Bishop Lynch High School Consolidated Financial Statements by Bishop Lynch High School

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Consolidated Financial Statements and Supplementary Information June 30, 2023 and 2022

TABLE OF CONTENTS

Page No. Independent Auditor's Report

1-3

Consolidated Statements of Financial Position

Consolidated Statements of Activities

5-6

Consolidated Statements of Cash Flows

7-8

Notes to Consolidated Financial Statements

9 - 28

Supplementary Information Consolidating Statement of Financial Position - June 30, 2023 Consolidating Statement of Activities - Year Ended June 30, 2023

30 - 31 32

INDEPENDENT AUDITOR'S REPORT Board of Directors and Trustees Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Dallas, Texas Opinion We have audited the accompanying consolidated financial statements of Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust, which comprise the consolidated statements of financial position as of June 30, 2023 and 2022, and the related consolidated statements of activities and cash flows for the years then ended, and the related notes to the consolidated financial statements. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust as of June 30, 2023 and 2022, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis of Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards, we: 

Exercise professional judgment and maintain professional skepticism throughout the audit.



Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.



Obtain an understanding of internal control relevant to the audit 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 Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust's internal control. Accordingly, no such opinion is expressed.



Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.



Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Supplementary Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The information on pages 30 - 32 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

ArmaninoLLP Dallas, Texas October 30, 2023

2022

ASSETS Cash and cash equivalents Investments, at fair value Tuition and other receivables, net Contractual tuition and fees receivable, net Contributions receivable, net Grants receivable Prepaid expenses and other assets Cash restricted for acquisition of property and equipment Cash board-designated for acquisition of property and equipment Contributions receivable restricted for acquisition of property and equipment, net Property and equipment, net Contributions receivable restricted for endowment, net Endowment Cash held for investment in endowment Investments held for endowment, at fair value Total assets

6,080,599 2,915,639 720,333 14,003,729 161,408 62,382 484,387 635,444 2,714,307

6,221,590 2,549,523 711,376 12,456,493 30,274 451,159 478,848 247,873 2,484,933

882,189 33,255,361 1,325,589

644,840 34,349,211 1,774,780

124,723 10,065,690

8,909,135

73,431,780

71,310,035

320,509 96,120 320,768 3,666,631 14,003,729 7,128,277 25,536,034

295,048 86,413 362,630 4,182,518 12,456,493 7,794,949 25,178,051

LIABILITIES AND NET ASSETS Liabilities Accounts payable and other accrued liabilities Accrued payroll, taxes and benefits Deferred other revenue Deferred tuition and fees Contractual unearned tuition and fees, net Notes payable Total liabilities Net assets Without donor restrictions With donor restrictions Total net assets Total liabilities and net assets

35,378,777 12,516,969 47,895,746 $

73,431,780

35,434,707 10,697,277 46,131,984 $

71,310,035

The accompanying notes are an integral part of these consolidated financial statements. 4

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Consolidated Statement of Activities For the Year Ended June 30, 2023 Without Donor Restrictions Revenues, gains and other support Tuition and fees, net Contributions Government grants Student activities and organizations Supporting services income Realized and unrealized gains on investments, net of management fees Interest and dividends Other revenue Gain on uncollectible contributions receivable Net assets released from restriction Total revenues, gains and other support

Functional expenses Program Management and general Fundraising Total functional expenses Change in net assets Net assets, beginning of year Net assets, end of year

With Donor Restrictions

Total

17,828,594 $ 448,517 1,853,812 879,514

- $ 2,407,889 164,776 -

17,828,594 2,856,406 164,776 1,853,812 879,514

528,213 103,542 90,531 1,645,292 23,378,015

869,900 13,263 9,156 (1,645,292) 1,819,692

1,398,113 116,805 90,531 9,156 25,197,707

17,877,352 3,969,135 1,587,458 23,433,945

(55,930)

1,819,692

1,763,762

35,434,707

10,697,277

46,131,984

35,378,777

12,516,969

The accompanying notes are an integral part of these consolidated financial statements. 5

47,895,746

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Consolidated Statement of Activities For the Year Ended June 30, 2022 Without Donor Restrictions Revenues, (losses) and other support Tuition and fees, net Contributions Government grants Student activities and organizations Supporting services income Realized and unrealized losses on investments, net of management fees Interest and dividends Other revenue Loss on uncollectible contributions receivable Net assets released from restriction Total revenues, (losses) and other support

Total

16,950,917 $ 450,039 1,407,991 800,160

- $ 4,648,861 451,159 -

16,950,917 5,098,900 451,159 1,407,991 800,160

(793,253) 8,652 82,348 1,917,392 20,824,246

(1,490,877) (935) (244,918) (1,917,392) 1,445,898

(2,284,130) 7,717 82,348 (244,918) 22,270,144

Functional expenses Program Management and general Fundraising Total functional expenses

16,218,453 4,238,981 1,492,909 21,950,343

Change in net assets

(1,126,097)

1,445,898

319,801

Net assets, beginning of year

36,560,804

9,251,379

45,812,183

Net assets, end of year

With Donor Restrictions

35,434,707

10,697,277

The accompanying notes are an integral part of these consolidated financial statements. 6

