Development Guild DDI - Framingham, Massachusetts CEO … · parents/guardians in a language-rich...

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Framingham, Massachusetts CEO Search | December 2017

The Learning Center for the Deaf (TLC) is conducting a national search for a new position, Chief Executive Officer (CEO). What differentiates TLC is central to the CEO’s role. Ever since its founding in 1970, TLC’s vision has been to create exceptional educational programs and services to the community. As the first school in Massachusetts to use sign language in its instruction, TLC was an early developer of bilingual and bicultural pedagogy. Since then, TLC has grown substantially in its complexity and potential, and has developed dynamic, entrepreneurial, and innovative solutions that address the challenges and opportunities facing the deaf and hard-of-hearing community it serves. Today, TLC is the largest employer of people who are deaf in New England. TLC has effectively recruited Deaf staff regionally and nationally and invested in professional development for all staff. As a result, TLC enjoys the benefits of an excellent senior management team which year by year has deepened its Deaf leadership. TLC’s dual commitments to Deaf leadership and inclusivity underpin the strength of the organization. Over the years, TLC has experienced a steady growth and increased diversity in the population that it serves. Its two schools are its largest and best-known programs, each a leader in their fields and each led by a Deaf director. Marie Philip School, TLC’s earliest school, is a Pre-K through 12th grade+ day and residential school providing highly individualized instruction and a broad range of support services to deaf and hard-of-hearing students in a language-rich bilingual-bicultural environment. The Walden School is a nationally recognized bilingual-bicultural residential program providing comprehensive treatment and educational services for deaf and hard-of-hearing children and youth. Walden School meets the significant treatment needs of its students through highly individualized care and therapy.

TLC also assists towns and school districts, addressing the specific needs of their mainstreamed deaf and hard-of-hearing students through its respected Public School Partnerships program. This program links TLC’s educational programming more closely to regional communities. TLC also offers a Parent-Infant Program led by a Deaf coordinator. TLC’s excellence extends beyond its schools and educational programs. TLC provides a variety of services and programs poised for further growth and development, such as:

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Therapeutic Services

• Walden School

• Walden Community Services

Community Services

• Audiology Clinic

• ASL Classes

• Interpreting Services

Cultural & Research Services

• Center for Research and Training

• Signing for Success

• Deaf Cultural Center

These services and programs are essential to TLC’s excellence, and strategically key to TLC’s ability to continue as an innovative leader serving people who are deaf and hard-of-hearing. For a more complete description of TLC’s diverse programming, please see the full announcement for this position. Growth in tuition-based revenue has been steady and modest over the past several years. Revenue and support exceeded $25 million for the fiscal year ending June 2017. Cumulative net surplus over the past four years totaled $2.6 million. With over 215 deaf and hard-of-hearing students taught on campus and over 350 public school students served off-campus through TLC’s Public School Partnerships program, tuition from towns where students reside continues to be TLC’s primary revenue base. Revenue from therapeutic, community, cultural and research services have recently increased from seven percent to fifteen percent of TLC’s total revenue. TLC’s private school and nonprofit status provide flexibility in creating unique solutions and initiatives, and distinguishes TLC programmatically, financially, and structurally from public schools serving students who are deaf. The CEO will be expected to provide leadership, planning and management expertise to continue to diversify TLC’s revenue sources while maintaining and increasing excellence in all programs. TLC’s highly respected Executive Director, Judy Vreeland, describes TLC’s senior management team’s roles and responsibilities as having grown and changed significantly under her watch. She aptly describes the CEO position as representing a natural progression in TLC’s structure, suitable to support its next steps toward regional, national, and international leadership. The position of Executive Director will be retired with Ms. Vreeland when she steps down in the summer of 2018. In sum, the CEO position is being created to provide a leadership platform to strategically direct and integrate this increasingly complex, mission driven organization and its engaged community. The CEO will:

• Partner with the Board of Trustees, providing leadership on the development of TLC’s vision for excellence, its strategic planning, management and policies - in support of TLC’s mission;

• Provide leadership anchored in TLC values, inclusiveness and respect, the importance of language and communication, and the value of investing in its staff and in Deaf leadership, among others;

• Represent TLC externally, responsible for developing key relationships that engage leadership, build philanthropic support, and produce revenue and program opportunities; and, importantly,

• Manage effectively, investing in strategic and visionary program development, diversification of revenue streams, and increasing fiscal resources.

Individuals interested in TLC’s CEO opportunity must be fluent in ASL and have a record of achievement working with organizations serving the Deaf community. Experience working with nonprofit boards is a requirement, as is the ability to manage the growth and excellence of a complex organization. Successful CEO candidates are not limited to those who are educators. Backgrounds in organizational management, mental health, or social work are also welcome. The start date for the new Chief Executive Officer position is Summer of 2018. The Learning Center for the Deaf is an Equal Opportunity/Affirmative Action Employer It is the policy of The Learning Center for the Deaf to afford equal opportunity to all qualified persons regardless of race, color, religious creed, national origin, age, military status, sexual orientation, disability, genetic information, gender identity, gender expression or gender unless based upon a bona fide occupational qualification. Please email your cover letter and resume in confidence to: [email protected] Suzanne Weber, MBA Chief Executive Officer Development Guild DDI

mailto:[email protected]

Appendix

I. Strategic Vision

II. Programs and Services

III. Staff and Senior Management Team

IV. Trustees

V. Audited Financial Statement (2016)

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I. Strategic Vision

The current strategic plan of The Learning Center for the Deaf was adopted in the fall of 2011. Over the

past six years, much has been accomplished. Student enrollment in its school programs has grown to

over 200 students each year. And its community service programs have expanded in size and breadth of

services.

As the Learning Center grew, there was a realization that while its schools were and would remain its

flagship programs, it had developed into an organization providing not only exemplary educational

services to deaf and hard-of-hearing children, but a wide range of services to children, adults, and

families.

Nevertheless, TLC is not without its beginnings.

In 1970, Warren Schwab and a determined and dedicated team of educators, recognizing that many deaf

and hard-of-hearing children in Massachusetts were not benefiting from traditional education practices,

founded The Learning Center for the Deaf. From its outset, the hallmarks of The Learning Center have

been continuous innovation, a fully accessible language environment, and respect for developing the

whole child, while establishing and maintaining high academic standards.

The school grew quickly as it responded to the diverse needs of its growing student population. In the

1990s, The Learning Center became one of the first schools in the nation to develop a bilingual and

bicultural model for educating deaf children; now, of course, this is a common and respected approach.

Today, The Learning Center is a nationally recognized school for the deaf with 200 students in its school

programs. As The Learning Center has grown, it has become much more than a center school, offering a

wide range of serves to children, families, and members of the community.

The Learning Center has achieved great success. In just 41 years, it has grown from a school of 19

children being served in rented space to a school and multiservice organization with a beautiful 14-acre

campus.

