The iLearn Academy Charter School (IACS) is under a cloud of uncertainty with regard to its finances and operations due to the adverse impact of COVID-19.
According to the Office of Public Accountability, which just released an audit of IACS, the charter school receives approximately 100% of its annual revenues from the Guam Legislature and due to continued uncertainties of the COVID-19 outbreak and its impact on the tourism-based economy of Guam, the charter school is unable at this time to reasonably estimate the potential future impact of the pandemic on its financial statements.
IACS did close FY 2020 with a positive net position of $157,000 and independent auditors from Ernst & Young LLP rendered an unmodified “clean” opinion on IACS’ financial statements. In addition, no material weaknesses or deficiencies were identified in IACS’ Report on Internal Control over Financial Reporting and Compliance.
However, OPA noted that IACS had an “over-enrollment” during School Year (SY) 2020 – 2021.
“At the end of FY 2020, IACS had an enrollment of 756 students. The 35th Guam Legislature passed Public Law 35-36 wherein the budget earmarked for only 620 student enrollment. Subsequently, IACS’ request to increase enrollment received support from the legislative body and the Guam Academy Charter School Council. However, this did not materialize due to the novel coronavirus (COVID-19) potential negative impact on the economy,” OPA stated in its audit report.
To accommodate the additional 136 students in SY 2020-2021, IACS reprioritized their expenditures. According to OPA, the Paycheck Protection Program (PPP) funding of $291,000 and the shutdown of campus use during COVID-19 made reprioritizing possible and achieved IACS’ core mission. The campus lease did not increase because no additional classrooms were needed to support the over-enrollment.
Increase in Revenues and Expenditures
According to the audit report, IACS’ total revenues increased by $102,000 from $4.0 million in FY 2019. However, of the total revenues, $3.8 million or a whopping 93 percent was from GovGuam appropriations. Only $165,000 came from grant revenue, $46,000 from the student store, $27,000 from extended learning, $26,000 from fundraising, and $17,000 from other sources of revenue.
Despite the increase in revenues, IACS’ operating expenditures increased by $220,000 from $3.6 million in FY 2019 to $3.9 million in FY 2020. Contract services comprised 53% of total expenditures which increased by $2,000. Contract services are composed of the A+ lease for building, supplies, and utilities; financial audit services; and legal services.
Salaries and wages also increased by $154,000 which is attributed to the hiring of additional teachers to accommodate the additional students that exceeded the 620 allowed enrollment.
For more details on IACS’ operations, see the Management’s Discussion and Analysis in the audit report at www.opaguam.org and www.ilearnacademycharterschool.com.