46,131,984

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Consolidated Statements of Cash Flows For the Years Ended June 30, 2023 and 2022 2023 Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Depreciation (Gain) loss on uncollectible contributions receivable Realized and unrealized (gains) losses on investments, net Contributions revenue restricted for acquisition of property and equipment, net Donor restriction change in contributions receivable for property and equipment Contributions revenue restricted for endowment, net Donor restriction change in contributions receivable for endowment Changes in operating assets and liabilities Tuition and other receivables, net Contractual tuition and fees receivable, net Contributions receivable Donor restriction change in contributions receivable Grants receivable Prepaid expenses and other assets Accounts payable and other accrued liabilities Accrued payroll, taxes and benefits Deferred other revenue Deferred tuition and fees Contractual unearned tuition and fees, net Net cash provided by (used in) operating activities

Cash flows from investing activities Purchases of property and equipment Purchases of investments Proceeds from sales and maturities of investments Net cash provided by (used in) investing activities Cash flows from financing activities Principal payments on notes payable Cash collected on contributions restricted for acquisition of property and equipment Cash collected on contributions restricted for endowment Net cash provided by (used in) financing activities Net increase in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, beginning of year Cash, cash equivalents and restricted cash, end of year

1,763,762

2022 $

319,801

1,603,015 (9,156) (1,398,113)

1,715,681 244,918 2,284,130

(572,921)

(906,410)

(250,000) (532,678) 381,977

(2,423,833) -

(8,957) (1,547,236) 843 (131,977) 388,777 (5,539) 25,461 9,707 (41,862) (515,887) 1,547,236 706,452

(31,556) (1,901,605) (19,974) (451,159) (37,667) 6,786 (31,903) 130,563 (1,087,796) 1,901,605 (288,419)

(509,165) (571,343) 446,785 (633,723)

(434,801) (10,881,529) 11,972,551 656,221

(666,672)

(693,679)

562,817 631,803 527,948

199,750 465,955 (27,974)

600,677

339,828

8,954,396

8,614,568

9,555,073

8,954,396

The accompanying notes are an integral part of these consolidated financial statements. 7

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Consolidated Statements of Cash Flows For the Years Ended June 30, 2023 and 2022 2023 Cash, cash equivalents and restricted cash consisted of the following: Cash and cash equivalents Cash restricted for acquisition of property and equipment Cash board-designated for acquisition of property and equipment Cash held for investment in endowment

2022

6,080,599 635,444 2,714,307 124,723

6,221,590 247,873 2,484,933 -

9,555,073

8,954,396

282,805

253,315

Supplemental disclosure of cash flow information Cash paid during the year for interest

The accompanying notes are an integral part of these consolidated financial statements. 8

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Notes to Consolidated Financial Statements June 30, 2023 and 2022 1.

