EIN: 462612875
UEI: SUKMLJUK6CJ3
Data as of August 26, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 31, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by October 1, 2025 (329 days ago).
What is a management decision? →During our audit, we noted various disbursements without supporting invoices and/or lack of appropriate approvals on the supporting CharterAce software. In addition, we identified instances in which invoices relating to goods received or services performed prior to the year-end date were not recorded as payables in the proper period. Cause: During our audit, we noted that the third-party accountant did not have access to certain expense databases for shared expenses with other charter schools under Bold City Education, Inc. maintained by Schools’ management. In addition, schools’ personnel did not consistently adhere to the procedures regarding cash disbursements. Effect: Significant adjustments were required relating to operating expenses and accounts payable, as a result of our audit. Failure to perform procedures mentioned above could result in misstatement of liabilities, misappropriation of assets and/or invalid payments. 36 Recommendation: We recommend that the School adhere to the internal control policies and procedures relating to cash disbursements so that all disbursements are properly approved and have the appropriate source documentation on file. In addition, we recommend that a policy be implemented where all database ledgers and/or supporting schedules are reconciled monthly to the general ledger. Invoices received subsequent to year-end should also be reviewed in order to determine if any unrecorded liabilities exist at year-end, and if necessary, an accrual should be recorded for those items identified as relating to the prior period.
Show full finding ▾Hide full finding ▴Criteria: The Schools implemented an internal control system to reduce the risk of misappropriation of assets and/or invalid payments by establishing a general policy regarding cash disbursements via the use of Building Hope’s third-party accounting services and CharterAce software for approvals. It is important to reconcile database ledgers or supporting schedules to the general ledger to ensure the accuracy of financial information related to shared expenses with other charter schools.Condition: During our audit, we noted various disbursements without supporting invoices and/or lack of appropriate approvals on the supporting CharterAce software. In addition, we identified instances in which invoices relating to goods received or services performed prior to the year-end date were not recorded as payables in the proper period. Cause: During our audit, we noted that the third-party accountant did not have access to certain expense databases for shared expenses with other charter schools under Bold City Education, Inc. maintained by Schools’ management. In addition, schools’ personnel did not consistently adhere to the procedures regarding cash disbursements. Effect: Significant adjustments were required relating to operating expenses and accounts payable, as a result of our audit. Failure to perform procedures mentioned above could result in misstatement of liabilities, misappropriation of assets and/or invalid payments. 36 Recommendation: We recommend that the School adhere to the internal control policies and procedures relating to cash disbursements so that all disbursements are properly approved and have the appropriate source documentation on file. In addition, we recommend that a policy be implemented where all database ledgers and/or supporting schedules are reconciled monthly to the general ledger. Invoices received subsequent to year-end should also be reviewed in order to determine if any unrecorded liabilities exist at year-end, and if necessary, an accrual should be recorded for those items identified as relating to the prior period.
Bold City is continuing to collaborate with BuildingHope and is also coordinating with a 3rd party to perform an operations compliance review. Some of the missing documentation in the Charter Ace platform was a result of Bold City transitioning over to the platform during the fiscal year. Going forward, appropriate supporting documentation will be uploaded to Charter Ace for all the disbursments and all the cash disbursment procedures will be followed. In addition, Bold City believes Building Hope did have appropriate access to all necessary accounts and expense databases but will verify this going forward. Bold City will follow and imolement the reccomendations af the auditor.
FAC accepted this audit on April 16, 2024 — management decision was due October 16, 2024.
During the year, there was a significant period (Gap) in which the School’s established internal control policies and procedure over financial reporting and compliance were not followed. Cause: The School experienced turnover in key personnel and external vendors responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. Effect: The Gap in internal control prevented financial data from being accumulated and recorded in a timely manner. Accordingly, current management is unable to provide assertions as to the accuracy and valuation, existence, completeness, rights and obligations, presentation and disclosure of recorded balances and amounts nor ensure compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. Recommendation: We recommend that current management continue their efforts to re-establish the School’s internal control to ensure that they can meet their responsibility of preparing and presenting fair financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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 and ensure compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
Show full finding ▾Hide full finding ▴Criteria: Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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 and compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. Condition: During the year, there was a significant period (Gap) in which the School’s established internal control policies and procedure over financial reporting and compliance were not followed. Cause: The School experienced turnover in key personnel and external vendors responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. Effect: The Gap in internal control prevented financial data from being accumulated and recorded in a timely manner. Accordingly, current management is unable to provide assertions as to the accuracy and valuation, existence, completeness, rights and obligations, presentation and disclosure of recorded balances and amounts nor ensure compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. Recommendation: We recommend that current management continue their efforts to re-establish the School’s internal control to ensure that they can meet their responsibility of preparing and presenting fair financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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 and ensure compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
Bold City acknowledges that there were certain gaps in the School’s internal controls and financial reporting for the 22-23 fiscal year These gaps were primarily caused by the failure of key employees to follow the School's internal controls and ensure proper recordkeeping. There also appears to have been insufficient record keeping on the part of an outside contractor that provided back office and financial services to the School. Once Bold City identified this issue, the employee in question resigned from the organization. The contractor in question was also replaced by a new outside. contractor, Building Hope Services, LLC, that took over the School's finances and reporting as of May 1, 2023. Bold City has taken significant measures to strengthen its financial controls and ensure that all financial data is appropriately accumulated and recorded, Since Building Hope began servicing the School in May 2023, there has been appropriate backup maintained for all financial transactions, including for the months of May through June 2023. Bold City has Strengthened transparency and accountability by, among other things. granting bank account view access to more key personnel, adding additional layers of review for financials, moving to an electronic bill pay system, and opening additional bank accounts foreach cost center. Bold City is also working to hire an in-house chief financial officer to oversee the School’s financials and adherence to generally accepted accounting principles. These measurers will ensure greater accountability and an absence of data gaps in future fiscal years.
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