Much of this success has been due to TLC’s willingness to adapt to meet the changing needs of its deaf

students and their families while always staying true to its core values. Among those include: maintaining

high academic standards with a rigorous curriculum aligned with the National Core Standards. Building

upon the success of its bilingual model and ensure that it meets the needs of the growing number of

students with cochlear implants, and expanding its programming for deaf students with special needs to

ensure they have the life skills needed to transition successfully into the community. Additionally,

supplying enrichment opportunities beyond the school day has remained a high priority for parents, and

so TLC will work to develop those services, as well as expand its outreach programs and community

based services. And because TLC recognizes the importance of technology in education, it is committed

to ensuring that its faculty and staff have the tools and a strong integrated technology curriculum to

provide its students with the skills and knowledge they will need to compete in today’s world.

Since TLC is a private, nonprofit Chapter 766 special needs school, the state of Massachusetts

establishes the tuition rates for its educational programs, which are then paid by the sending school

districts. However, tuition alone does not cover TLC’s expenses. Some community based services, such

as The Outreach Partnership Program, provide additional revenue. Others, such as the Parent Infant

Program, a critical service to families with newly diagnosed deaf babies, receive very little state funding

and operate at a significant loss each year. As a young school without an endowment, it is essential that

TLC manage its resources carefully and generate more revenue through programming and development

efforts.

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The Learning Center for the deaf has an ambitious but attainable plan. The children and families it serves

depend on TLC’s commitment to meeting their needs and securing the resources necessary to allow it to

grow and prosper for many years to come.

To allow for time to fully address TLC’s priorities and carry out the plan through the hire of the new CEO

in 2018, the strategic plan was extended until 2019. It is the expectation that the new CEO will take

planning of a strategic vision and mission concepts forward.

TLC’s full strategic plan and amendments can be found on its website.

II. Programs and Services

Educational Services

The Parent Infant Program provides support and training for deaf and hard of hearing children and their

parents/guardians in a language-rich bilingual-bicultural environment.

Marie Philip School is a Pre-K – 12+ day and boarding school providing highly individualized instruction

and a broad range of support services to over 200 deaf and hard of hearing students in a language-rich

bilingual-bicultural environment where language and communication are keys to building competence,

character and community.

The Public School Partnerships program addresses the specific needs of students with hearing aids

and cochlear implants who attend public schools and provides a support system for monitoring deaf and

hard of hearing students’ academic and developmental progress.

Therapeutic Services

Walden School is a nationally recognized bilingual-bicultural residential program providing

comprehensive treatment and educational services for deaf and hard of hearing children and

adolescents. Walden School students are challenged by severe social and emotional difficulties, and

have significant treatment needs that have not been successfully addressed in other academic and

residential settings.

Walden Community Services provides linguistically accessible, culturally authentic clinical and support

services to families with a deaf member, as they work to understand and respond to the emotional and

behavioral health of a child/youth in the home.

Community Services

The non-profit Community Audiology Clinic at TLC provides comprehensive audiologic and hearing aid

services to residents of MetroWest and beyond. All proceeds from the services provided and products

sold benefit the children being served at TLC.

Community American Sign Language Classes allow teens and adults to learn ASL from native deaf

ASL users. Each 10-week session teaches ASL and deaf culture in a dynamic and engaging classroom

setting.

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New

Chief Executive Officer

Director of Operations and

Compliance

Human Resources Manager

Director of Audiology

Director of the Center for

Research and Training

Director of the Deaf Cultural Center

Chief Financial Officer

Associate Executive Director

Director of Public School Partnerships

Director of the Marie Philip School

Director of the Walden School

Director of Interpreting

Services

Co-Director of Walden Community

Services

Co-Director of Walden Community

Services

TLC offers fee-based Interpreting Services and consultation for local businesses, schools, and local and

state agencies. It is currently the only private agency that has a contract with the state through the

Massachusetts Commission for the Deaf and Hard of Hearing.

Cultural & Research Services

The Center for Research and Training (CRT) has developed sophisticated ASL assessment tools to

help determine a child’s linguistic proficiency in ASL and works with schools across the country to

implement the assessments. CRT also provides school management consultation and professional

development programs to schools. The Center has an ongoing partnership with Boston University.

The Signing for Success program provides ASL classes and private tutoring for families with deaf and

hard of hearing children. It provides workshops and presentations related to ASL and Deaf culture for

families and for professionals who work with deaf and hard of hearing students.

The Deaf Cultural Center provides opportunities for the Deaf Community and those who study and

support it to learn more about the history of TLC, the broader Deaf Community, and ASL.

III. Staff and Senior Management Team

The Learning Center for the Deaf is supported by 255 full-time staff members in addition to a number of

part-time staff and volunteers.

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Michael Bello

Joseph Grainger

Shilpa Hanumantha

Ralph Hinckley, Chair

TLC Board of Trustees

Val Hollingsworth

Joseph Innes

Josh Mendelsohn

Evan Ricker

Dr. Marilyn Sass-Lehrer

Judith Vreeland,

Executive

Director, TLC

IV. Trustees

V. Audited Financial Statement

Following is the Audited Financial Statement for years ended June 30, 2016 and 2015. The most current

statement is being finalized.

THE LEARNING CENTER FOR THE DEAF, INC. FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2016 AND 2015 AND

REPORT ON INTERNAL CONTROL AND COMPLIANCE YEAR ENDED JUNE 30, 2016

THE LEARNING CENTER FOR THE DEAF, INC.

FINANCIAL STATEMENTS Years Ended June 30, 2016 and 2015

AND REPORT ON INTERNAL CONTROL AND COMPLIANCE

Year Ended June 30, 2016

TABLE OF CONTENTS Page Independent Auditor’s Report ............................................................................................................ 1-2 Financial Statements:

Statements of Financial Position ................................................................................................... 3 Statements of Activities and Changes in Net Assets ..................................................................... 4 Statements of Cash Flows ............................................................................................................. 5-6 Notes to Financial Statements ....................................................................................................... 7-28

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............... 29-30

INDEPENDENT AUDITOR’S REPORT

The Board of Trustees The Learning Center for the Deaf, Inc. Framingham, Massachusetts Report of the Financial Statement We have audited the accompanying financial statements of The Learning Center for the Deaf, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and changes in net assets and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the 2016 financial statements referred to above present fairly, in all material respects, the financial position of The Learning Center for the Deaf, Inc. as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Prior Period Financial Statements The financial statements of The Learning Center for the Deaf, Inc. as of June 30, 2015, were audited by other auditors whose report dated November 12, 2015, expressed an unmodified opinion on those statements.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 9, 2016, on our consideration of The Learning Center for the Deaf, Inc.’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering The Learning Center for the Deaf, Inc.’s internal control over financial reporting and compliance.