NATURE OF OPERATIONS Bishop Lynch High School, Inc. (the "School") is a nonprofit educational institution of the Roman Catholic Diocese of Dallas (the "Diocese") providing a Catholic secondary education for grades 9-12 in the Dallas, Texas area. The School began operations in September 1963 and is governed by its Board of Directors ("Board"). The School is a continuing Trustee of the Bishop Lynch High School Building and Endowment Trust, an irrevocable charitable trust ("BE Trust"). The BE Trust was established to create an endowment fund to which individual donors may transfer property and from which the BE Trust can construct, expand, equip and maintain an educational institution. The BE Trust is governed by its Trustees ("BE Trustees"). The School is a continuing Trustee of The Bishop Lynch High School Education and Endowment Trust, an irrevocable charitable trust ("EE Trust"), established to create a continuing endowment fund for the purpose of assisting, promoting, enhancing and furthering the education of students enrolled in the School and to advance and grow educational offerings. The EE Trust is governed by its Trustees ("EE Trustees"). Principles of consolidation The consolidated financial statements include the assets, liabilities and related financial activity managed by the School, as well as the accounts of the BE Trust and the EE Trust referred to herein as the "Organization". All significant intercompany transactions have been eliminated. Consolidation of the financial statements does not establish a legal ownership and is only to be utilized for financial reporting purposes.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of accounting and financial statement presentation The consolidated financial statements of the Organization have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). Net assets and changes therein are classified as follows:  Net assets without donor restrictions - Net assets available for use in general operations and not subject to donor-imposed restrictions. The Organization's governing board may designate net assets without restrictions for specific purposes.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Basis of accounting and financial statement presentation (continued)  Net assets with donor restrictions - Net assets subject to stipulations imposed by donors and grantors. Some donor restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity. Net assets with donor restrictions also include the portion of donor-restricted endowment funds that are not required to be maintained in perpetuity until such funds are appropriated for expenditure by the EE Trustees. Donor-imposed restrictions are released when a restriction expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. Revenues are reported as increases in net assets without donor restrictions unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Gains and losses on assets and liabilities are reported as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit donor restriction or by law. Expirations of restrictions on net assets (i.e., the donorstipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as transfers between the applicable classes of net assets. Cash and cash equivalents The Organization maintains cash and cash equivalents with major financial institutions. The Organization considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Periodically, cash on deposit may be in excess of federally insured limits. The Organization believes that it mitigates this risk by maintaining deposits with high credit quality institutions. The Organization has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Tuition and other receivables, net Tuition and other receivables, net includes tuition receivables for the 2022-2023 school year and prior years as well as various other school related receivables. The allowance for doubtful accounts is based on historical collection experience and an evaluation of the outstanding receivables at the end of the year. Bad debt recoveries are included in income as realized. The allowance for doubtful tuition and other receivables was $179,771 and $185,869 for the years ended June 30, 2023 and 2022, respectively.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Inventory Inventory consists principally of school store memorabilia. Inventory is stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. As of June 30, 2023 and 2022, inventory of $83,147 and $76,838, respectively, is recorded in prepaid expenses and other assets. Investments Investments are recorded at fair value. Investments received by donation are recorded at fair value at the date of donation. Net realized and unrealized gains or losses and interest and dividends are classified as increases or decreases in net assets without donor restrictions, unless their use is restricted by explicit donor restriction or by law. The Organization invests in various investment securities. Investments are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the consolidated statements of financial position. Fair value measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. U.S. GAAP requires the Organization to disclose assets and liabilities measured at fair value based on the level of observable inputs. The three levels of the fair value hierarchy are as follows:  Level 1 - Quoted prices in active markets for identical assets or liabilities. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.  Level 3 - Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect management's assumptions and best estimates based on available data.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair value measurements (continued) The Organization holds investments in equity funds, bond funds and limited partnerships which are reported at net asset value (NAV) per share (or its equivalent) as a practical expedient to determine the fair value of investments which (a) do not have a readily determinable fair value and (b) either have the attributes of an investment fund or prepare their financial statements consistent with the measurement principles of an investment fund. Valuation techniques used in fair value measurements need to maximize the use of observable inputs and minimize the use of unobservable inputs. A valuation method may produce a fair value measurement that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although management believes the valuation methods are appropriate and consistent with those used by other market participants, the use of different methodologies or assumptions could result in different fair value measurements at the reporting date. Property and equipment The BE Trust capitalizes all property and equipment with a cost greater than $5,000 and an estimated useful life in excess of one year. Property and equipment are recorded at cost or, if donated, at the estimated fair value on the date of donation. Such donations are reported as contributions without donor restrictions unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the BE Trust reports expirations of donor restrictions when the donated or acquired assets are placed in service. Maintenance and repairs are charged to expense when incurred. Major improvements are capitalized. Depreciation of property and equipment is computed using the straight-line method over the following estimated useful lives: Buildings and improvements Furniture, fixtures and equipment Vehicles

40 years 3-5 years 5-10 years

Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recovered, the BE Trust, using its best estimates and projections, reviews the carrying value of long-lived identifiable assets to be held and used in the future for impairment. No longlived assets were deemed to be impaired as of June 30, 2023 or 2022.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contributions and contributions receivable, net Contributions received are reported as net assets with or without donor restrictions, depending upon the presence or absence of donor restrictions, if any. Contributions, including unconditional promises to give, are recognized as revenues in the period the promise is received. Contributions that are promised in one year but are not expected to be collected until after the end of that year are discounted at an appropriate discount rate commensurate with the risks involved. Amortization of any such discounts is recorded as additional contribution revenue in accordance with donor-imposed restrictions, if any, on the contributions. An allowance for doubtful contributions receivable is provided based upon management's judgment including such factors as prior collection history, type of contribution and current aging of contributions receivable. The allowance for doubtful contributions receivable was and $228,762 and $273,871 for the years ended June 30, 2023 and 2022, respectively. Conditional promises to give are not recognized until they become unconditional, that is, when the barriers on which they depend are substantially overcome, or there is no longer a right of return or right of release. As of June 30, 2023 and 2022, the School has $231,293 and $133,670, respectively, of conditional funding related to government grants. Government grants and grants receivable During the year ended June 30, 2022, the School was notified by the Texas Education Agency ("TEA") of its eligibility for reimbursements, direct services and/or equipment in the amount of $584,829 as part of the Emergency Assistance to Non-Public Schools ("EANS") program under the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 ("CRRSA Act") issued by the United States Department of Education. The EANS program was created to provide services or assistance to eligible non-public schools to address the impact that coronavirus disease has had, and continues to have, on non-public school students and teachers. Funding was distributed by the TEA based on a per-student base rate, with an additional supplemental rate for each student from a low-income family. Schools receive funding by submitting applications for reimbursement for qualifying expenses that are subject to review and approval by the TEA. The TEA retains title to all assets provided. During the year ended June 30, 2023, the School incurred $133,670 in qualifying expenses and recognized related revenue of $133,670 in the accompanying consolidated financial statements. The School recognized a grant receivable of $31,276 in the consolidated financial statements related to EANS funding not received as of June 30, 2023. During the year ended June 30, 2022, the School incurred $451,159 in qualifying expenses and recognized a grant receivable and related revenue of $451,159 in the accompanying consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Government grants and grants receivable (continued) During the year ended June 30, 2023, the School was notified by the TEA of its eligibility for direct services and/or equipment in the amount of $262,399 as part of the Governor's Emergency Education Relief Fund ("GEER") Assistance to Private Schools ("GAPS") program under the American Rescue Plan Act ("ARP") issued by the United States Department of Education. The GAPS program was created to provide services or assistance to eligible non-public schools to address needs identified and caused by the coronavirus pandemic, including limited school safety related activities. The TEA works with third-party contractors to directly provide services and assistance to eligible non-public schools. The TEA retains title to all assets provided. During the year ended June 30, 2023, the School was approved for $31,106 in assets and recognized related revenue of $31,106 in the accompanying consolidated financial statements. The School recognized a grant receivable of $31,106 in the consolidated financial statements related to assets not received as of June 30, 2023. Contributed goods and services Contributed materials and equipment are reflected as contributions in the accompanying consolidated statements of activities at their estimated fair values at date of receipt. Contributed services are reflected in the consolidated financial statements at the fair value of the services received. Contributions of services are recognized if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills that are provided by individuals possessing those skills and would typically need to be purchased if not provided by donation. The Organization receives donated services from a variety of unpaid volunteers who make contributions of their time in conjunction with programs and events. No amounts have been recognized in the accompanying consolidated statements of activities because the criteria for recognition of such volunteer efforts as contributed services have not been satisfied. Revenue recognition and deferred revenue The School recognizes revenue from student tuition and fees during the year in which the related services are provided to students. The performance obligation of delivering educational services is simultaneously received and consumed by the students; therefore, the revenue is recognized ratably over the course of the academic year. Payment for tuition may be required before the start of the academic year. All tuition amounts received prior to the commencement of the academic year, including tuition deposits, are deferred and fully recognized as revenue within the next fiscal year. Financial aid provided to students is recorded as a reduction from the posted tuition at the time revenue is recognized.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition and deferred revenue (continued) Tuition and fees, net is comprised of the following as of June 30: 2023

