KEYS GATE CHARTER SCHOOL

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KEYS

GATE

CHARTER

SCHOOL

(ACOMPONENTUNITOFTHESCHOOL BOARDOFMIAMIͲDADECOUNTY,FLORIDA)

BASIC

FINANCIAL

STATEMENTS

June30,2014

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KEYS

GATE

CHARTER

SCHOOL

BASICFINANCIALSTATEMENTS June30,2014

TABLEOFCONTENTS

PAGES

BASICFINANCIALSTATEMENTS

IndependentAuditor’sReport 1Ͳ2

Management’sDiscussionandAnalysis

(NotcoveredbyIndependentAuditor’sReport) 3Ͳ7

GovernmentͲwideBasicFinancialStatements:

StatementofNetPosition 8

StatementofActivities 9

FundBasicFinancialStatements:

BalanceSheetͲGovernmentalFunds 10

ReconciliationoftheBalanceSheetofGovernmental

FundstotheStatementofNetPosition 11

StatementofRevenues,Expenditures,andChangein

FundBalancesͲGovernmentalFunds 12

ReconciliationoftheStatementofRevenues, ExpendituresandChangeinFundBalancesof

GovernmentalFundstotheStatementofActivities 13

StatementofRevenuesandExpendituresͲ

BudgetandActualͲGeneralFund 14

StatementofRevenuesandExpendituresͲ

BudgetandActual–SpecialRevenueFund 15

StatementofAssetsandLiabilitiesͲAgencyFund 16

NotestoBasicFinancialStatements 17Ͳ25

OTHERREPORTSOFINDEPENDENTAUDITOR’SREPORTS

ReportonInternalControloverFinancialReportingandonComplianceand OtherMattersBasedonanAuditofFinancialStatementsPerformedin

AccordancewithGovernmentAuditingStandards 26Ͳ27

IndependentAuditor’sReporttotheBoardofDirectors 28Ͳ29

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BASIC

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KMCcpa.com |

INDEPENDENTAUDITOR’SREPORT

TotheBoardofDirectors KeysGateCharterSchool Homestead,Florida

ReportontheFinancialStatements

Wehaveauditedtheaccompanyingfinancialstatementsofthegovernmentalactivities,eachmajor fund,andtheaggregateremainingfundinformationofKeysGateCharterSchool(the“School”),a DepartmentofTheFloridaCharterEducationalFoundation,Inc.andacomponentunitoftheSchool BoardofMiamiͲDadeCounty,Florida,asofandfortheyearendedJune30,2014,andtherelated notestothefinancialstatements,whichcollectivelycomprisetheSchool’sbasicfinancialstatementsas listedinthetableofcontents.

Management'sResponsibilityfortheFinancialStatements

Managementisresponsibleforthepreparationandfairpresentationofthesefinancialstatements inaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;this includesthedesign,implementation,andmaintenanceofinternalcontrolrelevanttothepreparation andfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherdueto fraudorerror.

Auditor’sResponsibility

Ourresponsibilityistoexpressopinionsonthesefinancialstatementsbasedonouraudit.We conductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesof AmericaandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards, issuedbytheComptrollerGeneraloftheUnitedStates.Thosestandardsrequirethatweplanand performtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefree frommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor'sjudgment, includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whether duetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevant totheentity'spreparationandfairpresentationofthefinancialstatementsinordertodesignaudit proceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinion ontheeffectivenessoftheentity'sinternalcontrol.Accordingly,weexpressnosuchopinion.Anaudit alsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessof significantaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentation ofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovidea basisforourauditopinions.

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KeysGateCharterSchool

Opinions

Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects, therespectivefinancialpositionofthegovernmentalactivities,eachmajorfund,andtheaggregate remainingfundinformationoftheSchool,asofJune30,2014,andtherespectivechangesinfinancial position,andbudgetarycomparisonfortheGeneralFundandSpecialRevenueFundfortheyearthen endedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

EmphasisofMatter

AsdiscussedinNote1,thefinancialstatementsoftheSchoolareintendedtopresentthefinancial positionandchangeinfinancialpositionofonlythatportionofthegovernmentalactivities,eachmajor fundandtheaggregateremainingfundinformationofTheFloridaCharterEducationalFoundation,Inc. thatisattributabletothetransactionsoftheSchool.Theydonotpurportto,anddonot,presentfairly thefinancialpositionofTheFloridaCharterEducationalFoundation,Inc.asofJune30,2014andthe changesinitsfinancialpositionorbudgetarycomparisons,whereapplicable,fortheyearthenended, inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

OtherMatters

RequiredSupplementaryInformation

Accounting principles generally accepted in the United States of America require that the management'sdiscussionandanalysisonpages3through7bepresentedtosupplementthebasic financialstatements.Suchinformation,althoughnotapartofthebasicfinancialstatements,is requiredbytheGovernmentalAccountingStandardsBoard,whoconsidersittobeanessentialpartof financialreportingforplacingthebasicfinancialstatementsinanappropriateoperational,economic, orhistoricalcontext.Wehaveappliedcertainlimitedprocedurestotherequiredsupplementary informationinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica, whichconsistedofinquiriesofmanagementaboutthemethodsofpreparingtheinformationand comparingtheinformationforconsistencywithmanagement'sresponsestoourinquiries,thebasic financialstatements, and other knowledgewe obtained duringouraudit of the basicfinancial statements.Wedonotexpressanopinionorprovideanyassuranceontheinformationbecausethe limitedproceduresdonotprovideuswithsufficientevidencetoexpressanopinionorprovideany assurance.

OtherReportingRequiredbyGovernmentAuditingStandards

InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdatedAugust 26,2014,onourconsiderationoftheSchool’sinternalcontroloverfinancialreportingandonourtests ofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrantagreementsand othermatters.Thepurposeofthatreportistodescribethescopeofourtestingofinternalcontrol overfinancialreportingandcomplianceandtheresultsofthattesting,andnottoprovideanopinion oninternalcontroloverfinancialreportingoroncompliance.Thatreportisanintegralpartofanaudit performedinaccordancewithGovernmentAuditingStandardsinconsideringtheSchool’sinternal controloverfinancialreportingandcompliance.

KEEFEMcCULLOUGH

FortLauderdale,Florida August26,2014

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MANAGEMENT’S

DISCUSSION

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KEYS

GATE

CHARTER

SCHOOL

MANAGEMENT’SDISCUSSIONANDANALYSIS June30,2014

AsmanagementofKeysGateCharterSchool(the“School”),aDepartmentofTheFlorida CharterEducationalFoundation,Inc.andacomponentunitoftheSchoolBoardofMiamiͲDade County,Florida,weofferreadersoftheSchool’sbasicfinancialstatementsthisnarrativeoverview andanalysisofthefinancialactivitiesoftheSchoolfortheyearsendedJune30,2014and2013.

Management’sdiscussionandanalysisisincludedatthebeginningoftheSchool’sbasic financialstatementstoprovide,inlayman’sterms,thepastandcurrentpositionoftheSchool’s financialcondition. Thissummaryshouldnotbetakenasareplacementfortheaudit,which consistsofthebasicfinancialstatements.

FINANCIALHIGHLIGHTS

OurgovernmentͲwidefinancialstatementsprovidetheseinsightsintotheresultsofthis year’soperations.

• The changes in net position at the School resulted in net position of $7,387,020asofJune30,2014ascomparedto$7,531,527,asofJune30, 2013.

• TheSchool’stotalrevenueswere$16,021,872andconsistedof$14,043,935 from grants and entitlements; $958,781 from capital grants and contributions,$670,094fromoperatinggrantsandcontributions,$263,548 fromchargesforservices,$7,895frominvestmentearningsand$77,619 frommiscellaneousincome. The School’s expenses for this year were $16,166,379.