Citrin Cooperman & Company, LLP

Braintree, Massachusetts November 9, 2016

THE LEARNING CENTER FOR THE DEAF, INC.Statements of Financial PositionJune 30, 2016 and 2015

2016 2015

CURRENT ASSETS:Cash 409,914$ 1,033,038$ Accounts receivable, net of allowance of $104,651 for 2016 and $27,891 for 2015 1,346,067 1,287,114Contributions receivable, net (Note 4) - 15,479 Prepaid expenses 223,410 103,416 Other assets 33,500 33,500

Total current assets 2,012,891 2,472,547

PROPERTY, PLANT AND EQUIPMENT, NET (NOTE 9) 11,443,234 11,429,032

OTHER ASSETS:Investments, at fair value (Notes 5, 6 and 7) 3,541,230 2,751,953Investments in deferred compensation plan, at fair value (Notes 5 and 6) 830,757 878,848 Deferred financing fees, net of accumulated amortization of $93,554

for 2016 and $79,465 for 2015 327,575 341,664

Total other assets 4,699,562 3,972,465

Total assets 18,155,687$ 17,874,044$

CURRENT LIABILITIES:Current portion of bond payable (Note 11) 331,479$ 319,727$ Current portion of capital lease obligation (Note 13) 15,403 13,954 Current portion of long-term debt (Note 12) 5,224 - Accounts payable 350,912 343,269 Accrued expenses 1,272,544 1,286,276 Employee withholdings 7,353 8,193 Deferred revenue 132,403 252,858 Student funds held in trust 9,313 3,838

Total current liabilities 2,124,631 2,228,115

LONG-TERM LIABILITIES:Bonds payable, net of current portion (Note 11) 11,160,880 11,494,333 Long-term debt, net of current portion (Note 12) 214,776 - Capital lease obligation, net of current portion (Note 13) 7,611 23,882 Deferred compensation plan 830,757 878,848

Total long-term liabilities 12,214,024 12,397,063

Total liabilities 14,338,655 14,625,178

NET ASSETS:Unrestricted:

Operations 252,201 457,833 Board-designated (Note 8) 3,500,625 2,713,133

Total unrestricted 3,752,826 3,170,966

Temporarily restricted (Note 15) 40,001 53,695 Permanently restricted (Note 16) 24,205 24,205

Total net assets 3,817,032 3,248,866

Total liabilities and net assets 18,155,687$ 17,874,044$

LIABILITIES AND NET ASSETS

ASSETS

See accompanying notes to financial statements.

Temporarily Permanently Temporarily PermanentlyRestricted Restricted Restricted Restricted

Unrestricted Net Assets Net Assets Total Unrestricted Net Assets Net Assets TotalREVENUES, GAINS AND OTHER SUPPORT:

Tuition 21,220,888$ -$ -$ 21,220,888$ 20,020,355$ -$ -$ 20,020,355$ Audiology 649,684 - - 649,684 828,322 - - 828,322 Grants and fees 1,013,073 - - 1,013,073 830,658 - - 830,658 Contributions - annual giving 88,745 - - 88,745 108,825 - 500 109,325 Fundraising 192,434 - - 192,434 233,344 15,479 - 248,823 In-kind donated investments 5,225 - - 5,225 7,892 - - 7,892 Interest and dividends 12,206 1,020 - 13,226 29,026 448 - 29,474 Loss on disposal of property and equipment (1,878) - - (1,878) - - - - Net realized and unrealized gains (losses) on investments 113,694 765 - 114,459 (5,307) 140 - (5,167) Net assets released from restrictions (Note 17) 15,479 (15,479) - - 48,159 (48,159) - -

- - - - Total revenues, gains and other support 23,309,550 (13,694) - 23,295,856 22,101,274 (32,092) 500 22,069,682

EXPENSES: (Notes 3, 18 and 19)Salaries and wages 14,616,679 - - 14,616,679 14,000,594 - - 14,000,594 Employee benefits 1,625,364 - - 1,625,364 1,577,377 - - 1,577,377 Payroll taxes 1,076,175 - - 1,076,175 1,079,476 - - 1,079,476 Occupancy 928,203 - - 928,203 937,304 - - 937,304 Depreciation 616,152 - - 616,152 622,790 - - 622,790 Professional fees 547,874 - - 547,874 359,899 - - 359,899 Food supplies 452,432 - - 452,432 408,455 - - 408,455 Educational supplies and activities 405,333 - - 405,333 360,425 - - 360,425 Interest 393,283 - - 393,283 416,010 - - 416,010 Utilities 365,686 - - 365,686 359,690 - - 359,690 Office 324,076 - - 324,076 229,253 - - 229,253 Pension 267,647 - - 267,647 255,593 - - 255,593 Outpatient audiology supplies 250,582 - - 250,582 329,070 - - 329,070 Grant expenses 230,104 - - 230,104 208,225 - - 208,225 Fundraising 123,857 - - 123,857 107,731 - - 107,731 Other 121,521 - - 121,521 50,686 - - 50,686 Staff training and meetings 101,827 - - 101,827 82,257 - - 82,257 General liability insurance 100,802 - - 100,802 97,227 - - 97,227 Transportation 70,650 - - 70,650 71,229 - - 71,229 Wraparound 51,821 - - 51,821 65,758 - - 65,758 Building and equipment leases 39,141 - - 39,141 39,379 - - 39,379 Amortization 14,089 - - 14,089 14,089 - - 14,089 Housekeeping and medical supplies 4,392 - - 4,392 22,407 - - 22,407

Total expenses 22,727,690 - - 22,727,690 21,694,924 - - 21,694,924

CHANGES IN NET ASSETS 581,860 (13,694) - 568,166 406,350 (32,092) 500 374,758

NET ASSETS, BEGINNING OF YEAR 3,170,966 53,695 24,205 3,248,866 2,764,616 85,787 23,705 2,874,108

NET ASSETS, END OF YEAR 3,752,826$ 40,001$ 24,205$ 3,817,032$ 3,170,966$ 53,695$ 24,205$ 3,248,866$

2015

THE LEARNING CENTER FOR THE DEAF, INC.Statements of Activities and Changes in Net AssetsFor the Years Ended June 30, 2016 and 2015

2016


2016 2015

CASH FLOWS FROM OPERATING ACTIVITIES:Change in net assets 568,166$ 374,758$ Adjustments to reconcile change in net assets to net cash

provided by operating activities:Depreciation 616,152 622,790 Amortization 14,089 14,089 Loss on disposal of property and equipment 1,878 - In-kind donated investments (5,225) (7,892) Change in allowance for doubtful accounts 76,760 - Net realized and unrealized (gains) losses on investments (114,459) 5,167

Change in net assets adjusted for depreciation, amortization,In-kind donated investments and net realized and unrealized (gains) losses on investments 1,157,361 1,008,912

Changes in assets and liabilities:(Increase) decrease in:

Accounts receivable - student tuition (135,713) 38,890 Contributions receivable 15,479 7,680 Prepaid expenses and other assets (119,994) (39,673) Other assets - (1,500)

Increase (decrease) in:Accounts payable 7,643 116,610 Accrued expenses (13,732) 366,250 Employee withholdings (840) (5,387) Deferred revenue (120,455) 249,856 Student funds held in trust 5,475 (8,292)

Net cash provided by operating activities 795,224 1,733,346

CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of investments (3,298,905) (1,523,189) Proceeds from sale of investments 2,629,312 - Acquisition of property and equipment (412,232) (271,247)

Net cash used in investing activities (1,081,825) (1,794,436)

CASH FLOWS FROM FINANCING ACTIVITIES:Payments on obligation under capital lease (14,822) (7,781) Payments on bonds payable (321,701) (312,056)