2022

Tuition and fees Less: financial aid

21,850,503 $ (4,021,909)

20,717,487 (3,766,570)

Tuition and fees, net

17,828,594

16,950,917

Contractual tuition and fees receivable, net includes tuition and fee amounts due under fully executed student enrollment agreements, net of applicable discounts and financial aid, for the upcoming school year. Contractual unearned tuition and fees, net includes unearned tuition and fee amounts that will be collected within the next twelve months and will be satisfied through the performance obligations of delivering educational services to students during the upcoming school year. The School uses the allowance method to account for doubtful tuition and fees for the upcoming school year based on historical collection experience and an evaluation of the outstanding receivables. The allowance for doubtful tuition and fees for the upcoming school year was $362,217 and $305,244 as of June 30, 2023 and 2022, respectively, and is included within contractual tuition and fees receivable, net on the accompanying consolidated statements of financial position. Supporting services income includes the School's store sales, bussing fees, income from the School's athletic teams and revenue from various other related activities. Student activities and organizations revenue consists of fundraising income raised from the School's various student clubs and other program related dues. Revenue is recorded for supporting services and student activities at the time services are provided or goods are delivered Functional expense allocation The costs of providing program and other activities have been summarized on a functional basis in the consolidated statements of activities. Expenses, such as payroll and benefits, have been allocated among program services and supporting services based upon the employees' estimated time spent by function. Facility related costs such as depreciation, interest and utilities have been allocated based upon estimated square footage usage.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income taxes The School is organized as a single-member, Texas nonprofit corporation exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code through the annual Internal Revenue Service Group Ruling for the Catholic Church in the United States. The single member of the School is the Bishop of the Diocese. The EE Trust and BE Trust are separate 501(c)(3) organizations under the Internal Revenue Code. Accordingly, no provision for income taxes has been made in the accompanying consolidated financial statements. The Organization has evaluated its current tax positions and has concluded that as of June 30, 2023 and 2022 , the Organization does not have any significant uncertain tax positions for which a reserve would be necessary. Use of estimates The preparation of financial statements in accordance with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Uses of estimates include, but are not limited to, accounting for the allowances for doubtful accounts and contributions receivable, the estimated useful lives of property and equipment, the fair value of investments measured at NAV as a practical expedient and the allocation of expenses by function. Actual results could differ from those estimates. Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. Total net assets and change in net assets are unchanged due to these reclassifications. Subsequent events The Organization has evaluated subsequent events through October 30, 2023, the date the consolidated financial statements were available to be issued. No subsequent events have occurred that would have a material impact on the presentation of the Organization's consolidated financial statements.

LIQUIDITY AND FUNDS AVAILABLE The Organization monitors its liquidity in order to meet operating needs and other contractual commitments while maintaining sufficient resources to meet donor restrictions placed on contributed financial assets.

