LIVE OAK CHARTER SCHOOL

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LIVE OAK CHARTER SCHOOL

100 Gnoss Concourse Petaluma, CA 94952•(707) 762-9020

Agenda for the Regular Meeting of the Board of Directors Live Oak Charter School Handwork Room room

January 17, 2019 6:30pm

Mission & Program

To ensure the humanity and potential of its students through an education resonant with their unfolding awareness and capacities, and supportive of the full and integrated development of body, heart, and mind. LOCS provides a K-8 program inspired by Waldorf education to children and families of Petaluma and surrounding communities. Waldorf inspired education is a developmental approach to learning that cultivates the innate capacities of each child through age appropriate curriculum. Live Oak educates the whole child – head, heart, and hands, through an education that integrates each child’s creative, intellectual, emotional, physical and social domains. Live Oak oﬀers an

interdisciplinary liberal arts program where art, music, and movement are integrated with core academic instruction. Exploration of the natural world, human culture, language and mathematics enlivens curiosity which is the foundation of intellectual growth, conceptual flexibility, empathy and sense of connectedness.

OPENING

PUBLIC COMMENT

This portion of the meeting is set aside for members of the audience to make comments or raise issues that are not specifically on the agenda. These presentations are limited to three minutes per presentation and the total time allotted to non-agenda items will not exceed fifteen minutes.

OPEN SESSION

A. Approve the agenda

B. Reports

1. Committee reports

2. Executive Director Report

C. Consent agenda

All matters listed under Consent Agenda are considered to be routine, and all will be enacted by one motion and vote. There will be no separate discussion of these items unless a Board member requests items to be removed from the Consent Agenda for separate action.

1. Board minutes for December 13, 2018 2. Monthly financials for December 2018

D. The board will consider the following for discussion and approval 1. Application, Enrollment, and Waitlist Policy

E. The Board will consider the following for discussion 1. Food Service

2. Class Looping Policy 3. 2018-19 Parent Survey

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CLOSED SESSION

Pursuant to Government Code 54956.8 Conference with Real Property Negotiator

Property: 100 Gnoss Concourse, Petaluma; Negotiating Parties: Sonoma-Marin Fair; under negotiation: price and terms

Pursuant to Government Code 54957: Public Employee Contracts

OPEN SESSION

Report on actions taken in closed session

ADJOURNMENT

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LIVE OAK CHARTER SCHOOL

100 Gnoss Concourse Petaluma, CA 94952•(707) 762-9020

Minutes for the Regular Meeting of the Board of Directors Live Oak Charter School Multi-purpose room

December 13, 2018

PRESENT: Sarah Grossi (SG), Chair Josh Kizner (JK), Treasurer Cortney Calahan (CC), Secretary Erin Wrightsman (EW), Director James Jenson (JJ), Director Daniella Baker (DB), Director

Matthew Morgan (MM), Executive Director

ABSENT: Chris Fox (CF), Director

OPENING (6:40 pm)

PUBLIC COMMENT No public comment

OPEN SESSION

A. Approve the agenda. EW moved, JK seconded, all aye, motion passed.

B. Reports

1. Committee reports

- Executive Committee (SG) met, set agenda for this meeting - Finance Committee (JK) met, reviewed financials

- Foundation report - none present

2. Executive Director Report

- Updates on: facilities, food service opportunities, curriculum, human resources, finances, dashboard update, winter classroom activities

C. Consent agenda - JK moves to approve, JJ second, all aye, motion passed.

All matters listed under Consent Agenda are considered to be routine, and all will be enacted by one motion and vote. There will be no separate discussion of these items unless a Board member requests items to be removed from the Consent Agenda for separate action.

1. Board minutes for regular meeting November 8, 2018 2. Monthly financials for November 2018

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D. The board will consider the following for discussion and approval 1. Review and adopt First Interim Budget

- JJ move to adopt the first interim, DB seconded, all aye, approved 2. Approve form J13A for emergency school closure

- EW move to approve, JJ seconded, all aye, approved 3. Adopt 2019-20 school calendar

- DB moved to approve with noted changes, JJ seconded, all aye, approved

E. The Board will consider the following for discussion

1. Redwood Empire School Insurance Group Liabilities - MM made the statement of RESIG liabilities

2. Class looping policy - pros and cons discussed and considered; kinds of loops include: a) 1-3, 4-5, 6-8, b) 1-4, 5-8

3. Food service

- possible vendors and prices discussed - more info will be brought to January meeting 4. LOCS 2018/19 Parent/Guardian Survey

