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Exhibit 43

Financial and Operational Examination of


Fulton Science Academy Middle School (FSAMS)
06/01/2012
Pages 1 71

FINANCIAL AND OPERATIONAL EXAMINATION OF


FULTON SCIENCE ACADEMY MIDDLE SCHOOL (FSAMS)

Report Made to Mr. Glenn Brock, Esq.,


Brock, Clay, Calhoun & Rogers, L.L.C. (Brock Clay)

JUNE 1, 2012

Exhibit 43, Page 1 of 71

TABLE OF CONTENTS

1.

ENGAGEMENT TEAM AND RESPONSIBILITIES IN THIS MATTER .............. 1

2.

SUMMARY AUDIT FINDINGS ................................................................................. 2

3.

DETAILED FINDINGS ................................................................................................ 2

4.

3.1

FSAMS Cooperation with FCS and IAGs Audit Engagement ............................. 2

3.2

Condition of Books and Records ........................................................................... 8

3.3

Security Issues ....................................................................................................... 9

3.4

Immigration Issues ............................................................................................... 10

3.5

International Field Trips ...................................................................................... 13

3.6

Construction Bond ............................................................................................... 16

3.7

Vendor Relationships........................................................................................... 17

RESTRICTION ............................................................................................................ 26

Exhibit 43, Page 2 of 71

1.

Engagement Team and Responsibilities in this Matter


IAG Forensics (IAG) was retained by Brock Clay in February 2012 to serve as an

accounting and auditing consultant to Fulton County Schools (FCS) Internal Audit Department
(Internal Audit). Laurie Dyke (IAG Managing Partner), Karen Fortune (IAG Partner), Pat
Salem (IAG Forensic Accountant) and Caroline Chang (IAG Forensic Manager) served as the
engagement services team, along with support staff providing administrative assistance. Ms.
Salem and Ms. Chang performed the fieldwork at Fulton County School Boards offices and
FSAMS.
In connection with this engagement, IAG was asked to assist Jim Yerich, Director of
Internal Audit for FCS and his department (including staff member Angela Huston, Manager of
Internal Audit).

Hereafter, Mr. Yerich, Ms Huston, Ms. Salem and Ms. Chang (and any

combination of these individuals) are collectively referred to as the Auditors. Our directive
was to audit various areas of school operations, including, but not limited to financial
management, governance and compliance with federal, state, local and school charter laws, rules,
guidelines and guidance. In this report, we are not expressing any opinion on such compliance;
rather, we are providing facts and findings from our audit procedures and will rely upon counsel
and FCS to make any legal or compliance determinations.
We were not engaged to perform an audit in accordance with Generally Accepted
Auditing Standards (GAAS) or to express an opinion on whether the financial statements were
reasonably stated in accordance with Generally Accepted Accounting Principles (GAAP). The
services provided in this matter were performed in accordance with the Standards for Consulting
Services established by the American Institute of Certified Public Accountants and opinions, if
any, are expressed to a reasonable degree of accounting certainty.
We concluded our fieldwork on May 7, 2012 and based our analysis on the records as of
that date. Our report does not contemplate any changes that may have been made since then.
We reserve the right to revise and/or supplement our analyses, opinions, and report to the extent
additional relevant information is provided.

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Exhibit 43, Page 3 of 71

2.

Summary Audit Findings


The following summarizes specific issues we encountered and addressed in the course of

our engagement:

3.

FSAMS Cooperation with FCS and IAG in the course of the engagement

Condition of the books and records

Security Issues

Immigration Issues

International Field Trips

Construction Bond

Vendor Relationships

Detailed Findings
The following represent our findings and observations from this engagement:

3.1

FSAMS Cooperation with FCS and IAGs Audit Engagement


Internal Audit contacted Mr. Ali Ozer, Executive Director at FSAMS, on February 6,

2012 regarding its intention to audit FSAMS.1

The data first requested was the FSAMS

accounting records which are currently maintained on QuickBooks Online (QB).


QuickBooks Files
Initial access to the current FSAMS QB accounting records was granted on February 8,
2012 along with a copy of prior accounting records in the form of a Peachtree backup file.2 Mr.
Yerich communicated with FSAMS the difficulty in working with QB, which included the fact
that this read-only version did not allow a user to drill-down to see the detail behind the
recorded transactions. We understood and agreed that we did not desire rights to modify the
data. At the same time, however, without the ability to fully navigate the accounting records, the
1

Email from James Yerich to Ali Ozer, dated February 6, 2012, 4:14PM Audit and Records Request with attached
letter
2
Email from Ali Ozer to James Yerich, dated February 8, 2012, 3:18PM Re: Audit and Records Request with
attached Peachtree Backup file

2
Exhibit 43, Page 4 of 71

audit process would have been more time-intensive, and we would have had to use more
stringent procedures to complete our audit. We would have been able to capture data using only
QB report-generating procedures.
Mr. Yerich requested that FSAMS download the QB files to a file for use on a desktop,
but FSAMS was unable to do this. As of February 13, 2012, FSAMS Principal Sener was
working on this request.3 IAG was able to download the data and convert it to a desktop version
which then permitted us to navigate all the transactions and drill-down to the lowest unit of
information. This conversion process took us a considerable amount of effort and time. Thus, it
is conceivable that this was beyond the technical capabilities at FSAMS.
Bond Documents
In the meantime, Internal Audit requested all accounting records and documentation
related to the construction project and the related bond, bond proceeds and sources and uses of
funds.4

We analyzed the activity per the trust account statements and agreed them to the

requisitions submitted to the trustee. Refer to Section 3.6 below for our findings.
Fieldwork
On March 15, 2012, Internal Audit sent a document request list to Mr. Sener for all
documents that were to be provided for review upon Mr. Yerichs and Ms. Salems arrival at
9:00AM on March 21, 2012.5
Mr. Yerich and Ms. Salem met with Mr. Ozer (Executive Director of FSAMS), Mr. Sener
(Principal of FSAMS) and Mr. Yilmaz (Business Manager of FSAMS) on Wednesday, March
21, to discuss the audit. Mr. Ozer recorded the meeting on a hand-held recording device. At that
time, the Auditors were told that they could only conduct the on-site audit based on the
availability of Mr. Yilmaz. Additionally, Mr. Ozer stated that Mr. Yilmaz would only be made
available every third day, because he splits his time between the elementary school, the middle
school, and the high school. Mr. Yerich asked if there was anyone else who could be available

Email from Kenan Sener to James Yerich, dated February 13, 2012, 4:19PM Re: This Might Help
Email from James Yerich to Ali Ozer, dated February 8, 2012, 12:37PM Additional Requested Information with
attached letter
5
Email from James Yerich to Kenan Sener, dated March 15, 2012, 9:12AM Audit Documents Request with
attached letter
4

3
Exhibit 43, Page 5 of 71

to pull and copy the files so that work could continue every day rather than only every third day.
Mr. Yerich was told that Mr. Yilmaz was the only person who could pull these records.
The Auditors conducted the review of the FSA records in a conference room. There was
at least one monitor selected by FSAMS in the conference room throughout the day. When the
Auditors first arrived, the bookkeeper was in the room; he remained for the entire day. Later, a
teacher arrived, and she stayed for the remainder of the day. During the day, while Mr. Yerich
was away at lunch, Ms. Salem was questioned by Ms. Angela Lassetter, a member of the
FSAMS governing board, regarding who she worked for. In the course of the conversation, Ms.
Salem told Ms. Lassetter that she was working with Mr. Yerich as a contractor and was
employed by IAG Forensics. Prior to leaving that day, the Auditors met with Mr. Ozer, Mr.
Sener and Mr. Yilmaz, once again trying to find a way to continue the on-site audit without
interruption. The auditors asked if the bookkeeper, or anyone else, could pull the records in Mr.
Yilmazs absence. Once again, the auditors were told that Mr. Yilmaz was the only person who
could pull the requested records.
Ms. Salem returned to FSA Middle School on Monday, March 26, at 9AM (the earliest
date that Mr. Yilmaz was available); Ms. Angela Huston joined her at about 10AM. Ms. Salem
briefly spoke with Mr. Ozer, upon her arrival, and then went directly to the conference room to
get started. The bookkeeper was in the conference room when she arrived; he remained in the
room until the Auditors departure. Shortly after arriving, the Auditors were told that Mr.
Yilmaz would only be available until 1PM, because he had to prepare the payroll for all three
schools. Once again, no one else would be made available to pull the records in Mr. Yilmazs
absence. The Auditors were given the option of coming back to the school for half days for the
remainder of the week, or returning for full days on Thursday (March 29th) and Friday (March
30th). On March 27, Mr. Yerich communicated to Mr. Ozer that the Auditors would return on
Thursday and Friday of that week and that he expected the complete list of original documents,
including original vendor invoices, which I gave you nearly two weeks ago to be made available
in advance of the auditors arrival.6

