Winston-Salem Academy Inc.

“The board of directors of the academy has entered into a management agreement ("the agreement") with national heritage academies, inc. ("nha") for the provision of all educational, management and business services related to the operation of the academy. The agreement was submitted to and approved by the north carolina department of public instruction as part of the chartering process. Pursuant to the terms of the agreement, nha receives all revenue allocated to the academy as its management fee, from which it provides its comprehensive educational management services as specified in the agreement and required under the academy's charter (i.e., all of the operating costs of the academy identified in the budget approved by the academy's board). The functional expenses reported in part ix are the expenses paid from the funds remitted under the nha management agreement. In the event expenses exceed revenues, nha covers the shortfall with an in-kind contribution. This agreement has been approved by the north carolina department of public instruction during the academy's charter process as well as the internal revenue service during the academy's exemption application process.”

“A draft copy of the form 990 was provided to the board of directors in a package of materials for board review prior to the scheduled board meeting that was held before the filing of this return.”

“The academy's bylaws require that any director, officer, key employee or committee member who has a conflict of interest must promptly notify the board of the conflict and the conflict will be duly noted in the board of director meeting minutes. The person with the conflict will be excluded from any future decision making on this issue. The board may take formal, corrective and disciplinary actions if proper disclosure of conflicts of interest are not made.”

“Documents approved by the board of directors, including the academy's financial statements, are available to the public upon request.”