Octorara Area School District

OCTORARA AREA SCHOOL DISTRICT
FINANCIAL AND COMPLIANCE REPORT Year Ended June 30, 2013
TABLE OF CONTENTS
Pages
INDEPENDENT AUDITOR'S REPORT........................................................................ MANAGEMENTS DISCUSSION AND ANALYSIS ..................................................... BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position ....................................................................................... Statement of Activities ............................................................................................ Fund Financial Statements Balance Sheet - Governmental Funds .................................................................... Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ...................................................... Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds ........................................................................................... Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ......................................................................................... Statement of Net Position - Proprietary Fund ......................................................... Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund .................................................................................................. Statement of Cash Flows - Proprietary Fund .......................................................... Statement of Net Position - Fiduciary Funds .......................................................... Statement of Changes in Net Position - Fiduciary Funds ....................................... Notes to Basic Financial Statements .....................................................................
1-2 MD&A
3 4
8-9 10
11 12 - 13 14 15 16 - 44
REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule for the General Fund ........................................... Schedule of Funding Progress and Employer Contributions Postemployment Benefits Plan .............................................................................. Note to Required Supplementary Information ........................................................... SUPPLEMENTARY INFORMATION Schedule of Expenditures of Federal Awards ........................................................... Notes to Schedule of Expenditures of Federal Awards ............................................. INDEPENDENT AUDITORS 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 .......................... INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133.............................. SCHEDULE OF FINDINGS AND QUESTIONED COSTS ........................................... STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS ......................... CORRECTIVE ACTION PLAN ..................................................................................... 49 50 45 - 46
47 48
51 - 52
53 - 55 56 - 61 62 63 - 66
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INDEPENDENT AUDITOR'S REPORT
To the Board of School Directors Octorara Area School District Atglen, Pennsylvania
Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Octorara Area School District as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Districts basic financial statements as listed in the table of contents. Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 entitys 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 entitys 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 opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Octorara Area School District, as of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
HERBEIN+COMPANY,INC. 2763CenturyBoulevardReading,PA19610Telephone:6103781175Facsimile:6103780999 reading@herbein.com OtherOffices:PITTSBURGHGREENSBURG

Emphasis of Matter As described in Note 14 to the financial statements, effective July 1, 2012, the Octorara Area School District adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the managements discussion and analysis, budgetary comparison schedule for the general fund, and the schedule of funding progress and employer contributions - postemployment benefits plan be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Octorara Area School Districts basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. The information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic 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 awards is fairly stated, in all material respects, in relation to the basic 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 November 18, 2013, on our consideration of the Districts internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Districts internal control over financial reporting and compliance.
Reading, Pennsylvania November 18, 2013
OCTORARA AREA SCHOOL DISTRICT Managements Discussion and Analysis (MD&A) June 30, 2013 AUN Number: 124156503 Managements Discussion & Analysis (MD&A) for the Octorara Area School Districts financial performance provides an overall review of the Schools financial activities for the fiscal year ended June 30, 2013. The intent of the MD&A is to look at the financial performance as a whole. Readers should review the basic financial statements and corresponding notes to the financial statements to enhance their understanding of the Schools financial performance. The Management Discussion and Analysis (MD&A) is an element of the reporting model adopted by the Governmental Accounting Standards Board (GASB) in their Statement No. 34 Basic Financial Statements and Managements Discussion and Analysis for State and Local Governments issued June 1999. Certain comparative information between the current year and the prior year is required to be presented in the MD&A. SCHOOL DISTRICT Octorara Area School District is a public school district in Chester County, Pennsylvania organized under the Public School Code of Pennsylvania. The School provides educational programs from kindergarten through twelfth grade to students who are residents of the school district and non-residents on a tuition basis. The District maintains five school buildings under the following grade structure (K-2, 3-4, 5-6, 7-8, and 9-12). MISSION STATEMENT Octorara Area School District, through a partnership among school, community and family, is to promote educational excellence in a safe, secure environment, empowering our students with the skills necessary to be successful, responsible members of society. SCHOOL DISTRICT FINANCIAL HISTORY The School District and its predecessors have never defaulted on the payment of lease rentals or debt service. The status of the School Districts present indebtedness is shown in the table entitled Outstanding School Financing, in Appendix A. FUTURE FINANCING In August of 2011, the majority of the additions and renovations were completed on the Octorara High School. Other than routine repairs and maintenance, no future projects have been planned. During the 2012-13 fiscal year, the District refinanced the 2008 Series Bond and recognized a savings of $260,000 that was spread over the 2012-13 and 2013-14 fiscal years. The District will continue to monitor the market and take advantage of future bond refinancing opportunities. FINANCIAL HIGHLIGHTS The District ended the 2012-13 fiscal year with a surplus of $1.8M in the general fund. The 2012-13 budget approved in June 2012 included the appropriation of $1.2M of fund balance. The majority of the variance can be attributed to lower health care expenditures, lower salaries and utility expenses, not using the budgetary reserve and lower than anticipated charter school costs. The general fund reported a positive fund balance of $8.4M. FINANCIAL STATEMENTS The financial statements consist of three parts: Management Discussion and Analysis (this section), the basic financial statements and required supplementary information (RSI). The basic financial statements include two kinds of statements that present different views of Octorara Area School District. The first two statements are government-wide financial statements the Statement of Net position and the Statement of Activities. These provide both long-term and short-term information about the Schools overall financial status. The remaining statements are fund financial statements that focus on individual parts of the Schools operations in more detail than the government-wide statements. The governmental funds statements tell how basic services such as regular and special education were financed were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short- and long-term financial information about the activities that the School operates like a business. For the School, this is our Food Service Fund. Fiduciary fund statements provide information about financial relationships where the School acts solely as a trustee or agent for the benefit of others.