Email from James Yerich to Ali Ozer; dated March 27, 2012, 2:22PM

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Exhibit 43, Page 6 of 71

On Wednesday, March 28, Mr. Ozer sent Mr. Yerich an email7 stating:
You are welcome to bring additional auditors. However, due to the confidential
information to be reviewed, anyone without a current Fulton County Schools ID needs to
have a signed contract with Fulton County Schools. Prior to continuing the audit on
Thursday, March 29, please ensure that any audit team members that this provision may
apply to makes the relevant contracts available for me to review and copy for our
records.
In the afternoon of March 28, Mr. Yerich made arrangements for Ms. Chang and Ms.
Salem to obtain FCS credentials. Ms. Chang and Ms. Salem subsequently traveled to the FCS
office to complete all required processes, including consenting to criminal background checks, in
order to obtain these credentials (badges).
On Thursday, March 29, 2012, Ms. Chang and Ms. Salem arrived at FSAMS at 8AM to
continue their work. When they arrived, Mr. Ozer told them that they could not begin work until
Angela Huston arrived because he needed to see a copy of a contract. Ms. Salem replied that she
thought the FCS badges were sufficient for them to continue their work. Both Ms. Chang and
Ms. Salem presented their badges; FSAMS later requested the badges and said they were going
to make copies of these badges.
None of the previously requested documents had been pulled or copied in advance of the
Auditors arrival. Instead, the Auditors had to work with Mr. Yilmaz, going through one folder
at a time, pulling the documents that needed to be copied. Each folder contained a month's worth
of data. This is the same way the Auditors were forced to work on prior visits. In the previous
visit, Ms. Salem and Mr. Yerich got through the expense folders for the months of November
2011 through March 2012. On March 29, 2012, prior to departing, Ms. Chang and Ms. Salem
reviewed the expense folders for the months of July 2011 through November 2011.
About 11:30AM, two governing board members (one of whom was Ms. Lassetter) came
into the conference room and began asking questions. The governing board members told Ms.
Chang, Ms. Salem and Ms. Huston that they were going to record the conversation with a handheld recording device. They asked the Auditors if they were full-time employees of Fulton
County Schools. When Ms. Chang and Ms. Salem said that they were not, the governing board
members asked who they worked for, to which they responded IAG Forensics. After this
7

Email from Ali Ozer to James Yerich dated March 28, 2012, 12:08 PM

5
Exhibit 43, Page 7 of 71

conversation, the governing board members returned to Mr. Sener's office for a conference.
Shortly after, Mr. Ozer returned to the conference room and told Ms. Salem and Ms. Chang that
they would have to leave until he received a note from Jim Yerich stating that they were
authorized to work at FSAMS. Mr. Ozer said that Ms. Salem and Ms. Chang could return to
FSAMS after lunch, or whenever he received this correspondence from Jim Yerich. The
Auditors subsequently packed up their bags and left.
In the afternoon of March 29, 2012, staff at IAG Forensics received two phone calls from
unidentified individuals inquiring about Ms. Chang and Ms. Salem. One caller asked to speak
with Ms. Chang. When told that Ms. Chang was not available, the caller asked to speak with
Ms. Salem, but hung up immediately after the call was transferred. George Dyke, Director of
Operations for IAG Forensics, fielded a second call in which the caller asked whether or not Ms.
Chang and Ms. Salem were employed by IAG Forensics.8 That evening, Mr. Dyke was copied
on an on-going email stream, originated by Susan Muly.9 In this email, Ms. Muly inquired about
Ms. Salems role in the audit of FSAMS. In addition, Ms. Muly asked about the FCS badges that
had been issued to non-contractual employees. Mr. Dyke had had no prior contact with Ms.
Muly, nor had he been involved in the audit of FSAMS.
Mr.Yerich sent an email to Mr. Ozer later that afternoon stating the following:
From: Yerich, James
Sent: Thu 3/29/2012 5:38 PM
To: Ozer, Ali
Cc: Brock, Glenn; Schultz, Linda; Avossa, Robert
Subject: RE: Auditor Identity Issue

Mr Ozer:
Pat Salem and Caroline Chang will return to Fulton Science Academy Middle School at
8:00 a.m. on Friday, March 30, 2012.
The fact that IAG Forensics is assisting me with your audit is not new information that
you only became privy to today. You have known this since March 21. Their authority to
assist with the audit comes from me, for any reason I deem necessary, and my authority
8
9

It is firm policy not to comment on personnel, clients or cases in which the firm is involved
Email from Susan Muly to Julie T. Baldwin, cc George Dyke and others; dated March 29, 2012, 4:37PM; Re:
Open records request per Mr. Davis

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Exhibit 43, Page 8 of 71

to conduct audits at any of our schools or charter schools comes from the Fulton County
Board of Education. "Auditor Identity" is not an issue.
Accordingly, Ms. Salem and Ms. Chang will be at your office at the date and time noted
above and I expect you and your staff will give them your full cooperation.
James Yerich, CPA
Director of Internal Audits
Fulton County Board of Education

In the evening of March 29, 2012, Mr. Brock sent a letter to Mr. Ozer to inform Mr. Ozer
of his current and ongoing breach of the Fulton Science Academy Middle School (FSAMS)
charter contract.10 Mr. Brock cited the on-going obstructionist behavior that the Auditors were
encountering, hampering their ability to conduct the audit. In addition, with a copy of the same
letter, Mr. Brock notified the State Department of Education of this communication.
Ms. Salem, Ms. Chang and Ms. Huston returned on March 30, 2012 to continue their
work. From that day forward, the FSAMS staff cooperated fully with the Auditors. FSAMS did,
however, maintain its policy of only allowing the audit to be conducted every third day, when
Mr. Yilmaz was available. In addition, the process of pulling records, one month at a time
continued; and documents were not pulled in advance of the auditors arrival.
On the morning of that same day, March 30, 2012, FCS board members received an
email from Mark Lassetter regarding the FSAMS audit.11 In his note, Mr. Lassetter accused the
Lead Auditor of Fulton County School System of a serious breach of ethics and safety for
issuing fraudulent identifications to employees of IAG. The FCS badges issued to Ms. Chang
and Ms. Salem, however, were not fraudulent; Ms. Chang and Ms. Salem followed the
procedures, as set forth by FCS, to legally obtain these badges.
Mr. Lassetters email also stated, Thursday morning three individuals arrived at FSA
Middle school (sic) and presented FCSS identifications. Later it was discovered (and recorded)
that two of them were in fact NOT FCSS employees, but employees of IAG. Mr. Lassetter was
10

Email from Donna Durrett (on behalf of Glenn Brock) to Ali Ozer; dated March 29, 2012, 6:22PM; Fulton
Science Academy Middle School (FSAMS)
11
Email from Mark Lassetter to Fulton County School Board members; dated March 30, 2012, 8:24AM; Urgent
Fulton County School System Issued Fraudulent Identification Cards To 2 Individuals ; Mr. Lassetter resides at
the same address as that of Ms. Lassetter

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Exhibit 43, Page 9 of 71

not present on the previous day when Ms. Lassetter questioned Ms. Chang, Ms Huston and Ms.
Salem, nor was he present on March 21, the first time Ms. Lassetter questioned Ms. Salem, so it
is not clear from where he obtained his facts. At no time during this audit have Ms. Chang or
Ms. Salem represented themselves as FCS employees. As stated above, on March 21, when Ms.
Lassetter asked Ms. Salem for whom she worked, Ms. Salem clearly stated that she worked for
IAG Forensics. Ms. Salem provided the same answer on March 29, when Ms. Lassetter asked
her the same question. It was not, therefore, a new discovery on March 29, as Mr. Lassetter
describes it, that Ms. Salem was not an FCS employee.
In this same email, Mr. Lassetter also states that the FCS badges allowed Ms. Chang and
Ms. Salem access to parent personal financial information and more importantly put all the
students at risk. Mr. Lassetter later states in his note, I feel that this may even be criminal as it
involves child endangerment. Ms. Chang and Ms. Salem are not aware of ever having been in
the same proximity as Mr. Lassetter. Mr. Lassetter provided no substantive proof that the IAG
auditors had, at any time, taken any action to endanger the children at FSAMS. In fact, the
Auditors had no interaction with any child while on FSAMS premises other than passing the
students in the hall or at the front of the school at dismissal time. It is, therefore, unclear what
actions may have been perpetrated to warrant an accusation of child endangerment.
As detailed above, the Auditors experienced an environment of resistance and
obstructionism. Concerns about FSAMS management and their lack of compliance with state
guidelines were raised by Fitch Ratings and referenced in Mr. Louis J. Erstes April 30, 2012
letter to Mr. Ozer. Fitch stated that FSAs management is either unable or unwilling to
operate effectively in a highly regulated charter school environment.12
This unwillingness to cooperate with the Auditors and comply with regulations may
provide explanations for some of the other audit findings discussed below.
3.2

