Audited Financial Statements Council for Exceptional Children December 31, 2012

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Independent Auditor's Report

To the Board of Directors The Council for Exceptional Children

We have audited the accompanying financial statements of The Council for Exceptional Children (the Council), which comprise the statements of financial position as of December 31, 2012 and 2011 and the related statements of activities, functional expense, and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and Fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material mis-statement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of" the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Council's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Council's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Council for Exceptional Children as of December 31, 2012 and 2011, 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.

Tate & Tryon

Washington, DC

March 25, 2013

COUNCIL FOR EXCEPTIONAL CHILDREN
Statement of Financial Position
December 31, 2012 and 2011

Year Ended December 31,                  2012          2011

Assets
  Cash and cash equivalents        $1,567,053    $2,492,542
  Investments                       3,485,914     3,220,108
  Accounts receivable                 112,694       248,193
  Inventory                           279,694       439,214
  Prepaid expenses and
    other assets                      397,888       442,159
  Property and equipment            2,353,996     1,736,050
Total Assets                       $8,197,239    $8,578,266

Liabilities and Net Assets
Liabilities
  Accounts payable and
    accrued expenses                 $507,583      $400,151
  Amounts due to divisions            173,395       188,516
  Refunds payable to afilliated
    units                             297,065       323,585
  Deferred revenue                  2,491,511     2,236. …