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HYNES CHARTER SCHOOL CORPORATIONFINANCIAL STATEMENTS

JUNE 30,2007

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date /

HYNES CHARTER SCHOOL

TABLE OF CONTENTS

INDEPENDENT AUDITORS' REPORT

FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION 3

STATEMENT OF ACTIVITIES 4

STATEMENT OF FUNCTIONAL EXPENSES 5

STATEMENT OF CASH FLOWS 6

NOTES TO FINANCIAL STATEMENTS 7

SUPPLEMENTAL INFORMATION

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 12

COMPENSATION PAID TO BOARD MEMBERS 13

SCHEDULES REQUIRED BY STATE LAW

(R.S. 24:514 PERFORMANCE AND STATISTICAL DATA)

AGREED-UPON PROCEDURES REPORT 15

SCHEDULE 1GENERAL FUND INSTRUCTIONAL AND SUPPORT EXPENDITURES ANDCERTAIN LOCAL REVENUE SOURCES 19

SCHEDULE 2EDUCATION LEVELS OF PUBLIC SCHOOL STAFF 20

SCHEDULE 3NUMBER AND TYPE OF PUBLIC SCHOOLS 21

SCHEDULE4EXPERIENCES OF PUBLIC PRINCIPALS AND FULL-TIME 22CLASSROOM TEACHERS

SCHEDULE 5PUBLIC SCHOOL STAFF DATA 23

SCHEDULE 6CLASS SIZE CHARACTERISTICS 24

HYNES CHARTER SCHOOL

TABLE OF CONTENTS (Continued)

SCHEDULES REQUIRED BY STATE LAW(R.S. 24:514 PERFORMANCE AND STATISTICAL DATA)

SCHEDULE 7LOUISIANA EDUCATIONAL ASSESSMENT PROGRAM (LEAP) 25

SCHEDULE 8THE GRADUATION EXIT EXAM 26

SCHEDULE 9THE IOWA TESTS 27

OTHER INDEPENDENT AUDITORS' REPORTS

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGCOMPLIANCE AND ON BASED ON AN AUDIT OF FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS 29

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TOEACH MAJOR PROGRAM AND ON INTERNAL CONTROLOVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 31

SCHEDULE OF FINDINGS AND QUESTIONED COSTS 33

SlLVA 8e ASSOCIATES, LLCCertified Public Accountants

Craig A. Silva, CPA

Brent A. Silva, CPA

Tom A. Gurtner, CPA

INDEPENDENT AUDITORS' REPORT

To the Board of DirectorsHynes Charter School CorporationNew Orleans, Louisiana

We have audited the accompanying statement of financial position of Hynes Charter School Corporation(the School) as of June 30, 2007 and the related statements of activities and cash flows for the year thenended. These financial statements are the responsibility of the School's management. Our responsibility isto 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 ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards.issued by the Comptroller General of the United States; and the provisions of the Office of Managementand Budget (OMB) Circular A-133, Audits of Institutions of Higher Education and Other NonprofitInstitutions. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Hynes Charter School Corporation as of June 30, 2007, and the changes in its netassets and its cash flows for the year then ended in conformity with accounting principles generallyaccepted in the United States of America.

Our audit was performed for the purpose of forming an opinion on the basic financial statements of HynesCharter School Corporation taken as a whole. The accompanying supplementary schedules are presentedfor purposes of additional analysis and are not a required part of the financial statements of theOrganization. The accompanying schedule of federal financial assistance is presented for purposes ofadditional analysis as required by U.S. Office and Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financialstatements. The information in these schedules have been subjected to the procedures applied in the auditof the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to thebasic financial statements taken as a whole.

4330 Dumaine St. 4331 Iberville St.New Orleans, LA 70119 Mandeville, LA 70471Office: (504) 833-2436 Office: (985) 626-8299

Fax: (504) 484-0807 www.silvaandassociates.com Fax: (985) 626-9767

INDEPENDENT AUDITORS* REPORT(CONTINUED)

To the Board of DirectorsHynes Charter School CorporationNew Orleans, LouisianaPage 2

In accordance with Government Auditins Standards, we have also issued a report dated December 20, 2007on our consideration of Hynes Charter School Corporation's internal control over financial reporting andon our tests of its compliance with certain provisions of laws, regulations, contracts, and grants agreementsand other matters. The purpose of that report is to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of the testing and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards and should be considered in assessing theresults of our audit.

December 20, 2007

HYNES CHARTER SCHOOL CORPORATIONSTATEMENT OF FINANCIAL POSITION

JUNE 30, 2007

ASSETSCurrent Assets:Cash and cash equivalents $ 1,503,787Cash restricted for student activities 175,195Grants receivable 902,496Other receivables 61,127Prepaid insurance 11,428

Total Current Assets 2,654,033

Total Assets $ 2,654,033

LIABILITIES AND NET ASSETSCurrent Liabilities:Accrued payroll liabilities $ 359,525Accrued unpaid leave 34,871Deferred revenue 21,445

Total Liabilities 415,841

Net Assets:Net assets - unrestricted 1,994,958Net assets - temporarily restricted 243,234

Total Net Assets 2,238,192

Total Liabilities & Net Assets $ 2,654,033

The accompanying notes are an integral part of this financial statement.3

HYNES CHARTER SCHOOL CORPORATIONSTATEMENT OF ACTIVITIES

FOR THE YEAR ENDING JUNE 30, 2007

TemporarilyUnrestricted Restricted Totals

Revenues and Other Support:Grants

FederalState & Local Minimum Foundation ProgramOther

DonationsNon-cash donationsStudent FeesMiscellaneous revenueNet assets released from restrictions

