PRINCETON BALLET SOCIETY

FINANCIAL STATEMENTS

JUNE 30, 2022 AND 2021

 Princeton Ballet Society
Table of Contents
June 30, 2022 and 2021

Page

Independent Auditor's Report 1-3

Financial Statements

Statements of Financial Position 4

Statements of Activities 5-6

Statements of Functional Expenses 7-8

Statements of Cash Flows 9

Notes to Financial Statements 10 - 22

Supplemental Information

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 23 - 24
Standards

Independent Auditor's Report on Compliance for Each Major Program and

on Internal Control over Compliance Required by the Uniform
Guidance 25 - 27

Schedule of Expenditures of Federal and State Awards 28

Notes to Schedule of Expenditures of Federal and State Awards 29

Schedule of Findings and Questioned Costs 30

INDEPENDENT AUDITOR'S REPORT

To the Board of Trustees

Princeton Ballet Society

Opinion
We have audited the accompanying financial statements of Princeton Ballet Society (a not-for-profit
corporation), which comprise the statements of financial position as of June 30, 2022 and 2021, and
the related statements of activities, functional expenses and cash flows for the years then ended,
and the related notes to the financial statements.

In our opinion, the financial statements present fairly, in all material respects, the financial position of
Princeton Ballet Society as of June 30, 2022 and 2021, and the changes in its net assets and its
cash flows for the years then ended in accordance with accounting principles generally accepted in
the United States of America.

Basis for Opinion

We conducted our audits 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. 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 Princeton Ballet Society 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.

Prior period adjustment

As described in Note 2 to the financial statements, pledges and grants receivable and contributions
of financial assets were understated in the Organization's previously issued financial statements.
The cumulative effect of these corrections is an increase in net assets as of June 30, 2021 of
$67,500. Our opinion is not modified with respect to that matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about Princeton Ballet
Society’s ability to continue as a going concern within one year after the date that the 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 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 and Government 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 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 and Government
Auditing Standards, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material misstatement of the 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 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 Princeton Ballet Society’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
financial statements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about Princeton Ballet Society’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 audits.
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a
whole. The accompanying schedule of expenditures of federal and state awards, as required by Title
2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional
analysis and is not a required part of the 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 financial statements. The information has been subjected to the auditing
procedures applied in the audit of the financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the financial statements or to the financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the schedule of expenditures of federal and state awards is fairly
stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated
December 9, 2022, on our consideration of Princeton Ballet Society’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 solely 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 the effectiveness of Princeton Ballet Society’s 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 Princeton Ballet Society’s internal
control over financial reporting and compliance.

Lear & Pannepacker, LLP

Princeton, New Jersey
December 9, 2022
 Princeton Ballet Society
Statements of Financial Position
June 30, 2022 and 2021

2022 2021
(Restated)
Assets

Cash $ 283,127 $ 558,599

Accounts receivable, net 27,832 5,144
Pledges and grants receivable 263,996 202,513
Prepaid expenses 34,867 31,536
Cash, endowment funds 6,900 6,137
Investments 787,511 312,815
Property and equipment, net 929,982 952,409
Intangible assets, net 29,007 13,311
Security deposits 26,138 26,138

Total assets $ 2,389,360 $ 2,108,602

Liabilities and net assets

Liabilities
Accounts payable and accrued expenses $ 74,143 $ 66,978
Paycheck Protection Program loan -- 402,162
Deferred revenue 622,333 355,455
Deferred rent 110,665 89,777
Refundable advance -- 25,000
Long-term debt 428,093 450,713
Total liabilities 1,235,234 1,390,085

Net assets
Net assets without donor restrictions 1,021,307 492,698
Net assets with donor restrictions 132,819 225,819
Total net assets 1,154,126 718,517

Total liabilities and net assets $ 2,389,360 $ 2,108,602

See notes to financial statements

4
 Princeton Ballet Society
Statement of Activities
Year Ended June 30, 2022

Without Donor With Donor

Restrictions Restrictions Total
Revenue, gains and other support
School tuition $ 1,582,653 $ -- $ 1,582,653
Scholarships and tuition assistance ( 160,084) -- ( 160,084)
Performance revenues 297,512 -- 297,512
Education/outreach 123,100 -- 123,100
Grants and contributions of financial assets:
Government grants 1,538,531 -- 1,538,531
Contributions 434,856 -- 434,856
PPP loan forgiveness 402,162 -- 402,162
Payroll tax assistance - CARES Act 148,959 -- 148,959
Special events 118,027 -- 118,027
Contributions of nonfinancial assets 46,565 -- 46,565
Investment loss ( 74,128) -- ( 74,128)
Other income 2,656 -- 2,656
4,460,809 -- 4,460,809
Net assets released from restrictions 93,000 ( 93,000) --
Total revenue, gains and other support 4,553,809 ( 93,000) 4,460,809

Expenses
Program costs 3,343,065 -- 3,343,065
General and administrative 548,993 -- 548,993
Fundraising 133,142 -- 133,142
Total expenses 4,025,200 -- 4,025,200