- topics to keep/add were discussed

CLOSED SESSION

Pursuant to Government Code 54956.8 Conference with Real Property Negotiator

Property: 100 Gnoss Concourse, Petaluma; Negotiating Parties: Sonoma-Marin Fair; under negotiation: price and terms

Pursuant to Government Code 54957: Public Employee Contracts

OPEN SESSION

Report on actions taken in closed session

ADJOURNMENT 10:22pm

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LIVE OAK CHARTER SCHOOL

100 Gnoss Concourse Petaluma, CA 94952 • (707) 762-9020

Minutes for Finance Committee Meeting of the Board of Directors

Live Oak Charter School, Executive Director’s Office

Tuesday January 8, 2019, 6:15 PM

Present:

Josh Kizner (JK), Board Member & Committee Chair

John Gerber (JG), Committee Member

Matthew Morgan (MM), Executive Director & Committee Member

OPENING

(6:15 pm)

PUBLIC COMMENT

None

OPEN SESSION (6:15pm)

A. Approve the agenda

B. The Executive Committee will consider the following for discussion

1. First Interim Budget

2. Monthly Financials

3. Facilities Update

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Live Oak Charter School

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INDEX TO FINANCIAL STATEMENTS

Independent Auditor’s Report ... 2

Financial Statements Statement of Financial Position ... 4

Statement of Activities ... 5

Statement of Cash Flows ... 6

Notes to Financial Statements ... 7

Supplementary Information Organization ... 15

Schedule of Average Daily Attendance ... 16

Schedule of Instructional Time ... 17

Statement of Functional Expenses ... 18

Reconciliation of Charter School Unaudited Actuals Financial Report With Audited Financial Statements ... 19

Other Independent Auditor’s Report Section Independent Auditor’s 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 ... 20

Independent Auditor’s Report on State Compliance ... 22

Findings and Recommendations Section Schedule of Audit Findings and Questioned Costs ... 24

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INDEPENDENT AUDITOR’S REPORT

Board of Directors Live Oak Charter School Petaluma, California

Report on the Financial Statements

We have audited the accompanying financial statements of Live Oak Charter School (a nonprofit organization), which comprise the statement of financial position as of June 30, 2018, and the related statements of activities, and cash flows for the fiscal 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 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

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 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. Those standards require that we 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 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. Accordingly, we 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.

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Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Live Oak Charter School as of June 30, 2018, and the changes in its net assets and its cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information as listed in the index of financial statements is presented for purposes of additional analysis and is 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 our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 14, 2018, on our consideration of Live Oak Charter School’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Live Oak Charter School’s 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 Live Oak Charter School’s internal control over financial reporting and compliance.

SQUAR MILNER LLP

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LIVE OAK CHARTER SCHOOL

STATEMENT OF FINANCIAL POSITION

June 30, 2018

Page 4 The accompanying notes are an integral part of these financial statements.

ASSETS

Current assets:

Cash $ 798,293

Accounts receivable 210,215

Total current assets 1,008,508

Fixed assets, net of depreciation 16,368

Total assets $ 1,024,876

LIABILITIES AND NET ASSETS

Current liabilities:

Accounts payable $ 171,115

Accrued expenses 1,137

Total current liabilities 172,252

Total liabilities 172,252

Net assets:

Temporarily restricted 173,327

Unrestricted 679,297

Total net assets 852,624

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LIVE OAK CHARTER SCHOOL

STATEMENT OF ACTIVITIES

For the Fiscal Year Ended June 30, 2018

Temporarily

Unrestricted Restricted Total

REVENUES

Revenue limit sources:

State apportionments $ 727,733 $ - $ 727,733

Education protection account 91,869 - 91,869

In-lieu of property taxes 1,433,177 - 1,433,177

State revenues 277,617 173,327 450,944

Local revenues:

Interest 11,024 - 11,024

Fees and contracts 115,769 - 115,769

Other local revenue 235,510 - 235,510

Total revenue before transfers 2,892,699 173,327 3,066,026

Net assets released from restrictions 30,711 (30,711)

-Total revenues 2,923,410 142,616 3,066,026

EXPENSES

Program services:

Education 2,382,048 - 2,382,048

Support services:

Management and general 498,890 - 498,890

Total expenses 2,880,938 - 2,880,938

CHANGE IN NET ASSETS 42,472 142,616 185,088

NET ASSETS, BEGINNING OF YEAR 636,825 30,711 667,536

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LIVE OAK CHARTER SCHOOL

STATEMENT OF CASH FLOWS

For the Fiscal Year Ended June 30, 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Change in net assets $ 185,088

