Pro-Vision Educational Services, Inc.

Pro-Vision Educational Services, Inc.

Financial Statements and Independent Auditors' Report for the Year Ended August 31, 2018 (with comparative totals for 2017)

Pro-Vision Educational Services, Inc.

Table of Contents

Certificate of Board

1

Independent Auditors' Report

2-3

General-Purpose Financial Statements

Statement of Financial Position

4

Statement of Activities

5

Statement of Cash Flows

6

Note to Financial Statements

7-13

Specific Purpose Financial Statements

14

Statement of Financial Position

15

Statement of Activities

16

Notes to Specific Purpose Financial Statements

17

Supplementary Information

18

Schedule of Expenses

19

Schedule of Capital Assets

20

Budgetary Comparison Schedule

21

Independent Auditors' Report on Internal Control Over Financial Reporting and Accordance on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Acccordance with Government Auditing Standards

22-23

Schedule of Findings and Responses

24 - 25

Appendix I - Budget To Actual Variance Explantions

26

Pro-Vision Educational Services, Inc. Federal Employer Identification Number: 20-5490040

County: Harris Co.-District: 101868

Certificate of Board

We, the undersigned, certify that the attached Financial and Compliance Report of the abovenamed charter holder was reviewed and (check one) _____approved _____disapproved for the year ended August 31, 2018, at a meeting of the Board of Directors of such charter holder on the _____day of ______________, 2019.

____________________________ ____________________________

Signature of Board Secretary

Signature of Board President

If the Board of Directors disapproved the auditors' report, the reason(s) for disapproving it is (are): (attach list as necessary)

1|Page

12777 Jones Road Ste. 240

Houston, TX 77070

Independent Auditors' Report

To the Board of Directors Pro-Vision Educational Services, Inc. Houston, Texas

Report on the Financial Statements We have audited the accompanying financial statements of Pro-Vision Educational Services, Inc. (a nonprofit organization), which comprise the statement of financial position as of August 31, 2018, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pro-Vision Educational Services, Inc. as of August 31, 2018, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

2|Page

Emphasis of Matter The accompanying financial statements have been prepared assuming that the School will continue as a going concern. As discussed in Note 13 to the financial statements, the Organization experienced a decrease in net assets from operations and a liability amount to vendors as of August 31, 2018. Managements evaluation of the events and conditions and management's plans to mitigate those matters are also described in Note 14. Our opinion is not modified with respect to that matter.

Report on Summarized Comparative Information We have previously audited the Pro-Vision Educational Services, Inc.'s 2017 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated January 25, 2018. In our opinion, the summarized comparative information presented herein as of and for the year ended August 31, 2017, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Specific Purpose Financial Statements and Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedules:

a. Specific Purpose Financial Statements ? Statement of Financial Position and Statement of Activities.

b. Supplementary Information ? Schedule of Expenses, Schedule of Capital Assets, and Budgetary Comparison Schedule.

The above schedules are presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 25, 2018, on our consideration of Pro-Vision Educational Services, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Pro-Vision Educational Services, Inc.'s internal control over financial reporting and compliance.

Bennoch & Tipton LLC Certified Public Accountants Houston, Texas

January 25, 2019

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PRO-VISION EDUCATIONAL SERVICES, INC. STATEMENTS OF FINANCIAL POSITION AS OF AUGUST 31, 2018 (with comparative totals for 2017)

ASSETS Current Assets

Cash and cash equivalents Due from State Due from related party Total Current Asset

Other Assets Property and Equipment Building Furniture and equipment Vehicles Accumulated depreciation Total Property and Equipment, net

Total Assets

2018

2017

$

17,970 $ 215,132

263,951

259,826

16,236

-

298,157

474,958

248,518 583,501

30,251 (564,907)

297,363

160,105 510,816

30,251 (474,569)

226,603

$ 595,520 $ 701,561

LIABILITIES AND NET ASSETS Liabilities Current Liabilities

Accounts payable Accrued expenses Installment agreement Other current liabilities Total Current Liabilities