Change in net assets 528,609 ( 93,000) 435,609

Net assets – beginning of year 492,698 225,819 718,517

Net assets – end of year $ 1,021,307 $ 132,819 $ 1,154,126

See notes to financial statements

5
 Princeton Ballet Society
Statement of Activities
Year Ended June 30, 2021

Without Donor With Donor Total

Restrictions Restrictions (Restated)
Revenue, gains and other support
School tuition $ 1,244,888 $ -- $ 1,244,888
Scholarships and tuition assistance ( 162,883) -- ( 162,883)
Performance revenues 14,077 -- 14,077
Education/outreach 120,425 -- 120,425
Grants and contributions of financial assets:
Government grants 645,991 -- 645,991
Contributions 482,082 103,000 585,082
PPP loan forgiveness 386,700 -- 386,700
Payroll tax assistance - CARES Act 177,691 -- 177,691
Special events 68,652 -- 68,652
Contributions of nonfinancial assets 52,483 -- 52,483
Investment income 77,090 -- 77,090
Other income 307 -- 307
3,107,503 103,000 3,210,503
Net assets released from restrictions 21,000 ( 21,000) --
Total revenue, gains and other support 3,128,503 82,000 3,210,503

Expenses
Program costs 2,132,643 -- 2,132,643
General and administrative 339,360 -- 339,360
Fundraising 80,920 -- 80,920
Total expenses 2,552,923 -- 2,552,923

Change in net assets 575,580 82,000 657,580

Net assets – beginning of year ( 82,882) 143,819 60,937

Net assets – end of year (restated, Note 2) $ 492,698 $ 225,819 $ 718,517

See notes to financial statements

6
 Princeton Ballet Society
Statement of Functional Expenses
Year Ended June 30, 2022

Programs Support
Company Education
and and General and
School Performance Outreach Total Administrative Fundraising Total

Salaries and wages $ 1,086,554 $ 362,185 $ 90,546 $ 1,539,285 $ 181,092 $ 90,546 $ 1,810,923
Facility costs 398,813 132,938 33,234 564,985 99,703 -- 664,688
Technical and production 184,098 61,366 15,342 260,806 46,025 -- 306,831
Professional fees and services 170,178 56,726 -- 226,904 56,726 -- 283,630
Marketing and communications 151,197 62,999 -- 214,196 37,799 -- 251,995
Payroll taxes 97,049 32,349 8,087 137,485 24,262 -- 161,747
Employee benefits 76,569 25,523 6,381 108,473 19,142 -- 127,615
Depreciation and amortization 59,090 24,621 -- 83,711 14,773 -- 98,484
Other operating expenses 52,625 17,541 4,385 74,551 13,156 -- 87,707
Travel and transportation 45,115 15,039 3,760 63,914 11,279 -- 75,193
Special events expenses -- -- -- -- -- 42,596 42,596
Equipment, non-capital 25,400 10,583 -- 35,983 6,350 -- 42,333
Insurance 10,332 -- -- 10,332 15,498 -- 25,830
Supplies and materials 5,128 -- -- 5,128 11,965 -- 17,093
Interest expense 9,628 6,419 -- 16,047 -- -- 16,047
Loss on disposal of fixed assets -- -- -- -- 11,223 -- 11,223
Bad debt expense 1,265 -- -- 1,265 -- -- 1,265
Total expenses $ 2,373,041 $ 808,289 $ 161,735 $ 3,343,065 $ 548,993 $ 133,142 $ 4,025,200

See notes to financial statements

7
 Princeton Ballet Society
Statement of Functional Expenses
Year Ended June 30, 2021

Programs Support
Company Education
and and General and
School Performance Outreach Total Administrative Fundraising Total

Salaries and wages $ 698,431 $ 232,810 $ 58,203 $ 989,444 $ 116,405 $ 58,203 $ 1,164,052
Facility costs 383,681 127,894 31,973 543,548 95,920 -- 639,468
Technical and production 27,539 9,180 2,295 39,014 6,885 -- 45,899
Professional fees and services 62,216 20,739 -- 82,955 20,739 -- 103,694
Marketing and communications 74,962 31,235 -- 106,197 18,741 -- 124,938
Payroll taxes 52,518 17,506 4,376 74,400 13,129 -- 87,529
Employee benefits 69,522 23,174 5,793 98,489 17,380 -- 115,869
Depreciation and amortization 60,448 25,186 -- 85,634 15,112 -- 100,746
Other operating expenses 35,007 11,669 2,917 49,593 8,752 -- 58,345
Travel and transportation 5,474 1,825 456 7,755 1,369 -- 9,124
Special events expenses -- -- -- -- -- 22,717 22,717
Equipment, non-capital 16,878 7,032 -- 23,910 4,219 -- 28,129
Insurance 6,367 -- -- 6,367 9,550 -- 15,917
Supplies and materials 3,948 -- -- 3,948 9,213 -- 13,161
Interest expense 9,866 3,982 649 14,497 1,946 -- 16,443
Bad debt expense 6,892 -- -- 6,892 -- -- 6,892
Total expenses $ 1,513,749 $ 512,232 $ 106,662 $ 2,132,643 $ 339,360 $ 80,920 $ 2,552,923