Adjustments to reconcile change in net assets to net cash provided by operations:

Depreciation 7,585

(Increase) decrease in operating assets:

Accounts receivable (27,286)

Increase (decrease) in operating liabilities:

Accounts payable (14,790)

Accrued expenses (3,734)

Net cash flows provided by operating activities 146,863

NET CHANGE IN CASH 146,863

CASH, BEGINNING OF YEAR 651,430

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 7

1. ORGANIZATION AND MISSION

Live Oak Charter School (the Organization) was incorporated on February 16, 2001, under the laws of the State of California’s nonprofit public benefit corporation and the Organization was granted its charter by Petaluma City School District on March 27, 2001 and renewed through June 30, 2019, pursuant to the terms of the Charter Schools Act of 1992, as amended. This charter, among other matters, calls for the Petaluma City School District and the Organization to enter into a mutually agreeable memorandum of understanding, regarding the funding entitlements of the Organization, pursuant to Education Code Section 47612 and 47613.5, to define the operational and oversight arrangements between the Petaluma City School District, and to define and resolve other matters of mutual interest.

The mission of the Organization is to provide students of Southern Sonoma County with a whole-child program inspired by Waldorf Education. The Organization embraces a developmental approach to learning that strives to bring forth from each child his or her innate capacities through an age-appropriate curriculum. The Organization seeks to educate the whole child – head, hands and heart – through an education that cultivates and integrates each child’s creative, intellectual, emotional, physical, and social capacities. The Organization offers an artistically rich and experientially-based program that enlivens student curiosity about the natural world and human culture as the foundation for fostering academic achievement.

The Organization commenced operations during the 2001-2002 fiscal year and currently serves 293 students in Kindergarten through Grade 8.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statement Presentation

The financial statements are presented in conformity with Accounting Standards Codification (ASC) 958-205, Not-For-Profit Entities – Presentation of Financial Statements. Under ASC 958-205, the Organization reports information regarding its financial position and activities according to three classes of net assets:

Unrestricted Net Assets: Unrestricted net assets are available to support all activities of the Organization, and are not subject to donor-imposed stipulations. These generally result from revenues generated by providing services, receiving unrestricted contributions, and receiving interest from investments, less expenses incurred in providing program-related services, raising contributions, and performing administrative functions.

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Statement Presentation(continued)

Permanently Restricted Net Assets: Net assets that are subject to donor-imposed stipulations that the restrictions be maintained permanently by the Organization. Generally, the donors of these assets permit the Organization to use all or part of the income earned on the related investments for general or specific purposes. There were no permanently restricted net assets as of June 30, 2018.

Accounting Method - Basis of Accounting

The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as applicable to not-for-profit organizations. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported on the financial statements. The Organization uses the accrual basis of accounting, under which revenues are recognized when they are earned and expenditures are recognized in the accounting period in which the liability is incurred.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Income Taxes

The Organization is exempt from income taxes under Internal Revenue Code Section 501(c)(3). It is, however, subject to income taxes from activities unrelated to its tax-exempt purpose. The Organization uses the same accounting methods for tax and financial reporting. GAAP provides accounting and disclosure guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed.

Functional Allocation of Expenses

The costs of providing the program services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program services based on employees’ time incurred and management’s estimates of the usage of resources.

Cash and Cash Equivalents

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 9

Fixed Assets

Fixed assets are recorded at cost and depreciated under the straight-line method over their estimated useful lives of 5 to 10 years. Repair and maintenance costs, which do not extend the useful lives of the asset, are charged to expense. The cost of assets, sold or retired, and related amounts of accumulated depreciation are eliminated from the accounts in the year of disposal, and any resulting gain or loss is included in the earnings. Management has elected to capitalize and depreciate all assets costing $5,000 or more; all other assets are charged to expense in the year incurred.

Deferred Revenue

Cash received for federal and state special projects and programs is recognized as revenue to the extent that qualified expenditures have been incurred. Deferred revenue is recorded to the extent cash received on specific projects and programs exceeds qualified expenditures.

Revenue Sources and Recognition

The Organization primarily receives funds from the California Department of Education (CDE). Revenue limit sources and state revenues received from the CDE are determined based on the Organization’s average daily attendance (ADA) of students and recognized in the period the ADA occurs.

In addition, the Organization receives state and local revenues for the enhancement of various educational programs. This assistance is generally received based on applications submitted to and approved by various granting agencies.