Condition of Books and Records


While the audit process was impeded due to the early lack of cooperation and FSAMS

continued failure to gather and organize the documents requested in advance of the site visits, the

12

Business Wire, Fitch Downgrades Fulton Science Academy, GAs Revs to B; Rating Watch Negative, March
13, 2012; Louis J. Erste Letter to Mr. Ali Ozer, dated April 30, 2012, re: Fulton Science Academy Middle School
state chartered special school petition

8
Exhibit 43, Page 10 of 71

QB records and physical accounting records seemed to be well-maintained and organized. Each
time Mr. Yilmaz was requested to locate a specific check and related invoice, he was able to
retrieve it. We did note that the method by which the school maintained its invoices did make it
more time-consuming to locate specifically selected invoices;13 however, per Mr. Yerich, this
filing system is not uncommon among some of the FCS schools.
Mr. Yerich and Ms. Huston provided IAG with copies of various mapping schedules
that Mr. Yilmaz purportedly prepared to assist Internal Audit and the FCS Board of Education
(FCSBOE) in their efforts to match the QB financial accounting records at FSAMS to the
monthly reports provided to the FCSBOE (Exhibit 1).14 We have not performed any procedures
on these mapping schedules (either to compare them with the QB files or to the monthly
financial reports provided to the FCSBOE); however, we did note that they are very difficult to
follow (particularly for non-accountants) and do not simplify the desired matching process. We
recommend that FSAMS consider a different format (i.e. grouping schedules by account number)
that can be easily replicated by Internal Audit or the FCSBOE each month to enhance the
transparency of the monthly reporting to all interested parties.
We refer you to Mr. Yerichs report on this issue.
3.3

Security Issues
In the typical course of our engagements, we perform various Internet searches of

interested parties. Such searches were performed in this engagement to determine whether there
existed any inter-relationships or potential conflicts of interest which would violate the terms of
FSAMS charter. In the course of these searches, we encountered a relevant finding of a criminal
nature involving an individual in a position of authority. As a result, we requested copies of the
background checks for a number of individuals.
It was noted that the individual discovered to have a criminal background did sign a
consent form for a criminal background check to be performed by FCS. We are not aware of
13

FSAMS files each invoice with the check with which it was paid. Each check is filed in order by check number.
Thus, locating invoices by vendor is very time consuming and difficult since they are not filed in a vendor file.
Instead of pulling the vendor file, one first has to determine all the check numbers associated with all the vendor
invoices desired, and then search for the month in which that check cleared in order to locate the selected invoice
for vouching.
14
Mapping Schedules prepared by Mr. Yilmaz to assist the FCSBOE in matching FSAMS financial records to the
monthly reports to the FCSBOE

9
Exhibit 43, Page 11 of 71

whether the criminal background check was, in fact, performed. Nor are we aware of whether
the criminal record was sealed on the Georgia Crime Information Center (GCIC) database as a
first time offender and thus, may not have appeared on a GCIC criminal background check.
We also inquired about the security measures taken with regard to FSAMS field trips to
Turkey that ranged in length from one to two weeks each. Specifically, Ms. Salem asked
Principal Sener whether background checks were performed on the adults who traveled with the
students and teachers. According to Principal Sener, the adults were considered participants, not
chaperones, and as a result, the school did not require any background checks to be performed.
As discussed below in Section 3.5, there were a large number of adults traveling with the
students on each of the three trips examined. FCS, in its role of charter schools oversight, and
FSAMS, in its role of the trip sponsor, might want to consider the security issues this might raise.
3.4

Immigration Issues
We were requested to examine the immigration practices of FSAMS and noted that the

school engaged the services of the Law Offices of Cherie E. Cookorinis and incurred costs with
the U.S. Department of Homeland Security (DHS). During the period between May 2009 and
present, FSAMS incurred $74,846 in fees to the attorney and DHS. The following summarize
our findings in this area:
Legal Costs Incurred for Family Members
We noted that FSAMS incurred legal costs for immigration services on behalf of not only
their employees, but also their family members. We noted the following legal services for which
FSAMS paid:

Advance parole travel permit renewal for Yucel Aktas and spouse totaling $1,235
(See Exhibit 2). Mr. Aktas spouse is an employee of Fulton Science Academy
Elementary School (FSAES); we are not aware of any reimbursement from FSAES
to FSAMS for the cost of the immigration services related to Mr. Aktas spouse.

Advance parole travel permit renewal for Yucel Aktass spouse and two children
totaling $520 (See Exhibit 3)

Preparation and filing of a two-year renewal of U.S. Work Authorization document


on behalf of Yucel Aktas spouse, Mrs. Nazife Aktas totaling $895 (See Exhibit 4)
10
Exhibit 43, Page 12 of 71

Preparation and filing of I-140 and I-485 on behalf of Sehnaz Dogu Ekicikol and
spouse totaling $7,090 (See Exhibit 5). Ms. Ekicikols spouse was an employee of
FSAMS from 8/2/2007 to 1/31/2010, and became an employee of Fulton Science
Academy High School (FSAHS) as of the 2011-2012 school year. We are not
aware of any reimbursement from FSAHS to FSAMS for the cost of the immigration
services related to Ms. Ekicikols spouse.

Preparation and filing of H-4 status extension on behalf of the spouse of Mr. Ismail
Okumus totaling $490 (See Exhibit 6)

Legal Costs Incurred for a (Former) Employee


We noted an invoice for immigration legal services rendered on behalf of Mr. Davut
Seker that was issued on November 16, 2011 during a period in which Mr. Seker was not
employed by FSAMS. This invoice was received after Mr. Seker terminated his employment
with FSAMS July 31, 2011. We did note, however, that he was then rehired February 1, 2012.
Length of Employment with FSAMS after Immigration Legal Services Were Provided
In addition, we noted that of the 19 employees for which immigration services were
rendered by the Law Office of Cherie E. Cookorinis and invoiced to FSAMS between May 2009
and present, seven (7) left the school shortly after the last immigration services were provided
and have not returned to date, as follows:

Doguscu Mehmet Aksoy last immigration services invoice dated November 10,
2010, terminated July 31, 2011

Ridvan Ay last immigration services invoice dated March 17, 2011,15 terminated
July 31, 2011

Zafer Demir last immigration services invoice dated November 5, 2010, terminated
July 31, 2011

Aziz Genc last immigration services payment dated July 20, 2009, terminated July
31, 2010

15

The check for this invoice was voided because Mr. Ridvan had received his green card. Prior invoice is dated
12/20/2010

11
Exhibit 43, Page 13 of 71

Ergul Generhan last immigration services payment dated July 23, 2009, terminated
July 31, 2010

Sule Kuyucu last immigration invoice services payment dated October 14, 2009,
terminated July 31, 2010

Ibrahim Yeter last immigration invoice services payment dated October 14, 2009,
terminated July 31, 2010

High Concentration of Immigrant-Employees


Per the Payroll Summary Report for pay period 02/01/2012 to 02/29/2012, FSAMS had
62 employees. On Monday, May 7, 2012, Mr. Yilmaz stated that FSAMS has 60 employees. Of
the 60 employees (as cited by Mr. Yilmaz) currently working for FSAMS, 12 (20%) have
received or are currently receiving immigration services paid for by FSAMS.
By cross-referencing the invoices from the Law Office of Cherie E. Cookorinis and the
DHS and the rosters provided by FCS, we determined that FSAMS recruited personnel from
outside the country for the following positions. The specific individuals we identified and their
respective positions (between 2009 and present) are as follows:

Aksoy, Doguscu (Mehmet) Network Administrator

Aktas, Yucel HR Manager

Ay, Ridvan Combination Teacher

Bozkir, Enes (Necip) Character Education Teacher (MS Connections Teacher)

Demir, Zafer Science Teacher, Science Olympiad Teacher, Academic Team Coach

Dilek, Elif Turkish Teacher

Dogu, Sehnaz Life Science Teacher

Ersoy, Sabiha Math Teacher

Genc, Aziz Combination Teacher

Gunerhan, Ergul Combination Teacher

Kaya, Mehmet Turkish Teacher

Kaya, Yasin IT Specialist, Computer Teacher

Kuyucu, Sule Combination Teacher

12
Exhibit 43, Page 14 of 71

Okumus, Ismail Turkish Teacher, African/Semetic Language Teacher, Science Lab


Coordinator

Oncul, Ebru Earth Science Teacher

Seker, Davut Math Teacher

Turan, Nevruz Science Teacher, Asst. Principal of Instruction

Tuzen, Salih Math Teacher

Yeter, Ibrahim Combination Teacher

3.5

International Field Trips


We examined three of the international field trips in the course of our engagement: (1)

Spring 2011 Turkey Trip, (2) Summer 2011 Turkey Trip and (3) Spring 2012 Turkey Trip.
Spring 2011 Turkey Trip (Schedule 1)
With regard to the Spring 2011 Turkey Trip, we noted that there was evidence of 47
potential participants; however, we were unable to determine the identity of five (5) of them.
The following chart provides the number of participants (whose identities were known) by
classification (i.e., employee, parent, student and other):
Classification
Employee
Parent
Student
Other
GrandTotal

Total
2
13
26
1
42

The MEDEX invoice (for travel insurance), dated 03/08/2011, lists C

as

a participant on the trip. We have been unable to determine the nature of the relationship
between FSAMS and Ms. C

(whether she is a student, parent or chaperone); we, therefore,

have classified her in the other category. In addition, we did not find any indication that Ms.
C

received an invoice from FSAMS requesting payment for her expenses related to this

trip.