Net cash used in financing activities (336,523) (319,837)

NET DECREASE IN CASH AND CASH EQUIVALENTS (623,124) (380,927)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,033,038 1,413,965

CASH AND CASH EQUIVALENTS, END OF YEAR 409,914$ 1,033,038$

THE LEARNING CENTER FOR THE DEAF, INC.Statements of Cash FlowsFor the Years Ended June 30, 2016 and 2015


2016 2015

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the year for:

Interest 393,283$ 416,010$

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

In-kind donated investments 5,225$ 7,892$

Property and equipment purchased 632,232$ 315,713$ Property and equipment financed through capital lease obligation - (44,466) Property and equipment financed through long-term debt (220,000) -

412,232$ 271,247$

THE LEARNING CENTER FOR THE DEAF, INC.Statements of Cash Flows…continuedFor the Years Ended June 30, 2016 and 2015


THE LEARNING CENTER FOR THE DEAF, INC. Notes to Financial Statements June 30, 2016 and 2015

1. ORGANIZATION

The Learning Center for the Deaf, Inc. (the “Organization”) is a national leader in educational, therapeutic, and community services for deaf and hard of hearing children and adults. The Organization is headquartered in Framingham, Massachusetts, and is the largest provider of services to deaf and hard of hearing children in New England and the largest employer of the deaf in Massachusetts. Through all of its programs, the Organization provides direct service to more than 1,500 children and adults annually.

Educational Services – The Organization delivers a full spectrum of educational services to empower deaf and hard of hearing children of all ability levels to achieve their full potential. Services include:

Parent Infant Program – The Parent Infant Program provides support and training for deaf and hard of hearing children and their parents/guardians in a language-rich, bilingual-bicultural environment. Families, referred through local Early Intervention centers, can participate in parent support groups, child playgroups, home visits, individual sessions with a licensed Speech/Language Pathologist, and classes in American Sign Language. Services received will be incorporated into a child’s Individual Family Service Plan (“IFSP”).

Marie Philip School – a Pre-K – 12+ school provides highly individualized instruction

and a broad range of support services to over 200 deaf and hard of hearing students in a language-rich, bilingual-bicultural environment where language and communication are keys to building competence, character and community. The program includes day and boarding options, an Honors Program, a Functional Academic Program, and a Career Technology Education program. Support services include speech-language pathology, occupational therapy, physical therapy, educational audiology, behavioral analysis, and counseling support.

Public School Partnerships – The Public School Partnership program addresses the

specific needs of students with hearing aids and cochlear implants who attend public schools, providing a support system for monitoring deaf and hard of hearing students' academic and developmental progress. The program assists districts in complying with the Individuals with Disabilities Education Act (“IDEA”), Americans with Disabilities Act (“ADA”) and Section 504 of the Rehabilitation Act (“504 plans”) for deaf and hard of hearing students in the classroom. Currently, the Public School Partnership program serves over 200 students in 66 towns and 50 school districts.


1. ORGANIZATION…continued Therapeutic Services – The Organization offers a continuum of therapeutic services that provide highly individualized care and therapy to deaf and hard of hearing children and adults facing social and emotional challenges. Services include:

Walden School – Walden School is a nationally recognized bilingual-bicultural

residential program that provides comprehensive treatment and educational services for deaf and hard of hearing children and adolescents between the ages of eight to 22. Walden School students are challenged by severe social and emotional difficulties, and have significant treatment needs that have not been successfully addressed in other academic and residential settings.

Walden Community Services – Walden Community Services (“WCS”) provides community-based mental health services for families with a deaf member. WCS provides linguistically accessible, culturally authentic clinical services. WCS has offices in Framingham and Springfield and offers a variety of services including Therapeutic Mentoring (“TM”), Family Support and Training (“FS&T”) with a Family Partner (“FP”), Intensive Care Coordination (“ICC”), and In Home Therapy (“IHT”).

Community Services – The Organization offers a range of community services designed to empower, educate, and engage deaf, hard of hearing, and hearing people in the Metro West area and beyond. Services include:

Audiology Clinic – The Community Audiology Clinic at The Learning Center for the Deaf provides comprehensive audiology and hearing aid services to residents of the Metro West and beyond. All proceeds from the services provided and products sold benefit the children being served at The Learning Center for the Deaf.

ASL Classes – In our Community American Sign Language (“ASL”) Classes, teens and

adults learn ASL from deaf and fluent ASL users. Each 10-week session teaches ASL and deaf culture in a dynamic and engaging classroom setting.

Interpreting Services – The Learning Center for the Deaf offers fee-based interpreting

services and consultation for local businesses, schools, and local and state agencies. It is currently the only private agency that has a contract with the state through the Massachusetts Commission for the Deaf and Hard of Hearing.


1. ORGANIZATION…continued

Culture and Research Services – The Organization is committed to ongoing research and activities that promote and enhance deaf culture and ASL. Services include:

Center for Research and Training – The Center for Research and Training (the “Center”) has developed sophisticated ASL assessment tools to help determine a child’s linguistic proficiency in ASL and works with schools across the country to implement the assessments. The Center also provides school management consultation and professional development programs to schools. The Center has an ongoing partnership with Boston University.

Signing for Success – The Signing for Success program provides ASL classes and private

tutoring for families with deaf and hard of hearing children and provides workshops and presentations related to ASL and Deaf culture for families and for professionals who work with deaf and hard of hearing students in order to build awareness for the benefits of early language acquisition and to demonstrate the value of fully accessible education and recreational opportunities for deaf and hard of hearing students who communicate primarily in ASL.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting – The financial statements of the Organization have been prepared on the accrual basis. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.

Classification and Reporting of Net Assets – The Organization follows the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Subtopic Presentation of Financial Statements for Not-For-Profit Entities. The Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Net assets of the Organization and change therein are classified and reported as follows:

Unrestricted net assets – Net assets of the Organization that are neither permanently restricted nor temporarily restricted by donor-imposed stipulations. Unrestricted net assets include expendable funds available for support of the Organization, as well as funds invested in property, plant and equipment and board-designated amounts.

Temporarily restricted net assets – Net assets subject to donor-imposed stipulations that will be met by actions of the Organization and/or passage of time.

Permanently restricted net assets – Net assets subject to donor-imposed stipulations that must be maintained permanently by the Organization. Generally, the donors of these assets permit the Organization to use all or part of the income earned on related investments for general or specific purposes.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…continued Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents – Cash and cash equivalents include all highly liquid instruments purchased with a maturity of three months or less. Accounts Receivable – Accounts receivable are carried at original invoice amount less an estimate for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. Bad debts are written off against the allowance when identified. Recoveries of trade receivables previously written off are recorded when received. An account receivable is considered past due if any portion of the receivable balance is outstanding greater than 60 days. Revenues – Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets by fulfillment of the donor-stipulated purpose or by passage of the stipulated time period are reported as net assets released from restrictions. The programs of the Organization are supported principally by contracts with various agencies of the Commonwealth of Massachusetts, as well as other states. Therefore, the Organization is subject to the regulations of the Massachusetts Operational Services Division. Revenue is recorded by the individual programs at the rates approved by the Massachusetts Operational Services Division.