The Organization recognizes federal revenue to the extent that eligible expenditures have been incurred. Revenue that is restricted is recorded as an increase in unrestricted net assets if the restriction expires in the reporting period in which the revenue is recognized. All other restricted revenues are reported as increases in temporarily restricted net assets.

New Accounting Pronouncements

In February 2016, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASU 2016-02). ASU 2016-02 requires a lessee to recognize a lease asset representing its right to use the underlying asset for the lease term, and a lease liability for the payments to be made to lessor, on its statement of financial position for all operating leases greater than 12 months. ASU 2016-02 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Although the full impact of this Update on the Organization’s financial statements has not yet been determined, the future adoption of this guidance will require the Organization to record assets and liabilities on its statement of financial position relating to facility and other leases currently being accounted for as operating leases (See Note 8).

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 10

the changes in those resources) to donors, grantors, creditors, and other users. These include qualitative and quantitative requirements in the following areas: (1) net asset classes; (2) investment return; (3) expenses; (4) liquidity and availability of resources; and (5) presentation of operating cash flows. ASU 2016-14 will be effective for annual financial statements issued for fiscal years beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Early application of the amendments is permitted. The Organization has not yet completed its assessment of the impact of this guidance on its financial statements. Under this guidance, the Organization will be required to present two classes of net assets (net assets with donor restrictions and net assets without donor restrictions) and changes in each of these two classes, on the face of the statement of financial position and statement of activities, respectively, rather than the current required three classes (unrestricted, temporarily restricted and permanently restricted).

3. CASH

Cash at June 30, 2018, consisted of the following:

The Organization maintains a portion of its cash in the Sonoma County (the County) as part of the common invest pool. Cash may be added or withdrawn from the investment pool without limitation.

The County is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. Government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.

The County Treasurer's investments consist of 0.73% cash and cash equivalents, 11.37% U.S. Treasury notes, 68.95% other governmental notes, 7.51% negotiable certificates of deposit, 7.41% corporate notes and bonds, 4.02% money market mutual funds, and 0.01% government pools and JPA’s. The credit ratings for these investments included A+/A1 by Moody's Investor Service, and AAA by Standard and Poor's.

Cash in Banks

Cash balances held in banks are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The Organization maintains its cash in bank deposit accounts that at times may exceed federally insured limits. The Organization has not experienced any losses in such accounts. At June 30, 2018, the Organization had no funds in excess of excess of FDIC insured limits.

Cash in County Treasury $ 766,948

Cash in banks 26,215

Cash in revolving fund 5,130

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 11

4. ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2018, consisted of the following:

5. FIXED ASSETS, NET

Fixed assets, net at June 30, 2018, consisted of the following:

During the fiscal year ended June 30, 2018, $7,585 was charged to depreciation expense.

6. TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets include funds received but not expended and consisted of the following as of June 30, 2018:

7. EMPLOYEE RETIREMENT SYSTEMS

Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Certificated employees are members of the State Teachers' Retirement System (STRS), and classified employees are members of the California Public Employees' Retirement System (CalPERS).

Revenue limit sources:

State apportionments $ 9,289

In-lieu of property taxes 94,732

State revenues 106,194

Total accounts receivable $ 210,215

Leasehold improvements

Building

$

46,708

Less: Accumulated depreciation

(30,340)

Total Fixed assets

$

16,368

Prop 39 - California Clean Energy Jobs Act $ 173,327

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 12

7. EMPLOYEE RETIREMENT SYSTEMS (continued)

STRS

Plan Description

The Organization contributes to STRS, a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement, disability and survivor benefits to beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the State Teachers’ Retirement Law. According to the most recently available actuarial valuation report as of June 30, 2017, total plan net assets are $197.7 billion, the total actuarial present value of accumulated plan benefits is $362.4 billion, contributions from all employers totaled $4.0 billion and the plan is 62.6% funded. The Organization did not contribute more than 5% of the total contributions to the plan.

Copies of the STRS annual financial reports may be obtained from STRS, 7667 Folsom Boulevard, Sacramento, CA 95826 and www.calstrs.com.

Funding Policy

Active plan members are required to contribute 10.20% of their salary and the Organization is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers’ Retirement Board. The required employer contribution rate for fiscal year 2017-2018 was 14.43% of annual payroll. The contribution requirements of the plan members are established by state statute. The Organization’s contributions to STRS for the fiscal year ending June 30, 2018, were $115,584 and equal 100% of the required contributions for the year.