13
Exhibit 43, Page 15 of 71

Excluding Ms. C

(since we are uncertain as to whether she is an adult or child), the

chaperone/adult to student ratio was 15:26, or approximately 58%.16


FSAMS made the travel arrangements and paid for the participants airfare. There is no
evidence that the two employees that chaperoned the trip reimbursed FSAMS for their airfare;
however, the records indicated that all other participants, excluding Ms. C
invoices for their expenses related to this trip.

, received

Total income for the trip was $58,450.00

(invoiced to trip participants) and total expenses were $51,006.00.


No food or lodging expenses were listed as costs related to the trip. Mr. Yilmaz did
submit expenses for reimbursement totaling $1,582.66, but these expenses were likely not
enough to provide food and lodging for 42 or more people. It is unknown where the trip
participants stayed, where they ate while they were traveling, and how these expenses were paid
for.
Summer 2011 Turkey Trip (Schedule 2)
With regard to the Summer 2011 Turkey Trip, we noted that there was evidence of 33
potential participants. The following chart provides the number of potential participants by
classification (i.e., adult, customer, employee, student and other):
Classification
Adult
Customer
Employee
Student
Other
GrandTotal

Total
2
8
7
15
1
33

Confirmed flight reservations for the trip were issued to S

. We have

been unable to determine the nature of the relationship between FSAMS and Ms. A
therefore, listed Ms. A

; we,

in the other category.

FSAMS made all of the travel arrangements and paid for the participants airfare. Seven
(7) of the 33 participants were FSAMS employees and there is no evidence that these employees
reimbursed FSAMS for their airfare.
16

In addition, we found no evidence that invoices

On May 7,2012, Mr. Sener stated that parents that participate in field trips are not chaperones. Only FSAMS
employees are chaperones.

14
Exhibit 43, Page 16 of 71

(reimbursement requests) were issued to eight (8) other participants (labeled as other 1,
student 4, customer 1 and adult 2) to cover expenses related to this trip. Thus, of the
33 total participants, 45% did not appear to pay for their own airfare. Total income for the trip
was $25,200.00 and total expenses were $37,535.51. It is unknown how the $12,535.51 deficit
was funded.
No food or lodging expenses were listed as costs related to the trip. Mr. Yilmaz did
submit expenses for reimbursement totaling $1,718.98, but these expenses were likely not
enough to provide food and lodging for 33 people. It is unknown where the trip participants
stayed, where they ate while they were traveling, and how these expenses were paid for.
Of the seven (7) employees who chaperoned this trip, four (4) did not make the return
flight with the students. One (1) of these four (4) remained in Turkey an additional two weeks.
The other three (3) of these four (4) stayed in Turkey for an additional month. It is unknown as
to the purpose of sending seven (7) school chaperones on the trip, since four (4) of the seven (7)
were apparently not needed to insure the safe travel of the students on the return trip; and it is
further unknown as to the purpose of providing free airfare for those who apparently stayed
longer, possibly on vacation.
Spring 2012 Turkey Trip (Schedule 3)
Mr. Yilmaz provided a participant roster, dated 04/13/2012, listing the parents and
students who were potential participants in the Spring 2012 Turkey trip. Mr. Yilmaz, however,
stated that the participant roster may not be accurate. The participant roster lists 35 parents and
students. In addition, there is evidence that airline tickets were purchased for five additional
people, not included on the participant roster, comprised of three employees; Tahir Duzyol, an
employee of FSAES; and S
exists between Ms. D

(we have not been able to determine what relationship

and FSAMS). In total, there were 40 potential participants on this

trip; however, there is evidence of only 34 airline tickets having been purchased by FSAMS (27
from American International Travel, and 7 from Expedia). We could not specifically identify the
six (6) individuals who did not participate on this trip.
The following chart provides the number of (unadjusted) potential participants by
classification (i.e., employee, parent, student and other):

15
Exhibit 43, Page 17 of 71

Classification
Employee
Parent
Student
Other
GrandTotal

Total
3
15
20
2
40

Including the other category (since we were able to determine these individuals, Mr.
and Ms. Duzyol, were adults), the adult to student ratio was 20:20, or 100%.
FSAMS made all of the travel arrangements and paid for the participants airfare. Three
(3) of the participants were FSAMS employees and there is no evidence that these employees
reimbursed FSAMS for any airfare. Total income for the trip was $50,700.00 (collected from
trip participants) and total expenses were $42,853.96.
No food or lodging expenses were listed as costs related to the trip. The three employees
did submit expenses for reimbursement totaling $5,000.00, but these expenses were likely not
enough to provide food and lodging for all participants.

We are uncertain what these

reimbursable expenses were for. It is also unknown where the trip participants stayed, where
they ate while they were traveling and how these expenses were paid for.
3.6

Construction Bond
On May 9, 2011, Mr. Ozer signed a completed Development Authority of Alpharetta,

Georgia Application for Revenue Bond Inducement Letter. On this application, the information
entered in the Name of Property Owner field was Mr. Ali Ozer, Grace Institute. After FCS
raised concerns about Graces [refer to Section 3.7 for further detail on the Grace Institute]
involvement with the bond, Merchant Capital issued a letter, dated October 17, 2011, stating that
the inclusion of Grace Institute on the application was an error. A memo from Stacy Edelstein
Hyken and Sarina Russotto of Arnall Golden Gregory, dated October 17, 2011, states, in item 5,
about the application, This document was completed by a bank representative, who was not
fully aware of the relationships between the schools and Grace.
contained factual errors.

17

17

Therefore, the document

Although, this error has been corrected, we are unclear why and how

Exhibit 2-E Memorandum to Nina Gupta and Laura Lashley from Stacy Hyken and Sarina Russotto dated October
17, 2011

16
Exhibit 43, Page 18 of 71

the bank representative knew about Grace Institute to even consider including it on the
application.
In the course of our examination of vendor relationships (discussed in detail below), we
noted that FSAMS submitted an invoice on April 4, 2012 to Merchant Capital (Underwriter of
Construction Bond) which included a request for reimbursement of a $10,000 legal invoice. This
invoice was received from Sutherland, Asbill & Brennan (Sutherland) and was for a retainer to
provide services in connection with the FSAMS charter renewal with the FCBOE. FSAMS paid
this retainer on March 23, 2012, which was subsequent to the denial FSAMS received on its
charter application in late 2011. (See Exhibit 7). It is unclear on why FSAMS engaged
Sutherland related to the charter with the FCBOE during the time it was applying for a charter
with the State of Georgia. It is also unclear why FSAMS is seeking reimbursement from the
construction bond for these legal expenses.
We also noted in FSAMS May 4, 2012 letter to the Charter Schools Division Director of
the Georgia Department of Education that FSAMS did not include this invoice (and others that
appeared to be construction-related) in its list of bond proceed requisitions and withdrawals.18
3.7

Vendor Relationships
We were asked to gather information regarding FSAMS contracts and vendor

relationships to determine if conflicts of interest existed. We noted the following items for
consideration.
Grace Institute for Educational Research & Resources, Inc. (Refer to Schedule 4)
The first agreement between FSAMS and Grace Institute for Educational Research &
Resources, Inc. (Grace) was dated November 15, 2008. This agreement was signed on behalf
of Grace by Mr. Selim Ozdemir. At that time, Mr. Ozdemir was both a Board Member for Grace
and the Executive Director for both FSAMS and FSAHS. Mr. Ayhan Korucu (Board Member
and current Governing Board President of FSAMS) signed the agreement on behalf of FSAMS.
In addition, FSAMS Principal Sener also served as a Board Member for Grace; and Mr. Ozer
served as both President of Grace and Curriculum Director for FSAMS.