See notes to financial statements

8
 Princeton Ballet Society
Statements of Cash Flows
Years Ended June 30, 2022 and 2021

2022 2021
(Restated)
Cash flows from operating activities
Change in net assets $ 435,609 $ 657,580
Adjustments to reconcile change in net assets to
net cash provided by operating activities:
PPP loan forgiveness ( 402,162) ( 386,700)
Depreciation and amortization 98,484 100,746
Loss on disposal of fixed assets 11,223 --
Net realized and unrealized (gains) losses on investments 79,839 ( 77,372)
Changes in operating assets and liabilities:
Accounts receivable ( 22,688) 38,820
Pledges and grants receivable ( 61,483) ( 117,514)
Prepaid expenses ( 3,331) ( 12,470)
Accounts payable and accrued expenses 7,166 ( 104,231)
Deferred revenue 266,878 191,549
Deferred rent 20,888 54,182
Refundable advances ( 25,000) 25,000
Net cash provided by operating activities 405,423 369,590

Cash flows from investing activities

Acquisition of property and equipment ( 73,475) ( 41,861)
Purchases of investments ( 554,535) ( 43,700)
Acquisition of intangible assets ( 29,500) --
Net cash used in investing activities ( 657,510) ( 85,561)

Cash flows from financing activities

Payments on line of credit -- ( 359,540)
Proceeds from Paycheck Protection Program loan -- 402,162
Proceeds from long-term debt -- 149,900
Principal payments on long-term debt ( 22,621) ( 15,471)
Net cash provided by (used in) financing activities ( 22,621) 177,051

Net change in cash ( 274,708) 461,080

Cash – beginning of year 564,735 103,655
Cash – end of year $ 290,027 $ 564,735
Supplementary disclosure of cash flow information
Cash paid for the years for interest $ 27,823 $ 29,413

See notes to financial statements

9
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 1 – Summary of significant accounting policies

Significant accounting policies followed by Princeton Ballet Society (the "Organization") in the
preparation of the accompanying financial statements are summarized below:

Nature of organization
Princeton Ballet Society is a New Jersey not-for-profit organization incorporated in April 1954. The
Organization was formed for the purpose of operating a ballet school and a production company.
The Organization's mission is to bring the joy, beauty, artistry and discipline of classical and
contemporary dance to New Jersey and nationwide audiences and to dance students through
artistic and educational programs. The Organization derives revenue from its students for school
tuition and from ticket sales for dance performances.

Basis of presentation
The financial statements of the Organization have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP). Net assets, revenues, expenses, gains and losses are classified based on
the existence or absence of donor-imposed restrictions. The Organization uses the following
classifications to distinguish among restrictions:

Net assets without donor restrictions

Net assets that are not subject to donor-imposed restrictions may be spent for any purpose in
performing the primary objectives of the Organization. These net assets may be used at the
discretion of the Organization's management and the board of trustees. Contributions with donor
imposed restrictions that are met during the same year as the contribution is received are included
in net assets without donor restrictions.

Net assets with donor restrictions

Net assets with donor restrictions are subject to stipulations imposed by donors and grantors.
Some donor restrictions are temporary in nature; those restrictions will be met by actions of the
Organization or by the passage of time. Other donor restrictions are perpetual in nature, where by
the donor has stipulated the funds must be maintained in perpetuity. When a restriction is
satisfied, net assets with donor restrictions are reclassified to net assets without donor restrictions
and are reported in the statement of activities as net assets released from restrictions.

Cash and cash equivalents

Cash consists of checking accounts and money market accounts. For purposes of the financial
statements, the Organization considers all highly liquid debt instruments purchased with an initial
maturity of three months or less to be cash equivalents. The Organization had no cash equivalents
at June 30, 2022 and 2021.

Accounts, pledges and grants receivable

Accounts receivable are uncollateralized student tuition requiring payment with a specified amount
of time from the start date of the applicable class session. Accounts receivable are stated at the
amount billed to the student.

10
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 1 – Summary of significant accounting policies (continued)

Accounts, pledges and grants receivable (continued)

Payments of accounts receivable are allocated to specific invoices identified on the student's
remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

Pledges and grants receivable consist of amounts to be contributed by individuals, the State of
New Jersey and Middlesex County. Pledges and grants receivable at June 30, 2022 and 2021
were as follows:

2022 2021
Receivable in less than one year $ 263,996 $ 197,513
Receivable in one to five years -- 5,000
Pledges and grants receivable $ 263,996 $ 202,513

The Organization reflects multi-year pledges at face value, as the difference between recorded
amounts and their present values was not considered significant at June 30, 2022 and 2021.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects
management's best estimate of the amounts that may not be collected. Management individually
reviews all accounts receivable balances that are past due and based upon an assessment of
current creditworthiness, estimates the portion, if any of the balance that may not be collected.
Pledges and grant receivables are reviewed periodically to ensure that assets are not overstated
due to lack of collectibility. Accordingly, the Organization considers the amounts reported to be
substantially collectible as of the statement of financial position date, and therefore, no allowance
for doubtful accounts is reflected in the financial statements.

Property and equipment

Property and equipment are stated at cost, or if donated, at the approximate fair value at the date
of donation. Repairs which neither increase the value of the asset nor extend its useful life are
expensed as incurred. As assets are sold or retired, the cost and the accumulated depreciation is
removed from the accounts and any gain or loss is recognized. Depreciation and amortization are
computed using the straight-line method over the expected useful lives of the assets as follows:

Estimated
Life (Years)
Building 40
Building and leasehold improvements 5-40
Furniture and equipment 3-5
Production assets 5-10

Amortization
The Organization maintains a trademark which is being recognized as an intangible asset, in
accordance with U.S. GAAP. This intangible asset is being amortized over the life of the asset,
which is ten years. The Organization also incurred website development fees which are being
amortized over five years.