CalPERS

Plan Description

The Organization contributes to CalPERS, a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by CalPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the Public Employees’ Retirement Law.

According to the most recently available actuarial valuation report as of June 30, 2017, the School Employer Pool total plan assets are $60.9 billion, the total actuarial present value of the total pension liability is $84.4 billion, contributions from all employers totaled $2.0 billion, and the plan is 72.1% funded. The Organization did not contribute more than 5% of the total contributions to the plan.

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 13

7. EMPLOYEE RETIREMENT SYSTEMS (continued)

CalPERS (continued)

Funding Policy

Active plan members are required to contribute 7.0% of their salary, and the Organization is required to contribute an actuarially determined rate. Effective January 1, 2013, any new participants in the plan will be required to contribute 6.5% of their salary. The actuarial methods and assumptions used for determining the rate are those adopted by the CalPERS Board of Administration. The required employer contribution rate for fiscal year 2017-2018 was 15.531% of annual payroll based on PERS reduction transfers. The contribution requirements of the plan members are established by the state statute. The Organization’s contributions to CalPERS for the fiscal year ending June 30, 2018, were $106,519 and equal 100% of the required contribution for the year.

8. OPERATING LEASE

The Organization leases various buildings and equipment that are for more than one year. The future minimum lease payments are as follows:

Year ending Lease

June 30, payments

2019 $ 180,040

2020 180,319

Total future lease payments $ 360,359

The Organization receives no sublease rental revenues nor pays any contingent rentals associated with this lease. For the fiscal year ended June 30, 2018, operating lease expense was $195,651.

9. COMMITMENTS AND CONTINGENCIES

State Allowances, Awards, and Grants

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LIVE OAK CHARTER SCHOOL

NOTES TO FINANCIAL STATEMENTS

June 30, 2018

Page 14

10. SUBSEQUENT EVENTS

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LIVE OAK CHARTER SCHOOL

ORGANIZATION

JUNE 30, 2018

Page 15 See accompanying Independent Auditor’s Report.

Live Oak Charter School [Charter #0382] is a Kindergarten through Grade 8 Charter School and was granted its charter renewal by Petaluma City School District through June 30, 2019, pursuant to the terms of the Charter School Act of 1992, as amended. The Organization is currently operating at 100 Gnoss Concourse in Petaluma, California.

The Board of Directors for the fiscal year ended June 30, 2018, was comprised of the following members:

Name Office Term Term Expiration

Shaina Ferraro Chair 2 years June 30, 2018

Chris Fox Vice Chair 3 years June 30, 2019

Josh Kizner Treasurer 3 years June 30, 2018

Sarah Grossi Secretary 2 years June 30, 2018

Daniella Baker Member 3 years June 30, 2020

Cortney Callahan Member 2 years June 30, 2019

Erin Wrightsman Member 2 years June 30, 2019

Kim Anderson Office Manager

Administration

Name Position

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LIVE OAK CHARTER SCHOOL

SCHEDULE OF AVERAGE DAILY ATTENDANCE

For the Fiscal Year Ended June 30, 2018

Second Period Annual

Report Report

Transitional Kindergarten/Kindergarten - Grade 3 133.05 133.53

Grades 4 - 6 90.81 91.11

Grades 7 - 8 55.59 55.47

Total 279.45 280.11

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LIVE OAK CHARTER SCHOOL

SCHEDULE OF INSTRUCTIONAL TIME

For the Fiscal Year Ended June 30, 2018

2017-2018 Number of Days

Minutes 2017-2018 Traditional

Grade Level Requirements Actual Minutes Calendar Status

Kindergarten 36,000 44,625 175 In Compliance

Grade 1 50,400 50,450 175 In Compliance

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LIVE OAK CHARTER SCHOOL

STATEMENT OF FUNCTIONAL EXPENSES

For the Fiscal Year Ended June 30, 2018

Program Support

Services Services

Management

Education and General Total

Certificated salaries $ 755,734 $ 115,000 $ 870,734

Classified salaries 564,876 161,838 726,714

Employee benefits 488,488 81,723 570,211

Books, supplies, and other 103,887 16,545 120,432

Travel and conferences 22,165 281 22,446

Dues and memberships - 4,545 4,545

Utilities 39,684 7,514 47,198

Insurance - 12,175 12,175

Rental, leases, repairs, and

non-capitalized improvements 171,677 32,506 204,183

Professional/consulting services and

operating expenditures 93,204 61,170 154,374

Communications 6,329 5,593 11,922

Depreciation 7,585 - 7,585

District fees/other 128,419 - 128,419

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LIVE OAK CHARTER SCHOOL

RECONCILIATION OF CHARTER SCHOOL UNAUDITED ACTUALS FINANCIAL REPORT WITH

AUDITED FINANCIAL STATEMENTS

For the Fiscal Year Ended June 30, 2018

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INDEPENDENT AUDITOR’S 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

