Budget Report and Audit

Atascadero District Teachers' Association - Statement of cash receipts and cash disbursements for the year ended August 31, 2006 and independent auditor's report.

Report of Independent Auditors

To the Executive Board -Atascadero District Teachers' Association

We have audited the accompanying statement of cash receipts and cash disbursemnets of ADTA for the year ending August 31, 2006. The financial statements are the respnsibility of the Associaton's management. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audt in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of cash receipts and cash disbursements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statemnet of cash receipts and cash disbursements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement of cash receipts and cash disbursements. We believe that our audit provides a reasonable basis for our opinion.

As described in Note 2, the financial statements were prepared on the cash receipts and cash disbursements basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles.

In our opinion, the statement of cash receipts and cash disbursements referred to above presents fairly, in all material respects, the cash receipts and cash disbursements of ADTA for the year ended August 31, 2006, on the basis of accounting described in Note 2.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of Chargeable and Non-chargeable disbursements in presented for the purpose of additional analysis and is not a required part of the basic financial statements. This additional information is the responsibility of the Association's management. Such information has been sibjected to the auditing procedures applied in our audit of the basic financial statements and , in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statement taken as a whole.

Sasaki Shishima & Co

March 27 , 2007

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ADTA Statement of Cash Receipts and Cash Disbursements

For the Year Ended August 31, 2006

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Notes to Financial Statements for the Year Ended August 31, 2006.

1. Organization Purpose -- ADTA is a not-for profit organizations affiliated with the California Teachers' Association(CTA) and the National Educaton Association(NEA). All dues are received from the members through ADTA. The purpose of ADTA is to promote and improve the welfare and working conditins of its members.

2. Summary of Significant Accounting Policies - The financial statements of ADTA have been prepared using the cash basis of accounting. Revenue is recognized when received rather than when earned, and expenses are recognized when paid rather than when the obligation is incurred. Accordingly, the accompanying financial statements are not presented in accordance with generally accepted accounting principles.

Net assetes are classified as unrestricted, temporarily restricted or permanently restricted. Net assets are generally reported as unrestricted unless assets are received from donors with explicit stipulatons that limit the use of those assets.

Income taxes - The Internal Revenue Service has classified ADTA as exempt from Federal income taxes under Section 501(c)(5) of the nternal Revenue Code.

Concentration of credit risk - ADTA's income is derived from union dues withheld from salaries of its members within the Atascadero Unified School District.

Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assests and liabilities and disclosure of contingent assets and liabilities at the date of the financial statemenst and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. Funding -- ADTA receives a majority of its revenue from member duse which are unrestricted.

4. Commitments and Contingencies -- ADTA has a noncancelable lease for its office facilities which expires August 31, 2008. Rent expense for the year amounted to $6,0961. The future minimum lease payments are as follows: Year ending August 31, 2007 $5700.00. Year ending August 31, 2008 $6000.00. Total minimum lease payments: $11,700

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ADTA Agency Fee Calculation

For the Year Ended August 31, 2006