OVERVIEWOFTHEFINANCIALSTATEMENTS

ThisdiscussionandanalysisisintendedtoserveasanintroductiontotheSchool’sbasic financialstatements.TheSchool’sbasicfinancialstatementsarecomprisedofthreecomponents: 1)governmentͲwidebasicfinancialstatements,2)fundbasicfinancialstatements,and3)notesto thebasicfinancialstatements.

GovernmentͲWideBasicFinancialStatements

ThegovernmentͲwidebasicfinancialstatementsaredesignedtoprovidereaderswitha broadoverviewoftheSchool’sfinancesinamannersimilartoaprivatesectorbusiness.

ThestatementofnetpositionpresentsinformationonalloftheSchool’sassets,liabilities, anddeferredinflows/outflowsofresourceswiththedifferencebetweenthetworeportedasnet position. Overtime,increasesordecreasesinnetpositionmayserveasausefulindicatorof whetherthefinancialpositionoftheSchoolisimprovingordeteriorating.

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KEYS

GATE

CHARTER

SCHOOL

ThestatementofactivitiespresentsinformationshowinghowtheSchool’snetposition changedduringtheyear.Allchangesinnetpositionarereportedassoonastheunderlyingevent givingrisetothechangeoccurs,regardlessofthetimingofrelatedcashflows.Thus,revenuesand expensesarereportedinthisstatementforsomeitemsthatwillonlyresultincashflowsinfuture fiscalperiods(e.g.uncollectedrevenuesandservicesrenderedbutunpaid).

ThegovernmentͲwidebasicfinancialstatementsincludeallgovernmentalactivitiesthatare principallysupportedbygrantsandentitlementsfromthestateforfullͲtimeequivalentfunding. TheSchooldoesnothaveanybusinessͲtypeactivities.ThegovernmentalactivitiesoftheSchool primarilyincludeinstructionandinstructionalsupportservices.

ThegovernmentͲwidefinancialstatementscanbefoundonpages8and9ofthisreport.

FundFinancialStatements

Afundisagroupingofrelatedaccountsthatisusedtomaintaincontroloverresourcesthat havebeensegregatedforspecificactivitiesorobjectives. TheSchool,likeotherstateandlocal governments,usesfundaccountingtoensureanddemonstratecompliancewithfinanceͲrelated legalrequirements.

GovernmentalFunds

Governmentalfundsareusedtoaccountforessentiallythesamefunctionsreportedas governmentalactivitiesinthebasicgovernmentͲwidefinancialstatements. However,unlikethe governmentͲwidebasicfinancialstatements,governmentalfundbasicfinancialstatementsfocus onnearͲterminflowsandoutflowsofspendableresources,aswellasbalancesofspendable resourcesavailableattheendofthefiscalyear.Suchinformationmaybeusefulinevaluatingthe School’snearͲtermfinancingrequirements.

BecausethefocusofgovernmentalfundsisnarrowerthanthatofthegovernmentͲwide basicfinancialstatements,itisusefultocomparetheinformationpresentedforgovernmental fundswithsimilarinformationpresentedforgovernmentalactivitiesinthegovernmentͲwidebasic financialstatements. Bydoingso,readersmaybetterunderstandthelongͲtermimpactofthe School’snearͲtermfinancingdecisions. Both thegovernmentalfundbalancesheetand the governmentalfundstatementofrevenues,expenditures,andchangeinfundbalanceprovidea reconciliation to facilitate this comparison between governmental funds and governmental activities.

TheSchoolmaintainsseveralindividualgovernmentalfunds. Informationispresentedin the governmental fund balance sheet and the governmental fund statement of revenues, expenditures,andchangeinfundbalances.TheGeneralFund,SpecialRevenueFundandCapital ProjectFundareconsideredtobetheSchool’smajorfunds.

TheSchooladoptsanannualbudgetforitsgovernmentalfunds.Abudgetarycomparison statementhasbeenprovidedfortheGeneralFundandSpecialRevenueFundtodemonstrate compliancewiththebudget.

Thegovernmentalfundfinancialstatementscanbefoundonpages10through15ofthis report.

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KEYS

GATE

CHARTER

SCHOOL

AgencyFund

Inaddition,theSchoolhasoneagencyfundwhichisastudentactivityfund.Thisfundis formedforeducationandschoolpurposes.

Thebasicagencyfundfinancialstatementcanbefoundonpage16ofthisreport.

NotestoBasicFinancialStatements

Thenotesprovideadditionalinformationthatisessentialforafullunderstandingofthe dataprovidedinthegovernmentͲwideandfundbasicfinancialstatements. Thenotestobasic financialstatementscanbefoundonpages17through25ofthisreport.

GOVERNMENTͲWIDEFINANCIALANALYSIS

TheSchoolhasbeeninoperationforelevenyears;therefore,comparativegovernmentͲ widedataispresented. TheSchool’snetpositionwas$7,387,020atJune30,2014. Ofthis amount, $6,978,218 represented unrestricted net position and $ 408,802 represented net investmentincapitalassets.TheSchool’snetpositionwas$7,531,527atJune30,2013.Ofthis amount, $7,205,535 represented unrestricted net position and $ 325,992 represented net investmentincapitalassets.

OuranalysisinthetablebelowfocusesonthenetpositionoftheSchool’sgovernmental activities:

KeysGateCharterSchool NetPosition

June30, June30,

2014 2013

ASSETS:

Currentandotherassets $ 7,814,056 $ 8,239,227

Capitalassets,netofdepreciation 408,802 325,992

Totalassets 8,222,858 8,565,219

LIABILITIES:

Currentliabilities 831,440 1,029,979

LongͲtermliabilities 4,398 3,713

Totalliabilities 835,838 1,033,692

NETPOSITION

Netinvestmentincapitalassets 408,802 325,992

Unrestricted 6,978,218 7,205,535

Totalnetposition $ 7,387,020 $ 7,531,527

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KEYS

GATE

CHARTER

SCHOOL

GovernmentalActivities

Theresultsofthisyear’soperationsfortheSchoolasawholearereportedinthestatement ofactivitiesonpage9. ThetablebelowprovidesacondensedpresentationoftheSchool’s revenuesandexpensesfortheyearsendedJune30,2014and2013:

KeysGateCharterSchool ChangeinNetPosition

June30, June30,

2014 2013

REVENUES:

Generalrevenues $ 14,129,449 $ 12,404,954

Programrevenues 1,892,423 1,636,043

Totalrevenues 16,021,872 14,040,997

FUNCTIONS/PROGRAM EXPENSES:

Instruction 6,887,061 5,901,622

Instructionalsupportservices 5,781,687 5,042,723

OperationofnonͲinstructional

services 3,497,631 2,559,750

Totalgovernmentalactivities 16,166,379 13,504,095

Changeinnetposition $ (144,507) $ 536,902

GovernmentalFundExpenditures

Inthetablebelow,wehavepresentedthecostofthelargestfunctions/programsasa percentageoftotalgovernmentalexpenditures:

Functions/Programs Expenditures Percent Expenditures Percent

Governmentalexpenditures:

Instructionalexpenditures $ 6,704,211 41.3% $ 5,750,856 42.5%

Administrativeservices 743,209 4.6% 676,309 5.0%

Plantoperationsandmaintenance 4,020,129 24.7% 3,579,087 26.5%

Fiscalservices 2,641,100 16.3% 1,758,333 13.0%

Allotherfunctions/programs 2,134,352 13.1% 1,755,688 13.0%

Totalgovernmental

expenditures $ 16,243,001 100.0% $ 13,520,273 100.0%

2014 2013

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KEYS

GATE

CHARTER

SCHOOL

CAPITALASSETSANDDEBTADMINISTRATION

Capitalassets

At June 30, 2014, the School had capital assets of $408,802, net of accumulated depreciation,investedincomputers,furnitureandequipmentandleaseholdimprovementsas comparedto$325,992atJune30,2013.