MD&A 1
The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and reports the financial statements with the comparison of Octorara Area School Districts budget for the year. Figure A-1 shows how the required parts of the Financial Section are arranged and relate to one another: Figure A-1 Required components of Octorara Area School Districts Financial Report
Management Discussion and Analysis
Basic Financial Statements
Required Supplementary Information
Government-wide Financial Statements
Fund Financial Statements
Notes to the Financial Statements
Summary
Detail
Figure A-2 summarizes the major features of the financial statements, including the portion of the Program they cover and the types of information they contain. The remainder of this overview section of management discussion and analysis explains the structure and contents of each of the statements.
Figure A-2 Major Features of Octorara Area School Districts Government-wide and Fund Financial Statements Fund Statements GovernmentWide Statements Entire School (except fiduciary funds).
Scope
Governmental Funds The activities of the School that is not proprietary or fiduciary, such as education, administration and community services.
Required financial statements.
Statement of net position Statement of activities.
Balance Sheet Statement of revenues, expenditures, and changes in fund balance.
Accounting basis and measurement focus. Type of asset/liability information.
Accrual accounting and economic resources focus. All assets and liabilities, both financial and capital, and short-term and long-term.
Modified accrual accounting and current financial resources focus.
Proprietary Funds An activity the School operates similar to private business Food Services and Production. Statement of net position Statement of revenues, expenses and changes in net position Statement of cash flows. Accrual accounting and economic resources focus. All assets and liabilities, both financial and capital, and short-term and long-term.
Fiduciary Funds Instances in which the School is the trustee or agent to someone elses resources Scholarship Funds. Statement of fiduciary net position Statement of changes in fiduciary net position.
Accrual accounting and economic resources focus.
Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included.
All assets and liabilities, both short-term and longterm.
Type of inflowoutflow information.
All revenues and expenses during year, regardless of when cash is received or paid.
A revenue for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter.
MD&A 2
OVERVIEW OF FINANCIAL STATEMENTS Government-Wide Statements The government-wide statements report information about the school as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the governments assets and liabilities. All of the current years revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the schools net position and how they have changed. Net position, the difference between the schools assets, deferred outflows of resources, liabilities, and deferred inflows of resources are one way to measure the schools financial health or position. Over time, increases or decreases in the schools net position are an indication of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the school, you need to consider additional factors, such as changes in the Commonwealth of Pennsylvania contributions, increase of the Public School Employees Retirement contributions, and the projected enrollment of the students.
The government-wide financial statements of the school are divided into two categories: Governmental activities All of the schools basic services are included here, such as instruction, administration and community services. Local tax revenue and state subsidies finance most of these activities. Business type activities The school operates a food service operation and charges fees to staff, students and visitors to help it cover the costs of the food service operation.
Fund Financial Statements The Districts fund financial statements provide more detailed information about the districts funds, focusing on its most significant or major funds not the district as a whole. Some funds are required by state law and by bond requirements. Governmental funds Most of the schools activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. They are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School operations and the services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the schools programs. The relationship (or differences) between governmental activities (reported in the Statement of Net position and the Statement of Activities) and governmental funds is reconciled in the financial statements. Proprietary funds These funds are used to account for the schools activities that are similar to business operations in the private sector; or where the reporting is on determining net income, financial position, changes in financial position, and a significant portion of funding through user charges. When the School charges customers for services it provides whether to outside customers or to other units in the school these services are generally reported in proprietary funds. The Food Service Fund is the Schools proprietary fund and is the same as the business-type activities reported in the government-wide statements, but provide more detail and additional information, such as cash flows. Fiduciary funds The school is the trustee, or fiduciary, for assets that belong to others, such as scholarship funds or student activity funds. The School is responsible for ensuring that the assets reported in these funds, are used only for their intended purposes and by those to whom the assets belong. The School excludes these activities from the Districtwide financial statements because it cannot use these assets to finance its operations.
MD&A 3
FINANCIAL ANALYSIS OF THE SCHOOL AS A WHOLE The Schools total net position was $17,272,719 at June 30, 2013. Table A-1 Fiscal Years Ended June 30, 2012 and June 30, 2013 Statement of Net Position
Governmental Activities 2013 2012 ASSETS Cash and cash equivalents Taxes receivable Internal balances Due from other governments Other receivables Inventories Prepaid expenses Capital Assets Not Being Depreciated: Land and improvements Capital Assets, Net of Accum. Deprec. Site Improvements Building and Improvements Fixtures and Equipment TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCE Deferred Charge Bond Refunding LIABILITIES Accounts payable Accrued salaries and benefits Payroll Deductions and Withholdings Other Current Liabilities Accrued interest Unearned revenue Retirement Incentive Payable Long-term liabilities Portion due or payable within one year Bonds payable in future years Bonds payable, Net Postemployment Benefits Accumulated compensated absences TOTAL LIABILITIES NET POSITION Net Investment in Capital Assets Restricted Fund Balance Unrestricted TOTAL NET POSITION 915,194 1,552,345 661,007 35,677 437,343 58,037 1,559,002 1,498,516 701,633 25,968 471,539 48,762 12,000 43 103 12,885 34 103 12,335 915,237 1,552,448 661,007 35,677 437,343 70,922 1,559,036 1,498,619 701,633 25,968 471,539 61,097 12,000 $ 12,815,647 1,504,657 12,442 555,073 125,185 7,039 4,202,324 167,237 71,443,507 1,717,524 92,550,635 $ 11,999,389 1,514,427 44,607 516,781 84,967 24,155 4,202,324 185,191 72,414,402 2,065,716 93,051,959 $ 274,665 (12,442) 7,808 10 26,389 170 27,433 324,033 $ 259,272 (44,607) 5,084 17,628 21,854 259,231 $ 13,090,312 1,504,657 562,881 125,195 26,389 7,209 4,202,324 167,237 71,443,507 1,744,957 92,874,668 $ 12,258,661 1,514,427 521,865 84,967 17,628 24,155 4,202,324 185,191 72,414,402 2,087,570 93,311,190 Business-Type Activities 2013 2012 Totals 2013 2012
407,646
492,359
407,646
492,359
3,220,000 67,323,185 943,042 850,734 75,996,564
3,159,475 70,411,378 793,111 1,071,998 79,753,382
13,031
12,472
3,220,000 67,323,185 943,042 850,734 76,009,595
3,159,475 70,411,378 793,111 1,071,998 79,765,854
9,854,953 358,212 6,748,552 $ 16,961,717
8,329,109 297,617 5,164,210 $ 13,790,936
27,433 283,569 311,002
21,854 224,905 246,759
9,882,386 358,212 7,032,121 $ 17,272,719
8,350,963 297,617 5,389,115 $ 14,037,695
Most of the Schools net position is invested in capital assets (buildings, land, and equipment). The remaining unrestricted net position is a combination of assigned and unassigned amounts. The assigned balances are amounts set-aside to fund future equipment purchases, debt service, PSERS increases, health care or capital projects as may be planned by the School. The long-term liabilities decreased in the 2013 fiscal year due to the regularly scheduled payments on the Districts outstanding bonds.