We have audited, in accordance with the 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, the financial statements of Live Oak Charter School (a nonprofit organization), which comprise the statement of financial position as of June 30, 2018, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated December 14, 2018.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Live Oak Charter School’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Live Oak Charter School’s internal control. Accordingly, we do not express an opinion on the effectiveness of Live Oak Charter School’s internal control.

A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Compliance and Other Matters

As part of obtaining reasonable assurance about whether Live Oak Charter School’s financial statements are free from material misstatement, we 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 our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

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INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE

Report on Compliance for Each State Program

We have audited Live Oak Charter School’s compliance with the types of compliance requirements described in the 2017-18 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, published by the Education Audit Appeals Panel,that could have a direct and material effect on each of Live Oak Charter School’s state programs for the fiscal year ended June 30, 2018. Live Oak Charter School’s state programs are identified below.

Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its state programs.

Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of Live Oak Charter School’s state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the State’s Audit Guide, 2017-18 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, published by the Education Audit Appeals Panel. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a state program occurred. An audit includes examining, on a test basis, evidence about Live Oak Charter School’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

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Procedures

Description Performed

Educator Effectiveness Yes

California Clean Energy Jobs Act Yes

After/Before School Education and Safety Program Not Applicable

Proper Expenditure of Education Protection Account Funds Yes

Unduplicated Local Control Funding Formula Pupil Counts Yes

Local Control and Accountability Plan Yes

Independent Study-Course Based Not Applicable

Attendance Yes

Mode of Instruction Yes

Nonclassroom-Based Instruction/Independent Study for Charter Schools Not Applicable

Determination of Funding for Nonclassroom-Based Instruction Not Applicable

Annual Instructional Minutes - Classroom Based Yes

Charter School Facility Grant Program Yes

The term “Not Applicable” is used above to mean either that the Organization did not offer the program during the current fiscal year,or that the program applies only to a different type of local education agency.

Opinion on State Programs

In our opinion, Live Oak Charter School complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its state programs for the fiscal year ended June 30, 2018.

The purpose of this report on state compliance is solely to describe the scope of our testing of state compliance and the results of that testing based on the requirements of 2017-18 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting. Accordingly, this report is not suitable for any other purpose.

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LIVE OAK CHARTER SCHOOL

SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS

For the Year Ended June 30, 2018

A. Summary of Auditor's Results

1. Financial Statements

Type of auditor's report issued:

Internal control over financial reporting:

One or more material weaknesses identified? Yes X No

One or more significant deficiencies identified that

are not considered to be material weaknesses? Yes X No

Noncompliance material to financial

statements noted? Yes X No

2. Federal Awards

Internal control over major programs:

One or more material weaknesses identified? Yes N/A No

are not considered to be material weaknesses? Yes N/A None Reported

Type of auditor's report issued on compliance for major programs:

Any audit findings disclosed that are required to be reported under Section 200.516 Audit

Findings paragraph (a) of OMB Uniform Guidance? Yes N/A No

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

Dollar threshold used to distinguish between type A and type B programs:

Auditee qualified as low-risk auditee? Yes N/A No

Unmodified

N/A

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LIVE OAK CHARTER SCHOOL

SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS

For the Year Ended June 30, 2018

A. Summary of Auditor's Results (continued) 3. State Awards

Internal control over state programs:

One or more material weaknesses identified? Yes X No

are not considered to be material weaknesses? Yes X None Reported

Type of auditors' report issued on compliance for state programs:

B. Financial Statement Findings

None

C. Federal Award Findings and Questioned Costs

None

D. State Award Findings and Questioned Costs

None

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LIVE OAK CHARTER SCHOOL

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

For the Year Ended June 30, 2018

Explanation If

Findings/Recommendations Current Status Not Implemented

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LIVE OAK CHARTER SCHOOL

BOARD POLICY

Application, Enrollment and Wait List

Application and admission to Live Oak Charter is open to any student residing in California who wishes to attend. However, if the number of students who wish to attend Live Oak Charter exceeds the school’s capacity, enrollment shall be determined by a public random drawing (lottery). (Education Code Section 47605(d)(2)(A) and (B))

Currently enrolled students are not required to submit a new application each year, but must notify the school of their intent to re-enroll. In accordance with the lottery preferences articulated in the school’s charter, student who are presently enrolled in the school will be exempted from the lottery drawing and will have guaranteed enrollment for the subsequent school year.