GENERALFUNDBUDGETARYHIGHLIGHTS

Revenueswerefavorabletothebudgetfortheyearmainlyduetotheperstudentfunding ratewhichwashigherthanbudgeted.

Expenditureswereunfavorabletothebudgetininstructionduetosalaryincreasesrelating totheGovernor’sallocation.Expenditureswerealsounfavorableincentralservicesbecausethe School was not considered high performing for the 2013/2014 school year and paid an administrativefeetotheDistrictof5%ratherthan2%.

ECONOMICFACTORSANDNEXTYEAR'SBUDGET

TheStateofFloridaisprojectinga2.6%fundingincreaseinperstudentrevenueforthe nextfiscalyear. ThisincreaseisreflectedintheperstudentFloridaEducationFinanceProgram (FEFP)fundingfortheSchool.

Captialoutlayfundingisexpectedtodeceasewithareductionintheoverallfundingpool forallcharterschools. Areductionincapitaloutlayfundingofapproximately33%hasbeen budgetedinthecomingfiscalyeartoaccountforthisandthedilutioneffectresultingfroma greaternumberofschoolsbeingincludedinthepool.

ExpendituresarebudgetedtoriseinproportiontotheexpectedgrowthattheSchool.A2% meritpayincreasepoolhasbeenbuiltintothebudgetsforalleligibleschoolstaff.

REQUESTSFORINFORMATION

Ifyouhaveanyquestionsaboutthisreportorneedadditionalinformation,pleasewriteMs. HillaryDaigle,Controller;CharterSchoolsUSA;800CorporateDrive,Suite124;FortLauderdale, Florida33334.

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Theaccompanyingnotestobasicfinancialstatementsareanintegralpartofthesestatements. Governmental

Activities CURRENTASSETS:

Cashandcashequivalents $ 7,124,924

Notereceivable 524,515

Duefromothergovernments 81,874

Otherdeposits 41,628

Otherreceivables 21,365

Prepaidexpendituresandotherassets 19,750

Totalcurrentassets 7,814,056

NONCURRENTASSETS:

Capitalassets(depreciable),netofaccumulateddepreciation 408,802

Totalassets 8,222,858

CURRENTLIABILITIES:

Accountspayable 74,138

Salariesandwagespayable 662,181

Compensatedabsences 13,194

Duetorelatedparty 81,927

Totalcurrentliabilities 831,440

NONCURRENTLIABILITIES:

Compensatedabsences 4,398

Totalnoncurrentliabilities 4,398

Totalliabilities 835,838

COMMITMENTS(Notes8and10) Ͳ

NETPOSITION:

Netinvestmentincapitalassets 408,802

Unrestricted 6,978,218

Totalnetposition $ 7,387,020

LIABILITIESANDNETPOSITION

KEYS

GATE

CHARTER

SCHOOL

STATEMENTOFNETPOSITION June30,2014

ASSETS

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Theaccompanyingnotestobasicfinancialstatementsareanintegralpartofthesestatements.

Governmental Activities NetRevenue Charges Operating Capital (Expense)and

for Grantsand Grantsand Changein Expenses Services Contributions Contributions Netposition FUNCTIONS/PROGRAMS:

Instruction $ 6,887,061 $ Ͳ $ 31,130 $ Ͳ $ (6,855,931) Pupilpersonnelservices 328,174 Ͳ Ͳ Ͳ (328,174) Instructionalmediaservices 23,248 Ͳ Ͳ Ͳ (23,248) Instructionandcurriculum

developmentservices 114,861 Ͳ Ͳ Ͳ (114,861)

Instructionalstafftrainingservices 19,119 Ͳ Ͳ Ͳ (19,119) Instructionrelatedtechnology 158,327 Ͳ 61,825 Ͳ (96,502) Schoolboard 24,256 Ͳ Ͳ Ͳ (24,256) Schooladministration 744,334 Ͳ Ͳ Ͳ (744,334) Fiscalservices 2,641,100 Ͳ Ͳ Ͳ (2,641,100) Foodservices 671,932 81,825 577,139 Ͳ (12,968) Centralservices 10,360 Ͳ Ͳ Ͳ (10,360) Pupiltransportationservices 333,647 Ͳ Ͳ Ͳ (333,647) Operationofplant 3,709,654 Ͳ Ͳ 958,781 (2,750,873) Maintenanceofplant 350,323 Ͳ Ͳ Ͳ (350,323) Communityservices 149,983 181,723 Ͳ Ͳ 31,740

Totalgovernmental

activities $ 16,166,379 $ 263,548 $ 670,094 $ 958,781 (14,273,956)

Generalrevenues:

Grantsandentitlements 14,043,935

Investmentearnings 7,895

Miscellaneous 77,619

Totalgeneralrevenues 14,129,449

Changeinnetposition (144,507)

Netposition,July1,2013 7,531,527 Netposition,June30,2014 $ 7,387,020

ProgramRevenues

KEYS

GATE

CHARTER

SCHOOL

STATEMENTOFACTIVITIES FortheYearEndedJune30,2014

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Special Capital

General Revenue Project

Fund Fund Fund Total

ASSETS:

Cashandcashequivalents $ 7,124,924 $ Ͳ $ Ͳ $ 7,124,924

Notereceivable 524,515 Ͳ Ͳ 524,515

Duefromothergovernments Ͳ Ͳ 81,874 81,874

Duefromotherfunds 81,874 Ͳ Ͳ 81,874

Otherdeposits 41,628 Ͳ Ͳ 41,628

Otherreceivables 21,365 Ͳ Ͳ 21,365

Prepaidexpenditures

andotherassets 19,750 Ͳ Ͳ 19,750

Totalassets $ 7,814,056 $ Ͳ $ 81,874 $ 7,895,930

LIABILITIES:

Accountspayable $ 74,138 $ Ͳ $ Ͳ $ 74,138

Salariesandwagespayable 662,181 Ͳ Ͳ 662,181

Duetootherfunds Ͳ Ͳ 81,874 81,874

Duetorelatedparty 81,927 Ͳ Ͳ 81,927

Totalliabilities 818,246 Ͳ 81,874 900,120

COMMITMENTS(Notes8and10) Ͳ Ͳ Ͳ Ͳ

FUNDBALANCES: Nonspendable:

Prepaidexpendituresanddeposits 61,378 Ͳ Ͳ 61,378

Unassigned 6,934,432 Ͳ Ͳ 6,934,432

Totalfundbalances 6,995,810 Ͳ Ͳ 6,995,810

Totalliabilities

andfundbalances $ 7,814,056 $ Ͳ $ 81,874 $ 7,895,930

LIABILITIESANDFUNDBALANCES

KEYS

GATE

CHARTER

SCHOOL

BALANCESHEETͲGOVERNMENTALFUNDS June30,2014

ASSETS

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Theaccompanyingnotestobasicfinancialstatementsareanintegralpartofthesestatements. AMOUNTSREPORTEDFORGOVERNMENTALACTIVITIES

INTHESTATEMENTOFNETPOSITION AREDIFFERENTBECAUSE:

Totalfundbalancesofgovernmentalfunds

inthebalancesheet,page10 $ 6,995,810

Capitalassetsusedingovernmentalactivitiesarenot financialresourcesand,therefore,arenotreported inthegovernmentalfunds.