LIQUIDITY AND FUNDS AVAILABLE (continued) As part of the Organization's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities and other obligations come due. Although the Board does not intend to spend from its board-designated net assets, $5,063,239 of board designated funds could be made available if necessary. In addition, $2,415,400 of Quasiendowment funds could made available by the EE Trustees. The following quantitative disclosure describes assets that are available or expected to be available within one year of June 30, 2023 to fund general expenditures and obligations as they become due: Financial assets: Cash and cash equivalents Investments, at fair value Tuition and other receivables, net Contractual tuition and fees receivable, net Contributions receivable, net Grants receivable Cash restricted for acquisition of property and equipment Cash board-designated for acquisition of property and equipment Contributions receivable restricted for acquisition of property and equipment, net Contributions receivable restricted for endowment, net Cash held for investment in endowment Investments held for endowment, at fair value

882,189 1,325,589 124,723 10,065,690 39,692,032

Less amounts unavailable for general expenditure within one year due to: Cash board-designated for acquisition of property and equipment Cash restricted for acquisition of property and equipment Contributions receivable, net not due within one year Contributions receivable restricted for acquisition of property and equipment, net Contributions receivable restricted for endowment, net Quasi-endowment funds Donor-restricted endowment funds Other board-designated net assets Other purpose restricted net assets

(2,714,307) (635,444) (136,709) (882,189) (1,325,589) (2,415,400) (7,775,013) (2,348,932) (1,737,326) (19,970,909) $

6,080,599 2,915,639 720,333 14,003,729 161,408 62,382 635,444 2,714,307

19,721,123

CONTRIBUTIONS RECEIVABLE, NET Contributions receivable, net consisted of the following: 2023 Contributions receivable, net Contributions receivable restricted for acquisition of property and equipment, net Contributions receivable restricted for endowment, net

161,408

2022 $

882,189 1,325,589 $

2,369,186

30,274 644,840 1,774,780

2,449,894

A summary of contributions receivable, net as of June 30 is as follows:

Receivables due in less than one year Receivables due in one to five years Receivables due in more than five years

2023

2022

849,476 $ 1,878,647 112,647 2,840,770 (228,762) (242,822)

947,753 1,893,315 133,791 2,974,859 (273,871) (251,094)

2,369,186

2,449,894

Less: allowance for doubtful contributions Less: discounts to net present value at 5%

INVESTMENTS A summary of investments as of June 30 is as follows: 2023 Investments, at fair value Investments held for endowment, at fair value

2022

2,915,639 10,065,690

2,549,523 8,909,135

12,981,329

11,458,658

Investments consisted of the following: 2023 Equity funds Bond funds Limited partnerships

2022

2,133,322 782,317 10,065,690

1,772,252 777,271 8,909,135

12,981,329

11,458,658

FAIR VALUE MEASUREMENTS The following table sets forth by level, within the fair value hierarchy, the Organization's assets at fair value as of June 30, 2023: Level 2

Level 1

Investments measured at NAV

- $

Level 3 - $

Fair Value - $ 12,981,329 $ 12,981,329

The following table sets forth by level, within the fair value hierarchy, the Organization's assets at fair value as of June 30, 2022: Level 2

Level 1 Investments measured at NAV

- $

Level 3 - $

Fair Value - $ 11,458,658 $ 11,458,658

Investments in certain entities that are measured at fair value using NAV per share as a practical expedient are as follows at June 30, 2023: Product

NAV in Funds

Unfunded Redemption Commitments Terms Redemption Notice Period

Equity funds

$ 2,133,322

N/A

Bond funds

782,317

N/A

10,065,690

N/A

Limited partnerships

$ 12,981,329

Monthly

6 business days prior to month-end Monthly 6 business days prior to month-end Monthly - 6 15 calendar days prior to months* month-end

FAIR VALUE MEASUREMENTS (continued) Investments in certain entities that are measured at fair value using NAV per share as a practical expedient are as follows at June 30, 2022: Product

NAV in Funds

Unfunded Redemption Commitments Terms Redemption Notice Period

Equity funds

$ 1,772,252

N/A

Bond funds

777,271

N/A

8,909,135

N/A

Limited partnerships

Monthly

6 business days prior to month-end Monthly 6 business days prior to month-end Monthly - 6 15 calendar days prior to months* month-end

$ 11,458,658 *Regular redemption requests can be submitted on a monthly basis for 5% of investments in limited partnerships. Redemption requests for more than 5%, but up to 50% of the investment account must be submitted 95 calendar days prior to the withdrawal date. Not more than 50% of the investment account may be withdrawn in a single rolling three month period. A limited partner may withdraw its full capital account over a six month period. Equity funds - Funds focused on growth in equity, buyout opportunities or distressed debt. These investments are not readily redeemable; however, a secondary market does exist. Distributions normally are received through the liquidation of the underlying assets in the fund. Bond funds - Funds focused on diversifying the investment portfolio by allocating assets to other fixed income securities and strategies, including but not limited to global bonds, inflation indexed bonds, high yield bonds, emerging markets debt and opportunistic fixed income strategies. Limited partnerships - Investment partnerships focused on pursuing multiple investment strategies to diversify risks and reduce volatility, including but not limited to equity, bonds and private investment funds.

PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following: 2023 Land Buildings and improvements Furniture, fixtures and equipment Vehicles Construction in progress

530,604 $ 530,604 52,842,894 52,800,485 1,565,212 1,249,149 1,218,751 1,218,751 820,139 970,832 57,128,293 56,619,128 (22,269,917) (23,872,932)

33,255,361

Accumulated depreciation

2022

34,349,211

NOTES PAYABLE As a result of the Veritas Capital Campaign, which included renovation of the current facility and new construction, the School and the BE Trust have two outstanding notes payable. In April 2014, the School and the BE Trust received a $7.5 million loan with a financial institution ("Loan 1"). Principal and interest payments are made on a monthly basis and interest accrues on the day-to-day principal balance. The interest rate has a discount of 0.5% off the highest prime rate, not to exceed the ceiling rate. Prior to April 2022, the ceiling rate ranged from 3.25% to 4.45% throughout the term of the loan. In April 2022, the School and BE Trust entered into a loan modification agreement to modify the ceiling rate of the note to 3.75% through April 2025, 4.125% from April 2025 through April 2028 and 4.45% from April 2028 through maturity of April 2032. The interest rate as of June 30, 2023 and 2022, was 3.75%. As of June 30, 2023 and 2022, the outstanding balance on Loan 1 was $4,845,867 and $5,299,100, respectively. In February 2015, the School and the BE Trust received a $5.8 million loan with a financial institution ("Loan 2"). Principal and interest payments are made on a monthly basis and interest accrues on the day-to-day principal balance. The interest rate has a discount of 0.5% off the highest prime rate, not to exceed the ceiling rate. Prior to April 2022, the ceiling rate ranged from 3.00% to 5.45% throughout the term of the loan. In April 2022, the School and BE Trust entered into a loan modification agreement to modify the ceiling rate of the note to 3.75% through April 2025, 4.125% from April 2025 through April 2028 and 4.45% from April 2028 through maturity of April 2032. The interest rate as of June 30, 2023 and 2022, was 3.75%. As of June 30, 2023 and 2022, the outstanding balance on Loan 2 was $2,282,410 and $2,495,849, respectively. Both loans are collateralized by the property and equipment of the School and the BE Trust and neither have a prepayment penalty. Total interest expense was $282,805 and $253,315 for the years ended June 30, 2023 and 2022, respectively.

NOTES PAYABLE (continued) The future maturities of the notes payable are as follows: Year ending June 30, 2024 2025 2026 2027 2028 Thereafter

691,717 719,190 747,016 775,918 805,545 3,388,891

7,128,277

Loan 1 and Loan 2 require the School and the BE Trust to be in compliance with several loan covenants mainly pertaining to reporting to the lender within certain time frames. As of June 30, 2023 and 2022, the School and the BE Trust were in compliance with each of these covenants. 9.

ENDOWMENT The endowment, held by the EE Trust, consists of several individual funds established for a variety of purposes. As required by U.S. GAAP, net assets associated with endowment funds, including Quasi-endowment funds (funds designated by the EE Trustees to function as endowments), are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of relevant law The EE Trustees have interpreted the State of Texas' Uniform Prudent Management of Institutional Funds Act ("UPMIFA") as allowing the EE Trustees to appropriate for expenditure or accumulate so much of an endowment fund as determined prudent for the uses, benefits, purposes and duration for which the endowment fund is established, subject to the intent of the donor as expressed in the gift instrument. Unless stated otherwise in the gift instrument, the assets in an endowment fund shall be donor-restricted assets until appropriated for expenditure. The remaining portion of the donor-restricted endowment fund that is not to be held in perpetuity is classified as with donor restrictions until those amounts are appropriated for expenditure in a manner consistent with the standard of prudence prescribed by UPMIFA.

ENDOWMENT (continued) Interpretation of relevant law (continued) In accordance with UPMIFA, the EE Trust considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: (1) The duration and preservation of the fund (2) The purposes of the Organization and the donor-restricted endowment fund (3) General economic conditions (4) The possible effect of inflation and deflation (5) The expected total return from income and the appreciation of investments (6) Other resources of the EE Trust (7) The investment policies of the EE Trust Return objectives and risk parameters The EE Trust has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that must be held in perpetuity or for a donor-specified purpose. Under this policy, the EE Trustees diversify investments, subject to practicality constraints, among a variety of asset classes so as to provide a balance that will enhance total real return while avoiding undue risk concentration in any single asset class or investment category. Strategies employed for achieving objectives To satisfy its long-term rate-of-return objectives, the EE Trust relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The EE Trustees target a diversified asset allocation to achieve its long-term return objectives within prudent risk constraints. Spending policy and how the investment objectives relate to spending policy In the EE Trust Agreement, the EE Trustees are authorized to distribute funds of the endowment as the EE Trust, in their discretion and in accordance with the EE Trust Agreement, shall determine to be necessary or proper. Distributions in a calendar year shall be made in an amount that may be set by the EE Trustees, but shall in no event exceed 5% of the average of the fair market values of all assets held by the EE Trust on the last day of the fiscal year for the three previous years.