A. Grade Assignment by Age

The Waldorf-inspired curriculum followed at Live Oak Charter is based on a developmental model that is directly linked to the age of the student. Below is our grade assignment by student age (birth date):

Kindergarten (2-year) 5 by Dec. 2 (5th birthday after September 1 through Jan 15*)

Kindergarten (1-year) 5 by September 1

First Grade 6 by September 1

Second Grade 7 by September 1

Third Grade 8 by September 1

Fourth Grade 9 by September 1

Fifth Grade 10 by September 1

Sixth Grade 11 by September 1

Seventh Grade 12 by September 1

Eighth Grade 13 by September 1

Live Oak Charter offers Transitional Kindergarten, which applies only for those children

turning 5 years of age between September 2 and January 15th (priority given for students who

turn 5 between September 2nd and December 1st inclusive). All Kindergarten classrooms are mixed age and include Transitional Kindergarten students. All Transitional Kindergarteners will matriculate to the conventional kindergarten program the following school year unless otherwise determined through educational review.

Students will be enrolled or considered for the lottery in each class according to the above chart. Parental concerns about potential grade placement must be submitted in writing with the student’s application for Executive Director consideration.

B. Calendar and Deadlines

The annual Open Enrollment period for the following academic year begins on August 15 and ends on the last business day before the date of the announced random public lottery each academic year, typically held in mid-March.

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enrollment application during the Open Enrollment period. II. Open Enrollment and Applications

A. Class Size

The Live Oak Charter Board of Directors will approve the maximum capacity (“class cap”) for each grade level for the following school year at the January board meeting of the preceding school year, or as soon as reasonably practicable thereafter. Open spaces, if any, in each class will be determined on the basis of the approved class caps, compared with the number of returning students. The Board of Directors will approve appropriate enrollment limits for each grade, based on the pedagogical requirements of the school’s Waldorf-inspired curriculum, Executive Director and faculty recommendations, budget considerations, and facility constraints. These class enrollment limits may be revised during the school year with the approval of the Board.

B. Open Enrollment Period

The annual Open Enrollment process for following year enrollment begins on August 15 and end on the last business day before the date of the announced random public lottery each academic year, typically held in mid-March. In the event that the annual enrollment process and public random drawing does not result in all available openings being filled, Live Oak Charter reserves the right to conduct subsequent Open Enrollment periods to fill any remaining open spaces.

Families interested in Live Oak Charter may submit an enrollment application at any point during the year. Applications received outside of the Open Enrollment period are labeled as post-Open Enrollment applications and will be processed as described in Section IV below.

C. Enrollment Priority

Students are considered for enrollment with the following priority status as set forth in the school’s charter:

1. Students presently enrolled in Live Oak Charter (guaranteed enrollment for following year)

2. Students who have siblings enrolled in Live Oak Charter. (Siblings include children

living in the same household who share at least one parent, stepparent or guardian).

3. Students who are the children of staff members of Live Oak Charter

4. Children residing in attendance area of district school, McDowell Elementary

5. Children residing in attendance area of the Petaluma Elementary School District

6. Children residing outside of the Petaluma Elementary School District

Once a student has been enrolled in the school, they will be guaranteed enrollment for

subsequent years, subject to timely notification to the school of his or her intent to re-enroll by submission of the school’s Intent to Re-enroll form.

If, however, at any time the school determines that the student did not qualify for an enrollment priority status through which the student was initially granted admission, the school reserves the right to dis-enroll the student. In the event of disenrollment, a new application for

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D. Public Random Drawing (Lottery)

When the number of applicants for a particular grade exceeds the number of open spaces in that grade, applicants will participate in a public lottery held within seven (7) school days of the last day of the Open Enrollment period. All lottery drawings will be conducted in public during normal business hours by the school’s Executive Director or Office Manager, and will be witnessed by at least two people, one of whom serves on the school’s board of directors, and one of whom is selected by the school and is not a school employee or current parent. Open Enrollment lotteries are conducted as follows:

1. Currently enrolled students are not required to submit new applications each year. The

names of returning students in each grade will be enrolled in the appropriate grade.

2. Lotteries are held by grade level, with applications chosen randomly from a general pool

and numbered based on that draw.