11
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 1 – Summary of significant accounting policies (continued)

Investments
Investments with readily determinable fair values are measured at fair value based on quoted
market prices in the statement of financial position. Investment income or loss (including gains and
losses in investments, interest, and dividends) is included in the statement of activities as
increases or decreases in unrestricted net assets unless the income or loss is restricted by donor
or law.

Revenue recognition
The Organization recognizes revenue from performances in the period when the performance
takes place. Ticket sales are reflected net of box office fees. Funds received for school tuition are
recorded as deferred revenue when received by students, and are recognized as tuition revenue
ratably over the service period.

The table below shows beginning and ending contract balances for the years ended June 30, 2022
and 2021:

2022 2021 2020

Accounts receivable, net $ 27,832 $ 5,144 $ 43,964
Deferred revenue $ 622,333 $ 355,455 $ 163,906

Revenue recognized for the years ended June 30, 2022 and 2021 that was included in the
contract liability balance at the beginning of each year totaled $355,455 and $163,906,
respectively.

Contributions of nonfinancial assets

The Organization recognizes donated goods, materials, and services at their fair value on the date
of donation to the extent that these items are able to be reasonably valued and provide tangible
benefit to the Organization. Donated services are recognized as support if the services create or
enhance non-financial assets or require specialized skills, are performed by people with those
skills, and otherwise would be purchased by the Organization. Donations of property and
equipment are recorded as support at their estimated fair value. Such donations are reported as
support without donor restrictions unless the donor has restricted the donated asset to a specific
purpose.

In addition, members of the Organization and other individuals have contributed numerous hours
of their time on a volunteer or nominally paid basis to develop and support various programs and
fundraising activities. The value of the contributed time is not reflected in these financial
statements since they do not meet the criteria for recognition under U.S. GAAP.

Scholarships and tuition assistance

The Organization customarily charges students for the dance lessons it provides; however, the
Organization has a program to provide scholarships based on merit and/or financial need on the
school tuition. Eligibility for scholarships based on financial need is determined annually based on
a review of the individual's assets, income and expenses. The decision to provide financial
assistance is determined by the Organization's director and staff.

12
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 1 – Summary of significant accounting policies (continued)

Scholarships and tuition assistance (continued)

Scholarships and tuition assistance is reported as a reduction of school tuition in the
accompanying financial statements.

Functional expenses
The costs of providing programs and other activities are summarized in the statements of
functional expenses. Expenses that can be identified with a specific program or supporting service
are charged directly to the program or supporting service. Expenses which apply to more than one
functional category have been allocated based on estimates made by management. Accordingly,
certain costs have been allocated among the programs, fundraising, and general areas. Costs are
allocated as follows:

 Personnel costs are allocated based on estimated time and effort between program
services, management and general and fundraising.
 Rent and occupancy costs are allocated based on the percentage of space used for
program services, management and general and fundraising.
 Other expenses, including programming and development are based on identification of
specific costs, as well as a percentage of occupancy costs.

Rent expense
The Organization's leases include initial rent holidays and annual increases in base rents due. In
accordance with U.S. GAAP, the Organization records rent expense under these leases on a
straight-line basis based on the average monthly rents due under the applicable leases.

Advertising costs
The Organization expenses the cost of advertising as incurred. Advertising expenses for the years
ended June 30, 2022 and 2021 amounted to $119,452 and $44,359, respectively.

Income taxes
The Organization has been classified by the Internal Revenue Service ("IRS") as an organization
described under Section 501(c)(3) of the Internal Revenue Code ("the Code") as exempt from
federal income taxes under section 501(a) of the Code. The Organization is subject to a tax on
income from any unrelated business.

ASC Topic 740 Accounting for Uncertainty in Income Taxes clarifies the accounting for uncertainty
in income taxes recognized in an entity’s financial statements and prescribes a recognition
threshold of more-likely-than-not to be sustained upon examination by the appropriate taxing
authority. Measurement of the tax uncertainty occurs if the recognition threshold has been met.
The guidance also provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, and disclosure.

The Organization's policy is to account for interest and penalties related to unrecognized tax
benefits as a component of income tax expense.

13
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 1 – Summary of significant accounting policies (continued)

Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

Reclassifications
Certain amounts in the prior year financial statements have been reclassified in order to be
comparable with the current year presentation.

Note 2 – Prior period adjustment

Contributions of financial assets were understated in our previously issued financial statements for the
year ended June 30, 2021. The cumulative effect of this correction is an increase in pledges and grants
receivable and contribution income for the year ended June 30, 2021 and net assets with donor
restrictions as of June 30, 2021 of $67,500.

Note 3 – Adoption of new accounting pronouncement

During the year ended June 30, 2022, the Organization adopted the provisions of Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC"), ASU 2020-07 Presentation and
Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. These standards amend
certain aspects of financial reporting and disclosure requirements for contributed nonfinancial assets,
including disclosure as to the nature of donated items and services received and the method of valuing
these items.

Note 4 – Cash
Restricted cash, including cash maintained in the Organization's endowment are combined with other
cash accounts for the statements of cash flows.