Governmentalcostofcapitalassets $ 1,729,779

Lessaccumulateddepreciation (1,320,977) 408,802

Certainliabilitiesarenotdueandpayableinthe currentperiodand,therefore,arenotreportedin thefunds.

Compensatedabsences (17,592)

NETPOSITIONOFGOVERNMENTALACTIVITIES,

PAGE8 $ 7,387,020

RECONCILIATIONOFTHEBALANCESHEETOFGOVERNMENTALFUNDS

KEYS

GATE

CHARTER

SCHOOL

TOTHESTATEMENTOFNETASSETS June30,2014

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Special Capital

General Revenue Project

Fund Fund Fund Total

REVENUES:

Statesources $ 14,075,065 $ 2,191 $ 958,781 $ 15,036,037

Federalthroughstate Ͳ 636,773 Ͳ 636,773

Localsources 167,339 Ͳ Ͳ 167,339

Aftercare 181,723 Ͳ Ͳ 181,723

Totalrevenues 14,424,127 638,964 958,781 16,021,872

EXPENDITURES:

Instruction 6,704,211 Ͳ Ͳ 6,704,211

Pupilpersonnelservices 327,568 Ͳ Ͳ 327,568

Instructionalmediaservices 23,248 Ͳ Ͳ 23,248

Instructionandcurriculum

developmentservices 114,861 Ͳ Ͳ 114,861

Instructionalstafftrainingservices 19,119 Ͳ Ͳ 19,119

Instructionrelatedtechnology 96,502 61,825 Ͳ 158,327

Schoolboard 24,256 Ͳ Ͳ 24,256

Schooladministration 743,209 Ͳ Ͳ 743,209

Facilitiesacquisitionandconstruction 301,051 Ͳ Ͳ 301,051

Fiscalservices 2,641,100 Ͳ Ͳ 2,641,100

Foodservices 94,793 577,139 Ͳ 671,932

Centralservices 10,360 Ͳ Ͳ 10,360

Pupiltransportationservices 333,647 Ͳ Ͳ 333,647

Operationofplant 2,711,025 Ͳ 958,781 3,669,806

Maintenanceofplant 350,323 Ͳ Ͳ 350,323

Communityservices 149,983 Ͳ Ͳ 149,983

Totalexpenditures 14,645,256 638,964 958,781 16,243,001

Excess(deficiency)of

revenuesoverexpenditures (221,129) Ͳ Ͳ (221,129)

OTHERFINANCINGACTIVITIES:

Proceedsfrominsuranceclaims 11,404 Ͳ Ͳ 11,404

Netchangeinfundbalances (209,725) Ͳ Ͳ (209,725)

FUNDBALANCES,July1,2013 7,205,535 Ͳ Ͳ 7,205,535

FUNDBALANCES,June30,2014 $ 6,995,810 $ Ͳ $ Ͳ $ 6,995,810

KEYSGATECHARTERSCHOOL

STATEMENTOFREVENUES,EXPENDITURESAND CHANGEINFUNDBALANCESͲGOVERNMENTALFUNDS

FortheYearEndedJune30,2014

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Theaccompanyingnotestobasicfinancialstatementsareanintegralpartofthesestatements. AMOUNTSREPORTEDFORGOVERNMENTAL

ACTIVITIESINTHESTATEMENTOFACTIVITIES AREDIFFERENTBECAUSE:

NetchangeinfundbalancesͲtotalgovernmentalfunds,

page12. $ (209,725)

Governmentalfundsreportcapitaloutlaysas

expenditures.However,inthestatementofactivities, thecostofthoseassetsaredepreciatedovertheir estimatedusefullives.

Expendituresforcapitalassets $ 301,051

Lossondispositionofcapitalassets (20,936)

Lesscurrentyearprovisionfordepreciation (197,305) 82,810 Certainitemsreportedinthestatementofactivitiesdo

notrequiretheuseofcurrentfinancialresources,and therefore,arenotreportedasexpendituresinthe governmentalfunds.

Compensatedabsences (17,592)

CHANGEINNETPOSITIONOFGOVERNMENTAL

ACTIVITIES,PAGE9 $ (144,507)

KEYS

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CHARTER

SCHOOL

RECONCILIATIONOFTHESTATEMENTOFREVENUES, EXPENDITURESANDCHANGEINFUNDBALANCES

OFTHEGOVERNMENTALFUNDSTOTHESTATEMENTOFACTIVITIES

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Original Final

Budget Budget Actual Variance

REVENUES:

Statesources $ 13,953,948 $ 13,953,948 $ 14,692,485 $ 738,537

Localsources 112,900 112,900 167,339 54,439

Aftercare 193,780 193,780 181,723 (12,057)

Totalrevenues 14,260,628 14,260,628 15,041,547 780,919

EXPENDITURES:

Instruction 6,153,473 6,153,473 6,704,211 (550,738)

Pupilpersonnelservices 404,915 404,915 327,568 77,347

Instructionalmediaservices 16,834 16,834 23,248 (6,414)

Instructionandcurriculum

developmentservices 80,693 80,693 114,861 (34,168)

Instructionalstafftrainingservices 12,759 12,759 19,119 (6,360)

Instructionrelatedtechnology 99,360 99,360 96,502 2,858

Schoolboard 20,881 20,881 24,256 (3,375)

Schooladministration 712,536 712,536 743,209 (30,673)

Facilitiesacquisitionandconstruction 264,191 264,191 301,051 (36,860)

Fiscalservices 2,211,743 2,642,859 2,641,100 1,759

Foodservices 88,171 88,171 94,793 (6,622)

Centralservices 306,862 306,862 627,780 (320,918)

Pupiltransportationservices 396,000 396,000 333,647 62,353

Operationofplant 2,592,415 2,592,415 2,711,025 (118,610)

Maintenanceofplant 307,708 307,708 350,323 (42,615)

Communityservices 236,524 236,524 149,983 86,541

Totalexpenditures 13,905,065 14,336,181 15,262,676 (926,495)

Excess(deficiency)

ofrevenuesoverexpenditures 355,563 (75,553) (221,129) (145,576)

OTHERFINANCINGACTIVITIES:

Proceedsfrominsuranceclaims Ͳ Ͳ 11,404 11,404

Netchangeinfundbalance $ 355,563 $ (75,553) $ (209,725) $ (134,172)

KEYS

GATE

CHARTER

SCHOOL

STATEMENTOFREVENUESANDEXPENDITURES BUDGETANDACTUALͲGENERALFUND

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Theaccompanyingnotestobasicfinancialstatementsareanintegralpartofthesestatements. Original

andFinal

Budget Actual Variance

REVENUES:

Federalsources:

NationalSchoolLunchProgram $ 542,058 $ 574,948 $ 32,890

RacetotheTop Ͳ 61,825 61,825

Statesources:

NationalSchoolLunchProgram Ͳ 2,191 2,191

Totalrevenues 542,058 638,964 96,906

EXPENDITURES:

Instructionrelatedtechnology Ͳ 61,825 (61,825)

Foodservices 542,058 577,139 (35,081)

Totalexpenditures 542,058 638,964 (96,906)

Netchangeinfundbalance $ Ͳ $ Ͳ $ Ͳ

KEYS

GATE

CHARTER

SCHOOL

STATEMENTOFREVENUESANDEXPENDITURES BUDGETANDACTUALͲSPECIALREVENUEFUND

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Theaccompanyingnotestobasicfinancialstatementsareanintegralpartofthesestatements. Student Activity

ASSETS:

Cash $ 123,584

Totalassets $ 123,584

LIABILITIES:

Duetostudents $ 123,584

LIABILITIES

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STATEMENTOFASSETSANDLIABILITIESͲAGENCYFUND June30,2014

ASSETS

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NOTESTOBASICFINANCIALSTATEMENTS June30,2014

NOTE1ͲORGANIZATIONANDOPERATIONS

KeysGateCharterSchool(the“School”),aDepartmentofTheFloridaCharterEducational Foundation,Inc.andacomponentunitoftheSchoolBoardofMiamiͲDadeCounty,Florida,was establishedinOctober2000asapubliccharterschoolforstudentsfromkindergartentoeighth gradeinMiamiͲDadeCounty. TheSchoolisaDepartmentofTheFloridaCharterEducational Foundation,Inc.,aFloridanonprofitcorporation. AsofJune30,2014,2,164studentswere enrolledintheSchool.