ENDOWMENT (continued) Endowment composition Endowment net asset composition by type of fund as of June 30, 2023 is as follows: Without Donor Restrictions $

Quasi-endowment funds Donor-restricted endowment funds: Original donor-restricted gift amount and amounts required to be maintained in perpetuity by donor Unexpended endowment earnings

2,415,400

With Donor Restrictions $

2,415,400

Total - $

5,792,374 1,982,639 7,775,013 $

7,775,013

2,415,400

5,792,374 1,982,639 7,775,013 $

10,190,413

Endowment net asset composition by type of fund as of June 30, 2022 is as follows: Without Donor Restrictions $

Quasi-endowment funds Donor restricted endowment funds: Original donor-restricted gift amount and amounts required to be maintained in perpetuity by donor Unexpended endowment earnings

2,261,809

With Donor Restrictions $

2,261,809

Total - $

5,160,571 1,486,755 6,647,326 $

6,647,326

2,261,809

5,160,571 1,486,755 6,647,326 $

8,909,135

ENDOWMENT (continued) Endowment composition (continued) Changes in endowment net assets for the fiscal years ended June 30, 2023 and 2022 are as follows:

Balance, June 30, 2021 Contributions Realized and unrealized losses on investments, net of management fees Appropriations for scholarships Balance, June 30, 2022 Contributions Realized and unrealized gains on investments, net of management fees Appropriations for scholarships Balance, June 30, 2023

Without Donor Restrictions

With Donor Restrictions

Total

$ 2,655,649

$ 7,670,721

$ 10,326,370

100,000

465,955

565,955

(491,840) (2,000)

(1,427,454) (61,896)

(1,919,294) (63,896)

2,261,809

6,647,326

8,909,135

631,803

261,391 (107,800)

809,234 (313,350)

1,070,625 (421,150)

$ 2,415,400

$ 7,775,013

$ 10,190,413

Funds with deficiencies From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or UPMIFA requires to be maintained for a perpetual duration. As of June 30, 2023, funds with original gift values of $841,591, fair values of $806,356 and deficiencies of $35,235 were reported in net assets with donor restrictions. As of June 30, 2022, funds with original gift values of $1,286,777, fair values of $1,147,566 and deficiencies of $139,211 were reported in net assets with donor restrictions. For a variety of reasons, including but not limited to the stated purposes of the underwater funds, the EE Trustees in its discretion applied the Organization's standard spending policy to its underwater endowment funds.

BOARD-DESIGNATED NET ASSETS Board-designated net assets consisted of the following: 2023 Quasi-endowment Board-designated reserve fund Board-designated for capital projects BL Innovation fund

11.

2022

2,415,400 2,121,339 2,714,307 227,593

2,261,809 1,888,773 2,484,933 217,920

7,478,639

6,853,435

NET ASSETS WITH DONOR RESTRICTIONS Net assets with donor restrictions consisted of the following: 2023 Subject to expenditure for specified purpose: Special projects Capital campaign BL Experience fund JP Lynch Scholarship fund Scholarships

Subject to the passage of time: Contributions receivable, net Contributions receivable restricted for acquisition of property and equipment, net Contributions receivable restricted for endowment, net Subject to the Organization's spending policy and appropriation of the EE Trust: Investments in perpetuity (including amounts above the original gift amount of $5,792,374 and $5,160,571 respectively), the income in which is expendable to support: Scholarships $

162,562 940,130 130,322 436,385 703,371 2,372,770

2022 $

131,456 427,955 114,999 327,829 597,818 1,600,057

161,408

30,274

882,189 1,325,589 2,369,186

644,840 1,774,780 2,449,894

7,775,013

6,647,326

12,516,969

10,697,277

NET ASSETS WITH DONOR RESTRICTIONS (continued) Net assets with donor restrictions released from restriction during the year were as follows: 2023 Scholarships committed for the upcoming school year BL Experience fund Government grant funding

12.

2022

1,502,428 9,194 133,670

1,459,913 6,320 451,159

1,645,292

1,917,392

CONCENTRATIONS OF CREDIT RISK The School extends credit to parents requesting installment payments throughout the school year. The ability of the parents to honor the installment payment contracts is dependent upon their individual earnings and cash flows. Historically, losses on these contracts have not been significant.

13.

RELATED PARTY TRANSACTIONS Retirement plan The School participates in the Diocese's 403(b) retirement savings plan (the "Plan") for lay employees. The Plan is a defined contribution self-directed plan open to all eligible employees. Employee contributions to the Plan are fully vested whereas contributions made by the School on behalf of the employee vest over five years. After one year of service, the School contributes 3% of the eligible employee's compensation to the Plan and matches employee contributions on a dollar-for-dollar basis up to 3% of compensation. The School's contributions to the Plan were $488,007 and $469,082 during the years ended June 30, 2023 and 2022, respectively. Insurance The School and the BE Trust participate in the Diocesan workers' compensation, property and casualty insurance plan and School personnel participate in the Diocesan group insurance and flexible benefits plans. Amounts paid to the Diocese for these services were $1,941,192 and $1,792,955 during the years ended June 30, 2023 and 2022, respectively. As of June 30, 2023 and 2022, no amounts were owed to the Diocese. Contributions The Organization received contributions totaling approximately $256,000 and $199,000 from faculty, staff and members of the Board during the years ended June 30, 2023 and 2022, respectively.

