Educational Resource Center Inc

“The board of directors annually reviews the 990 tax return at a board meeting. In addition, the board certifies the audited financial statements that are used in the preparation of the 990 tax return.”

“The organization follows the necessary texas education agency requirements of independence. All transactions are monitored for possible conflicts of interest. The organization enforces policies that are in compliance with the requirements of the texas education agency.”

“The board of directors of the organization reviews and surveys comparable data in determining compensation. The board of directors approve the compensation of the organization's executive director.”

“The organization makes its governing documents and financial statements available upon request.”

“Erc, inc. And its affiliate's obligations under bonds payable consist of education revenue bonds (series 2013a) issued through danbury higher education authority, inc. And dated june 1, 2013. All bonds were closed and funded on july 2, 2013, with proceeds being held by the u.s. Bank national association. The bonds' proceeds will be used for property acquisition and construction at the inspire academies campus and were underwritten by oppenheimer & co., inc. The interest rates on the bonds range from 5.25% to 6.50%, and the terms of the bonds range from ten to thirty years. As of august 31, 2015, the outstanding balance on bonds payable was $9,675,000, consisting of bonds payable - current portion of $145,000 and bonds payable - long-term of $9,285,491 (net of a discount of $263,543 and related accumulated amortization of $19,034). As of august 31, 2014, the outstanding balance on bonds payable was $9,815,000, consisting of bonds payable - current portion of $140,000 and bonds payable - long-term of $9,421,706 (net of a discount of $263,543 and related accumulated amortization of $10,249). The original amount of the discount at date of issuance was $263,543, of which approximately $64,642 was paid at date of issuance. Amortization expense related to this discount for the years ended august 31, 2015 and 2014 was $8,785. Issuance costs paid for these bonds at date of issuance totaled $411,93 9. Amortization expense related to these costs for the years ended august 31, 2015 and 2014 was $13,731. Section 5.9 of the series 2013a bond covenants establishes a debt service coverage ratio, which stipulates that available revenues (i.e., the amount of excess (deficit) of adjusted revenues over expenses) for each fiscal year must be equal to at least 1.10 times the annual debt service requirements of erc, inc. As of the end of the first fiscal year after the date of issuance of the bonds and annually thereafter until the bonds have been paid in full. Expenses include all operating and non-operating expenses or losses incurred during the fiscal year other than (a) interest expense, (b) depreciation and amortization, ( c) extraordinary losses and ( d) capital expenditures. As of august 31, 2015 and 2014, erc, inc. Was in compliance with this covenant and all other applicable covenants contained in the loan agreement. Interest expense on bonds payable was $501,798 and $81,526 for the years ended august 31, 2015 and 2014, respectively. Capitalized interest was $110,227 and $537,368 for the years ended august 31, 2015 and 2014, respectively.”

“The organization's process for assuming responsibility for oversight of the audit, review, or compilation of its financial statements and the selection of an independent auditor have not changed from the prior year.”

“Note 12 - prior period restatement during the year august 31, 2015, management received a special accreditation investigation report from tea, in which one of the outlined findings related to the recording of the administration building purchased in 2011 for $1,060,390. The charter district paid $665,036 towards the purchase of the building, with the remaining portion paid by the foundation. The total amount of the building was recorded on the foundation's books and was classified as local funds on the schedule of capital assets in the specific purpose financial statements. The tea concluded that the charter district records must reflect the appropriate breakdown between state and local interests; therefore, the purchase should have reflected the portion of funds paid by the charter district for the building and classified as state funds on the schedule of capital assets in the specific purpose financial statements. In response to this required action, management decided to use local funds to purchase back the portion of the building funded by the charter district. Therefore, as of august 31, 2014, $665,036 of the total building amount was transferred from the foundation's books to erc, inc.'s books, with a corresponding payable to the charter district recorded on erc, inc.'s books. Conversely, a receivable from erc, inc. For this amount was recorded on the charter district's books. These transactions had no effect on net assets at august 31, 2014. However, to properly restate net assets by entity, the portion of depreciation expense and accumulated depreciation ($51,819) related to the transfer of the building was also transferred from the foundation's books to erc, inc.'s books, resulting in a decrease of $51,819 in the net assets of erc, inc. And a corresponding increase in the net assets of the foundation at august 31, 2014. The related party payable and receivable as of august 31, 2015 and 2014 related to this transaction was $-0- and $665,036, respectively, due to erc, inc. Using local funds to purchase the building from the charter district.”

“Educational resource center inc 10325 bandera road san antonio, tx 78250 employer identification number: 74-2869255 for the year ending august 31, 2015 educational resource center inc is making the de minimis safe harbor election under reg. Sec. 1.263(a)-1(f).”