The following table provides a reconciliation of cash and restricted cash reported within the statements
of financial position that sum to the total of the same such amounts shown in the statements of cash
flows:

2022 2021
Cash $ 283,127 $ 558,599
Cash, endowment funds 6,900 6,137
Total cash $ 290,027 $ 564,736

Note 5 – Investments and fair value measurements

Investments consist of shares of a pooled investment account managed by the Princeton Area
Community Foundation ("PACF"), mutual funds, exchange-traded funds, and common stocks.

Financial Accounting Standards Board ASC 820, Fair Value Measurements, provides a framework for
measuring, reporting and disclosing fair value under generally accepted accounting principles. The
framework provides 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 an active
market for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3).

14
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 5 – Investments and fair value measurements (continued)

The three levels of the fair value hierarchy under ASC 820 are described as follows:

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the Organization has the ability to access.

Level 2 – Inputs to the valuation methodology include:

 quoted prices for similar assets or liabilities in active markets;
 quoted prices for similar assets or liabilities in inactive markets;
 inputs other than quoted prices that are observable for the asset or liability;
 inputs that are derived principally from or corroborated by observable market data by
correlation or other means.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.

Following is a description of the valuation methodologies used for assets measured at fair value. There
have been no changes in methodologies used at June 30, 2022 and 2021.

Investments in investee funds that are valued using the net asset values (NAV) of the underlying
investee fund as a practical expedient are not categorized within the fair value hierarchy. The value of
the PACF balance totaled to $220,376 as of June 30, 2022. The Organization did not have investments
at PACF as of June 30, 2021.

The methods described above may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, while 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 could result in a different fair value
measurement at the reporting date.

The following tables set forth, by level within the fair value hierarchy, the Organization's investments at
fair value as of June 30:
Level 1 Level 2 Level 3 Total
June 30, 2022
Mutual funds - domestic equities $ 234,619 $ $ $ 234,619
Exchange-traded funds - growth 144,297 144,297
Exchange-traded funds - fixed income 143,137 143,137
Common stocks 45,082 45,082
Total $ 567,135 $ $ $ 567,135

June 30, 2021

Mutual funds - domestic equities $ 128,369 $ $ $ 128,369
Exchange-traded funds - growth 104,124 104,124
Exchange-traded funds - fixed income 20,802 20,802
Common stocks 59,520 59,520
Total $ 312,815 $ $ $ 312,815

15
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 5 – Investments and fair value measurements (continued)

Investment income in the accompanying statement of activities includes interest and dividends earned
from cash and investment accounts, realized and unrealized gains (losses) and are net of investment
expenses. Total investment income for the years ended June 30 is summarized as follows:

2022 2021
Interest, dividends, and capital gain distributions $ 10,508 $ 2,407
Net realized and unrealized gains (losses) on
investments ( 79,839) 77,372
Investment expenses ( 4,797) ( 2,689)
Total investment income (loss) $( 74,128) $ 77,090

Note 6 – Property and equipment

The costs and accumulated depreciation and amortization of property and equipment are summarized at
June 30 as follows:
2022 2021
Property and equipment
Land $ 56,100 $ 56,100
Building and improvements 910,935 910,935
Leasehold improvements 758,530 753,497
Furniture and equipment 111,841 111,841
Production assets 497,071 428,628
Total property and equipment 2,334,477 2,261,001

Accumulated depreciation and amortization

Building and improvements 449,198 426,207
Leasehold improvements 573,546 545,671
Furniture and equipment 85,500 76,239
Production assets 296,251 260,475
Total accumulated depreciation and
amortization 1,404,495 1,308,592
Property and equipment, net $ 929,982 $ 952,409

Depreciation and amortization expense of property and equipment for the years ended June 30, 2022
and 2021 amounted to $95,904 and $98,350, respectively.

Note 7 – Intangible assets

The costs and accumulated amortization of intangible assets are summarized at June 30 as follows:

2022 2021
Trademark $ 1,961 $ 1,961
Website development fees 29,500 36,785
31,461 38,746
Less: accumulated amortization ( 2,454) ( 25,435)
Intangible assets, net $ 29,007 $ 13,311

16
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 7 – Intangible assets (continued)

Amortization expense of intangible assets for the years ended June 30, 2022 and 2021 amounted to
$2,580 and $2,396, respectively. Estimated amortization expense for the years ending June 30 are as
follows: 2023 through 2026: $5,900 and 2027: $5,408.

Note 8 – Line of credit

The Organization has a revolving line of credit with a banking institution maturing July 1, 2023,
collateralized by all of the Organization's assets and a $500,000 certificate of deposit owned by a
member of the board of trustees. The line of credit bears interest at the prime rate (4.75% at June 30,
2022) and the maximum borrowing amount is $500,000. As of June 30, 2022, there were no borrowings
against the line of credit.