3. Applicants are placed on a list in the order in which their lottery number is drawn.

4. The order of applicants on the list is then rearranged by the priority status categories

outlined in Section II.C.

5. If there is more than one applicant in a particular priority category, the applicants in that

category are ranked in order of their initial lottery number, e.g. 3 above 4, 10 above 11, etc. to form a prioritized Open Enrollment wait list.

6. Open spaces, if any, are then offered from the priority-adjusted wait list.

7. After all open spaces are filled in a particular grade, the remaining applicants will be

placed on a wait list preserved by the priority-adjusted ranking described above. If spaces become available, Live Oak Charter will extend offers of enrollment to applicants in the order of their Open Enrollment wait list position.

E. Special Conditions for Applying

Twins and Multiples: Families applying for enrollment of twins (or multiples) for the same class must complete a separate application for each child. Each application will be entered in the lottery process as an individual student but with the indication that the student has a twin (multiple) also applying for the same class.

a) During the lottery process, if one of the twins (multiples) is chosen, the second twin (or

multiples) will be placed on the wait list immediately after the first twin’s (multiple’s) name.

b) If a class space is offered to one twin (multiple) and not the other(s) for the same class,

the same time frame for accepting the class spot and participating in the enrollment process is required in order to reserve the class space.

F. Wait List

Open Enrollment applicants not offered enrollment will remain on the Open Enrollment wait list in the order of their priority ranking. Wait-list applicants may be contacted to confirm their continued interest. The Open Enrollment wait list does not carry forward following the next lottery and is dissolved at the time of the subsequent lottery.

A new application must be submitted during the subsequent Open Enrollment period and that application will be processed with all others received in the public lottery.

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If an open space in a class becomes available during the year as determined by the class cap, offers of enrollment will be made to applicant(s) on the Open Enrollment wait list in order of their ranking. Students will not be enrolled for the current school year after April 15 unless approved by the Executive Director. Children of military personnel or those subject to the McKinney-Vento Homeless Assistance Act may be enrolled at any time during the year, in accordance with their wait list position.

Applicants on the wait list will forfeit their spot if they decline a placement in class, but may reapply for subsequent school years.

G. Changes to Priority Status

Current Open Enrollment wait list applicants and post-Open Enrollment wait list applicants (see Section IV below) may request a change in priority status at any time during the year with a written request from parent(s)/guardian(s) and proof of changed status, and their status on the corresponding prioritized wait list will be adjusted accordingly. A change in sibling or residence priority status for a post-Open Enrollment applicant may allow the applicant to obtain a higher priority on the post-Open Enrollment wait list but will not alter their status in relationship to Open Enrollment wait list.

a) Change in Sibling Status: A family enrolling two or more children must complete the

enrollment process with one child before sibling priority status can be requested for any remaining children.

b) Change in Residence Status: A family may request in-district priority status with the

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III. The Enrollment Process

A. Notification of Enrollment Offer

An offer of admission, if any, will be made by letter to the applicant’s family, to be sent within ten (10) business days of the enrollment lottery. The family will have five (5) business days from the date of mailing to respond. If the family does not respond, one phone call will be made, and the family has two (2) business days to contact the school. If the family still does not respond, the applicant will be considered to have “declined” and will lose their place in the class.

Families that accept the admission offer must complete an enrollment packet that must be returned to the school office within five (5) business days. If the paperwork is not submitted in a timely manner, the admission offer will be withdrawn and the applicant will lose their place in the class.

Upon timely completion of the Enrollment Packet, the applicant is considered an enrolled new student.

IV. Post-Open Enrollment Applications

Families interested in Live Oak Charter may submit an admission application at any point in the year. Applications received outside of the Open Enrollment period are labeled as post-Open Enrollment applications and will be held in a post-post-Open Enrollment application file. Families with applications on file will be contacted at least once a year to confirm their

continued interest. In order to participate in the next annual lottery, a new application must be submitted during the subsequent Open Enrollment period.

If a space becomes available during the year, applications received post-Open Enrollment will be considered after any applicants on the current Open Enrollment wait list.

If there is an available space in the class, there are no students on the Open Enrollment wait list, and there is more than one post-Open Enrollment applicant for that class, the school will

conduct a public lottery as described in Section II.D to determine the order in which the open space(s) will be offered to applicants. Priority status will be applied to the results of this lottery, as described in Section 11.C and a Open Enrollment wait list will be compiled. This post-Open Enrollment wait list will not carry forward following the subsequent post-Open Enrollment public lottery.