Excess of revenue over expenses from Commonwealth of Massachusetts supported programs, up to certain defined limits, can be utilized by the Organization for expenditures in accordance with its exempt purposes, provided that such expenditures are reimbursable under the Operational Services Division’s regulations. Amounts in excess of these limits are subject to negotiated use or potential recoupment.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…continued Contributions – Contributions, including unconditional promises to give, are recognized as revenues in the period the promise is received. Conditional promises to give are not recognized until they become unconditional, that is, at the time when the conditions on which they depend are substantially met. Contributions of assets other than cash are reported at their estimated fair value. Contributions to be received after one year are discounted at an appropriate rate commensurate with the risk involved. Amortization of the discount is recorded as additional contribution revenue in accordance with donor-imposed restrictions, if any. An allowance for uncollectible contributions receivable is provided based upon management's judgment of potential defaults. The determination includes such factors as prior collection history, type of contribution and nature of fundraising activities. Contributions received with donor-imposed restrictions that are fulfilled in the same year as received are reported as unrestricted support. Contributions of land, buildings and equipment without donor stipulations concerning the use of such long-lived assets are reported as revenues of the unrestricted net asset class. Contributions of cash or other assets to be used to acquire land, buildings and equipment with stipulations are reported as revenues of the temporarily restricted net asset class; the restrictions are considered to be released at the time of acquisition of such long-lived assets.

Contributions of services that create or enhance non-financial assets or that require specialized skills, which are provided by individuals possessing those skills and would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received. From time to time, items are donated to the Organization for use in fundraising efforts. These items are recorded at fair value with a corresponding offset to the related expense category. A significant portion of the Organization’s activities is conducted by unpaid officers, board members and volunteers. The value of administrative volunteer contributed time is not reflected in the accompanying financial statements since their time does not meet the criteria necessary for recognition.

Investments – Investments, which consist of money market funds, mutual funds, exchange traded funds, government bonds, insurance company general contracts, common stocks, and corporate bonds, are measured at fair value in the accompanying statements of financial position. Investment income (including realized and unrealized gains and losses on investments, interest and dividends) is included in operating income (loss).

Endowment – The Organization’s endowment includes funds designated by the board of trustees to function as endowments. As required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by the board of trustees to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…continued Endowment …continued

Interpretation of Relevant Law The Organization follows FASB ASC Section 958-205-45, “Other Presentation Matters”, in regard to reporting endowment funds. This section provides guidance on the net asset classification of donor-restricted endowment funds for a not-for-profit organization that is subject to an enacted version of Uniform Prudent Management of Institutional Funds Act (“UPMIFA”).

Return Objectives and Risk Parameters The Organization has employed investment and spending strategies for donor-restricted and board- designated funds that, over the long term, is expected to enhance the real purchasing power of the Organization’s assets while not impairing its ability to meet current obligations. Endowment assets represent both donor-restricted funds as well as those unrestricted funds that the board of trustees has designated as long-term assets with similar strategic goals as donor-endowed funds for financial statements purposes. Under this strategy, as approved by the board of trustees, the endowment assets are invested in a manner that is intended to maintain these funds in perpetuity and produce results that compare favorably with the results achieved by investment managers of endowment funds with similar investment objectives while assuming a moderate level of investment risk. Actual returns in any given year may vary. Spending Strategy and How the Investment Objectives Relate to Spending Strategy The Organization currently reinvests all earnings of the endowment assets. Any expenditures from the endowment assets must be supported by the board of trustees and be consistent, with the intent of donors and the board for that fund. This is consistent with the Organization’s objective to ensure that the future growth of the endowment assets is sufficient to offset normal inflation plus reasonable spending, thereby preserving the constant dollar value and purchasing power of the endowment assets held for future operations as well as to provide additional real growth through new gifts and investment return. The Organization’s policy is to annually distribute 4% of the trailing three-year average of the endowment’s total asset value, with the expectation that, over time, the total real return (return net of inflation) from investments will exceed the endowment’s pay-out rate, thus allowing for real growth of endowment assets. During the years ended June 30, 2016 and 2015, no amounts were spent from the endowment.

Fair Value Measurement – The Organization follows the provisions of FASB ASC Topic Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Under the standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Fair Value Measurement Topic establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. The three levels of the fair value hierarchy are described below.

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or

liabilities.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…continued

Fair Value Measurement…continued

Level 2 – Observable inputs other than Level 1 inputs that are either directly or indirectly observable.

Level 3 – Unobservable inputs based on the Organization’s assessment of the assumptions that market participants would use in pricing the asset or liability.

The following is a description of the valuation methodologies used for asset investments measured at fair value, as well as the general classification pursuant to the valuation hierarchy. There have been no changes in the methodologies used at June 30, 2016 and 2015.

Money market funds – The fair value of the money market fund is based on quoted net asset values of the shares held at year end. These securities are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied.

Mutual funds, exchange traded funds, government bonds, common stocks, and corporate bonds – The fair value of mutual funds, exchange trade funds, government bonds, common stocks, and corporate bonds is based on quoted net asset values of the shares held at year end. These securities are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied.

Insurance company general contracts – The TIAA Traditional Annuity is a fixed annuity contract that is fully and unconditionally guaranteed by Teachers Insurance and Annuity Association of America (“TIAA”), a New York domiciled non-profit legal reserve life insurance company. During the accumulation phase, the TIAA Traditional Annuity provides a guarantee of principal, a guaranteed minimum rate of interest (generally 3%, but in some recent contracts between 1% and 3%), and the potential for additional interest if declared by TIAA. Additional interest, when declared, remains in effect for the “declaration year,” which begins each March 1. Additional interest is not guaranteed for future years. When the accumulation in TIAA Traditional is converted to an annuity based on life expectancy, the present value of the stream of payments is equal to the accumulation.

The TIAA Traditional Annuity is reported at contract value. At June 30, 2016 and 2015, the contract value approximates fair value and therefore no contract adjustment was deemed necessary. The contract value of the TIAA Traditional Annuity equals the accumulated cash contributions and interest credited to the plan’s contracts, less any withdrawals. The TIAA Traditional Annuity is not available for sale or transfer on any securities exchange. Accordingly, transactions in similar investment instruments are not observable.

While transactions involving the purchases/sales of individual TIAA Traditional contracts are not observable in a public marketplace, contract value has historically approximated fair value and thus no contract adjustment is necessary in the accompanying statements of financial position. The Organization has provided no reserves against such contract value for credit risk of the contract issuer.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…continued

Fair Value Measurement…continued – The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of the certain financial instruments could result in a different fair value measurement at the reporting date. Property, Plant and Equipment – Property, plant and equipment are stated at cost if purchased, or if donated, at fair value on date of donation. Major renewals, additions and betterments are charged to the property accounts while replacements and maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed in the year incurred. Depreciation of property and equipment is provided over the estimated useful life of the respective assets on a straight-line basis as follows:

Buildings and improvements 5-40 Furniture and equipment 3-10 Motor vehicles 3-5 Playground 10

Valuation of Long-Lived Assets – The Organization accounts for the valuation of long-lived assets in accordance with the FASB ASC Topic Property, Plant and Equipment. The FASB ASC Topic Property, Plant and Equipment requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reportable at the lower of the carrying amount or fair value, less costs to sell. At June 30, 2016 and 2015, the Organization has determined that no long-lived assets are impaired.