Note 9 – Long-term debt

Long-term debt consists of the following at June 30:

2022 2021
Term loan payable to bank, payable in monthly installments of $3,107
including principal and interest. The loan matures January 2026 and
bears interest at 4.12%. At maturity, the remaining balance of
approximately $171,000 will become due unless the loan is otherwise
refinanced. The loan is collateralized by business assets, and real estate
held by the Organization. $ 270,451 $ 297,342

In August 2020, the Organization received an Economic Injury Disaster

Loan (EIDL) totaling $149,900 from the U.S. Small Business
Administration. This loan has a term of 30 years, interest of 2.75% per
annum and monthly payments of principal and interest of $641 per
month beginning thirty months from the date of the note. 157,642 153,371
Total long-term debt $ 428,093 $ 450,713

Aggregate maturities of long-term debt of the Organization due in the years ending June 30 are as
follows:

2023 $ 26,642
2024 29,957
2025 32,387
2026 190,679
2027 3,656
Thereafter 144,772
Total $ 428,093

Interest expense was $16,047 and $16,443 in the years ended June 30, 2022 and 2021, respectively.

17
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 10 – Net assets with donor restrictions

Net assets with donor restrictions consist of the following at June 30:

2022 2021
Purpose restrictions $ -- $ 92,500
Time restrictions 10,000 10,500
Permanent endowments 122,819 122,819
Total net assets with donor restrictions $ 132,819 $ 225,819

The Organization's endowment fund assets are required to be invested in perpetuity; the income is
expendable to support general operating activities and scholarships.

During the years ended June 30, 2022 and 2021, net assets were released from donor-imposed
restrictions by incurring expenses satisfying the purpose restrictions specified by the donors as follows:

2022 2021
Purpose restrictions $ 92,500 $ --
Time restrictions 500 21,000
Total net assets released from restrictions $ 93,000 $ 21,000

Note 11 – Contributions of nonfinancial assets

Contributed nonfinancial assets recognized within the statements of activities for the years ended June
30 consist of:

2022 2021
Studio space $ 38,942 $ 52,483
Photography services 7,623 --
$ 46,565 $ 52,483

In the years ended June 30, 2022 and 2021, the Organization received the use of additional space
adjacent to its Princeton location at no cost. The value of donated rent is included in income and rent
expense in the accompanying financial statements. In the year ended June 30, 2022, the Organization
also received professional services from private donor, which are used to support programming
operations. The value of photography services is based on estimated fair value on the date of donation
as provided by the donor.

Note 12 – Scholarships and tuition assistance

The DancePower Program provides scholarships to students each year and is provided each
subsequent year until the student graduates high school. Scholars continue to receive tuition assistance
through 12th grade if they remain enrolled in the DancePower Program, exhibit a minimal level of
attendance, and progress in their program.

Merit scholarships provided through endowments held by the Organization are awarded to students
during program performances in May of each fiscal year. The scholarships can be applied to the
subsequent year and only applies for that year.

18
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 12 – Scholarships and tuition assistance (continued)

The Organization records scholarships and tuition assistance as a reduction of tuition revenue in the
applicable year.

Note 13 – Liquidity and availability of financial assets

The Organization manages its liquid resources by focusing on investing excess cash in interest-bearing
accounts with reputable financial institutions that maximize earnings potential balanced with the amount
of risk the Organization's board of trustees has decided can be tolerated. This policy is designed to
ensure adequate financial assets are available to meet general expenditures, liabilities, and other
obligations as they become due.

The Organization prepares a detailed budget to ensure adequate resources to cover programs.
Princeton Ballet Society focuses on timing vendor payments to maximize the time they have access to
the cash. The Organization also has access to a line of credit to assist in meeting cash needs. The
following reflects the Organization's financial assets available to be used for general expenditures within
one year of June 30:

2022 2021
Cash $ 283,127 $ 558,599
Accounts receivable 27,832 5,144
Pledges and grants receivable 263,996 202,513
Cash, endowment funds 6,900 6,137
Investments 787,511 312,815
Total financial assets 1,369,366 1,085,208

Less those unavailable for general expenditures

within one year, due to:
Purpose restrictions by donors -- ( 92,500)
Time by donors ( 10,000) ( 10,500)
Permanent endowments ( 122,819) ( 122,819)
Net financial assets $ 1,236,547 $ 859,389

Note 14 – Permanent endowment funds

The Organization's endowment funds are invested in money market funds, mutual funds, and exchange
traded funds, established for scholarships. The endowments include only donor-restricted endowment
funds. As required by U.S. GAAP, net assets associated with endowment funds are classified and
reported based on the existence or absence of donor-imposed restrictions.

Interpretation of relevant law

The board of trustees of the Organization has interpreted state law as requiring the preservation of the
value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor
stipulations to the contrary. As a result of this interpretation, the Organization classifies as permanently
restricted net assets (a) the original value of the gifts donated to the permanent endowment and (b) the
original value of the subsequent gifts to the permanent endowment. The remaining portion of the donor-
restricted endowment fund that is not classified in permanently restricted net assets is classified as
temporarily restricted net assets until those amounts are appropriated for expenditure by the
Organization in a manner consistent with applicable laws. Refer to Note 10 for the Organization's policy
on treatment of income derived from the endowment funds.

19
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 14 – Permanent endowment funds (continued)

The Organization 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 purpose of the Organization and the donor-restricted endowment fund
3. General economic conditions
4. The possible effect on inflation and deflation
5. The expected total return from income and the appreciation of investments
6. Other resources of the Organization
7. The investment policies of the Organization

Return objectives and strategies for achieving objectives

At the direction of the donors, the Organization has invested the endowments in money market funds,
mutual funds, and exchange traded funds and uses guidance from the Uniform Prudent Management of
Institutional Funds Act (UPMIFA) to ensure a consistent return on investments.