The basic financial statements of the School, a Department of The Florida Charter EducationalFoundation,Inc.andcomponentunitoftheSchoolBoardofMiamiͲDadeCounty, Florida,presentonlythebalances,activityanddisclosuresrelatedtotheSchool. Theydonot purport to, and do not, present the financial position of The Florida Charter Educational Foundation, Inc. as of June 30, 2014, and its changes in financial position or budgetary comparisons,whereapplicable,fortheyearthenendedinconformitywithaccountingprinciples generallyacceptedintheUnitedStatesofAmerica.

NOTE2ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

Reportingentity:

TheSchooloperatesunderachartergrantedbythesponsoringSchoolDistrict,theMiamiͲ DadeCountyPublicSchoolDistrict.ThecurrentcharteriseffectiveuntilJune30,2027.Attheend ofthetermofthecharter,theDistrictmaychoosenottorenewthecharterundergrounds specifiedinthecharter,inwhichcasetheDistrictisrequiredtonotifytheSchoolinwritingatleast ninetydayspriortothecharter'sexpiration.Duringthetermofthecharter,theDistrictmayalso terminatethecharterifgoodcauseisshown.KeysGateCharterSchoolisconsideredacomponent unitoftheMiamiͲDadeCountyPublicSchoolDistrict.

TheSchoolmayalsobefinanciallyaccountableifanorganizationisfiscallydependenton theSchoolregardlessofwhethertheorganizationhasaseparatelyelectedgoverningboard,a governingboardappointedbyanothergovernment,orajointlyapprovedboard. Inaddition, component units can be other organizations for which the nature and significance of their relationshipwiththeSchoolaresuchthatexclusionwouldcausethereportingentity'sbasic financialstatementstobemisleadingorincomplete.

As a result of evaluating the above criteria, management has determined that no component units existfor whichtheSchoolisfinancially accountable,which would require inclusionintheSchool'sbasicfinancialstatements.

Basisofpresentation:

BasedontheguidanceprovidedintheAmericanInstituteofCertifiedPublicAccountants AuditandAccountingGuide ͲNotͲforͲProfitOrganizationsandprovisionsofSection228.056(9), FloridaStatutes,theSchoolispresentedasagovernmentalorganizationforfinancialstatement reportingpurposes.

GovernmentͲwideBasicStatements:

TheSchool'sbasicfinancialstatementsincludebothgovernmentͲwide(reportingtheSchool asa whole) andfund financial statements (reporting the School'smajorfunds). Both the governmentͲwideand fund basic financial statements categorize primary activities as either governmental orbusinessͲtype. All oftheSchool'sactivities areclassifiedasgovernmental activities.

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NOTE2ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

InthegovernmentͲwidestatementofnetposition,thegovernmentalactivitiescolumnis presentedonaconsolidatedbasis,ifapplicable,andisreportedonafullaccrualeconomicresource basis,whichrecognizesallnoncurrentassetsandreceivablesaswellasallnoncurrentdebtand obligations.

ThegovernmentͲwidestatementofactivitiesreportsboththegrossandnetcostofeachof the School'sfunctions. Thenetcosts, byfunction,arealsosupportedbygeneralrevenues (unrestrictedcontributions,investmentearnings,miscellaneousrevenue,etc.). Thestatementof activities reduces gross expenses (including provision for depreciation) by related program revenues,operatingandcapitalgrants,andcontributions. Programrevenuesmustbedirectly associatedwiththefunction.OperatinggrantsincludeoperatingͲspecificanddiscretionary(either operatingorcapital)grantswhilethecapitalgrantscolumnreflectscapitalͲspecificgrants.Forthe yearendedJune30,2014,theSchoolhadprogramrevenuesof$1,892,423.

ThisgovernmentͲwidefocusismoreontheabilitytosustaintheSchoolasanentityandthe changeintheSchool'snetpositionresultingfromthecurrentyear'sactivities.

Fundfinancialstatements:

TheaccountsoftheSchoolareorganizedonthebasisoffunds.Theoperationsofthefunds areaccountedforwithaseparatesetofselfͲbalancingaccountsthatcompriseitsassets,liabilities, equity,revenues,andexpenditures.

TheSchoolreportsthefollowingmajorgovernmentalfunds:

GeneralFund–Thisfundisusedtoaccountforalloperatingactivitiesofthe Schoolexceptforthoserequiredtobeaccountedforinanotherfund.

SpecialRevenueFund–Thisfundisusedtoaccountforfederalgrantsand certainstategrantsthatarelegallyrestrictedtoexpendituresforparticular purposes.

CapitalProjectFund–Thisfundisusedtoaccountforstatecapitaloutlay fundingthatislegallyrestrictedtoexpendituresforparticularpurposes.

Measurementfocusandbasisofaccounting:

Basisofaccountingreferstothepointatwhichrevenuesorexpenditures/expensesare recognizedintheaccountsandreportedinthefinancialstatements.Itrelatestothetimingofthe measurementsmaderegardlessofthemeasurementfocusapplied.Governmentalfundsusethe currentfinancialresourcesmeasurementfocusandthegovernmentalͲwidestatementusesthe economicresourcesmeasurementfocus.

GovernmentalactivityinthegovernmentͲwidebasicfinancialstatementsispresentedon thefullaccrualbasisofaccounting. Revenuesarerecognizedwhenearned,andexpensesare recognizedwhenincurred.

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Thegovernmentalfundsfinancialstatementsarepresentedonthemodifiedaccrualbasisof accountingunderwhichrevenueisrecognizedintheaccountingperiodinwhichitbecomes susceptibletoaccrual(i.e.,whenitbecomesbothmeasurableandavailable)."Measurable"means theamountofthetransactioncanbedeterminedand"available"meanscollectiblewithinsixty daysafteryearendorsoonenoughthereaftertobeusedtopayliabilitiesofthecurrentperiod.

Cashandcashequivalents:

The School considers all demand accounts and money market funds which are not subjectedtowithdrawalrestrictionstobecashandcashequivalents.

TheSchoolmaintainsitscashaccountswithafinancialinstitution,which,attimes,may exceedthefederallyinsuredlimit.TheSchoolhasnotexperiencedanylossesinsuchaccountsand doesnotbelieveitisexposedtoanysignificantcreditrisk.

Prepaiditems:

Certainpaymentstovendorsreflectcostsapplicabletofutureaccountingperiodsandare recordedasprepaiditems.

Duetoandduefromotherfunds:

Interfundreceivablesandpayablesarisefrominterfundtransactionsandarerecordedbyall fundsaffectedintheperiodinwhichtransactionsareexecuted.Thebalancesresultfromthetime lag between the dates that interfund goods and services are provided or reimbursable expendituresoccur,transactionsarerecordedintheaccountingsystem,andpaymentsbetween fundsaremade.