Deferred Financing Fees – Bond issuance costs are amortized over the term of the bond using the straight-line method. Accounting principles generally accepted in the United States of America require that the effective interest method be used to recognize amortization of financing fees; however, the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective interest method. Amortization expense related to the deferred financing fees for each of the years ended June 30, 2016 and 2015, was $14,089. Tax Status – The Organization is exempt from federal and state income taxes under Section 501(c) (3) of the Internal Revenue Code; as such, this entity is exempt from federal income taxes pursuant to Section 501(a) of the Internal Revenue Code and no provision for income taxes has been included in the accompanying financial statements.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…continued Tax Status…continued – The Organization accounts for uncertain tax positions in accordance with FASB ASC Topic Income Taxes. The Topic prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return. The Topic also provides guidance on recognition, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At June 30, 2016 and 2015, management believes that the Organization has no material uncertain tax positions. The Organization files informational tax returns in the U.S. Federal and Massachusetts State jurisdictions. Advertising – The Organization’s policy is to expense advertising costs as incurred. For the years ended June 30, 2016 and 2015, the Organization incurred $16,548 and $1,304, respectively, for advertising costs.

Concentration of Credit Risk – The Organization maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Organization has not experienced any losses in such accounts. The Organization believes it is not exposed to any significant credit risk on cash and cash equivalents.

Functional Expenses – Functional expenses are allocated to the various programs based on direct expenses, which can be identified to the programs, and indirect expenses, which are beneficial to more than one program. The indirect expenses are allocated based upon a cost allocation plan using appropriate methods such as time studies, square footage, etc.

Subsequent Events – The Organization has evaluated all events subsequent to the statement of financial position date of June 30, 2016, through the date which the financial statements were available to be issued, November 9, 2016, and has determined that there are no subsequent events that require disclosure under FASB ASC Topic Subsequent Events.

3. RELATED PARTY TRANSACTION

In October 2002, the Organization entered into a consulting arrangement with a board member who became Emeritus member during 2013. The initial contract was for a two-year period, and has been self-renewing annually thereafter. The Organization paid consulting fees of $26,500 to this board member for each of the years ended June 30, 2016 and 2015.

4. CONTRIBUTIONS RECEIVABLE

Contributions receivable consisted of the following at June 30, 2016 and 2015: 2016 2015 Gross contributions receivable $ - $ 15,479

Less: current portion - 15,479 Contribution receivable, net of current portion $ - $ -


5. FAIR VALUE MEASUREMENT

The following fair value hierarchy table presents information about the Organization’s investments measured at fair value on a recurring basis as of June 30, 2016:

Level 1 Level 2 Level 3 Fair Value

Money market funds $ 3,274,839 $ - $ - $ 3,274,839 Mutual funds:

Large blend 236,974 - - 236,974 Mid blend 62,538 - - 62,538 Mid cap 54,801 - - 54,801 Large cap 53,685 - - 53,685 Small cap 49,205 - - 49,205 Large growth 39,126 - - 39,126 Large value 9,994 - - 9,994 International equity 8,133 - - 8,133 Mid growth 3,543 - - 3,543 Intermediate-term 2,353 - - 2,353

Exchange traded funds 360,247 - - 360,247 Government bonds 66,291 - - 66,291 Insurance company

general contracts - - 64,903 64,903 Common stocks:

Financial 12,199 - - 12,199 Consumer goods 11,438 - - 11,438 Technology 6,172 - - 6,172 Basic materials 5,048 - - 5,048 Healthcare 4,162 - - 4,162 Industrial goods 3,050 - - 3,050 Utilities 1,784 - - 1,784 Specialty realty 1,195 - - 1,195 Telecommunication 1,050 - - 1,050

Corporate bonds 39,257 - - 39,257 Total $ 4,307,084 $ - $ 64,903 $ 4,371,987


5. FAIR VALUE MEASUREMENT…continued The following table provides a summary of changes in fair value of the Level 3 investments for the year ended June 30, 2016:

Insurance Company General Contracts

Balance, July 1, 2015 $ 77,646 Contributions 4,500 Dividend income 216 Total gains or losses (realized and unrealized)

included in the statement of activities 2,096 Transfers out (19,555)

Balance, June 30, 2016 $ 64,903

The following fair value hierarchy table presents information about the Organization’s investments measured at fair value on a recurring basis as of June 30, 2015:

Level 1 Level 2 Level 3 Fair Value

Money market funds $ 2,756,257 $ - $ - $ 2,756,257 Mutual funds:

Large blend 268,145 - - 268,145 Large cap equity 198,225 - - 198,225 Large growth 45,095 - - 45,095 Mid cap value 27,644 - - 27,644 Large value 24,543 - - 24,543 Mid blend 23,054 - - 23,054 Small cap equity 22,599 - - 22,599 Mid cap growth 14,348 - - 14,348 International equity 9,311 - - 9,311 Mid growth 2,991 - - 2,991 Fixed income 2,228 - - 2,228

Exchange traded funds 111,107 - - 111,107 Insurance company

general contracts - - 77,646 77,646 Common stocks:

Financial sector 37,538 - - 37,538 Basic materials 10,070 - - 10,070

Total $ 3,553,155 $ - $ 77,646 $ 3,630,801


5. FAIR VALUE MEASUREMENT…continued The following table provides a summary of changes in fair value of the Level 3 investments for year ended June 30, 2015:

Insurance Company General Contracts

Balance, July 1, 2014 $ 67,299 Contributions 8,100 Dividend income 224 Total gains or losses (realized and unrealized)

included in the statement of activities 2,023 Balance, June 30, 2015 $ 77,646

6. INVESTMENTS The Organization’s investments at June 30, 2016 and 2015, are as follows: 2016

Fair Unrealized Value Cost Gain/(Losses)

Money market funds $ 3,274,839 $ 3,274,839 $ - Mutual funds 520,352 519,947 405 Exchange traded funds 360,247 348,396 11,851 Government bonds 66,291 62,877 3,414 Insurance company general contracts 64,903 63,206 1,697 Common stocks 46,098 50,267 (4,169) Corporate bonds 39,257 37,144 2,113

$ 4,371,987 $ 4,356,676 $ 15,311

2015 Fair Unrealized Value Cost Gain

Money market funds $ 2,756,257 $ 2,756,257 $ - Mutual funds 638,183 616,449 21,734 Exchange traded funds 111,107 110,879 228 Insurance company general contracts 77,646 75,624 2,022 Common stocks 47,608 35,224 12,384

$ 3,630,801 $ 3,594,433 $ 36,368


6. INVESTMENTS…continued The composition of the investment return as reported in the accompanying statements of activities for the years ended June 30, 2016 and 2015, consisted of the following:

2016 2015 Interest and dividends $ 19,042 $ 30,775Investment expense (5,816) (1,301)Net realized and unrealized gains (losses) on investments 114,459 (5,167)

$ 127,685 $ 24,307

7. ENDOWMENT

The Organization endowment includes donor-imposed and Board of Trustees endowment funds. As required by generally accepted accounting principles, the Organization classifies the original value of gifts restricted by donors for permanent endowment as permanently restricted net assets. The remaining portion of the donor-restricted endowment funds, which typically includes earnings on endowment assets, is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by “UPMIFA”. Endowment Net Asset Composition by Type of Fund as of June 30, 2016

Temporarily Permanently Unrestricted Restricted Restricted Total Donor-restricted

endowment funds $ - $ 16,400 $ 24,205 $ 40,605 Board-designated endowment funds 485,542 - - 485,542 Total funds $ 485,542 $ 16,400 $ 24,205 $ 526,147


7. ENDOWMENT…continued

Changes in Endowment Net Assets for the Year Ended June 30, 2016 Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets,

beginning of year $ 177,384 $ 14,615 $ 24,205 $ 216,204 Investment return:

Investment income 9,420 2,061 - 11,481 Net appreciation

(realized and unrealized) 3,496 765 - 4,261 Investment expense (4,758) (1,041) - (5,799)

Investments return, net 8,158 1,785 - 9,943 Other changes:

Transfers in 300,000 - - 300,000 Total other changes 300,000 - - 300,000 Endowment net assets,

end of year $ 485,542 $ 16,400 $ 24,205 $ 526,147

Endowment Net Asset Composition by Type of Fund as of June 30, 2015

Temporarily Permanently Unrestricted Restricted Restricted Total Donor-restricted

endowment funds $ - $ 14,615 $ 24,205 $ 38,820 Board-designated endowment funds 177,384 - - 177,384 Total funds $ 177,384 $ 14,615 $ 24,205 $ 216,204


7. ENDOWMENT…continued

Changes in Endowment Net Assets for the Year Ended June 30, 2015

Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets,

beginning of year $ 76,211 $ 14,027 $ 23,705 $ 113,943 Investment return:

Investment income 1,759 883 - 2,642 Net appreciation

(realized and unrealized) 280 140 - 420 Investment expense (866) (435) - (1,301)

Investments return, net 1,173 588 - 1,761 Other changes:

Transfers in 100,000 - - 100,000 Contributions - - 500 500

Total other changes 100,000 - 500 100,500 Endowment net assets,

end of year $ 177,384 $ 14,615 $ 24,205 $ 216,204 8. BOARD-DESIGNATED

The board of trustees has designated unrestricted net assets for both long-term purposes and short- term reserve purposes. The long-term purposes include board-designated endowment funds. For financial reporting purposes, net assets associated with endowment funds, include unrestricted funds designated by the board of trustees to function similarly to endowments. The board also has designated a portion of unrestricted net assets as board-designated reserve funds to support multiple purposes that are generally shorter term in nature than endowment including: operations of the Organization, capital expenditures, special projects, one-time expenses and other initiatives that support the mission of the Organization. During the year ended June 30, 2016, the board didn’t approve the use of board-designated reserves to be used in operations. During the year ended June 30, 2015, the board approved a $300,000 transfer of board-designated reserves to be used in operations.


8. BOARD-DESIGNATED…continued Board-designated consisted of the following at June 30, 2016 and 2015: 2016 2015 Board-designated endowment $ 485,542 $ 177,384Reserves 3,015,083 2,535,749

Total board-designated $ 3,500,625 $ 2,713,133 9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at June 30, 2016 and 2015: 2016 2015 Land $ 908,916 $ 908,916Buildings and improvements 18,127,493 17,630,219Furniture and equipment 2,043,589 1,905,009Motor vehicles 482,634 473,285Playground 137,481 137,481Construction in progress - 59,138 Total cost 21,700,113 21,114,048Less: accumulated depreciation 10,256,879 9,685,016

Property, plant and equipment, net $ 11,443,234 $ 11,429,032

Depreciation expense for the years ended June 30, 2016 and 2015, totaled $616,152 and $622,790, respectively.

10. LINE OF CREDIT

At June 30, 2016 and 2015, the Organization has a line of credit with total borrowing capacity of the lesser of $2,000,000 or 80% of eligible accounts receivables as defined in the agreement. Advances bear interest at the bank’s prime rate. The rate in effect at June 30, 2016 and 2015, was 3.50% and 3.25%, respectively. The line is secured by substantially all assets of the Organization. At June 30, 2016 and 2015, there was no outstanding balance on the line of credit. The agreement also contains certain financial statement covenants. At June 30, 2016, the Organization was in compliance. The line of credit expires on March 31, 2017.


11. BONDS PAYABLE

Bonds payable consisted of the following at June 30, 2016 and 2015: 2016 2015 In March 2012, the Organization amended the original $9,000,000 bond payable through the Massachusetts Development Finance Agency (“MDFA”), Series A. Starting March 2, 2012, interest is fixed at a rate of 3.25% through September 25, 2019. Thereafter, the interest rate shall be readjusted for each subsequent 10-year period for the remaining term of the bond based on the Federal Home Loan Bank of Boston 10/20 Amortizing Advance Rate plus 2.50%. The bond is payable in monthly principal and interest installments of $41,987 through September 2039. The bond is secured by all assets of the Organization.

$ 8,173,978

$ 8,403,601

In March 2012, the Organization amended the original $3,600,000 bond payable through MDFA; Series B funded the construction of an early childhood center and library completed in May 2011. Starting March 2, 2012, interest is fixed at a rate of 3.25% through May 14, 2020. Thereafter, the interest rate shall be readjusted for each subsequent 10-year period for the remaining term of the bond based on the Federal Home Loan Bank of Boston 10/20 Amortizing Advance Rate plus 2.50%. The bond is payable in monthly principal and interest installments of $16,796 through May 2040. The bond is secured by all assets of the Organization.

3,318,381

3,410,459

11,492,359 11,814,060Less: current portion 331,479 319,727

$ 11,160,880 $ 11,494,333


11. BONDS PAYABLE…continued

Maturities of the bonds payable for the years ending June 30, are as follows: Year ending June 30: Amount

2017 $ 331,4792018 342,5692019 354,0292020 364,9412021 378,099Thereafter 9,721,242

$ 11,492,359

12. LONG-TERM DEBT

In June 2016, the Organization entered into a $220,000, promissory note with a bank for the purpose of purchasing a single family home at 330 Prospect Street, Framingham, Massachusetts. The interest rate is 3.99% with principal and interest payable in monthly installments of $1,167 through May 2026 with a balloon payment of $158,429 in June 2026. At June 30, 2016, the principal balance outstanding on the long-term debt was $220,000. Maturities of the long-term debt for the years ending June 30, are as follows: Year ending June 30: Amount

2017 $ 5,2242018 5,4142019 5,6372020 5,8472021 6,110Thereafter 191,768

$ 220,000

13. CAPITAL LEASE OBLIGATION

During the year ended June 30, 2015, the Organization entered into a lease agreement which is required to be recorded as capital lease obligations under FASB ASC Topic Leases. The lease is for certain computer equipment and expires in January 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are amortized over their estimated useful lives. The amortization of these assets is included in depreciation expense.