The following table provides information regarding the change in permanent endowment net assets for
the years ended June 30:

Balance at June 30, 2020 $ 122,819

Investment return 48,402
Amounts appropriated for expenditure ( 48,402)
Balance at June 30, 2021 122,819
Investment return ( 24,093)
Amounts transferred from net assets without donor restrictions 24,093
Balance at June 30, 2022 $ 122,819

Note 15 – Commitments
The Organization has a noncancellable operating lease agreements for its Princeton facilities through
August 2023. The agreement requires that certain real estate taxes, insurance, and certain other
expenses be paid by the Organization.

The Organization entered into a lease agreement for its studios in the New Brunswick Performing Arts
Center from September 2019 through September 2039, with three five-year renewal options. The
agreement requires common area maintenance fees of $758 per month with annual increases adjusted
to the consumer price index with a floor of 2% and a ceiling of 4%.

Approximate annual minimum noncancellable rental commitments due in the years ending June 30 are
as follows:
2023 $ 355,957
2024 160,321
2025 120,243
2026 120,443
2027 124,022
Thereafter 2,927,736
Total $ 3,808,722

20
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 15 – Commitments (continued)

Rent expense for the years ended June 30, 2022 and 2021 amounted to $434,062 and $444,165,
respectively, inclusive of the value of contributed space (Note 11).

Note 16 – Employee benefit plan

The Organization has a defined contribution retirement plan created in accordance with Section 401(k)
of the Internal Revenue Code. This Plan is available to full time employees who have reached 21 years
of age after six months of employment. Employees covered by the Plan may, at their discretion, make
contributions to the plan up to the current 401(k) retirement plan limits. Employer contributions to the
Plan are discretionary. No employer contributions were made in the years ended June 30, 2022 and
2021.

Note 17 – Concentration of risk

During the years ended June 30, 2022 and 2021, the Organization routinely maintained funds in excess
of the federal deposit insurance corporation (FDIC) insured maximum. The Organization has not
experienced any losses and believes it is not exposed to any significant credit risk on such funds.

Approximately 78% of the Organization's government grant and contribution revenues are derived from
various contracts with Federal, State and County of Middlesex. Approximately 96% of grants receivable
at June 30, 2022 are due under these contracts.

Note 18 – COVID-19
In March 2020, the World Health Organization (WHO) declared COVID-19 a global pandemic. This
pandemic event has resulted in significant business disruption and uncertainty in both global and U.S.
markets. While management believes the Organization is in an appropriate position to weather the
potential short-term effects of these world-wide events, the direct and long-term impact to the
Organization and its financial statements is undetermined at this time.

PPP Loans
In May 2020, the Organization received a loan of $386,700, which is guaranteed by the U.S. Small
Business Administration (SBA) under the Paycheck Protection Program (PPP). This loan is forgivable
when the Organization expends the funds for allowable expenses as defined by the PPP. This loan was
forgiven in the year ended June 30, 2021, at which time it was recognized as income.

In February 2021, the Organization received a second loan of $402,162, which is guaranteed by the U.S.
Small Business Administration (SBA) under the Paycheck Protection Program (PPP). This loan is
forgivable when the Organization expends the funds for allowable expenses as defined by the PPP.
This loan was forgiven in the year ended June 30, 2022, at which time it was recognized as income.

Payroll tax assistance - CARES Act

The CARES Act established the Employee Retention Tax Credit (ERTC) which provides a refundable
payroll tax credit to entities that were subject to full or partial COVID-19 shutdowns or whose gross
receipts declined by a specified percentage when compared to the same quarter in the prior year. The
ERTC covers a capped amount of wages and health care benefit expenses per employee. Total ERTC
refunds for payroll totaling $148,959 and $177,691 are recognized as revenue in the accompanying
financial statements of activities for the years ended June 30, 2022 and 2021, respectively.

21
 Princeton Ballet Society
Notes to Financial Statements
June 30, 2022 and 2021

Note 19 – Subsequent events

The Organization has evaluated subsequent events through December 9, 2022, which is the date the
financial statements were available to be issued and has not noted any events to be disclosed.

22
 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

To the Board of Trustees

Princeton Ballet Society

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
Princeton Ballet Society (a nonprofit organization), which comprise the statement of financial position
as of June 30, 2022, and the related statements of activities, functional expenses and cash flows for
the year then ended, and the related notes to the financial statements, and have issued our report
thereon dated December 9, 2022.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered Princeton Ballet
Society’s internal control over financial reporting (internal control) as a basis for designing 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
Princeton Ballet Society’s internal control. Accordingly, we do not express an opinion on the
effectiveness of Princeton Ballet Society’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 or significant deficiencies may exist that were not identified.
 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 (continued)

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether Princeton Ballet Society’s financial
statements are free from 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 financial statements. 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
Princeton Ballet Society's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering Princeton Ballet
Society's internal control and compliance. Accordingly, this communication is not suitable for any
other purpose.