18

FSAMS Letter to Mr. Louis J. Erste, dated May 4, 2012,[face of document states May 4, 2011] re: Supplemental
Information for the FSAMS State Chartered Special School Petition, section 9

17
Exhibit 43, Page 19 of 71

On its fiscal 2008-2009 tax return, Grace reported a loan of $10,018 from Mr. Ozdemir.
During the 2009-2010 school year, Messrs. Yucel Aktas (FSAMS teacher), Sener (FSAMS
Principal and Bookkeeper) and Ozer (FSAMS Executive Director) served as Grace Board
Member, Board Member and President, respectively. Refer to Schedule 4 for our analysis of
individuals with affiliations with both Grace and the FSA schools.
FSAMS financial transactions with Grace total the following amounts per year:
Period
01/01/1006/30/10
07/01/1006/30/11
07/01/11Present
Total

Expenses
$80,580.00
$72,564.00
$86,222.00
$239,366.00

No RFP or Open Bid Process


Based on our inquiry of Principal Sener and Mr. Ozer, there has never been a Request for
Proposal (RFP) or any open bid process for this contract. When FCS instructed FSAMS to
sever its relationship with Grace, due to the conflicts of interest that existed, the principals of
FSAMS and the other FSA schools (FSAHS and FSAES) left Graces Board of Directors
effective June 30, 2011. Three months later, FSAMS re-contracted with Grace. In this process,
FSAMS did not solicit bids from an open bid pool or issue an RFP. Instead, FSAMS requested
quotes from one other company, Pearson, for two of its products, PowerSchool and SchoolNet.
Pearson provided pricing for these two products in an email dated September 15, 2011.19 The
quote for PowerSchool did not include information about the product so that its features could be
compared with those of its other product, SchoolNet, and Graces product. Instead, Mr. Ozer
stated that information about PowerSchool could be viewed on Pearsons website. Likewise, Mr.
Ozer had no documentation about SchoolNet and its features; rather, he stated that he learned
about these features through the email in which the pricing structure was provided, and through
phone calls with a company representative. Mr. Ozer stated that neither of these products
provided all of the features that FSAMS required.

19

Email from David Amarante (Pearson), dated September 15, 2011, 12:13PM (Included in FSAMS April 18, 2012
State DOE Clarification Letter Item 2)

18
Exhibit 43, Page 20 of 71

On September 17, 2011 (two days after receiving Pearsons prices in an email), FSAMS
Governing Board voted to contract with Grace20 for $70,000 for Professional Services:
Customize School Software solution and Professional Services: Professional Development.21
Within the Governing Board September 17, 2011 meeting minutes, the Governing Board states:
County advised us that the State is going through a review of Contracts policies for all
charter schools, however FSA currently has a waiver from this due to the full flexibility
we have. The State will be changing this policy and asked us to follow the County
Contracts guidance until the State policy is complete. Purchases require approval as
follows:
Purchases Over $100,000 Require Board Approval
Purchases $50,000-$100,000 Require a public bid process
Purchases $10,000-$50,000 Require 3 Quotes [Emphasis added]22
We noted that the Governing Board unanimously voted to approve the Grace contract
totaling $70,000, yet did not put this contract out for a public bid process. The amount of the
contract falls within the range stated above as the Contracts guidance. In these Governing Board
meeting minutes, the Grace contract is divided into two separate services of $32,500 and
$37,500, which in form (but not in substance) falls below the stated $50,000 threshold requiring
a public bid process. It should be noted that the Grace contract was a single contract with two
service offering line items.
On September 19, 2011 (two days following this vote), FSAMS signed the new contract
with Grace.23
In addition, we noted that FSAMS has paid $86,222 by Grace during the 2011-2012
school year. This is comprised of the $70,00024 contracted amount and two additional invoices
for benchmarking services in the amounts of $12,500 and $3,720 (a total of $16,220) (See
Exhibit 8). Of this $16,220, at the time of the writing of this report, all of it had been paid.
20

September 17, 2011 Bi-Monthly Governing Board Meeting Minutes


September 17, 2011 Contracts Report Purchases for Board Approval Value of $5,000 and More
22
September 17, 2011 Bi-Monthly Governing Board Meeting Minutes, page 5 of 6
23
Agreement between Grace Institute of Educational Research and Resources and Fulton Science Academy Middle
School dated September 19, 2011
24
The total paid is actually $70,002 (due to three even dollar payments of $23,334 each)
21

19
Exhibit 43, Page 21 of 71

Conflicting or Unsupported Representations regarding Bids/Quotes


In reviewing documentation about FSAMS and its relationship with Grace, we noted the
following inconsistencies and conflicting representations:

In the November 15, 2008 meeting of the FSAMS Governing Board, the board
approved an affiliation agreement with Grace Institute. In the meeting minutes,
Mrs. Saylam asked, Does Fulton County have any issues with this idea? Mr.
Ozdemir responded, No issues. It is looked at as another vendor relationship.25
We have seen no evidence of Fulton County stating that it had no issues relating
to the Grace/FSAMS relationship prior to this meeting.

In a memo from Ms. Hyken of Arnall Golden Gregory, dated October 17, 2011,
Ms. Hyken states, in item 7, FSA MS followed the Districts regular
procurement procedure to obtain bids for the two (2) discrete services that FSA
MS discussed with Ms. Stowell.26 In discussing (2) discrete services, Ms. Hyken
was referring to (1) the customization of school software solutions; and (2)
professional development services. In Response 2 of the FSA MS State Petition
Clarification Response 4-23-11 document issued by FSAMS, however, FSAMS
states about Grace, As for the professional development services, they are
contracted on a sole source basis. The Math (Connected Mathematics II, College
Preparatory Mathematics), Science (Foundational Approaches in Science
Teaching), and Turkish as a World Language programs are all unique programs
and the Grace Institute is the only local provider with the required expertise in
these programs. [Emphasis added].27 On May 7, 2012, when questioned by Ms.
Salem, Mr. Ozer reiterated that no RFP had been issued nor were bids received
for these professional development services.

In Item 8 of the same memo from Stacy Edelstein Hyken, Ms. Hyken states that
FSA MS is willing to go through the RFP process Furthermore, Ms.
Hyken states that FSAMS followed the Districts procurement policy and

25

Exhibit 2-C Abbreviated Transcript of Agenda Item from November 15, 2008 FSA MS Governing Board meeting
Exhibit 2-E Memorandum to Nina Gupta and Laura Lashley from Stacy Hyken and Sarina Russotto dated October
17, 2011
27
April 18, 2012 State DOE Clarification Letter Item 2, FSA MS Response to Item 2
26

20
Exhibit 43, Page 22 of 71

requested multiple bids before choosing Grace...28 FSAMS did not, in fact, issue
a formal RFP for the services now provided by Grace. Instead, FSAMS simply
requested a quote from one vendor, Pearson, for two of its products. Such quotes
were received two days prior to FSAMS decision to engage Grace again.

In Form 1023, Application for Recognition of Exemption Under Section


501(c)(3) of the Internal Revenue Code, dated 09/30/2008, the mailing address of
Grace Institute is listed as 1675 Hembree Road, Alpharetta, GA 30009.29 This
same address is listed in Graces Form 990-EZ for the period beginning
07/01/2007 and ending 06/30/2008.30 This address is the same as that of FSAMS.

In Form 1023, Part IX, Financial Data, and the related description, Grace states
that, for the year ending 06/2009, it plans to pay salaries and wages for only two
staff members, a receptionist and an information technology person.31

It is

unclear what services Grace can provide to its member schools with only two paid
staff members, neither experienced in many of the service areas Grace contracted
to provide to FSAMS.
Potential Reliance on FSA Schools
A material amount of Graces revenue and student participation is reliant upon FSAMS,
FSAHS and FSAES. FSAHS financial transactions with Grace total the following amounts per
year:
Period
01/01/1006/30/10
07/01/1006/30/11
07/01/11Present
Total

Expenses
$64,060.00
$32,072.50
$46,462.00
$142,594.50

28

Exhibit 2-E Memorandum to Nina Gupta and Laura Lashley from Stacy Hyken and Sarina Russotto dated October
17, 2011
29
Exhibit 2-F Grace Institution 501c (3) application, Form 1023
30
Grace Institute for Educational Research & Resources, Inc. Form 990-EZ
31
Exhibit 2-F Grace Institution 501c (3) application, Form 1023

21
Exhibit 43, Page 23 of 71

FSAES financial transactions with Grace total the following amounts per year:
Period
01/01/1006/30/10
07/01/1006/30/11
07/01/11Present
Total

Expenses
$0.00
$60,400.50
$87,587.88
$147,988.38

In the 2009-2010 fiscal year, 49.6% of Graces income came from FSAMS and FSAHS:

FSAMS
FSAHS
Others
Total

Income
$80,580.00
$64,060.00
$146,834.00
$291,474.00

#ofStudents
512
235
553
1300

In the 2010-2011 fiscal year, 35.4% of Graces projected student population came from
FSAMS, FSAHS and FSAES:

FSAES
FSAMS
FSAHS
Others
Total

#ofStudents
413
508
231
2098
3250

Core Design & Production


Another vendor that we reviewed was Core Design and Production (Core). FSAMS
purchased its student uniform polo shirts from Core. Core is located in Arlington Heights,
Illinois.
Selection Process
We inquired of Mr. Sener as to why FSAMS selected Core as the vendor for their student
uniform shirts since it is located in Illinois and there are many local vendors. Mr. Sener stated
that a local shop had originally sold shirts to parents and students, but after rude in-store
treatment, FSAMS decided to purchase the shirts and sell them to the students itself. Mr. Sener
represented that he found Core through a web search and found this vendor had the best price at
22
Exhibit 43, Page 24 of 71

that time. When we did a search of Cores website www.coredesignproduction.com, we found


no reference to polo shirts. We are uncertain as to how Mr. Sener discovered that Core sold
school uniform polo shirts.
Core does sell promotional products through logomall.com, which can be directly
accessed at coredesignproduction.logomall.com. However, we did not locate anywhere on the
www.coredesignproduction.com website a connection to logomall, nor when we searched for
logomall on the Core website did we locate it.
Inventory (Purchases & Sales)
The following shows the number of shirts purchased, the costs and sales of polos to
students (assuming sold at cost).32 The average purchase price (per shirt) is calculated and the
estimated ending inventory on hand is also reflected.

Date
04/14/10
01/01/1006/30/10
8/3/2010
07/01/1006/30/11
07/25/11
07/01/11Present
07/01/11Present

DescriptionofTransaction
FSAMSpurchased1500shirts
FSAMSsoldshirts
FSAMSpurchased1128shirts
FSAMSsoldshirts
FSAMSpurchased900shirts
FSAMSsoldshirts
AcademyApparelsold261shirts

Est.Valueof
FSAMS
Inventory
Expense/
(basedon
(Income)
cost)
$20,316.00
$20,316.00
($2,571.00)
$17,745.00
$16,259.00
$34,004.00
($19,164.00)
$14,840.00
$13,725.00
$28,565.00
($7,281.00)
$21,284.00
($4,805.00)
$16,479.00

Average
Purchase
Price
$13.54

$14.41

$15.25

The on-hand inventory has an estimated value of $16,479. There is approximately


$2,209 worth of shirts held for sale at Academy Apparel and $14,270 on hand with FSAMS.
Ms. Salem observed these shirts and they are currently stored haphazardly in a storage facility.
Based on their historical sales of the shirts, the inventory represents over one years required
inventory.

32

According to Mr. Sener, polo shirts are sold for a couple of dollars above cost. For purposes of estimating ending
inventory, we assumed sales of polos at cost.

23
Exhibit 43, Page 25 of 71

Vendor Pricing
Performing a cursory web search, we compared various vendors pricing to the average
prices paid by FSAMS to Core and noted that there were cheaper prices to be obtained,33
particularly if one ordered in bulk, even considering the cost of adding a school logo.
According to Principal Sener, FSAMS has recently decided to issue bids for uniforms,
but has not done so yet. FSAMS is in the process of generating an RFP.
Atlantic Wind Group
FSAMS contracted with Atlantic Wind Group, LLC (AWG, also known as Atlantic
Wind Production) for video production, advertising, printing, website design and other related
services. AWGs registered agent and President is Mr. Baybars Bakay; and according to the
Georgia Secretary of State website, AWG was created on June 1, 2010.
Relationship Between AWG and FSAMS
In the course of our work, Mr. Bakay was identified as a former teacher at FSAMS.
When Ms. Salem inquired of Principal Sener who owned AWG, he responded that he did not
know. When Ms. Salem asked about Mr. Bakays relationship to FSAMS, Principal Sener told
her that Mr. Bakay had been a computer science teacher at FSAMS several maybe five years
ago.
FSAMS payroll records indicate that Mr. Bakay was last employed by FSAMS from
January 1, 2010 to July 31, 2010.
Selection Process
According to Principal Sener, AWG provided the best estimate for a video production
project. He also stated that due to its competitive prices and their good working relationship,
FSAMS decided to give subsequent business to AWG. The first payment we noted from
FSAMS to Mr. Bakay was in December 2010.

33

(1) http://www.jiffyshirts.com/poloshirts/; (2) http://www.frenchtoast.com/; and (3)


http://www.amazon.com/Southpole-Solid-School-UniformMedium/dp/B004DI6IW4/ref=lp_1268073011_1_17?ie=UTF8&qid=1336486353&sr=1-17

24
Exhibit 43, Page 26 of 71

Changes to AWGs Website


After this line of questioning between Ms. Salem and Principal Sener, we noted an
unusual change to AWGs website. Prior to the conversation (on March 5, 2012), the AWG
About webpage included a photo of Mr. Bakay, his title (President) and his email address
(bbakay@atlanticwindproduction.com). When we reviewed the website again on April 10, 2012,
all references to Mr. Bakay were removed from the About page. It is unknown as to the reason
for this change and if there is any relationship to the audit.
Discounts for Grace Institute Member Schools
On a few invoices, we noted that AWG offered 20% discounts for Grace Institute
Member Schools (See Exhibit 9). We also discovered that AWGs domain registrant is Mr.
Mustafa Bahcaci, who is also a programmer at Grace. In addition, Mr. Bahcaci worked at
FSAHS during the 2009-2010 school year. Other than the fact that both AWG and Grace
contract with the FSA schools, and the joint relationships involving Mr. Bahcaci, we were unable
to determine the reason for AWGs favorable pricing toward customers affiliated with Grace.
The financial transactions between FSAMS and AWG are as follows:
Period
01/01/1006/30/10
07/01/1006/30/11
07/01/11Present
Total

Expenses
$0.00
$14,085.00
$12,633.00
$26,718.00

Vendor Inter-relationships
While examining the FSAMS vendors, we noted numerous inter-relationships between
FSAMS, its vendors and other interested parties. Please refer to Schedule 5 for details. We
found these relationships to be of interest in light of the fact that there are alternative
goods/services vendors who are better established and more economical. Based on the links
between these various parties, there is a potential for bias in FSAMS vendor selection process.

25
Exhibit 43, Page 27 of 71

4.

Restriction
This report summarizes our analysis, observations, conclusions and opinions based upon

the work we have performed to date. We reserve the right to amend or supplement our report
and / or findings, should additional relevant information be provided. The attached exhibits,
schedules and accompanying notes to the schedules are an integral part of this report.
The procedures were performed solely for the information of counsel and assistance with
respect to this matter. This report is not to be reproduced, distributed, disclosed or used for any
other purpose without prior written consent of IAG Forensics. This report is not intended for
general circulation or publication.

__________________________________

Karen Fortune, CPA/CFF, MAcc

26
Exhibit 43, Page 28 of 71

Exhibit 1

Exhibit 43, Page 29 of 71

Exhibit 1

Exhibit 43, Page 30 of 71

Exhibit 1

Exhibit 43, Page 31 of 71

Exhibit 1

Exhibit 43, Page 32 of 71

Exhibit 1

Exhibit 43, Page 33 of 71

Exhibit 1

Exhibit 43, Page 34 of 71

Exhibit 1

Exhibit 43, Page 35 of 71

Exhibit 1

Exhibit 43, Page 36 of 71

Exhibit 1

Exhibit 43, Page 37 of 71

Exhibit 1

Exhibit 43, Page 38 of 71

Exhibit 1

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Exhibit 1

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Exhibit 1

Exhibit 43, Page 41 of 71

Exhibit 2

Exhibit 43, Page 42 of 71

Exhibit 3

Exhibit 43, Page 43 of 71

Exhibit 4

Exhibit 43, Page 44 of 71

Exhibit 5

Exhibit 43, Page 45 of 71

Exhibit 6

Exhibit 43, Page 46 of 71

Exhibit 7

Exhibit 43, Page 47 of 71

Exhibit 7

Exhibit 43, Page 48 of 71

Exhibit 43, Page 49 of 71

Exhibit 43, Page 50 of 71

Exhibit 43, Page 51 of 71

Exhibit 43, Page 52 of 71

Exhibit 43, Page 53 of 71

Exhibit 43, Page 54 of 71

Exhibit 43, Page 55 of 71

Exhibit 43, Page 56 of 71

Exhibit 9

Exhibit 43, Page 57 of 71

Exhibit 9

Exhibit 43, Page 58 of 71

FultonScienceAcademyMiddleSchool
AuditFindings
Spring2011TurkeyTrip

Participantsper3/8/2011MEDEX
InvoiceandQBOIncome

Oncul,Ebru

Sener,Kenan

6/17/2011Deposit

Classification
Parent
Student
Student
Student
Student
Parent
Other
Student
Parent
Student
Student
Parent
Student
Parent
Student
Student
Student
Parent
Student
Student
Student
Student
Parent
Parent
Student
Parent
Student
Parent
Student
Student
Employee
Parent
Student
Parent
Employee
Student
Student
Parent
Student
Student
Student
Student
Other
TotalIncome