13. CAPITAL LEASE OBLIGATION…continued

The following is a summary of property held under capital lease at June 30, 2016 and 2015:

2016 2015

Computer equipment $ 44,466 $ 44,466 Less: accumulated depreciation 15,069 6,175 $ 29,397 $ 38,291

Minimum future lease payments under the capital lease for the years ending June 30, are as follows:

2017 $ 17,2072018 7,933 Total minimum lease payments 25,140Less: amounts representing interest 2,126 Present value of future minimum lease payments 23,014Less: current portion 15,403 $ 7,611

14. COMMITMENTS

The Organization leases an operating facility in Framingham, Massachusetts, as a tenant at will. Lease expense for each of the years ended June 30, 2016 and 2015, was $22,800. During 2016, the Organization entered into a sub-lease agreement for an operating facility in Springfield, Massachusetts. The agreement provides for a base rental of $365 per month and a monthly cleaning fee of $100. The agreement is effective until June 30, 2017, and will repeat for one year term unless either party opts to terminate the agreement. The lease expense for the year ended June 30, 2016, was $3,644. The Organization has a lease agreement for an office space in Framingham, Massachusetts. The agreement provides for a base rental of $700 per month. The agreement was effective until June 2017 with an option to extend the lease for two years at the end of the term; however, this lease has been terminated in June 2016 as the Organization has since purchased this office space located in Framingham, Massachusetts. Lease expense for the years ended June 30, 2016 and 2015, was $8,400. The Organization has an agreement with a company for facilities maintenance services for the Framingham, Massachusetts, campus. Under the agreement terms, the Organization will pay a monthly fee of $33,803 with gradual increases. The amount of the monthly fee for the years ended June 30, 2016 and 2015, was $36,409 and $35,521, respectively. The agreement is effective until June 30, 2019, with a standard termination clause. Thereafter, the agreement will continue unless both parties decide to terminate the agreement. Expense paid to this company for the years ended June 30, 2016 and 2015, was $436,908 and $426,252, respectively.


14. COMMITMENTS…continued

The Organization has an agreement with a company for food services for the Framingham, Massachusetts, campus. The Organization reimburses the company for actual cost for providing food, operating supplies, and personnel. In addition, a management fee of $2,483 and an administrative fee of $1,016 is paid monthly. The agreement is effective until August 2017, with a standard termination clause. Expenses paid to this company for the years ended June 30, 2016 and 2015, was $444,692 and $424,346, respectively.

The Organization has an agreement with a company for custodial management services for the Framingham, Massachusetts, campus. Under the agreement, the Organization paid a monthly fee of $13,549 which has since increased to $13,888 during the year. The agreement is effective until January 1, 2020, with a standard termination clause. Thereafter, the agreement will continue unless both parties decide to terminate the agreement. Expense paid to this company for the years ended June 30, 2016, and 2015, was $162,744 and $81,294, respectively. During 2016, the Organization entered into an agreement with the same company that performs the custodial management services for cleaning services at 330 Prospect Street in Framingham, Massachusetts. Under the agreement terms, the Organization will pay an annual fee of $15,771, the first year and thereafter the annual fee will be increased by 3% each year until expiration of the agreement. The agreement is effective until February 2019. Expenses paid to this company for the year ended June 30, 2016, was $7,886. Total minimum future payments under these agreements for the years ending June 30, are as follows: Year ending June 30: Amount

2017 $ 1,081,003 2018 722,106 2019 648,631 2020 83,328

$ 2,535,068 15. TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets consisted of the following as of June 30, 2016 and 2015: 2016 2015 Purpose restrictions: Time restricted $ - $ 15,479 Appreciation on permanently restricted net assets (Note 7) 16,400 14,615 Various programs 23,601 23,601

$ 40,001 $ 53,695


16. PERMANENTLY RESTRICTED NET ASSETS

Permanently restricted net assets consisted of an endowment totaling $24,205 at June 30, 2016 and 2015. The balance as of June 30, 2016 and 2015, includes $10,955 in the Staff Appreciation Chris Huggins Fund.

17. NET ASSETS RELEASED FROM RESTRICTIONS

Net assets released from donor restrictions by incurring expenses or costs satisfying the restricted purposes or by occurrence of events specified by the donors were as follows:

2016 2015

Campaign for Learning $ 15,479 $ 23,159Various programs - 25,000

$ 15,479 $ 48,159

18. RETIREMENT PLAN

The Organization has a defined contribution retirement plan (the “Plan”) for substantially all faculty, administrative and staff employees. The Plan is designed in accordance with the provisions of Section 403(b) of the Internal Revenue Code. Contributions are made by the Organization and the participants to the Teachers’ Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF), the Plan’s investment custodian, based on participant elections. Under the Plan, employees may contribute up to the IRS indexed maximum amount for each calendar year. In addition, the Organization makes matching contributions to all eligible participants of the Plan and can also make additional contributions at the discretion of the board of trustees. Contributions to this Plan totaled $267,647 and $255,593 for the years ended June 30, 2016 and 2015, respectively.

19. DEFERRED COMPENSATION PLAN

During the fiscal year 2003, the Organization adopted a deferred compensation plan subject to Internal Revenue Code 457(b) for executives of the Organization. A participant is fully vested in all its contributions credited to their account. The Organization is funding the plan through various investments, including money market funds, mutual funds and insurance company general contract. Total contributions for the years ended June 30, 2016 and 2015, amounted to $58,750 and $85,600, respectively, and is included in employee benefits on the accompanying statements of activities and changes in net assets. At June 30, 2016 and 2015, the deferred compensation liability was $830,757 and $878,848, respectively. The Organization established various investments to accumulate assets to fund the future deferred compensation payments. These investments are part of the general assets of the Organization and the executives of the Organization do not have secured interest in them. However, since the Organization’s intention is to use these investments only to fund future deferred compensation payments, the investments are included in investments in the deferred compensation plan. The market value of these investments at June 30, 2016 and 2015, was $830,757 and $878,848, respectively.


20. FUNCTIONAL EXPENSES Expenses by functional classification for the years ended June 30, 2016 and 2015, consisted of the following:

2016 2015

Program services $ 20,746,533 $ 19,963,699Fundraising 226,944 307,037Administration 1,754,213 1,424,188

$ 22,727,690 $ 21,694,924 Depreciation and amortization, interest, operations and maintenance expenses have been allocated to functional classifications based on building square footage.

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Board of Trustees The Learning Center for the Deaf, Inc. Framingham, Massachusetts We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of The Learning Center for the Deaf, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and changes in net assets and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated November 9, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered The Learning Center for the Deaf, Inc.’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of The Learning Center for the Deaf, Inc.’s internal control. Accordingly, we do not express an opinion on the effectiveness of The Learning Center for the Deaf, Inc.’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters As part of obtaining reasonable assurance about whether The Learning Center for the Deaf, Inc.’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Citrin Cooperman & Company, LLP Braintree, Massachusetts November 9, 2016

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