Total public support revenues and other support

Expenses:Administrative expensesProgram expenses

Total expenses

Increase/(decrease) in net assets

Net assets at beginning of year

Net assets at end of year

$1,904,4712,504,921

37,89925,845140,20224,953

680161,738

4,800,709

418,8012,386,950

2,805,751

$ - $1,904,4712,504,92137,899

21,702 47,547140,202

348,179 373,132680

(161,738)

208,143 5,008,852

418,8012,386,950

2,805,751

1,994,958 208,143 2,203,101

- 35,091 35,091

$1,994.958 $ 243,234 $2,238,192


HYNES CHARTER SCHOOL CORPORATIONSTATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED JUNE 30,2007

Administrative ProgramExpenses Expense Total

Expenses:

Salaries $ 322,158 $ 1,378,720 $ 1,700,878Payroll taxes 12,818 54,856 67,674Employee group insurance 22,349 95,647 117,996Retirement fund contribution 45,980 196,777 242,757Other employee benefits 3,139 13,433 16,572Transportation - 60,285 60,285Advertising 95 1,488 1,583Due and fees 210 - 210Insurance 1,718 26,915 28,633Repairs and maintenance 1,123 17,597 18,720Professional services 5,097 - 5,097Miscellaneous expense 305 4,779 5,084Bank charges and fees 1,143 - 1,143Materials and supplies - 350,179 350,179Telephone and postage 1,597 25,020 26,617Utilities 1,069 16,743 17,812Food service management - 144,511 144,511

$ 418,801 S 2,386,950 $ 2,805.751


HYNES CHARTER SCHOOL CORPORATIONSTATEMENT OF CASH FLOWS

FOR THE YEAR ENDING JUNE 30,2007

Cash flows from operating activitiesIncrease in net assets $ 2,203,101Adjustments to reconcile changes in net assets tonet cash provided by operating activities:

(Increase)/decrease operating assets:Grants receivable (902,496)Other receivables (61,127)Prepaid insurance (11,428)

(Increase)/decrease in restricted assets (175,083)Increase/(decrease) in operating liabilities:

Accrued payroll liabilities 359,525Accrued unpaid leave 34,871Deferred Revenue 21,445

Net cash provided/(used) by operating activities 1,468,808

Net increase/(decrease) in cash and cash equivalents 1,468,808

Cash and cash equivalents, beginning of year 34,979

Cash and cash equivalents, end of year $ 1,503,787


HYNES CHARTER SCHOOL CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30,2007

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

The Hynes Charter School Corporation (the "School") was granted a charter by the Orleans Parish School Board in2006 to provide all students with a safe and diverse learning community by empowering them to be proficientreaders, writers, and critical thinkers. The Hynes Charter School Corporation is a Type 3 Charter School governedby a board of directors.

The Hynes Charter School Corporation is a nonprofit organization exempt from federal and state income tax underSection 501(c) (3) of the United States Internal Revenue Code.

Financial Statement Presentation

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance withaccounting principles generally accepted in the United States of America.

The School follows the guidance of Statement of Financial Accounting Standards (SFAS) No. 117, FinancialStatements of Not-for-Profit Organizations. Under SFAS No. 117, the School is required to report informationregarding its financial position and activities according to three classes of net assets: unrestricted, temporarilyrestricted, and permanently restricted. In addition, the School is required to present a statement of cash flows.

The School also follows the guidance of SFAS No., 116, Accounting for Contributions Received and ContributionsMade, whereby contributions received are recorded as unrestricted, temporarily restricted, or permanently restrictedsupport depending on the existence and/or nature of any donor restrictions. Restricted net assets are reclassified tounrestricted net assets upon satisfaction of the donor imposed time or purpose restrictions.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the UnitedStates of America requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and thereported amounts of revenues and expenses during the reporting period. Actual results could differ from thoseestimates.

Public Support and Revenue

The School's primary source of funding is through the Minimum Foundation Program (MFP) funded by the StatePublic School Fund and the Orleans Parish School Board. The School receives $3,809 from the State and $3,624from the School Board per eligible student in attendance at the official pupil count date of October 2, 2006. MFPrevenue accounts for 50% of the School's total support for the year ended June 30, 2007. State and Federal grantsare on a cost reimbursement basis and account for 38% of the School's total support for the year ended June 30,2007.

Donated Equipment, Services and Materials

Contributions of donated noncash assets are recorded at their fair values in the period received. Contributions ofdonated services that create or enhance nonfinancial assets or that require specialized skills are provided byindividuals possessing those skills, and would typically need to be purchased if not provided by donation, arerecorded at their fair values in the period received. The School has recorded $140,202 as revenue and expense inthe statement of activities for use of facilities, equipment, and materials owned by the Orleans Parish School Board.


JUNE 30, 2007

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Donated Equipment Services and Materials (continued)

As part of the Operating agreement with the Orleans Parish School Board, Hynes Charter School Corporation is notrequired to pay a lease on the property which houses the school. The administration has elected not to record thebenefit from this transaction on their books.

Cash and cash equivalents

For purposes of the statement of cash flows, the School considers all unrestricted, highly liquid investments with aninitial maturity of less then three months as cash and cash equivalents.