Invoice
Departure
Return
Amount
Date
Date
$ 1,800.00
$ 1,200.00
$ 1,200.00
$ 1,500.00
$ 1,200.00
4/2/2011 4/11/2011
$ 1,800.00
4/2/2011 4/11/2011
$ 1,200.00
$ 1,800.00
$ 1,200.00
$ 1,800.00
$ 1,800.00
$ 1,200.00
$ 1,800.00
$ 1,200.00
$ 1,200.00
$ 1,200.00
$ 1,800.00
$ 1,200.00
$ 1,200.00
$ 1,200.00
$ 1,600.00
$ 1,800.00
$ 1,800.00
$ 1,200.00
$ 1,800.00
$ 1,500.00
$ 2,250.00
$ 1,500.00
$ 1,200.00
$ 1,800.00
$ 1,200.00
$ 1,800.00

$1,085.10
$1,085.10

4/2/2011 4/11/2011

$1,085.10

4/2/2011 4/11/2011
4/2/2011 4/11/2011

$1,085.10
$1,085.10

4/2/2011 4/11/2011
4/2/2011 4/11/2011

$1,085.10
$1,085.10

4/2/2011 4/11/2011

$1,085.10

4/2/2011 4/11/2011
4/2/2011 4/11/2011

$ 1,200.00
$ 1,200.00
$ 1,800.00
$ 1,200.00
$ 1,500.00
$ 1,200.00
$ 1,200.00
$ 1,200.00 AssumedtobeMs.C
$58,450.00

Schedule1

Airline
Ticket

$1,085.10
$1,085.10

Travel
Insurance
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9

spayment
$10,851.00

Page1of2
Exhibit 43, Page 59 of 71

FultonScienceAcademyMiddleSchool
AuditFindings
Spring2011TurkeyTrip

AirlineTickets(Delta)
TravelInsurance(MEDEX)
TripRefund
Miscellaneous
ReimbursedExpenses
TotalExpenses

Classification
Employee
Parent
Student
Other
GrandTotal

$ 47,602.70
$ 936.28
$ 750.00
$ 134.36
$ 1,582.66
$ 51,006.00

TotalIncome $ 58,450.00
TotalExpense $ (51,006.00)
Profit/(Deficit) $ 7,444.00

Total
2
13
26
1
42

Schedule1

Page2of2
Exhibit 43, Page 60 of 71

FultonScienceAcademyMiddleSchool
AuditFindings
Summer2011TurkeyTrip

Participantsper5/23/2011
MEDEXInvoiceandAtlanta
InternationalTravel
Reservations

Ay,Ridvan

Dilek,Elif
Ersoy,Sabiha

Karaslan,Ahmet

Seker,Davut

Tuzen,Salih

Yilmaz,Ahmet

Classification
Other
Student
Employee
Student
Student
Customer
Employee
Student
Employee
Customer
Student
Customer
Student
Student
Student
Employee
Student
Student
Customer
Student
Student
Employee
Customer
Customer
Student
Adult
Customer
Student
Employee
Adult
Student
Customer
Refund
Employee
TotalIncome

Invoice
Amount

$ 1,250.00
$ 1,150.00
$ 1,500.00
$ 1,150.00
$ 1,250.00
$ 1,800.00
$ 1,250.00
$ 1,250.00
$ 1,250.00

$ 1,150.00
$ 1,250.00
$ 2,500.00
$ 1,400.00
$ 1,250.00
$ 1,150.00
$ 1,500.00

$ 1,500.00
$ 1,250.00
$ 400.00

Departure
Return Airline
Date
Date
Ticket
5/29/2011 6/16/2011
9
5/29/2011 6/16/2011
9
5/30/2011 7/15/2011
9
5/29/2011 6/16/2011
9
5/30/2011 6/17/2011
9
5/30/2011 6/17/2011
9
5/29/2011 7/15/2011
9
5/29/2011 6/16/2011
9
5/29/2011 6/16/2011
9
5/30/2011 6/17/2011
9
5/29/2011 6/16/2011
9
9
5/30/2011 6/17/2011
5/30/2011 6/17/2011
9
5/29/2011 6/16/2011
9
5/29/2011 6/16/2011
9
5/30/2011 6/17/2011
9
5/30/2011 6/17/2011
9
5/29/2011 6/16/2011
9
5/30/2011 6/17/2011
9
5/29/2011 6/16/2011
9
5/30/2011 6/17/2011
9
5/30/2011 7/1/2011
9
5/30/2011 6/17/2011
9
5/29/2011 6/16/2011
9
5/30/2011 6/17/2011
9
5/30/2011 7/1/2011
9
5/30/2011 6/17/2011
9
5/30/2011 6/17/2011
9
5/30/2011 7/15/2011
9
5/30/2011 7/1/2011
9
5/30/2011 6/17/2011
9
5/29/2011 6/16/2011
9
Assumednonrefundabledeposit
5/29/2011 6/16/2011
9

Travel
Insurance
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9

$25,200.00

Schedule2

Page1of2
Exhibit 43, Page 61 of 71

FultonScienceAcademyMiddleSchool
AuditFindings
Summer2011TurkeyTrip

AirlineTickets(AtlantaIntlTravel)
AirlineTickets(Expedia)
TravelInsurance(MEDEX)
ReimbursedExpenses
TotalExpenses

Classification
Adult
Customer
Employee
Student
Other
GrandTotal

$ 30,429.00
$ 4,545.90
$ 841.63
$ 1,718.98
$ 37,535.51

TotalIncome $ 25,200.00
TotalExpense $ (37,535.51)
Profit/(Deficit) $ (12,335.51)

Total
2
8
7
15
1
33

Schedule2

Page2of2
Exhibit 43, Page 62 of 71

FultonScienceAcademyMiddleSchool
AuditFindings
Spring2012TurkeyTrip

ParticipantsperFSAMSroster
andAtlantaInternational
TravelInvoice

Dilek,Elif

Ersoy,Sabiha

Karakoyun,Erdogan

Classification
Parent
Student
Student
Employee
Other
Other
Parent
Parent
Student
Parent
Employee
Student
Student
Student
Student
Parent
Student
Student
Parent
Parent
Student
Employee
Student
Parent
Student
Student
Student
Parent
Parent
Parent
Parent
Student
Parent
Student
Student
Parent
Student
Parent
Student
Student
TotalIncome

Invoice
Amount
$1,725.00
$1,225.00
$1,150.00

$1,800.00
$1,800.00
$1,400.00
$1,800.00
$1,400.00
$1,400.00
$1,500.00
$1,400.00
$1,800.00

Departure
Date
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012

Return Airline
Date
Ticket
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9
4/9/2012
9

5/31/2012
5/31/2012

4/9/2012
4/9/2012

9
9

5/31/2012

4/9/2012

5/31/2012
5/31/2012
5/31/2012

4/9/2012
4/9/2012
4/9/2012

9
9
9

5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012

4/9/2012
4/9/2012
4/9/2012
4/9/2012
4/9/2012
4/9/2012
4/9/2012
4/9/2012

9
9
9
9
9
9
9
9

5/31/2012
5/31/2012
5/31/2012
5/31/2012
5/31/2012

4/9/2012
4/9/2012
4/9/2012
4/9/2012
4/9/2012

9
9
9
9
9

$1,900.00
$1,400.00
$1,400.00
$1,800.00
$1,600.00
$1,400.00
$1,600.00
$1,800.00
$1,800.00
$1,800.00
$1,800.00
$1,600.00
$1,800.00
$1,400.00
$1,400.00
$1,800.00
$1,400.00
$1,800.00
$1,400.00
$1,400.00
$50,700.00

Schedule3

Roster
9
9
9

9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9
9

Page1of2
Exhibit 43, Page 63 of 71

FultonScienceAcademyMiddleSchool
AuditFindings
Spring2012TurkeyTrip

AirlineTickets(AtlantaIntlTravel)
AirlineTickets(Expedia)
TravelInsurance(MEDEX)
ReimbursedExpenses
TotalExpenses

Classification
Employee
Parent
Student
Other
GrandTotal

$ 30,375.00
$6,677.30
$ 801.66
$5,000.00
$ 42,853.96

TotalIncome $ 50,700.00
TotalExpense $ (42,853.96)
Profit/(Deficit) $ 7,846.04

Total
3
15
20
2
40

Schedule3

Page2of2
Exhibit 43, Page 64 of 71

FultonCountySchools
FultonScienceAcademyMiddleSchool
AuditFindings
GraceFSARelationships