MD&A 4
The results of this year's operations as a whole are reported in the Statement of Activities. All expenses are reported in the first column. Specific charges, grants, revenues and subsidies that directly relate to specific expense categories are represented to determine the final amount of the Schools activities that are supported by other general revenues. The largest general revenue category is tax revenue. Table A-2 takes the information from the Statement of Activity, rearranges it slightly, so you can see our total revenues for the year. The tables below present the expenses of both the Governmental Activities and the Business-type Activities of the School. Table A-2 Fiscal Years ended June 30, 2012 and June 30, 2013 Statement of Activities
Net (Expense) Revenue and Program Revenues Operating Charges for Functions/Programs GOVERNMENTAL ACTIVITIES Instruction Instructional Student Support Administrative & Financial Support Services Operation & Maintenance of Plant Services Pupil Transportation Student Activities Community Services Interest on longterm debt TOTAL GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES Food service TOTAL PRIMARY GOVERNMENT $707,813 $324,688 $446,680 $0 $0 $63,555 $63,555 $66,995 $26,659,934 $2,903,374 $176,842 $0 $4,273,750 $296,000 $0 $0 ($22,209,342) ($2,607,374) $0 $0 ($22,209,342) ($2,607,374) ($22,437,976) ($2,460,448) Expenses Services Grants and Contributions Capital Grants and Contributions Governmental Activities Business-type Activities 2013 Total 2012 Changes in Net position
$3,093,686
$0
$176,653
$0
($2,917,033)
$0
($2,917,033)
($2,853,964)
$4,108,887 $2,871,831 $562,811 $10,397 $2,899,257
$60,126 $45,004 $0 $0
$58,585 $1,069,817 $119,800 $5,535 $0
$0 $0 $0 $0 $687,354
($3,990,176) ($1,802,014) ($398,007) ($4,862) ($2,211,903)
$0 $0 $0 $0 $0
($3,990,176) ($1,802,014) ($398,007) ($4,862) ($2,211,903)
($4,691,944) ($1,646,019) ($359,635) ($36) ($2,411,749)
$43,110,177
$281,972
$6,000,140
$687,354
($36,140,711)
$0
($36,140,711)
($36,861,771)
$43,817,990
$606,660
$6,446,820
$687,354
($36,140,711)
$63,555
($36,077,156)
($36,794,776)
GENERAL REVENUES Property taxes, levied for general purposes Taxes levied for specific purposes Grants, Subsidies Investment earnings Loss on Sale of Fixed Assets Miscellaneous TOTAL GENERAL REVENUES CHANGE IN NET POSITION NET POSITION BEGINNING OF YEAR RESTATED NET POSITION END OF YEAR $130,434 $39,311,492 $3,170,781 $0 $688 $64,243 $130,434 $39,312,180 $3,235,024 $160,022 $37,903,409 $1,108,633 $30,022,180 $2,225,332 $6,789,664 $143,882 $0 $688 $0 $30,022,180 $2,225,332 $6,789,664 $144,570 $29,207,189 $1,564,636 $6,797,346 $174,216
$13,790,936 $16,961,717
$246,759 $311,002
$14,037,695 $17,272,719
$12,929,062 $14,037,695
MD&A 5
Fund Balances At June 30, 2013, the Schools governmental funds reported a combined fund balance of $10,798,792 which is an increase of $1,435,360 from June 30, 2012. General Fund: The School General Fund balance has no reserves. Capital Project Fund: In 2004, the school district borrowed $37,000,000 in General Obligation Bonds for the construction of a new grade 5-6 Intermediate School, a new maintenance building and renovation and addition projects at the High School. This was the first part of borrowing of the funds for a projected project of approximately $60M. The school district borrowed $10M in March of 2009, another $10M in February of 2010, and $7.5M in February of 2012. Table A-3 Fiscal Years ended June 30, 2012 and June 30, 2013 Fund Balance
General Capital Projects Total
Fund Balance June 30, 2012 $ 6,545,320 $ 2,818,112 $ 9,363,432
Fund Balance June 30, 2013 $ 8,379,979 $ 2,418,813 $ 10,798,792
Increase (Decrease) $ 1,834,659 $ (399,299) $ 1,435,360
General Fund Budget During the fiscal year, the school board authorizes revisions to the original budget to accommodate differences from the original budget to the actual expenditures of the School. A schedule showing the Schools original and final budget amounts compared with amounts actually paid and received is provided in the financial statements. Below are line items contributing to the net surplus for the year.