Property and Equipment

Property and equipment obtained with non-public funds are the property of the School and are capitalized at cost. Itis the School's policy to capitalize expenditures for these items in excess of $1,000. Normal building maintenanceand minor equipment purchases are included in expenses of the School. As of June 30, 2007, the School had nosignificant fixed assets purchased through non-public funding.

Instructional Fees

The school requires payment of a $75 instructional fee per student at the time of registration, which is in the springof the current year. Revenues from these fees are recognized in the year in which they are earned. Fees collected inthe current year that apply to the subsequent year are deferred. Receivables for instructional fees have not beenrecorded as the amount due has been determined to be uncollectible.

Functional Expense Allocation

Functional expenses are allocated among the various program services, general and administrative, and fundraisingcategories based on actual use or management's best estimate.

Restricted and Unrestricted Revenue

Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictionsexpire (that is, when a stipulated time restriction ends or purpose restriction is accomplished) in the reporting periodin which the revenue is recognized. All other donor-restricted contributions are reported as increases in temporarilyor permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires,temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activitiesas net assets released from restrictions. Temporarily restricted net assets are composed of cash and contributionsreceived from unrelated third parties that have set specific instructional purposes for these funds as well as studentactivity funds. As the School uses these funds for the purchase of the materials stipulated in the donation, or fornon-instructional student activities, they are released from restriction.

NOTE B - CONCENTRATION OF CREDIT RISK

The School maintains cash accounts at a local financial institution that may at times exceed amounts covered byinsurance provided by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. The School's cashbalances were in excess of FDIC insurance by $1,622,380 at June 30, 2007. The School has not experienced anylosses in such accounts and believes it is not exposed to any significant credit risk to cash.


JUNE 30,2007

NOTE C - COMPENSATED ABSENCES

Teachers and staff are allowed a maximum of 10 cumulative sick and/or personal days per year. As of June 30,2007, the School is following the policy of the Orleans Parish School Board, and has allowed employees tocarryover their unused days. Effective for the upcoming fiscal year, the School will no longer allow carryover ofunused sick/personal days and will pay employees an agreed upon amount for balances outstanding as of June 30,2007. The School has accrued for $34,871 of unpaid leave as of June 30, 2007.

NOTE D - GRANTS RECEIVABLE

Grants and contracts receivable are deemed to be fully collectible by management and are comprised of thefollowing amounts due at June 30,2007:

United States Department of EducationTitle I 231,054Title II 23,166Title III 23,130Title IV 2,137Preschool 1,500Hurricane Education Recovery Act (Restart) 609,412

United States Department of AgricultureNational School Lunch Program 12,097

Total grants receivable $ 902,496

NOTE E - RETIREMENT PLANS

Certain employees of the School participate in the Teachers' Retirement System of Louisiana (the System). TheSystem is a cost-sharing, multiple-employer defined benefit pension plan administered by separate boards oftrustees. Pertinent information relative to the plan follows:

Plan Description: The System provides retirement benefits as well as disability and survivor benefits. Ten years ofservice credit are required to become vested for retirement benefits, and five years to become vested for disabilityand survivor benefits. Benefits are established and amended by state statute. The System issues a publicly availablefinancial report that includes financial statements and required supplementary information for the System. Thatreport may be obtained by writing to the Teachers Retirement System of Louisiana, P.O. Box 94123, Baton Rouge,LA 70804-9123.

Funding Policy: Plan members are required to contribute 8% of their annual covered salary. The school is requiredto contribute at an actuarially determined rate. The current rate is 15.8% of annual eligible covered payroll.Member contributions and employer contributions for the System are established by state law, and rates areestablished by the Public Retirement System's Actuarial Committee. The School's contribution to the plan for theyear ended June 30,2007 is $337,879, of which $88,133 is accrued as a payroll liability.

NOTE F-FUNDS RESTRICTED FOR SCHOOL ACTIVITIES

The school maintains a separate bank account for student activities. The account is for the collected instructionalfees and the Husky Care (before and after-school care program) fees. Restricted student activity funds amounted to$175,195 at June 30, 2007, and are reported as an asset and as part of temporarily restricted net assets.


JUNE 30,2007

NOTE G - OTHER RECEIVABLE

Prior to Hurricane Katrina, fees for the before and after-school care program were deposited into an account(ADEPT) that was controlled by the Orleans Parish School Board. The school board would deduct certain fees fromthese funds and then remit the remaining amounts to the School. The administration was able to provide sufficientevidence to the Orleans Parish School Board to support their claim against the funds in the ADEPT account, andhave recorded $61,127 as other receivable and temporarily restricted net asset for amounts due from the schoolboard as of June 30,2007.

NOTE H - TEMPORARILY RESTRICTED NET ASSETS

The temporarily restricted net assets are composed of cash and contributions received from unrelated third partiesthat have set specific instructional purposes for these funds. As the School uses these funds for the purchase of thematerials stipulated in the donation, they are released from restriction.