FUNCTIONAL EXPENSE ALLOCATION The table below presents expenses by both their natural and functional classifications for the year ended June 30, 2023:

Salaries and payroll taxes Employee benefits Facilities and plant Depreciation Student activities School operations Community inclusive meal plan Interest

Program

Management and General

8,839,037 1,607,976 739,841 1,551,406 1,820,870 1,881,407 1,163,114 273,701

$ 2,160,179 $ 649,756 16,685 34,987 931,031 170,325 6,172

$ 17,877,352

$ 3,969,135

Fundraising

Total

971,894 $ 11,971,110 159,252 2,416,984 7,927 764,453 16,622 1,603,015 1,820,870 421,831 3,234,269 7,000 1,340,439 2,932 282,805

$ 1,587,458

$ 23,433,945

The table below presents expenses by both their natural and functional classifications for the year ended June 30, 2022:

Salaries and payroll taxes Employee benefits Facilities and plant Depreciation Student activities School operations Community inclusive meal plan Interest

Program

Management and General

8,162,693 1,434,958 667,979 1,660,445 1,355,449 1,587,883 1,103,887 245,159

$ 2,604,895 $ 637,988 15,064 37,446 776,406 161,653 5,529

$ 16,218,453

$ 4,238,981

Fundraising

Total

972,293 $ 11,739,881 152,167 2,225,113 7,157 690,200 17,790 1,715,681 1,355,449 334,232 2,698,521 6,643 1,272,183 2,627 253,315

$ 1,492,909

$ 21,950,343

SUPPLEMENTARY INFORMATION

Bishop Lynch High School, Inc., Bishop Lynch High School Building and Endowment Trust, and The Bishop Lynch High School Education and Endowment Trust Consolidating Statement of Financial Position June 30, 2023

ASSETS

BE Trust

School

EE Trust

Eliminating Entries

Cash and cash equivalents $ 6,080,599 $ - $ - $ Investments, at fair value 2,915,639 Tuition and other receivables, net 720,333 Contractual tuition and fees receivable, net 14,003,729 Contributions receivable, net 161,408 Grants receivable 62,382 Prepaid expenses and other assets 484,387 Cash restricted for acquisition of property and equipment 635,444 Cash board-designated for acquisition of property and equipment 2,714,307 Contributions receivable restricted for acquisition of property and equipment, net 882,189 Property and equipment, net 33,255,361 Contributions receivable restricted for endowment, net 1,325,589 Cash held for investment in endowment 124,723 10,065,690 Investments held for endowment, at fair value Total assets

$ 27,142,784

$ 34,772,994

$ 11,516,002

Total

- $ 6,080,599 2,915,639 720,333 14,003,729 161,408 62,382 484,387 -

635,444

2,714,307

882,189 33,255,361

1,325,589 124,723 10,065,690

- $ 73,431,780

LIABILITIES AND NET ASSETS

BE Trust

School

Liabilities Accounts payable and other accrued liabilities $ 298,233 $ 22,276 $ Accrued payroll, taxes and benefits 96,120 Deferred other revenue 320,768 Deferred tuition and fees 3,666,631 Contractual unearned tuition and fees, net 14,003,729 7,128,277 Notes payable 7,150,553 18,385,481 Total liabilities Net assets Without donor restrictions With donor restrictions Total net assets Total liabilities and net assets

Eliminating Entries

EE Trust

- $ -

7,163,255 1,594,048 8,757,303

25,800,122 1,822,319 27,622,441

2,415,400 9,100,602 11,516,002

$ 27,142,784

$ 34,772,994

$ 11,516,002

- $ 320,509 96,120 320,768 3,666,631 14,003,729 7,128,277 25,536,034

Total

35,378,777 12,516,969 47,895,746

- $ 73,431,780

BE Trust

EE Trust

Eliminating Entries

17,828,594 1,750,807 164,776 1,853,812 879,514

572,921 -

532,678 -

17,828,594 2,856,406 164,776 1,853,812 879,514

327,488 116,805 90,531

1,070,625 -

1,398,113 116,805 90,531

(22,755)

31,911

9,156

131,977 421,150 23,565,454

250,000 1,285,405 2,085,571

(381,977) 1,253,237

(1,706,555) (1,706,555)

25,197,707

16,052,246 5,213,381 1,567,904 22,833,531

1,825,106 41,159 19,554 1,885,819

421,150 421,150

(421,150) (1,285,405) (1,706,555)

17,877,352 3,969,135 1,587,458 23,433,945

731,923

199,752

832,087

1,763,762

8,025,380

27,422,689

10,683,915

46,131,984

$ 8,757,303

$ 27,622,441

$ 11,516,002

School Revenues, gains and other support Tuition and fees, net Contributions Government grants Student activities and organizations Supporting services income Realized and unrealized gains on investments, net of management fees Interest and dividends Other revenue Gain on uncollectible contributions receivable Change in donor restriction on contributions receivable Intercompany revenue Total revenues, gains and other support Functional expenses Program Management and general Fundraising Total functional expenses Changes in net assets Net assets, beginning of year Net assets, end of year

Total

- $ 47,895,746