2012-13 Revenues Expenses Net Contributing Line Items: Revenue Local Revenue State Revenue Federal Revenue Expense Salaries Healthcare Dental Prescription Retirement Contributions Social Security Contribution Charter School Tuition Utilities Tuition to Aps Budgetary Reserve Principal / Interest
$ $ $
Budget 45,564,536 46,664,374 (1,099,838)
$ $ $
Actual 46,241,449 44,406,790 1,834,659
$ $ $
Variance 676,913 2,257,584 2,934,497
$ $ $
32,449,126 11,897,722 1,217,688
$ $ $
33,258,094 11,744,866 1,238,489
$ $ $
808,968 (152,856) 20,801
$ $ $ $ $ $ $ $ $ $ $
18,930,094 2,288,050 254,206 771,638 2,337,367 1,442,368 2,627,000 750,000 150,634 250,000 6,091,088
$ $ $ $ $ $ $ $ $ $ $
18,270,659 1,737,364 161,093 1,014,288 2,197,106 1,354,938 2,310,080 604,970 74,645 0 5,954,673
$ $ $ $ $ $ $ $ $ $ $
659,435 550,686 93,113 (242,650) 140,261 87,430 316,920 145,030 75,989 250,000 136,415
MD&A 6
FUND BALANCE The school district will end the 20122013 fiscal year with a fund balance of $8.4M. Of this amount $4.8M has been assigned for anticipated increases in PSERS, increased costs associated with health care, future facilities improvements and debt service obligations. Amounts have also been designated for increased health care with some smaller amounts for buildings & grounds. CAPITAL ASSET AND DEBT ADMINISTRATION At June 30, 2013, the School had $77,530,592 in Governmental Funds and $27,433 in Business Type invested in a broad range of capital assets, including land, buildings, furniture and equipment. This amount represents a net decrease (including additions, deletions and depreciation) of $1,337,041 Governmental Activities and a net increase of $5,579 from Business Activities from June 30, 2012. The chart below demonstrates the breakdown of the 2012-13 general fund revenues
MD&A 7
This next chart demonstrates the breakdown of the 2012-13 local revenues
Table A-7 Governmental Activities Capital assets (net of depreciation) in thousands Governmental Activities 2012 2013 (Amounts Expressed in Thousands) Capital Assets Land & Improvements Site Improvements, Net of Depreciation Building & Improvements, Net of Depreciation Furniture & Equipment Total Capital Assets Debt Administration Bond Obligations As of June 30, 2013 the Octorara Area School District has outstanding bond obligations of $69,645,000. Leases The School has entered into operating leases for copiers. Other obligations include accrued vacation pay and sick leave for specific employees of the school amounting to $850,734. Subsequent to year-end, the District entered into a lease agreement for 1,200 I-pads. The lease commenced on July 5, 2013 with three annual payments of $186,043 Business-Type Activities 2012 2013 Total 2012 2013
$4,202 $185 $72,414 $2,066 $78,867
$4,202 $167 $71,444 $1,718 $77,531
$0 $0 $0 $22 $22
$0 $0 $0 $27 $27
$4,202 $185 $72,414 $2,088 $78,889
$4,202 $167 $71,444 $1,745 $77,558
MD&A 8
FACTORS BEARING ON OCTORARA AREA SCHOOL DISTRICTS FUTURE Factors that will affect the future finances of the School are employee health benefits, PSERS projected retirement rates, Real Estate Tax appeals and reduced state revenue. ACT 1 of 2006 provides for the school district to limit budget increases to an establish index that changes from year to year. The budget process is limited unless budget exceptions are approved by the PA Department of Education. The index for the Octorara Area School District for the budget process of 2007 2008 was 5.4%. The index provided by the PA Department of Education for the 2014 2015 fiscal year has been established at 2.6%. This low index will make it difficult to balance the 2014-15 budget without using a portion of the Districts fund balance. CONTACTING THE SCHOOL FINANCIAL MANAGEMENT This financial report is designed to provide citizens, taxpayers, parents, students, investors and creditors with a general overview of the Schools finances and to show the accountability for the money it receives. If you have questions about this report or wish to request additional financial information, please contact the Business Office, Octorara Area School District, 228 Highland Road, Suite #1, Atglen, PA 19310.
MD&A 9
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF NET POSITION June 30, 2013 BusinessType Activities $ 274,665 (12,442) 7,808 10 26,389 170 27,433 324,033
Governmental Activities ASSETS Cash and Investments Taxes Receivable, Net Internal Balances Intergovernmental Receivables Other Receivables Inventories Prepaid Expenses Capital Assets Not Being Depreciated: Land Capital Assets, Net of Accumulated Depreciation: Site Improvements Building and Building Improvements Fixtures and Equipment TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES Deferred Charge on Bond Refunding LIABILITIES Accounts Payable Accrued Salaries and Benefits Payroll Deductions and Withholdings Unearned Revenues Other Current Liabilities Accrued Interest Noncurrent Liabilities Long-Term Debt Due Within One Year Bonds Payable, Net Long-Term Portion of Compensated Absences Postemployment Benefit Obligation TOTAL LIABILITIES NET POSITION Net Investment in Capital Assets Restricted for Capital Projects Unrestricted TOTAL NET POSITION $ 12,815,647 1,504,657 12,442 555,073 125,185 7,039 4,202,324 167,237 71,443,507 1,717,524 92,550,635
Total $ 13,090,312 1,504,657 562,881 125,195 26,389 7,209 4,202,324 167,237 71,443,507 1,744,957 92,874,668
407,646
407,646
915,194 1,552,345 661,007 58,037 35,677 437,343 3,220,000 67,323,185 850,734 943,042 75,996,564
43 103 12,885 13,031
915,237 1,552,448 661,007 70,922 35,677 437,343 3,220,000 67,323,185 850,734 943,042 76,009,595
9,854,953 358,212 6,748,552 $ 16,961,717 $
27,433 283,569 311,002
9,882,386 358,212 7,032,121 $ 17,272,719
See accompanying notes.