10

REQUIRED SUPPLEMENTARY INFORMATION

HYNES CHARTER SCHOOLSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

FOR THE YEAR ENDED JUNE 30, 2007

Federal Grantor/Pass-through Grantor/Program

U.S. Department of Agriculture:Pass-through programs from:Louisiana Department of Education -National School Lunch Program

U.S. Department of EducationDirect Programs:Public Charter Schools Federal Grant Program:

Public Charter School ProgramPass-through programs from:Louisiana Department of Education -Title I - Grants to Local Educational Agencies -

Part A - BasicTitle II - Teacher & Principal Training & Recruitment FundTitle III - English Language Acquisition GrantsTitle IV - Safe & Drug-Free Schools & CommunitiesHurricane Education Recovery Act (Restart)

Total expenditures of federal awards

FederalCFDA

Number

10.555

84.282A

84.010A84.367A84.36584.186A84.938A

Pass-throughEntity

IdentifyingNumber

28-05-T1-36C28-05-50-36 C28-05-60-36 C28-05-70-36 C28-06-IR-36

FederalExpenditures

93,924

200,000

231,05423,16631,4182,137

1,322,773

$ 1,904,472

See independent auditors' report.12

HYNES CHARTER SCHOOL CORPORATIONSCHEDULE OF COMPENSATION PAID TO BOARD MEMBERS


Compensation

Todd Schexnayder, President of the Board & Parent$-0-

Executive Vice President of Human ResourcesPan American Life Insurance, Co.601 PoydrasNew Orleans, LA 70130

Alvin Miester, J.D. Vice President of the Board & Parent -0-Sher Gamer Cahill Richter Klein & Hilbert, L.L.C.909 Poydras Suite 2800New Orleans, LA 70112

Dr. Tim Ryan, UNO Chancellor -0-University of New OrleansNew Orleans, LA 70148

Dr. James Meza, Dean of the College of Education -0-University of New OrleansNew Orleans, LA 70148

Elizabeth Uzee Sigler, Parent -0-University of New OrleansOffice of ResearchNew Orleans, LA 70148

13

SCHEDULES REQUIRED BY STATE LAW

(R.S. 24:514 - PERFORMANCE AND STATISTICAL DATA)

14

SILVA & ASSOCIATES, LLCCertified Public Accountants

Craig A. Silva, CPA

Brent A. Silva, CPA

Tom A. Gurtner, CPA

INDEPENDENT ACCOUNTANT'S REPORTON APPLYING AGREED-UPON PROCEDURES

TO THE MANAGEMENT OF HYNES CHARTER SCHOOL CORPORATION

To the Board of DirectorsHynes Charter School CorporationNew Orleans, Louisiana

We have performed the procedures included in the Louisiana Governmental Audit Guide and enumerated below,which were agreed to by the management of Hynes Charter School Corporation and the Legislative Auditor, State ofLouisiana, solely to assist users in evaluating management's assertions about the performance and statistical dataaccompanying the annual financial statements of Hynes Charter School Corporation and to determine whether foespecified schedules are free of obvious errors and omissions as provided by the Board of Elementary and SecondaryEducation (BESE). This agreed-upon procedures engagement was performed in accordance with standardsestablished by the American Institute of Certified Public Accountants and Government Auditing Standards. Thesufficiency of these procedures is solely the responsibility of the specified users of the report Consequently, wemake no representation regarding the sufficiency of the procedures described below either for the purpose for whichthis report has been requested or for any other purpose.

Our procedures and findings relate to the accompanying schedules of supplemental information and are as follows:

General Fund Instructional and Support Expendituresand Certain Local Revenue Sources ("Schedule 1>

1. We selected a random sample of 25 transactions and reviewed supporting documentation to determine if diesampled expenditures/revenues are classified correctly and are reported in the proper amounts for each of thefollowing amounts reported on the schedule:

Total General Fund Instructional ExpendituresTotal General Fund Equipment ExpendituresTotal Local Taxation RevenueTotal Local Earnings on Investment in Real PropertyTotal State Revenue in Lieu of TaxesNonpublic Textbook RevenueNonpublic Transportation Revenue

Findings: None

4330 Dumoine St. 4331 Iberville St.New Orleans, LA 70119 Mandeville, LA 70471Office: (504) 833-2436 . . Office: (985) 626-8299


Education Levels of Public School Staff (Schedule 2)

2. We reconciled the total number of full-time classroom teachers per the schedule "Experience of PublicPrincipals and Full-time Classroom Teachers" (Schedule 4) to the combined total number of foil-time classroomteachers per this schedule and to school board supporting payroll records as of October 1.

3. We reconciled the combined total of principals and assistant principals per the schedule "Experience of PublicPrincipals and Full-time Classroom Teachers" (Schedule 4) to the combined total of principals and assistantprincipals per this schedule.

4. We obtained a list of full-time teachers, principals, and assistant principals by classification as of October 1 andas reported on the schedule. We traced a random sample of 5 teachers to the individual's personnel file anddetermine if the individual's education level was properly classified on the schedule.

Findings: None

Number and Type of Public Schools (Schedule 3>

5. We obtained a list of schools by type as reported on the schedule. We compared the list to the schools andgrade levels as reported on the Title 1 Grants to Local Educational Agencies (CFDA 84.010) application and/orthe National School Lunch Program (CFDA 10.555) application.

Findings: None

Experience of Public Principals and Full-timeClassroom Teachers (Schedule 4)

6. We obtained a list of full-time teachers, principals, and assistant principals by classification as of October 1 andas reported on the schedule and traced the same sample used in procedure 4 to the individual's personnel fileand determined if the individual's experience was properly classified on the schedule.

Findings: None

Public Staff Data (Schedule S>

7. We obtained a list of all classroom teachers including their base salary, extra compensation, and ROTC orrehired retiree status as well as full-time equivalent as reported on the schedule and traced a random sample of 5teachers to the individual's personnel file and determined if the individual's salary, extra compensation, andfull-time equivalents were properly included on the schedule.