Net Assets Unrestricted Temporarily restricted

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS

$ 126,501 $ 222,400

313,802

125,696

18,750

19,800

4,750

4,750

463,803

372,646

131,717 -

328,915 -

131,717

328,915

$ 595,520 $ 701,561

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

PRO-VISION EDUCATIONAL SERVICES, INC. STATEMENTS OF ACTIVITIES FOR THE YEAR ENDED AUGUST 31, 2018 (with comparative totals for 2017)

REVENUE Local Revenue:

5740 Other local revenue 5750 Food service, cocurricular & enterprising

Total Local Revenue

Unrestricted

Temporarily Restricted

2018 Total

2017 Total

$ 236,356 $ 1,010

237,366

-$ -

236,356 $ 1,010

237,366

8,594 665

9,259

State Program Revenue: 5810 Foundation School Program 5820 Other state revenue (TEA) Total State Program Revenues

4,010,421 43,917

4,054,338

-

4,010,421

3,430,504

-

43,917

21,608

-

4,054,338

3,452,112

Federal Program Revenues: Pass through TEA 5920 Federal Revenue Total Federal Program Revenues

502,015 502,015

-

502,015

429,262

-

502,015

429,262

Total Revenue

4,793,719

-

4,793,719

3,890,633

Net Assets Released from Temporary Restrictions

-

-

-

-

Total Revenues and Net Assets Released from Restrictions

4,793,719

-

4,793,719

3,890,633

EXPENSES Program Services: 10 Instruction and instructional related services 20 Instructional school leadership

Total Program Services

2,141,611 509,903

2,651,514

-

2,141,611

2,120,272

-

509,903

306,412

-

2,651,514

2,426,684

Supporting Services: 30 Support services-student 40 Administrative support services 50 Support services-non student 60 Ancillary services 70 Debt service 80 DFeubntdsrearisviincge

Total Supporting Services

813,147 481,728 1,024,822

18,574 929 203

2,339,403

-

813,147

586,318

-

481,728

477,378

-

1,024,822

771,136

-

18,574

339

-

929

-

-

203

-

-

2,339,403

1,835,171

Total Expenses

4,990,917

-

4,990,917

4,261,855

Change in net assets

(197,198)

-

(197,198)

(371,222)

Net assets, beginning of year

328,915

-

328,915

700,137

Net assets, end of year

$ 131,717 $

- $ 131,717 $ 328,915

5|Page The accompanying notes are an integral part of these financial statements

PRO-VISION EDUCATIONAL SERVICES, INC. STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED AUGUST 31, 2018 (with comparative totals for 2017)

Cash Flows From Operating Activities Cash received from federal sources Cash received from state sources Cash received from local sources Payments to suppliers Payments to employees Payments for employee benefits

Net Change from Operating Activites

Cash Flows from Investing Activities Purchases of property and equipment

Net Change from Investing Activities

Cash Flows from Financing Activities Proceeds from installment agreement Payments on capital lease obligations

Net Change from Investing Activities

Net change in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

Cash and Cash Equivalents, End of Year

Reconciliation of Change in Unrestricted Net Assets to Net Cash Provided by Operating Activities

Change in unrestricted net assets Adjustments to reconcile change in unrestricted

net assets to net cash provided by operating activities: Depreciation Changes in assets and liabilities: Due from state Due from related party Accounts payable Accrued expenses

Net Change from Operating Activites

Supplemental Disclosure of Cash Flow Information: Purchase of playground equipment with installment Purchase of buses with an installment agreement

2018

2017

$ 502,015 4,050,213 221,130 (2,362,317) (2,229,331) (216,723)

(35,013)

$ 441,896 3,484,821 8,551 (1,604,880) (2,137,524) (173,466)

19,398

(136,099) (136,099)

(15,296) (15,296)

(26,050) (26,050)

(197,162) 215,132

$ 17,970 $

(9,797) (9,797)

(5,695) 220,827

215,132

$ (197,198) $ (371,222)

90,339

91,053

(4,125)

44,635

(16,236) (95,899) 188,106

203,287

51,645

$ (35,013) $ 19,398

$ 25,000 $

-

$

- $ 30,251

6|Page The accompanying notes are an integral part of these financial statements

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