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF ACTIVITIES For the Year Ended June 30, 2013 Net (Expense) Revenue and Changes in Net Position Governmental Activities Business-Type Activities
Functions/Programs Governmental Activities: Instruction: Regular Special Vocational Other Instructional Programs Total Instructional Services Support Services: Pupil Personnel Instructional Staff Administration Pupil Health Business Services Operation of Plant and Maintenance Services Student Transportation Services Central Other Support Services Total Support Services Noninstructional Services: Student Activities Community Services Interest on Long-Term Debt Total Noninstructional Services Total Governmental Activities Business-Type Activities: Food Services Total Primary Government
Expenses
Charges for Services
Program Revenue Operating Capital Grants and Grants and Contributions Contributions
Total
$ 17,563,886 6,962,778 1,583,342 549,928 26,659,934
176,842 176,842
$ 2,145,900 2,053,464 24,084 50,302 4,273,750
$ (15,241,144) (4,909,314) (1,559,258) (499,626) (22,209,342)
$ (15,241,144) (4,909,314) (1,559,258) (499,626) (22,209,342)
1,309,649 507,616 2,524,178 441,192 523,748 4,108,887 2,871,831 644,917 45,760 12,977,778
60,126 60,126
91,842 99,804 143,227 82,908 33,426 58,585 1,069,817 21,446 1,601,055
(1,217,807) (407,812) (2,380,951) (358,284) (490,322) (3,990,176) (1,802,014) (623,471) (45,760) (11,316,597)
(1,217,807) (407,812) (2,380,951) (358,284) (490,322) (3,990,176) (1,802,014) (623,471) (45,760) (11,316,597)
562,811 10,397 2,899,257 3,472,465 43,110,177
45,004 45,004 281,972
119,800 5,535 125,335 6,000,140
687,354 687,354 687,354
(398,007) (4,862) (2,211,903) (2,614,772) (36,140,711)
(398,007) (4,862) (2,211,903) (2,614,772) (36,140,711)
707,813 $ 43,817,990 $
324,688 606,660
446,680 $ 6,446,820 $
687,354
(36,140,711)
63,555 63,555
63,555 (36,077,156)
General Revenues: Taxes: Property Taxes, Levied for General Purposes Public Utility Realty, Earned Income, and Mercantile Taxes Levied for General Purposes, Net Grants, Subsidies, and Contributions Not Restricted Investment Earnings Miscellaneous Total General Revenues Change in Net Position Net Position - Beginning - Restated Net Position - Ending
30,022,180 2,225,332 6,789,664 143,882 130,434 39,311,492 3,170,781 13,790,936 $ 16,961,717 $
688 688 64,243 246,759 311,002
30,022,180 2,225,332 6,789,664 144,570 130,434 39,312,180 3,235,024 14,037,695 $ 17,272,719
OCTORARA AREA SCHOOL DISTRICT BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2013 Total Governmental Funds $ 12,815,647 1,535,554 12,442 555,073 125,185 7,039 $ 15,050,940
General ASSETS Cash and Investments Taxes Receivable Interfund Receivables Intergovernmental Receivables Other Receivables Prepaid Expenditures TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS, AND FUND BALANCES LIABILITIES Accounts Payable Accrued Salaries and Benefits Payroll Deductions and Withholdings Unearned Revenues Other Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes FUND BALANCES Nonspendable for Prepaid Expenditures Restricted Fund Balance Assigned Fund Balance Unassigned Fund Balance TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS, AND FUND BALANCES $ 10,355,782 1,535,554 12,442 555,073 125,185 7,039 $ 12,591,075
Capital Projects $ 2,459,865 $ 2,459,865 $
Debt Service
874,142 1,552,345 661,007 58,037 35,677 3,181,208
41,052 41,052
915,194 1,552,345 661,007 58,037 35,677 3,222,260
1,029,888
1,029,888
7,039 4,811,919 3,561,021 8,379,979
2,418,813 2,418,813
7,039 2,418,813 4,811,919 3,561,021 10,798,792
$ 12,591,075
$ 2,459,865
$ 15,050,940
OCTORARA AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION June 30, 2013
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore, are not reported as assets in governmental funds. The cost of the assets is $101,702,765 and the accumulated depreciation is $24,172,173. Property taxes receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures and, therefore, are reported as unavailable revenue in the funds. Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore, are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Bonds Payable Accrued Interest on Long-Term Debt Unamortized Bond Premium Unamortized Bond Discount Deferred Charge on Bond Refunding Long-Term Portion of Compensated Absences Postemployment Benefits TOTAL NET POSITION - GOVERNMENTAL ACTIVITIES $ (69,645,000) (437,343) (1,033,675) 135,490 407,646 (850,734) (943,042)
$ 10,798,792
77,530,592
998,991
(72,366,658) $ 16,961,717
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended June 30, 2013 Total Governmental Funds $ 33,269,595 11,744,866 1,238,489 46,252,950
General REVENUES Local Sources State Sources Federal Sources TOTAL REVENUES EXPENDITURES Instructional Services Support Services Operation of Noninstructional Services Capital Outlay Debt Service Principal Interest Refund of Prior Year Revenues TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Sale of Capital Assets Proceeds from Refunding Bonds Payment to Escrow Agent, Refunding Bonds Bond Premium TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING $ $ 33,258,094 11,744,866 1,238,489 46,241,449 $
Capital Projects 11,501 11,501 $
Debt Service
26,653,702 11,262,466 516,618 3,100,000 2,854,673 23,361 44,410,820
410,800 410,800
97,740 114,958 212,698
26,653,702 11,360,206 516,618 410,800 3,100,000 2,969,631 23,361 45,034,318
1,830,629
(399,299)
(212,698)
1,218,632
4,030 4,030 1,834,659 6,545,320 8,379,979
(399,299) 2,818,112 $ 2,418,813 $
6,850,000 (6,935,000) 297,698 212,698 -
4,030 6,850,000 (6,935,000) 297,698 216,728 1,435,360 9,363,432 $ 10,798,792
OCTORARA AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended June 30, 2013
NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Capital Outlays Less: Depreciation Expense Because some property taxes will not be collected for several months after the District's year-end, they are not considered as "available" revenues in the governmental funds. Unavailable revenues increased (decreased) by this amount during the year. Issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of longterm debt consumes the current financial resources of governmental funds. However, neither transaction has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. The effect of these transactions in the statement of activities is shown below: Repayment of Bond Principal Proceeds from Refunding Bonds Payment to Escrow Agent, Refunding Bonds Bond Premium Amortization of Bond Discount Amortization of Bond Premium Amortization of Deferred Charge 3,100,000 (6,850,000) 6,935,000 (297,698) (15,296) 104,950 (53,476) $ 1,099,922 (2,436,963)
1,435,360
(1,337,041)
23,978
2,923,480
OCTORARA AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES - CONTINUED For the Year Ended June 30, 2013
Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, interest expense is recognized as the interest accrues, regardless of when it is due. The adjustment for interest accrued in the statement of activities compared to the amount paid is shown here. In the statement of activities, certain operating expenses - compensated absences (vacations and sick days) are measured by the amounts earned during the year. In the governmental funds; however, expenditures for these items are measured by the amount of financial resources used. This amount represents the difference between the amount earned versus the amount used. Postemployment benefits are recognized when they are paid on the fund statements. With the implementation of GASB #45, an estimated liability for future benefits due will be phased in over several years. This amount represents the difference between the estimated annual cost and the amount paid. CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $
34,196
240,739
(149,931) 3,170,781
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF NET POSITION PROPRIETARY FUND June 30, 2013 Enterprise Fund Food Service ASSETS CURRENT ASSETS Cash and Cash Equivalents Intergovernmental Receivables Other Receivables Inventories Prepaid Expenses TOTAL CURRENT ASSETS NONCURRENT ASSETS Fixtures and Equipment, Net TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Accounts Payable Interfund Payable Accrued Salaries and Benefits Unearned Revenues TOTAL LIABILITIES NET POSITION Net Investment in Capital Assets Unrestricted TOTAL NET POSITION $
274,665 7,808 10 26,389 170 309,042
27,433 336,475
43 12,442 103 12,885 25,473
27,433 283,569 311,002
10
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUND For the Year Ended June 30, 2013 Enterprise Fund Food Service OPERATING REVENUES Food Service Revenue OPERATING EXPENSES Salaries Employee Benefits Purchased Services Supplies Depreciation Repairs and Maintenance TOTAL OPERATING EXPENSES OPERATING LOSS NONOPERATING REVENUES Local Sources - Earnings on Investments State Sources Federal Sources TOTAL NONOPERATING REVENUES CHANGE IN NET POSITION NET POSITION - BEGINNING NET POSITION - ENDING $
324,688
267,878 89,334 5,270 313,257 16,150 15,924 707,813 (383,125)
688 26,188 420,492 447,368 64,243 246,759 311,002
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OCTORARA AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS PROPRIETARY FUND For the Year Ended June 30, 2013 Enterprise Fund Food Service CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Users Cash Payments to Employees for Services Cash Payments to Suppliers for Goods and Services NET CASH USED FOR OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Sources Federal Sources NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of Capital Assets CASH FLOWS FROM INVESTING ACTIVITIES Earnings on Investments NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR $ $ 325,228 (389,377) (300,091) (364,240)
26,184 374,490 400,674
(21,729)
688 15,393 259,272 274,665
12
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS - CONTINUED PROPRIETARY FUND For the Year Ended June 30, 2013 Enterprise Fund Food Service Reconciliation of Operating Loss to Net Cash Used For Operating Activities: Operating Loss Adjustments to Reconcile Operating Loss to Net Cash Used For Operating Activities: Depreciation Donated Commodities Used Changes in Assets and Liabilities: Other Receivables Prepaid Expenses Inventories Accounts Payable Unearned Revenues Interfund Payable Total Adjustments NET CASH USED FOR OPERATING ACTIVITIES NONCASH NONCAPITAL FINANCING ACTIVITIES During the year, the District used $43,282 of commodities from the U.S. Department of Agriculture. $ $ (383,125)
16,150 43,282
(10) (170) (8,761) 9 550 (32,165) 18,885 (364,240)
13
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF NET POSITION FIDUCIARY FUNDS June 30, 2013 Agency Funds Student Activities
Private Purpose Trust Fund Scholarship ASSETS CURRENT ASSETS Cash and Investments TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Other Current Liabilities TOTAL LIABILITIES NET POSITION Held in Trust for Scholarships
197,674 197,674
$ $
112,540 112,540
$ $
112,540 112,540
197,674
14
OCTORARA AREA SCHOOL DISTRICT STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS For the Year Ended June 30, 2013
Private Purpose Trust Fund Scholarship ADDITIONS Investment Income Donations Total Additions DEDUCTIONS Scholarships CHANGE IN NET POSITION NET POSITION - BEGINNING OF YEAR NET POSITION - END OF YEAR $
5,953 21,601 27,554
23,607 3,947 193,727 197,674
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OCTORARA AREA SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2013
The Octorara Area School District (the "District") is a unit established, organized, and empowered by the Commonwealth of Pennsylvania for the express purpose of carrying out, on the local level, the commonwealths obligation to public education, as established by the constitution of the commonwealth and by the School Law Code of the same (Article II; Act 150, July 8, 1968). The Octorara Area School District is a combination of three boroughs and five townships in Lancaster and Chester County. Lancaster County consists of Christiana Borough and Sadsbury Township, while Chester County consists of the boroughs of Parkesburg and Atglen and the townships of West Sadsbury, West Fallowfield, Highland, and Londonberry. As specified under the School Law Code of the Commonwealth of Pennsylvania, this and all other school districts of the state shall be and hereby are vested as, bodies corporate, with all necessary powers to carry out the provisions of this act (Article II, Section 211). The District is governed by a board of nine school directors who are residents of the School District and who are elected every two years, on a staggered basis, for a four-year term. The board of school directors has the power and duty to establish, equip, furnish, and maintain a sufficient number of elementary, secondary and other schools necessary to educate every person residing in such district, between the ages of six and twenty-one years, who may attend. The superintendent is the chief administrative officer and chief instructional officer of the board and the District and is responsible for the execution of all actions of the board. Subject to the policies and direction of the board, the superintendent is responsible for the administration and operation of the public school system and oversees all matters pertaining to instruction. The superintendent manages the District with the assistance of the business administrator, director of operations, the director of special education, as well as the building principals.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the District (the primary government) and its component units. The District used guidance contained in generally accepted accounting principles to evaluate the possible inclusion of related entities (authorities, boards, etc.) within its reporting entity. The criteria used by the District for inclusion are financial accountability and the nature and significance of the relationships. In determining financial accountability in a given case, the District reviews the applicability of the following criteria. The District is financially accountable for: Organizations that make up the legal District entity.