Findings: None

8. We recalculated the average salaries and full-time equivalents reported in the schedule.

Findings: None

16

Class Size Characteristics (Schedule 6>

9. We obtained a list of classes by school, school type, and class size as reported on the schedule and reconciledschool type classifications to Schedule 3 data, as obtained in procedure 5. We then traced a random sample of10 classes to the October 1 roll books for those classes and determined if the class was properly classified on theschedule.

Findings: None

Louisiana Educational Assessment Program (LEAP)for the 21st Century (Schedule 71

10. We obtained test scores as provided by the testing authority and reconciled scores as reported by the testingauthority to scores reported in the schedule by Hynes Charter School Corporation.

Findings: None

The Graduation Exit Exam for the 21st Century (Schedule 8>

11. Not applicable

The LEAP and ILEAP Tests (Schedule 91

12. We obtained test scores as provided by the testing authority and reconciled scores as reported by the testingauthority to scores reported in the schedule by Hynes Charter School Corporation

Findings: None

We were not engaged to, and did not perform an examination, the objective of which would be the expression of anopinion on management's assertions. Accordingly, we do not express such an opinion. Had we performedadditional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the use of management of Hynes Charter School Corporation, the LouisianaDepartment of Education, the Louisiana Legislature, and the Legislative Auditor, State of Louisiana, and should notbe used by those who have not agreed to the procedures and taken responsibility for the sufficiency of theprocedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the LegislativeAuditor as a public document.

December 20,2007

17

HYNES CHARTER SCHOOL CORPORATIONSCHEDULES REQUIRED BY STATE LAW

(R.S. 24:514 - PERFORMANCE AND STATISTICAL DATA)FOR THE YEAR ENDED JUNE 30,2007

Schedule 1 - General Fund Instructional and Support Expenditures and Certain Local Revenue SourcesThis schedule includes general fund instructional and equipment expenditures. It also contains local taxationrevenue, earnings on investments, revenue in lieu of taxes, and nonpublic textbook and transportation revenue. Thisdata is used either in the Minimum Foundation Program (MFP) formula or is presented annually in the MFP 70%Expenditure Requirement Report.

Schedule 2 - Education Levels of Public School StaffThis schedule includes the certificated and uncertificated number and percentage of full-time classroom teachers andthe number and percentage of principals and assistant principal's with less than a Bachelor's; Master's; Master's+30; Specialist in Education; and Ph. D or Ed. D. degrees. This data is currently reported to the Legislature in theAnnual Financial and Statistical Report (AFSR).

Schedule 3 - Number and Type of Public SchoolsThis schedule includes the number of elementary, middle/junior high, secondary and combination schools inoperation during the fiscal year. This data is currently reported to the Legislature in the Annual Financial andStatistical Report (AFSR).

Schedule 4 - Experience of Public Teachers and Full-time Classroom TeachersThis schedule includes the number of years of experience in teaching for assistant principals, principals, and full-time classroom teachers. This data is currently reported to the Legislature in the Annual Financial and StatisticalReport (AFSR).

Schedule 5 - Public School Staff DataThis schedule includes average classroom teachers' salary using full-time equivalents, including and excludingROTC and rehired retiree teachers. This data is currently reported to the Legislature in the Annual Financial andStatistical Report (AFSR).

Schedule 6 - Class Size CharacteristicsThis schedule includes the percent and number of classes with student enrollment in the following ranges: 1-20, 21-26,27-33, and 34+ students. This data is currently reported to the Legislature in the Annual School Report (ASR).

Schedule 7 - Louisiana Educational Assessment Program (LEAP)This schedule represents student performance testing data and includes summary scores by district for grades 4 and8 in each category tested. Scores are reported as Advanced, Proficient, Basic, Approaching Basic, andUnsatisfactory, This schedule includes three years of data.

Schedule 8 - The Graduation Exit ExamNot applicable

Schedule 9 - The IOWA TestsThis schedule represents student performance testing data and includes a summary score for grades 3, 5, 6, 7 and 9for each district. The summary score reported is the National Percentile Rank showing relative position or rank ascompared to a large, representative sample of students in the same grade from the entire nation. This scheduleincludes three years of data.

18

Schedule 1

HYNES CHARTER SCHOOL CORPORATIONGENERAL FUND INSTRUCTIONAL AND SUPPORT EXPENDITURES

AND CERTAIN LOCAL REVENUE SOURCESFOR THE YEAR ENDED JUNE 30,2007

General Fund Instructional and Equipment Expenditures

General Fund Instructional Expenditures:

Teacher and Student Interaction Activities:

Classroom Teacher Salaries

Employee Benefits

Instructional Materials and Supplies

Instructional Equipment

Total Teacher and Student Interaction Activities

1,378,720

360,713

172,955

140,448

2,052,836

Pupil Support Services

Less: Equipment for Pupil Support Services

Net Pupil Support Services

Instructional Staff Services

Less: Equipment for Instructional Staff Services

Net Instructional Staff Services

School Administration

Less: Equipment for School Administration

Net School Administration

Total General Fund Instructional Expenditures

Total General Fund Equipment Expenditures

307,344

26,770

418,802

307,344

26,770

418,802

2,805,752

Certain Local Revenue Sources

Local Taxation Revenue:

Constitutional Ad Valorem Taxes

Renewable Ad Valorem Tax

Debt Service Ad Valorem Tax

Up to 1% of Collections by the Sheriff on Taxes Other than School Taxes

Sales and Use Taxes

Total Local Taxation Revenue

Local Earnings on Investment in Rea! Property:

Earnings from 16th Section Property

Earnings from Other Real Property

Total Local Earnings on Investment in Real Property

State Revenue in Lieu of Taxes:

Revenue Sharing - Constitutional Tax

Revenue Sharing - Other Taxes

Revenue Sharing - Excess Portion

Other Revenue in Lieu of Taxes

Total State Revenue in Lieu of Taxes

Nonpublic Textbook Revenue

Nonpubiic Transportation Revenue

See independent accounts' report on applying agreed-upon procedures.19

Schedule 2

HYNES CHARTER SCHOOL CORPORATIONEDUCATION LEVELS OF PUBLIC SCHOOL STAFF

AS OF OCTOBER 1, 2006

Category

Less than a Bachelor's DegreeBachelor's DegreeMaster's DegreeMaster's Degree + 30Specialist in EducationPh. D. or Ed. D.

Total

Full-time Classroom TeachersCertificated

Number

1891

28

Percent

58.06%29.03%

3.23%

90.32%

UncertificatedNumber

1

1

Percent

3.23%

3.23%

Principals & Assistant PrincipalsCertificated

Number

11

2

Percent

3.23%3.23%

6.45%

UncertificatedNumber Percent

See independent accountants' report on applying agreed-upon procedures.20

Schedule 3

HYNES CHARTER SCHOOL CORPORATIONNUMBER AND TYPE OF PUBLIC SCHOOLS


TypeElementaryMiddle/Jr. HighSecondaryCombination

Total

Number

11


Schedule 4

HYNES CHARTER SCHOOL CORPORATIONEXPERIENCE OF PUBLIC PRINCIPALS AND FULL-TIME CLASSROOM TEACHERS


Assistant PrincipalsPrincipalsClassroom Teachers

Total

0-1 Yr.

44

2-3 Yrs.

11

4-10 Yrs.1

34

11-14 Yrs.

44

15-1 9 Yrs.

178

20-24 Yrs.

55

25+ Yrs.

55

Total11

2931


Schedule 5

HYNES CHARTER SCHOOL CORPORATIONPUBLIC SCHOOL STAFF DATA


Average Classroom Teachers SalaryIncluding Extra Compensation

Average Classroom Teachers SalaryExcluding Extra Compensation

Number of Teacher Full-Time Equivalents(FTEs) used in Computation of AverageSalaries

All ClassroomTeachers

$40,061

$40,061

29

Classroom Teachers Excluding ROTC,Rehired Retirees, and Flagged Salary

Reductions

Note: Figures reported include all sources of funding (i.e., federal, state, and local) but exclude stipends andemployee benefits. Generally, retired teachers rehired to teach receive less compensation than non-retiredteachers; some teachers may have been flagged has receiving reduced salaries (e.g., extended medical leave);and ROTC teachers usually receive more compensation because of a federal supplement. For these reasons,these teachers are excluded from the computation in the last column. This schedule excludes day-to-daysubstitutes, temporary employees, and any teachers on sabbatical leave during any part of the school year.


Schedule 6

HYNES CHARTER SCHOOL CORPORATIONCLASS SIZE CHARACTERISTICS


School TypeElementrayElementray Activity ClassesMiddle /Jr. HighMiddle / Jr. High Activity ClassesHighHigh Activity ClassesCombinationCombination Activity Classes

Class Size Range1-20

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25%

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6

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27-33Percent Number

34+Percent Number

Note: The Board of Elementary and Secondary Education has set specific limits on the maximum size of classes at variousgrade levels. The maximum enrollment in grades K-3 is 26 students and maximum enrollment in grades 4-12 is 33students. These limits do not apply to activity classes such as physical education, chorus, band, and other classes withoutmaximum enrollment standards. Therefore, these classes are included only as separate line items.


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HYNES CHARTER SCHOOL CORPORATIONGRADUATION EXIT EXAM (GEE)


This schedule is not applicable as the School does not enroll students in grades 9-12.


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10

OTHER INDEPENDENT AUDITORS' REPORTS

SILVA & ASSOCIATES, LLCCertified Public Accountants

Craig A. Silva, CPA

Brent A. Silva, CPA

Tom A. Gurtner, CPA

INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of DirectorsHynes Charter School CorporationNew Orleans, Louisiana

We have audited the financial statements of Hynes Charter School Corporation, as of and for the yearended June 30, 2007, and have issued our report thereon dated December 20, 2007. We conducted ouraudit in accordance with auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States.

Internal Control over Financial Reporting

In planning and performing our audit, we considered Hynes Charter School Corporation's internal controlover financial reporting as a basis for designing our auditing procedures for the purpose of expressing anopinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness ofthe School's internal control over financial reporting. Accordingly, we do not express an opinion on theeffectiveness of Hynes Charter School Corporation's internal control over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose described in thepreceding paragraph and would not necessarily identify all deficiencies in internal control over financialreporting that might be significant deficiencies or material weaknesses. However, as discussed below, weidentified certain deficiencies in internal control over financial reporting that we consider to be materialweaknesses.

A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detect misstatementson a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,that adversely affects the entity's ability to initiate, authorize, record, process, or report financial datareliably in accordance with generally accepted accounting principles such that there is more than a remotelikelihood that a misstatement of the entity's financial statements that is more than inconsequential will notbe prevented or detected by the entity's internal control. We consider the deficiencies described in theaccompanying schedule of findings and questioned cost to be significant deficiencies in internal controlover financial reporting. [Reference numbers: 2007-1,2007-2, 2007-3,2007-4, 2007-5, and 2007-6].