Revenuerecognition:

StudentfundingisprovidedbytheStateofFloridathroughtheSchoolBoard.Suchfunding isrecordedasentitlementrevenueinthegovernmentͲwidefinancialstatementsandstatesource revenueinthefundfinancialbasicstatementsandisnetofa5%administrationfeeretainedbythe SchoolBoard. ThisfundingisreceivedonaproratabasisoveratwelveͲmonthperiodandis adjustedforchangesinfullͲtimeequivalent(FTE)studentpopulation.

Incometaxes:

TheSchoolisadivisionofanonprofitcorporation. RevenueoftheSchoolisderived primarilyfromothergovernmentalentities.TheSchoolisexemptfromincometaxesunderSection 501(c)(3)oftheInternalRevenueCode.Accordingly,noprovisionforincometaxeshasbeenmade inthesebasicfinancialstatements.

Capitalassets:

Property and equipment purchased or acquired are capitalized at historical cost or estimatedhistoricalcost.CapitalassetsaredefinedbytheSchoolasassetswithaninitialcostof $750andusefullifeofoveroneyear.Donatedpropertyandequipmentassetsarevaluedatthe estimatedfairmarketvalueasofthedatereceived.Additions,improvements,andothercapital outlaysthatsignificantlyextendtheusefullifeofanassetarecapitalizedanddepreciatedoverthe remainingusefullivesoftherelatedfixedassets.Othercostsincurredforrepairsandmaintenance areexpensedasincurred.

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NOTESTOBASICFINANCIALSTATEMENTS

June30,2014

DepreciationonallassetsisprovidedonthestraightͲlinebasisovertheestimateduseful livesasfollows:

Furnitureandequipment 5years

Computerequipment 3years

Leaseholdimprovements 3Ͳ10years

Deferredoutflows/inflowsofresources:

Inadditiontoassets,thestatementoffinancialpositionwillsometimesreportaseparate sectionfordeferredoutflowsofresources. Thisseparatefinancialstatementelement,deferred

outflowsofresources,representsaconsumptionofnetpositionthatappliestoafutureperiod(s) andsowillnotberecognizedasanoutflowofresources(expense/expenditure)untilthen. The Schooldoesnothaveanyitemsthatqualifyforreportinginthiscategory.

Inadditiontoliabilities,thestatementoffinancialpositionwillsometimesreportaseparate sectionfordeferredinflowsofresources. Thisseparatefinancialstatementelement,deferred

inflowsofresources,representsanacquisitionofnetpositionthatappliestoafutureperiod(s)and sowillnotberecognizedasaninflowofresources(revenue)untilthattime.Fortheyearended June30,2014,theSchooldoesnothaveanyitemsthatqualifyforreportinginthiscategory.

Unearnedrevenue:

UnearnedrevenueariseswhentheSchoolreceivesresourcesbeforeithasalegalclaimto them.

Compensatedabsences:

TheSchool’spolicypermitsemployeestoaccumulateearnedbutunusedpaidtimeoff, whichiseligibleforpaymentuponseparationfromservice.Theliabilityforsuchleaveisreported asincurredinthegovernmentͲwidefinancialstatements.Aliabilityforthoseamountsisrecorded inthegovernmentalfundsonlyiftheliabilityhasmaturedasaresultofemployeeresignationsor retirements. The liabilityfor compensated absences includes salaryͲrelated benefits,where applicable.PaymentsforcompensatedabsencesaregenerallypaidoutoftheGeneralFund.

Netposition:

Netpositionisclassifiedinthreecategories.Thegeneralmeaningofeachisasfollows:

x NetinvestmentincapitalassetsͲrepresentsthedifferencebetweenthe costofcapitalassets,lessaccumulateddepreciationreducedbythe outstanding balances of any borrowings used for the acquisition, constructionorimprovementofthoseassets.

x RestrictedͲconsistsofnetpositionwithconstraintsplacedontheiruse eitherby1)externalgroupssuchascreditors,grantors,contributors,or laws or regulations of other governments, or 2) law through constitutionalprovisionsorenablinglegislation.

x Unrestricted Ͳindicatesthatportionofnetpositionthatisavailableto fundfutureoperations.

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Fundbalance:

Thegovernmentalfundfinancialstatementspresentfundbalancesbasedontheprovisions ofGASBStatementNo.54,FundBalanceReportingandGovernmentalFundTypeDefinitions.This Statementprovidesmoreclearlydefinedfundbalanceclassificationsandalsosetsahierarchy whichdetailshowtheSchoolmayspendfundsbasedoncertainconstraints.Thefollowingarethe fundbalanceclassificationsusedinthegovernmentalfundfinancialstatements:

x NonspendableͲthisclassificationincludesamountsthatcannotbespent because they are either not in spendable form or are legally or contractuallyrequiredtobemaintainedintact. TheSchoolclassifies inventories,prepaiditems,longͲtermnotesreceivableanddepositsas nonspendablesincetheyarenotexpectedtobeconvertedtocashorare notexpectedtobeconvertedtocashwithinthenextyear.

x Restricted Ͳthisclassificationincludesamountsthatarerestrictedfor specificpurposesbyexternalpartiessuchasgrantorsandcreditorsorare imposedbylawthroughconstitutionalprovisionsorenablinglegislation.

x Committed Ͳthisclassificationincludesamountsthatcanbeusedfor specific purposes voted on through formal action of the Board of Directors(thehighestlevelofdecisionmakingauthority).Thecommitted amount cannot beusedforanyotherpurposeunlesstheBoardof Directorsremovesorchangesthecommitmentthroughformalaction.

x AssignedͲthisclassificationincludesamountsthattheBoardofDirectors intendstouseforaspecificpurposebuttheyareneitherrestrictednor committed.TheSchoolclassifiesexistingfundbalancetobeusedinthe subsequentyear’sbudgetforeliminationofadeficitasassigned.

x Unassigned Ͳthisclassificationincludesamountsthathavenotbeen restricted, committed or assigned for a specific purpose within the GeneralFund.

ThedetailsofthefundbalancesareincludedintheGovernmentalFundBalanceSheeton page10.

WhentheSchoolincursexpendituresforwhichrestrictedorunrestrictedfundbalanceis available,theSchoolwouldconsiderrestrictedfundstobespentfirst. WhentheSchoolhas expendituresforwhichcommitted,assignedorunassignedfundbalanceisavailable,theSchool wouldconsidercommittedfundstobespentfirst,thenassignedfundsandlastlyunassignedfunds.

Useofestimates:

Thepreparationoffinancialstatementsinconformitywithgenerallyacceptedaccounting principlesrequiresmanagementtomakeestimatesandassumptionsthataffectcertainreported amountsanddisclosures.Accordingly,actualresultscoulddifferfromthoseestimates.

Budget:

AnoperatingbudgetisadoptedandmaintainedbythegoverningboardfortheSchool pursuanttotherequirementsofFloridaStatutes.Thebudgetisadoptedusingthesamebasisof accountingthatisusedinthepreparationofthefinancialstatements,exceptforthereportingofa 5%administrationfeeretainedbytheSchoolBoard.

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A reconciliationof theGeneral Fundpresentedonabudgetary basisto the amount presentedinaccordancewithgenerallyacceptedaccountingprinciples(GAAP)isasfollows:

Revenues Expenditures

Budgetarybasis,page14 $ 15,041,547 $ 15,262,676

Less:5%administrationfeeretained

bytheSchoolBoardincludedas

revenueandexpendituresona

budgetarybasis (617,420) (617,420)

GAAPbasis,page12 $ 14,424,127 $ 14,645,256

Reclassifications:

Certainamountspresentedintheprioryeardatahavebeenreclassifiedinordertobe consistentwiththecurrentyear’spresentation.

Dateofmanagementreview:

SubsequenteventswereevaluatedbymanagementthroughAugust26,2014,whichisthe datethefinancialstatementswereavailabletobeissued.