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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
A. Reporting Entity - continued Legally separate organizations if District officials appoint a voting majority of the organizations' governing body and the District is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the District as defined below. Impose its will - If the District can significantly influence the programs, projects or activities of, or the level of services performed or provided by, the organization. Financial benefit or burden - exists if the District (1) is entitled to the organization's resources; (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide support to, the organization; or (3) is obligated in some manner for the debt of the organization. Organizations that are fiscally dependent on the District. Fiscal dependency is established if the organization is unable to adopt its budget, levy taxes, set rates or charges, or issued bonded debt without approval by the District.
Based on the foregoing criteria, the District has determined it has no component units. Governments commonly enter into special arrangements with each other to provide or obtain needed services. A common type of such an arrangement is a joint venture. In addition to joint ventures, governments also enter into contracts to plan for and address certain activities for their mutual benefits; i.e., a jointly governed organization. The District has one of each of these relationships: Joint Venture: The District is a participating member of the Chester County Technical College High School (formerly the Center for Arts and Technology). See Note 10 for details of involvement and financial information of the joint venture. Jointly Governed Organizations: The District is a participating member of the Chester County Intermediate Unit (CCIU). The CCIU is run by a joint committee consisting of members from each participating district. No participating district appoints a majority of the joint committee. The board of school directors of each participating district must approve CCIUs annual operating budget. The CCIU is a self-sustaining organization that provides services for fees to participating districts. As such, the District has no ongoing financial interest or responsibility in the CCIU. The CCIU contracts with participating districts to supply special education services, computer services, and to act as a conduit for certain federal programs.
17
OCTORARA AREA SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
B. Basis of Presentation - Government-Wide Financial Statements Government-wide financial statements (i.e., the statement of net position and the statement of activities) display information about the reporting entity, except for its fiduciary activities. All fiduciary activities are reported only in the fund financial statements. The government-wide statements include separate columns for the governmental and business-type activities of the primary government, as well as any discretely presented component units. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions are reported separately from business-type activities which rely to a significant extent, on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component units for which the primary government is financially accountable. Governmental activities are supported by taxes and intergovernmental revenues while businesstype activities are supported by user charges and fees. The statement of activities demonstrates the level to which the direct expenses of a given function to the District are offset by the program revenues related to that function. Direct expenses are those that are directly related to and clearly identified with a function. Program revenues include charges to customers or others who purchase, use or directly benefit from services or goods provided by a given function or grants and contributions that are restricted to meet the operational or capital requirements of a function. Other items not includable in program revenues are reported as general revenues. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are the contributions made to any component units from the Districts governmental funds and transfers between governmental funds and business-type and fiduciary funds. Elimination of these contributions would distort the direct costs and program revenues reported for the various functions concerned. C. Basis of Presentation - Fund Financial Statements The fund financial statements provide information about the governments funds, including its fiduciary funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprises funds are reported as separate columns in the fund financial statements. The District Reports the Following Major Governmental Funds: General Fund: This fund is established to account for resources devoted to financing the general services that the District performs. Intergovernmental revenues and other sources of revenue used to finance the fundamental operations of the District are included in this fund. The fund is charged with all costs of operating the District for which a separate fund has not been established.
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C. Basis of Presentation - Fund Financial Statements - continued Capital Projects Fund: This fund is established to account for bond proceeds to be used for the acquisition or construction of major capital equipment and facilities (other than those financed by proprietary funds). Debt Service Fund: This fund is established for the purpose of accumulating resources for the payment of interest and principal on long-term general obligation debt. The District has the Following Major Enterprise Fund: Food Service Fund: This fund accounts for all revenues, food purchases, and costs and expenses for the food service program. The food service fund is the Districts only major enterprise fund where the intent of the governing body is that the costs of providing food services are covered by user charges and subsidies received. Additionally, the District Reports the Following Fund Type: Fiduciary Funds: The Districts fiduciary funds include trust funds and agency funds. Trust funds are used to account for assets held by the district under a trust agreement for individuals, private organizations, or other governments and are therefore, not available to support the Districts own programs. The Districts only trust funds are the private-purpose trust funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The Districts student activity fund is an agency fund. During the course of operations, the government has activity between funds for various purposes. Any residual balances outstanding at year-end are reported as interfund receivables and interfund payables. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column. Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column.
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D. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus, and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, licenses, and interest associated with the current fiscal period is considered to be susceptible to accrual and so has been recognized as revenue of the current fiscal period. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the government. The proprietary fund is reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities.