A material -weakness is a significant deficiency, or combination of significant deficiencies, that results inmore than a remote likelihood that a material misstatement of the financial statements will not be preventedor detected by the entity's internal control.

4330 Dumaine St. 4331 (berville St.New Orleans, LA 70119 Mandeville, LA 70471Office: (504) 833-2436 Office: (985) 626-8299

Fax: (504) 484-0807 www.siivaandassociates.com Fax: (985) 626-9767

Our consideration of the internal control over financial reporting was for the limited purpose described inthe first paragraph of this section and would not necessarily identify all deficiencies in the internal controlthat might be significant deficiencies and, accordingly, would not necessarily disclose all significantdeficiences that are also considered to be material weaknesses. However, of the significant deficienciesdescribed above, we consider items 2007-1 and 2007-2 to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Hynes charter School Corporation's financialstatements are free of material misstatement, we performed tests of its compliance with certain provisionsof laws, regulations, contracts and grant agreements; noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing an opinion oncompliance with those provisions was not an objective of our audit and, accordingly, we do not expresssuch an opinion. The results of our test disclosed no instances of noncompliance or other matters that arerequired to be reported under Government Auditing Standards.

Hynes Charter School Corporation's response to the findings identified in our audit are described in theaccompanying schedule of findings and questioned costs. We did not audit Hynes Charter SchoolCorporation's response and, accordingly, we express no opinion on it.

This report is intended solely for the information and use of management, the Board of Trustees, theLouisiana Legislative Auditor, the Louisiana Department of Education, and the Orleans Parish SchoolBoard. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as apublic document

December 20,2007

SIUVA & ASSOCIATES, LLCCertified Public Accountants

Craig A. Silva, CPA

Brent A. Sifva, CPA

Tom A. Gurtner, CPA

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTSAPPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL

OVER COMPLIANCE IN ACCORDANCE WITH OFFICE OF MANAGEMENT ANDBUDGET (OMB) CIRCULAR A-133

Board of DirectorsHynes Charter School CorporationNew Orleans, Louisiana

Compliance

We have audited the compliance of the Hynes Charter School Corporation with the types of compliancerequirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 ComplianceSupplement that are applicable to each of its major federal programs for the year ended June 30, 2007.Hynes Charter School Corporation's major federal programs are identified in the summary of auditors'results section of the accompanying schedule of findings and questioned costs. Compliance withrequirements of laws, regulations, contracts, and grants applicable to each of its major federal programs isthe responsibility of the Hynes Charter School Corporation's management Our responsibility is to expressan opinion on the Hynes Charter School Corporation's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards for financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; and the provisions of Office of Management andBudget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.Those standards and OMB Circular A-133, require that we plan and perform the audit to obtain reasonableassurance about whether noncompliance with the types of compliance requirements referred to above thatcould have a direct and material effect on a major federal program occurred. An audit includes examining,on a test basis, evidence about the Hynes Charter School Corporation's compliance with those requirementsand performing such other procedures, as we considered necessary in the circumstances. We believe thatour audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination ofthe Hynes Charter School Corporation's compliance with those requirements.

In our opinion, the Hynes Charter School Corporation complied, in all material respects, with therequirements referred to above that are applicable to each of its major federal programs for the year endedJune 30,2007.

4330 Dumaine St. 4331 Ibervilte St.New Orleans, LA 70119 Mandeville, LA 70471Office: (504) 833-2436 Office: (985) 626-8299


Internal Control over Compliance

The management of the Hynes Charter School Corporation is responsible for. establishing and maintainingeffective internal control over compliance with the requirements of laws, regulations, contracts, and grantsapplicable to federal programs. In planning and performing our audit, we considered the Hynes CharterSchool Corporation's internal control over compliance with requirements that could have a direct andmaterial effect on a major federal program in order to determine our auditing procedures for the purpose ofexpressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectivenessof internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of theHynes Charter School Corporation's internal control over compliance.

A control deficiency in an entity's internal control over compliance exists when the design or operation of acontrol does not allow management or employees, in the normal course of performing their assignedfunctions, to prevent or detect noncompliance with a type of compliance requirement of a federal programon a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,that adversely affects the entity's ability to administer a federal program such that there is more than aremote likelihood that noncompliance with a type of compliance requirement of a federal program that ismore than inconsequential will not be prevented or detected by the entity's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results inmore than a remote likelihood that material noncompliance with a type of compliance requirement of afederal program will not be prevented or detected by the entity's internal control.

Our consideration of internal control over compliance was for the limited purpose described in the firstparagraph of this section and would not necessarily identify all deficiencies in internal control that might besignificant deficiencies or material weaknesses. We did not identify any deficiencies in internal controlover compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of management, the Board of Directors, theLouisiana Legislative Auditor, the Louisiana Department of Education, and the Orleans Parish SchoolBoard. This restriction is not intended to limit the distribution of this report, which is a matter of publicrecord.

December 20,2007

HYNES CHARTER SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS


Section I - Summary of Auditors' Results

Financial Statements

Type of auditors' report issued:Internal control over financial reporting:

Material weaknesses identified?Significant deficiencies identified

not considered to be material weaknesses?

Noncompliance material to financial statementsnoted?

Federal Awards

Internal control over major programs:Material weaknesses identified?Significant deficiencies identified

not considered to be material weaknesses?