20072008
Grace
Akcin,Haci
Akcin,Simona
Akgul,Aladdin
Aktas,Selma
Aktas,Yucel
Allenson,Rhonda

FSAES

FSAHS

Grace

Secretary

FSAES

Secretary

BoardMember

BoardMember
CFO
BoardMember

Basgun,Mustafa
BeugDeeb,Maria
Brown,Rodney
Budak,Ilbey
Bulut,Levent
Cahparala,Ramesh

20082009
FSAMS

FSAMS

FSAHS

Teacher

Teacher

CFO
BoardMember

BoardMember

BoardMember
BoardMember

Bookkeeper
CFO

BoardMember

BoardMember

BoardMember

BoardMember

Cetin,Murat

Cokavci,Avni

Gokkaya,Mert

Goktepe,Fethi
Greene,Steven
Hamki,Mohammad
Kazanci,Caner
Kececi,Mustafa

RegisteredAgent
Bookkeeper
Principal
$61,916

AssistantPrincipal
Bookkeeper
$60,000

CFO

CFO
Assistant
Administrator
$58,000
AssistantPrincipal
$63,000

AssistantPrincipal
AssistantPrincipal
BoardMember

BoardMember

BoardMember

BoardMember

Schedule4

Page1of6
Exhibit 43, Page 65 of 71

FultonCountySchools
FultonScienceAcademyMiddleSchool
AuditFindings
GraceFSARelationships

20092010
Grace
Akcin,Haci
Akcin,Simona
Akgul,Aladdin
Aktas,Selma
Aktas,Yucel
Allenson,Rhonda
Basgun,Mustafa
BeugDeeb,Maria
Brown,Rodney
Budak,Ilbey

FSAHS

Grace

FSAES

Employee
$47,000

BoardMember

20102011
FSAMS

FSAHS

Employee
$23,000
VicePresident

BoardMember

BoardMember

BoardMember

BoardMember

BoardMember

Principal
Bookkeeper

Employee
$58,000

BudgetSpecialist

Cetin,Murat

Gokkaya,Mert

FSAMS

Secretary

Bulut,Levent
Cahparala,Ramesh

Cokavci,Avni

FSAES

CFO

CFO

RegisteredAgent
Principal
$70,000
RegisteredAgent
Principal
$64,405/$72,000
CFO
Employee
$33,000

Bookkeeper

CFO

CEO
CFO
Secretary

Goktepe,Fethi
Greene,Steven
Hamki,Mohammad
Kazanci,Caner
Kececi,Mustafa

Employee
64,000
BoardMember

BoardMember

Schedule4

Page2of6
Exhibit 43, Page 66 of 71

FultonCountySchools
FultonScienceAcademyMiddleSchool
AuditFindings
GraceFSARelationships

Grace
Akcin,Haci
Akcin,Simona
Akgul,Aladdin
Aktas,Selma

FSAES

FSAHS
BoardMember

BoardMember
Secretary
HRManager
$20,000

Aktas,Yucel
Allenson,Rhonda
Basgun,Mustafa
BeugDeeb,Maria
Brown,Rodney
Budak,Ilbey

Teacher/HR
$20,000(33%)
VicePresident

BoardMember

Bulut,Levent
Cahparala,Ramesh

CFO
VicePresident

Cetin,Murat

RegisteredAgent
Principal

Cokavci,Avni

20112012
FSAMS

CFO
VicePresident

CFO
Secretary

CEO
CFO
Secretary
CollegeCounselor
$39,000

Gokkaya,Mert

Goktepe,Fethi
Greene,Steven
Hamki,Mohammad
Kazanci,Caner
Kececi,Mustafa

BoardMember
BoardMember
BoardMember

Schedule4

Page3of6
Exhibit 43, Page 67 of 71

FultonCountySchools
FultonScienceAcademyMiddleSchool
AuditFindings
GraceFSARelationships

20072008
Grace

FSAES

CEO
President

Korucu,Ayhan
Kucuktas,Tuncay
Lassetter,Angela
Lucas,Cynthia
Murphy,Wendi

Ozdemir,Selim

20082009
FSAMS

RegisteredAgent
CEO
CFO
President
Bookkeeper

Ozer,Ali
Ozerslan,Ahmet
Saylam,Sherry

VicePresident

Sener,Kenan

BoardMember

Sercan,Namik
Tascan,Mevlut
Webb,James
Wichser,Edith

Secretary

RegisteredAgent
CEO

FSAHS

Grace

FSAES

RegisteredAgent
CEO
President

FSAMS

CFO

CEO
President
CFO
Treasurer

VicePresident

VicePresident

RegisteredAgent
ExecutiveDirector
Bookkeeper
Principle(sic?)
$125,000

ExecutiveDirector

BoardMember

RegisteredAgent
ExecutiveDirector
Bookkeeper
$114,520

President

CurriculumDirector

Secretary

Principal
$90,000
BoardMember
Secretary

Secretary

Principal
$102,000

BoardMember

Employee

Secretary

Schedule4

FSAHS

CEO
President

ExecutiveDirector

BoardMembr
Secretary

Principal
$92,960
RegisteredAgent
CEO

Teacher

Page4of6
Exhibit 43, Page 68 of 71

FultonCountySchools
FultonScienceAcademyMiddleSchool
AuditFindings
GraceFSARelationships

20092010
Grace

FSAES

BoardMember

Korucu,Ayhan

FSAMS

CEO
President
CFO
Treasurer

FSAHS

CEO
President

Ozdemir,Selim

RegisteredAgent
ExecutiveDirector
$116,321/$126,000 ExecutiveDirector

Sercan,Namik
Tascan,Mevlut
Webb,James
Wichser,Edith

20102011
FSAMS

CEO

FSAHS

CEO

CFO

VicePresident

Sener,Kenan

FSAES

CEO

Kucuktas,Tuncay
Lassetter,Angela
Lucas,Cynthia
Murphy,Wendi

Ozer,Ali
Ozerslan,Ahmet
Saylam,Sherry

Grace

Secretary

CEO
CFO
President

ExecutiveDirector
$65,000
BoardMember

BoardMember

Secretary

RegisteredAgent
CEO
President

Secretary
Principal
Bookkeeper
$93,863/$103,000

ExecutiveDirector
BoardMember
Secretary

RegisteredAgent

RegisteredAgent
Employee
$45,000
Secretary

Secretary

Principal
$90,000
Bookkeeper
Employee
$40,000

Schedule4

RegisteredAgent
Employee
$80,000

Page5of6
Exhibit 43, Page 69 of 71

FultonCountySchools
FultonScienceAcademyMiddleSchool
AuditFindings
GraceFSARelationships

Grace

Korucu,Ayhan
Kucuktas,Tuncay
Lassetter,Angela
Lucas,Cynthia
Murphy,Wendi

FSAES

CEO
President

20112012
FSAMS

President

FSAHS

CEO
President

BoardMember
Secretary

Ozdemir,Selim

Ozer,Ali
Ozerslan,Ahmet
Saylam,Sherry

ExecutiveDirector

ExecutiveDirector
$40,000(33%)

Principal
$90,000

Sener,Kenan

Sercan,Namik
Tascan,Mevlut
Webb,James
Wichser,Edith

ExecutiveDirector
$40,000

RegisteredAgent
Principal
$80,000
BoardMember
BoardMember
BoardMember

Schedule4

Page6of6
Exhibit 43, Page 70 of 71

FSAMSVendorRelationships

OrlandoTurkishCulturalCenter

TurkishAmericanChamberof
CommerceoftheSoutheast

NileFoundation
MustafaKececi

EbruGarden
AtlanticWindGroup

BaybarsBakay

NossConstruction

AyhanKorucu

StitchbyStitch
Hotlantic

GlobalConnections
GurkanEkicikol

PowerBeez
MustafaKaradeniz

FSAElementarySchool
FSAMiddleSchool
FSAHighSchool
GlobalSpectrumFoundation
dbaIstanbulCenter

GridTelekom

AvniCokavci
SelimOzdemir

MustafaBasgun

AliOzer

AntBookstore
(ownedby)
TughraBooks
(formerly)
TheLightInc.

CoreDesign&Production

HakanBerberoglu

BrowardMathandScienceSchools
KenanSener
NewSpringsSchool
NamikSercan

NiagaraFoundation
TheFountain
Magazine
ChicagoGulenConference

OrlandoScienceSchools
GraceInstitute

RiverCityScienceAcademy

FethullahGulen

StarsMiddleSchool
SweetwaterBranchAcademy

FethiGoktepe
MustafaBahacaci

Schedule5

Exhibit 43, Page 71 of 71