NOTE3ͲDEPOSITS

AtJune30,2014,thecarryingamountofthedepositsandcashonhandtotaled$7,248,508 withabankbalanceof$7,339,890.

Statestatutesrequire,anditistheSchool’spolicy,thatalldepositsbemadeinto,andbe heldby,financialinstitutionsdesignatedbytheTreasureroftheStateofFloridaasqualifiedpublic depositoriesasdefinedbyChapter280oftheFloridaStatutes. Thisstatuterequiresthatevery qualifiedpublicdepositoryinstitutionmaintaineligiblecollateraltosecurethepublicentity’sfunds. Theminimumcollateraltobepledgedbyaninstitution,thecollateraleligibleforpledge,and reportingrequirementsofthequalifiedpublicdepositortothetreasurerisdefinedbythestatute. Collateralispooledinamultiplequalifiedpublicdepositoryinstitutionpoolwiththeabilityto assessmembersofthepoolshouldtheneedarise. TheSchool’sdepositsareheldinaqualified publicdepository.TheyarecoveredbythecollateralpoolastheSchoolhasidentifieditselfasa publicentityatJune30,2014.

NOTE4ͲDUEFROMOTHERGOVERNMENTS

DuefromothergovernmentsatJune30,2014consistsofanamountduefromtheFlorida DepartmentofEducationforcapitaloutlayfundingforthemonthofJune.

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NOTE5ͲDUETORELATEDPARTY

BoththeSchoolandKeysGateCharterHighSchool(“KGCHS”)arerelatedastheyboth sharecommonboardmembership.Thesetwoschoolsshareteachers,administrativestaff,aswell asexpenses,whichincluderentandotheroperatingexpenses.AtJune30,2014,thebasicfinancial statementsincludeanamountduetoKGCHSintheamountof$81,927forpayrollexpensesand othercosts.

NOTE6–NOTERECEIVABLE

BoththeFloridaCharterEducationFoundation,Inc.(the“Foundation”)andRenaissance CharterSchool,Inc.(“REN”)arerelatedastheybothsharecommonboardmembership.RENhas theabilitytoborrowupto$3,000,000fromtheFoundationtopurchaseequipmentforsixofits newcharterschools.ThenotematuresDecember31,2014andcarriesinterestatarateof6.5%. FortheyearendedJune30,2014,RENhasborrowed$524,515fromtheSchool.

NOTE7ͲCAPITALASSETS

CapitalassetbalancesandactivityfortheyearendedJune30,2014areasfollows:

Balanceat Balanceat

July1, June30,

2013 Additions Deletions 2014

Capitalassets,depreciable:

Furnitureandequipment $ 342,680 $ 43,439 $ Ͳ $ 386,119

Computerequipment 670,969 227,634 31,404 867,199

Leaseholdimprovements 446,483 29,978 Ͳ 476,461

Totalcapitalassets,depreciable 1,460,132 301,051 31,404 1,729,779

Accumulateddepreciation:

Furnitureandequipment 256,384 38,479 Ͳ 294,863

Computerequipment 567,467 118,978 10,468 675,977

Leaseholdimprovements 310,289 39,848 Ͳ 350,137

Totalaccumulateddepreciation 1,134,140 197,305 10,468 1,320,977

Netcapitalassets $ 325,992 $ 103,746 $ 20,936 $ 408,802

Provisionfordepreciationwaschargedtogovernmentalactivitiesasfollows:

Instruction $ 157,457

Operationofplant 39,848

$ 197,305

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NOTE8ͲLEASES

TheSchoolpreviouslyenteredintoanoperatingleaseagreementfortheuseofvarious capitalassetsanditspremises.TheleaseexpiresinAugust2043.Thebasemonthlyrentalamount isbasedonfullenrollmentoftheSchool. IftheSchoolisnotfullyenrolled,themonthlyrental amountisprorated.TheSchoolwasfullyenrolledfortheyearendedJune30,2014.Fortheyear endedJune30,2014,theSchoolpaid$1,175,334,netofcertaincreditsprovidedbythelandlord. Themonthlyrentshallincreaseannuallybaseduponthepercentagechangeintheconsumerprice index.

Previously,theSchoolenteredintoafacilityuseagreementwithRenaissanceCharter School,Inc. TheagreementexpiresinSeptember2040andpaymentsundertheagreementare determinedaccordingtotheproportionofthefacilityusedbytheSchool.FortheyearendingJune 30,2014,thepaymentis100%oftherequiredtotalpaymentasoutlinedintheuseagreement.In subsequentyears,thepaymentwillbedeterminedbasedoncapacityforthefollowingfiscalyear.

Rentexpensefortheleasestotaled$2,309,268fortheyearendedJune30,2014.

NOTE9ͲLONGͲTERMLIABILITIES

ChangesintheSchool’slongͲtermliabilitiesforfiscalyearendedJune30,2014,areas follows:

Amount

Balance Balance Due

July1, June30, Within

2013 Increases Decreases 2014 OneYear

Compensatedabsences $ 14,852 $ 16,728 $ 13,988 $ 17,592 $ 13,194

NOTE10ͲCOMMITMENTS

TheSchoolhasaformalagreementwithCharterSchoolsUSA,Inc.(“CSUSA”)tomanage, staff,andoperatetheSchool. AllstaffoftheSchoolareemployeesofCSUSA. Theagreement requirestheSchooltopayanadministrativefeetoCSUSAof15%oftheSchool’srevenuesas definedintheagreementorthebudgetedamountapprovedbytheBoardofDirectors.Theterm oftheagreementisconsistentwiththetermofthecharterandmayberenewedtocorrespondto charterrenewals.

Totalmanagementfeesamountedto$2,639,258fortheyearendedJune30,2014.The School’saccountspayablebalancecontainsanamountpayabletoCSUSAof$30,975,which representsmanagementfeesandotherexpensereimbursementsunpaidatJune30,2014.

PostͲretirementbenefits:

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NOTE11ͲEMPLOYEEBENEFITPLAN

DuringtheyearendedJune30,2014,theSchoolofferedallofitsfullͲtimeemployeeswho hadattained21yearsofage,aretirementplanunderInternalRevenueCodeSection401(k).The employeeisallowedtocontributeuptoamaximumof20%ofhis/herannualgrosscompensation, subjecttocertainlimitations.TheSchoolcontributedamatchingamountof$15,651fortheyear endedJune30,2014.

NOTE12ͲCAPITALAPPROPRIATIONSFUNDING

TheFloridaDepartmentofEducationhasapprovedaCharterSchoolCapitalOutlay(CSCO) awardfortheSchool. Ineachyearthatfundsareappropriatedbythestateforcharterschool capitaloutlaypurposes,thosefundsareallocatedamongeligiblecharterschools.Thefundsforthe School’sallocationaretransferredtotheSchoolonceaCSCOPlanhasbeenprovidedtoand approved by the sponsoring district. The School’s CSCO Award totaled $958,781 for the 2013/2014schoolyear,whichhasbeenrecognizedasrevenueintheaccompanyingbasicfinancial statements.IftheCSCOfundsareusedtoacquiretangiblepropertyassets,theSchoolBoardhasa reversionaryinterestinthoseassets. Intheeventofnonrenewal,termination,orbreachofthe charterschoolagreement,ownershipoftheassetswouldautomaticallyreverttotheSchoolBoard. TheSchoolhaselectedtousethesefundstopayitsportionoftheleaseexpenseonthefacility.

NOTE13ͲRISKFINANCING

TheSchoolisexposedtovariousrisksoflossrelatedtotorts,theftsof,damageto,and destructionofassetsandnaturaldisasters. TheSchoolhasobtainedpropertyinsurancefrom commercialcompanies. ClaimshavenotexceededthiscommercialcoveragesincetheSchool’s inception.

