse t (suc h a s le a se s fo r e q uipme nt, ve hic le s, e tc .)



T ype B (Ope ra ting ) - le a se o f pro pe rty (suc h a s la nd, a ll/ pa rt o f a b uilding , e tc .)



E ffe c tive fo r pub lic c o mpa nie s (inc luding no t-fo r-pro fit o rg a niza tio ns with pub lic ly tra de d o r c o nduit de b t) fo r a nnua l a nd inte rim pe rio ds b e g inning a fte r De c e mbe r 15, 2018 a nd fo r a ll o the r e ntitie s fo r a nnua l pe rio ds b e g inning a fte r De c e mb e r 15, 2019; ho we ve r, e a rly a do ptio n is pe rmitte d

E me rg ing F ina nc ia l Re po rting I ssue s (Co ntinue d)

Co nflue nc e Ac a de my, I nc .

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E me rg ing F ina nc ia l Re po rting I ssue s - GASB



GASB Sta te me nt No . 75, Ac c o unting a nd F ina nc ia l Re po rting fo r Po ste mplo yme nt Be ne fits Othe r T ha n Pe nsio ns



E ffe c tive fo r 2018 Distric t ye a r e nd



Simila r e ffe c t to GASB 68 fo r o the r po ste mplo ye me nt b e ne fits (he a lth a nd we lfa re pla ns), i.e ., PE RA’ s He a lth Ca re T rust F

• und. T

he Distric t will b e re q uire d to re po rt the ir pro po rtio na te sha re o f the b e ne fit pla n’ s pro je c te d lia bility.



GASB Sta te me nt No . 87, L e a se s



E ffe c tive fo r 2019 Distric t ye a r e nd



E sta b lishe s a sing le mo de l fo r le a se a c c o unting b a se d o n the princ iple tha t le a se s a re fina nc ing s o f the rig ht to use a n unde rlying a sse t



Applic a tio n o f this sta nda rd wo uld g o b e yo nd the pre vio us g uida nc e re la te d to re c o rding o f le a se d a sse ts a nd re c o rd a dditio na l le a se d ite ms o n the b o o ks a s a n inta ng ib le rig ht to use a sse ts a nd re la te d lia bilitie s.

Co nflue nc e Ac ade my, I nc .

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I nde pe nde nt Audito rs’ Re po rt On Additio nal I nfo rmatio n

Bo ard o f Dire c to rs Co nflue nc e Ac ade my, I nc .

• St. L
• uis, Misso uri

Our re po rt o n o ur a udit o f the ba sic fina nc ia l sta te me nts o f Co nflue nc e Ac a de my, I nc . (the Ac a de my) fo r June 30, 2017 appe ars in the fina nc ia l sta te me nts o f the Ac a de my. T ha t a udit was c o nduc te d fo r the purpo se o f fo rming a n o pinio n o n the ba sic fina nc ia l sta te me nts ta ke n a s a who le . T he a dditio na l info rma tio n pre se nte d o n the pre c e ding pa g e s is pre se nte d fo r purpo se s o f a dditio na l a na lysis a nd is no t a re quire d pa rt o f the ba sic fina nc ia l sta te me nts. Suc h info rmatio n has no t be e n subje c te d to the auditing pro c e dure s applie d in the audit o f the basic financ ial state me nts and, ac c o rding ly, we e xpre ss no o pinio n o n it. De c e mbe r8, 2017

E xhib it A

Management Representation Letter