Type of auditors' report issued on compliancefor major programs:

Any audit findings disclosed that are requiredto be reported in accordance withCircular A-133, Section .510 (a)?

Identification of major programs:

CFDA Numbers

84.938A

X

X

Unqualified

yes

yes

yes

Unqualified

yes

X

X

Name of Federal Program or Cluster

Hurricane Education Recovery Act (Restart)

no

nonereported

no

yes

yes

X no

X none

reported

no

Dollar threshold used to distinguishbetween Type A and Type B programs:

Auditee qualified as low-risk audit?

$300,000

yes X

33



Section II -Internal Control & ComplianceGovernmental Auditing Standards

Internal Control

Reference number: 2007-1

Criteria: Payroll expense per the payroll reports from the third-party payroll service provider areperiodically reconciled to the amounts recorded in the general ledger.

Condition: Payroll expenses cannot be reconciled from the payroll reports to the general ledger.

Cause: The Organization does not perform periodic reconciliations of payroll expense. There is nomanagement review of the payroll recording process. Payroll expense is not properly recorded in thegeneral ledger.

Effect: Payroll expense was materially misstated and the misstatement was not detected or corrected bymanagement during the normal course of their duties.

Recommendation: We recommend that employees perform monthly reconciliations between the generalledger and the payroll reports. Journal entries and monthly balances should be reviewed and approved bymanagement.

Corrective action plan: The school will begin performing and reviewing periodic reconciliations ofpayroll expense.

Contact person: Michelle Douglas, Principal

Estimated completion date: January 1,2008


Criteria: The accounting system produces accurate and timely financial information sufficient to providemanagement with reliable data to effectively monitor operations.

Condition: The accounting system does not reflect the current condition of the financial standing of theSchool.

Cause: Disbursements and deposits are not entered into the accounting system as they occur. A manualledger is kept, but the entries are not entered into the accounting system in a timely manner.

Effect: The accounting system could not provide useful information in preparing accruals for receivablesor payables. Manual calculations had to be prepared by the auditors. The accounting system does notprovide reports necessary for management to monitor the financial resources of the school on a timelybasis. Receivables, payables, revenue, and expense were materially misstated as a result of the School notrecording financial transactions on the accrual basis of accounting.

Recommendation: We recommend that the School record all financial transactions in the accountingsoftware as they occur.

34



Section II -Internal Control and Compliance (continued)Governmental Auditing Standards

Internal Control (continued)

Reference number: 2007-2 (continued)

Corrective action plan: The School is implementing the new accounting software utilized by the OrleansParish School Board.




Criteria: Payroll liability accounts will be reconciled to the trial balance periodically.

Condition: Payments for employee withholdings for the 403(B) plan were not being remitted to the properorganization.

Cause: The School does not perform periodic reconciliations of the payroll liability accounts.

Effect: Employee contribution accounts were not being administered correctly and the misstatement wasnot detected or corrected by management during the normal course of their duties.

Recommendation: We recommend that employees perform monthly reconciliations of all payroll liabilityaccounts to ensure that remittances on behalf of the employees are timely and accurate.

Corrective action plan: The accounting staff will begin performing monthly reconciliations of all payrollliability accounts.




Criteria: Reimbursement receivables from granting entities are routinely calculated and recorded in atimely manner.

Condition: The general ledger does not reflect receivables from reimbursement requests.

Cause: The School records grants received on a cash basis..

Effect: The accounts receivable balance was materially misstated as of June 30, 2007 and the misstatementwas not detected or corrected by management during the normal course of their duties.

Recommendation: We recommend that the client record revenue when earned.

35




Internal Control (continued)


Corrective action plan: The client will record receivables when the reimbursement request is prepared.


Estimated completion date: June 30, 2008


Criteria: Bank account reconciliations are performed monthly. The reconciliations are reviewed andapproved by management.

Condition: During our audit it was noted that bank reconciliations were not being performed in a timelymanner,

Cause: The accounting staff is not completing bank reconciliations on a monthly basis.

Effect: The accounting system does not provide reliable information for management to monitor thefinancial resources of the organization on a timely basis.

Recommendation: We recommend that all bank accounts be reconciled on a monthly basis and thereconciliations be reviewed and approved by management.

Corrective action plan: The accounting staff will begin performing monthly bank reconciliations on allaccounts within two weeks of receiving the monthly bank statements.


Estimated completion date: February 15, 2008

Compliance


Criteria: The chart of accounts is set up according to Louisiana Accounting and Uniform GovernmentalHandbook (LAUGH) guidelines and all revenue and expenses are recorded in the appropriate categories forcompletion of the Annual Financial Report (AFR).

Condition: The trial balance does not reflect the accounting requirements of the LAUGH guidelines andthe expenses and revenues are not recorded accordingly.

Cause: The client was not aware of the LAUGH guidelines when the accounting system was implementedand chose not to update their current software due to the impending implementation of a new accountingsystem required by the Orleans Parish School Board.

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Compliance (continued)

Effect: The APR was submitted with errors and will need to be adjusted and resubmitted.

Recommendation: We recommend that the current chart of accounts be converted to follow the LAUGHguidelines.

Corrective action plan: The accounting staff will convert the chart of account in the current generalledger accounting system to adhere to the LAUGH guidelines.


Estimated completion date: June 30,2008

Section HI -Internal Control and ComplianceMajor Federal Programs

No findings or questioned costs for the year ended June 30,2007.

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