AsdisclosedinNote10,CSUSAemploysalloftheemployeesoftheSchool.Asaresult,the Schoolisnotexposedtomedicalorworkers’compensationclaimsfortheseindividuals. In addition,CSUSAcarriesallrequiredinsuranceincluding,butnotlimitedto,generalliabilityand errorsandomissionsinsurance.

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OTHER

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INDEPENDENTAUDITOR’SREPORTONINTERNALCONTROLOVER FINANCIALREPORTINGANDONCOMPLIANCEANDOTHER

MATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMED INACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS

Wehaveaudited,inaccordancewiththeauditingstandardsgenerallyacceptedintheUnited StatesofAmericaandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditing

StandardsissuedbytheComptrollerGeneraloftheUnitedStates,thefinancialstatementsofthe governmentalactivities,eachmajorfund,andtheaggregateremainingfundinformationofKeysGate CharterSchool(the“School”),aDepartmentofTheFloridaCharterEducationalFoundation,Inc.anda componentunitoftheSchoolBoardofMiamiͲDadeCounty,Florida,asofandfortheyearendedJune 30,2014,andtherelatednotestothefinancialstatements,whichcollectivelycomprisetheSchool’s basicfinancialstatements,andhaveissuedourreportthereondatedAugust26,2014.

InternalControlOverFinancialReporting

Inplanningandperformingourauditofthefinancialstatements,weconsideredtheSchool’s internalcontroloverfinancialreporting(internalcontrol)todeterminetheauditproceduresthatare appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheSchool’s internalcontrol.Accordingly,wedonotexpressanopinionontheeffectivenessoftheSchool’sinternal control.

Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallow managementoremployees,inthenormalcourseofperformingtheirassignedfunctions,toprevent,or detectandcorrect,misstatementsonatimelybasis.Amaterialweaknessisadeficiency, ora combinationofdeficiencies,ininternalcontrol,suchthatthereisareasonablepossibilitythata materialmisstatementoftheentity'sfinancialstatementswillnotbeprevented,ordetectedand correctedonatimelybasis.Asignificantdeficiencyisadeficiency,oracombinationofdeficiencies,in internalcontrolthatislessseverethanamaterialweakness,yetimportantenoughtomeritattention bythosechargedwithgovernance.

Ourconsiderationofinternalcontrolwasforthelimitedpurposedescribedinthefirstparagraphof thissectionandwasnotdesignedtoidentifyalldeficienciesininternalcontrolthatmightbematerial weaknessesor,significantdeficiencies.Giventheselimitations,duringourauditwedidnotidentifyany deficiencies in internalcontrolthat weconsidertobematerial weaknesses.However, material weaknessesmayexistthathavenotbeenidentified.

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ComplianceandOtherMatters

AspartofobtainingreasonableassuranceaboutwhethertheSchool’sfinancialstatementsarefree frommaterialmisstatement,weperformedtestsofitscompliancewithcertainprovisionsoflaws, regulations,contracts,andgrantagreements,noncompliancewithwhichcouldhaveadirectand materialeffectonthedeterminationoffinancialstatementamounts.However,providinganopinion oncompliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonot expresssuchanopinion.Theresultsofourtestsdisclosednoinstancesofnoncomplianceorother mattersthatarerequiredtobereportedunderGovernmentAuditingStandards.

PurposeofthisReport

Thepurposeofthisreportissolelytodescribethescopeofourtestingofinternalcontroland complianceandtheresultsofthattesting,andnottoprovideanopinionontheeffectivenessofthe entity'sinternalcontroloroncompliance.Thisreportisanintegralpartofanauditperformedin accordancewithGovernmentAuditingStandardsinconsideringtheentity'sinternalcontroland compliance.Accordingly,thiscommunicationisnotsuitableforanyotherpurpose

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KMCcpa.com |

INDEPENDENTAUDITOR’SREPORTTOTHEBOARDOFDIRECTORS

ReportontheFinancialStatements

WehaveauditedthebasicfinancialstatementsofKeysGateCharterSchool(the“School”), a componentunitoftheSchoolBoardofMiamiͲDadeCounty,Florida,asofandforthefiscalyearended June30,2014,andhaveissuedourreportthereondatedAugust26,2014.

Auditor’sResponsibility

WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnited StatesofAmericaandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditing

Standards,issuedbytheComptrollerGeneraloftheUnitedStates.

OtherReportingRequiredbyGovernmentAuditingStandards

WehaveissuedourIndependentAuditor’sReportonInternalControloverFinancialReportingand Compliance and Other Matters Based on an Audit of the Financial Statements Performed in AccordancewithGovernmentAuditingStandards.Disclosuresinthatreport,whichisdatedAugust26, 2014,shouldbeconsideredinconjunctionwiththismanagementletter.

PriorAuditFindings

Section10.854(1)(e)1.,RulesoftheAuditorGeneral,requiresthatwedeterminewhetherornot correctiveactionshavebeentakentoaddressfindingsandrecommendationsmadeinthepreceding annualfinancialauditreport.Therewerenorecommendationsmadeintheprecedingauditreport.

FinancialCondition

Sections10.854(1)(e)2.and10.855(11),RulesoftheAuditorGeneral,require thatweapply appropriateprocedurestodeterminewhetherornottheSchoolhasmetoneormoreoftheconditions describedinSection218.503(1),FloridaStatutes,andidentificationofthespecificcondition(s)met.In connectionwithouraudit,wedeterminedthattheSchooldidnotmeetanyoftheconditions describedinSection218.503(1),FloridaStatutes.

Sections10.854(1)(e)6.a.and10.855(12),RulesoftheAuditorGeneral,requirethatweapply financialconditionassessmentproceduresfortheSchool.Itismanagement’sresponsibilitytomonitor the School’s financial condition, and our financial condition assessment was based in part on representationsmadebymanagementandthereviewoffinancialinformationprovidedbysame.

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Transparency

Sections10.854(1)(e)7.and10.855(13),Rulesofthe AuditorGeneral,require thatweapply appropriateprocedurestodeterminewhethertheSchoolmaintainsonitswebsitetheinformation specifiedinSection1002.33(9)(p),FloridaStatutes.Inconnectionwithouraudit,wedeterminedthat theSchoolmaintainedonitswebsitetheinformationspecifiedinSection1002.33(9)(p),Florida Statutes.

OtherMatters

Section10.854(1)(e)3.,RulesoftheAuditorGeneral,requiresthatweaddressinthemanagement letteranyrecommendationstoimprovefinancialmanagement.Inconnectionwithouraudit,wedid nothaveanysuchrecommendations.

Section10.854(1)(e)4.,RulesoftheAuditorGeneral,requiresthatweaddressnoncompliancewith provisionsofcontractsorgrantagreements,orabuse,thathaveoccurred,orarelikelytohave occurred,thathaveaneffectonthefinancialstatementsthatislessthatmaterialbutwhichwarrants theattentionofthosechargedwithgovernance.Inconnectionwithouraudit,wedidnothaveany suchfindings.

Section10.854(1)(e)5,RulesoftheAuditorGeneral,requiresthenameorofficialtitleoftheentity. TheofficialtitleoftheentityisKeysGateCharterSchool.

PurposeofthisLetter

OurmanagementletterisintendedsolelyfortheinformationanduseoftheLegislativeAuditing Committee,membersoftheFloridaSenateandtheFloridaHouseofRepresentatives,theFlorida Auditor General, Federal and other granting agencies, the Board of Directors and applicable managementandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecified parties.

KEEFEMcCULLOUGH