Lear & Pannepacker, LLP

Princeton, New Jersey
December 9, 2022
 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE
UNIFORM GUIDANCE

To the Board of Trustees

Princeton Ballet Society

Report on Compliance for Each Major Federal Program

Opinion on Each Major Federal Program
We have audited Princeton Ballet Society’s compliance with the types of compliance requirements
identified as subject to audit in the OMB Compliance Supplement that could have a direct and
material effect on the Princeton Ballet Society’s major federal program for the year ended June 30,
2022. Princeton Ballet Society’s major federal program is identified in the summary of auditor’s
results section of the accompanying schedule of findings and questioned costs.

In our opinion, Princeton Ballet Society complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on each of its
major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and the audit
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Our responsibilities under those standards and the Uniform Guidance are further described in the
Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of Princeton Ballet Society and to meet our other ethical
responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion on compliance for each major federal program. Our audit does not provide a legal
determination of Princeton Ballet Society’s compliance with the compliance requirements referred to
above.

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements
applicable to Princeton Ballet Society’s federal programs.
 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE
UNIFORM GUIDANCE (continued)

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on Princeton Ballet Society’s compliance based on our audit. 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, Government Auditing
Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The
risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Noncompliance with the compliance requirements referred to above is
considered material if there is a substantial likelihood that, individually or in the aggregate, it would
influence the judgment made by a reasonable user of the report on compliance about Princeton
Ballet Society’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government

Auditing Standards, and the Uniform Guidance, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.
 Identify and assess the risks of material noncompliance, 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 Princeton Ballet Society’s compliance with the
compliance requirements referred to above and performing such other procedures as we
considered necessary in the circumstances.
 Obtain an understanding of Princeton Ballet Society’s internal control over compliance relevant
to the audit in order to design audit procedures that are appropriate in the circumstances and to
test and report on internal control over compliance in accordance with the Uniform Guidance, but
not for the purpose of expressing an opinion on the effectiveness of Princeton Ballet Society’s
internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and material
weaknesses in internal control over compliance that we identified during the audit.
 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE
UNIFORM GUIDANCE (continued)

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance,
such that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal
program that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the
Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify
all deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal
control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements
of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Lear & Pannepacker, LLP

Princeton, New Jersey
December 9, 2022
 Princeton Ballet Society
Schedule of Expenditures of Federal and State Awards
Year Ended June 30, 2022

Assistance Listing
Grantor Identifying Number Contract Period Contract Award Expenditures

Federal awards
U.S. Small Business Administration
Shuttered Venue Operators Grant
SBAHQ21SV001315 59.075 7/3/2021 to 7/2/2022 $ 970,798 $ 970,798

U.S. Small Business Administration

Economic Injury Disaster Loan
3302523995 59.072 N/A 10,000 10,000

Total federal awards 980,798

State awards
State of New Jersey
State Council on the Arts
State ID #210732575-00
Contract #2201X010002 100-074-2530-032-6130 7/1/2021 to 6/30/2022 233,483 233,483

State of New Jersey

New Jersey Economic
Development Authority N/A N/A 20,000 20,000

Total state awards 253,483

Total federal and state awards $ 1,234,281

See notes to schedule of expenditures of federal and state awards

28
 Princeton Ballet Society
Notes to Schedule of Expenditures of Federal and State Awards
June 30, 2022

Note 1 – Basis of presentation

The accompanying schedule of expenditures of federal and state awards (the "Schedule") includes the
grant activity of the Princeton Ballet Society and is presented on the accrual basis of accounting. The
information in this schedule is presented in accordance with the requirements of the 2 CFR Part 200
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in
the preparation of, the financial statements.

The purpose of the schedule is to present a summary of those activities of the Organization for the year
ended June 30, 2022 which have been financed by federal and state agencies. For purposes of the
schedule, federal and state awards include any assistance provided by agencies directly or indirectly in
the form of grants, contracts, cooperative agreements, direct appropriation, loans, loan guarantees,
property, interest subsidies, insurance and other non-cash assistance. Because the schedule presents
only a selected portion of the activities of the Organization, it is not intended to, and does not, present
either the financial position or the revenue, expenditures and other changes in net assets of the
Organization.

Note 2 – Relationship to basic financial statements

Expenditures related to federal and state awards are reported in the schedule of functional expenses
under the caption of program services and general and administrative. With respect to certain programs,
the expenditures reported in the financial statements may differ from the expenditures reported in the
accompanying schedule of expenditures of federal and state awards due to program and general and
administrative expenditures in excess of grant or contract budgets, matching or contributions of
nonfinancial assets or capitalization policies required under accounting principles generally accepted in
the United States of America.

Note 3 – Indirect costs

The Organization has not elected to use the 10% de minimus indirect cost rate for the year ended June
30, 2022.

Note 4 – Subrecipients
There were no awards passed through to subrecipients for the year ended June 30, 2022.

29
 Princeton Ballet Society
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022

Section I – Summary of auditor's results

Financial statements
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiencies identified? No
Noncompliance material to financial statements noted? No
Federal awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiencies identified? No
Type of auditor's report issued on compliance for major programs Unmodified
Any audit findings disclosed that are required to be reported in accordance
with 2 CFR section 200.516(a)? No

Identification of major programs

Assistance Listing
Shuttered Venue Operators Grant 59.075

Dollar threshold used to distinguish between type A and type B programs $750,000
Auditee qualified as low-risk auditee? No

Section II – Financial statement audit findings

There are no financial statement findings reported

Section III – Major federal awards program audit findings and questioned costs
There are no federal findings or questioned costs reported

30