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E. Budgetary Information 1. Budgetary Basis of Accounting Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund in accordance with the PA School Code of 1949, as amended. Budgetary control is legally maintained at the function level within the General Fund. The PA School Code allows the District board to make budgetary transfers between major function and major object codes only within the last nine months of the fiscal year, unless there is a two-thirds majority of the school directors approving the transfer. All budget amounts presented in the accompanying financial statements have been adjusted for legally authorized revisions of the annual budget during the year. Appropriations, except unexpended grant appropriations and encumbrances, lapse at the end of each fiscal year. No budget has been adopted for the capital projects fund. F. Assets, Liabilities, Deferred Inflows/Outflows of Resources, and Net Position/Fund Balance 1. Cash and Cash Equivalents The Districts reporting entity considers all highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents. 2. Investments Investments are reported at fair value (generally based on quoted market prices). 3. Receivables/Payables Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the year are referred to as interfund receivables/payables. Any residual balances outstanding between the governmental and business-type activities are reported in the government-wide financial statements as internal balances.
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F. Assets, Liabilities, Deferred Inflows/Outflows of Resources, and Net Position/Fund Balance continued 4. Inventories On government-wide financial statements, inventories are presented at the lower of cost or market on a first-in, first-out basis and are expensed when used. Inventories of the governmental funds, consisting principally of textbooks and instructional supplies, are not valued since it is the policy of the District to charge these items to expense upon acquisition. Inventories of the Enterprise Fund consisting of food and paper supplies are carried at cost, using the first-in, first-out method. Federal donated commodities are valued at their fair market value as determined by the U.S. Department of Agriculture at the date of donation. The inventories on hand at June 30, 2013, consist of the following: Purchased food and supplies Donated commodities $ 18,175 8,214 $ 26,389 5. Capital Assets, Depreciation, and Amortization The Districts property, plant, and equipment, with useful lives of more than one year are stated at historical cost and comprehensively reported in the government-wide financial statements. Proprietary capital assets are also reported in their respective financial statements. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations, the government values these capital assets at the estimated fair value of the item at the date of its donation. The District generally capitalizes assets with a cost of $1,500 or more as purchase and construction outlays occur. Management has elected to include certain homogeneous asset categories with individual assets less than $1,500 as composite groups for financial reporting purposes. Assets purchased or constructed with long-term debt may be capitalized regardless of the threshold established. The costs of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets, including those of component units, are depreciated using the straight-line method. When capital assets are disposed, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations.
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F. Assets, Liabilities, Deferred Inflows/Outflows of Resources, and Net Position/Fund Balance continued 5. Capital Assets, Depreciation, and Amortization - continued Estimated useful lives, in years, for depreciable assets are as follows:
Assets Site Improvements Building and Building Improvements Fixtures and Equipment Years 10 - 20 20 - 50 5 - 10
Interest costs incurred during the construction phase of capital assets are capitalized when incurred by proprietary funds and similar component units on debt where proceeds were used to finance the construction of assets. 6. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District has one item that qualifies for reporting in this category, which is a deferred charge on bond refunding reported in the government-wide statement of net position. A deferred charge on bond refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from one source - property taxes. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
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F. Assets, Liabilities, Deferred Inflows/Outflows of Resources, and Net Position/Fund Balance continued 7. Unearned Revenues Revenues that are received but not earned are reported as unearned revenues in the government-wide and fund financial statements. Unearned revenues arise when resources are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the District has legal claim to the resources, the liability for unearned revenue is removed from the respective financial statements and revenue is recognized. 8. Net Position Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the governmentwide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the governments policy to consider restricted - net position to have been depleted before unrestricted - net position is applied. 9. Fund Balance Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the Districts policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. The Districts policy places no restrictions on the order of the unrestricted fund balances used. The order of the unrestricted fund balances used for disbursements is at the discretion of the business manager. 10. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance).
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F. Assets, Liabilities, Deferred Inflows/Outflows of Resources, and Net Position/Fund Balance continued 10. Fund Balance Policies - continued The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the governments highest level of decisionmaking authority. The board of school directors is the highest level of decision-making authority for the government that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of another resolution) to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The finance committee may assign fund balance. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or review a commitment. The unassigned fund balance of the general fund at the end of each fiscal year-end shall not be less than six percent of the following years projected budgeted expenditures. In any fiscal year where the District is unable to maintain this minimum reservation of fund balance as required in this section, the District shall not budget any amount of unassigned fund balance for the purpose of balancing the general fund budget until this level is achieved. G. Revenues and Expenditures/Expense 1. Program Revenues Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions (including special assessments) that are restricted to meeting the operations or capital requirements of a particular function or segment. All taxes and other internally dedicated resources are reported as general revenues rather than as program revenues.
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G. Revenues and Expenditures/Expense - continued 2. Compensated Absences Vacation Leave Vacation days are earned at various rates and are required to be utilized annually, except that two times your allotment may be carried forward. The District maintains records of all employees accumulated vacation days. Sick Pay Sick pay is accumulated with a 250 day limit per employee at the rate of one day for each month worked. Leave with pay is provided when employees are absent for health reasons. Personal days are earned during the year and are carried over with no limit. Eligible employees are vested at the completion of 10 to 15 years of service to the District and are then eligible for payment for each sick day accumulated. Payment amount ranges from $20 to $75 per day based on position. Eligible employees must retire from service to receive this benefit. Longevity Bonus A longevity bonus is earned when an administrator completes ten consecutive years of service as an administrator in the school district or a teacher completes 15 consecutive years with the district. The bonus is calculated on the salary of the last completed school year times 3/10 of one percent (.003) times the number of year of service. Teachers are limited to $2,500 while there is no limit for administrators. The District accrues for any administrator or teacher who qualifies for the bonus. 3. Proprietary Funds Operating and Nonoperating Revenues and Expenses Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds principal ongoing operations. The principal operating revenues of the food service fund are charges to customers for meals and services provided. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
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H. Other Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2 - CASH AND CASH EQUIVALENTS AND INVESTMENTS
Cash Custodial Credit Risk - Deposit Custodial credit risk is the risk that in the event of a bank failure, the governments deposits may not be returned. The District does have a policy for custodial credit risk on deposits. At June 30, 2013, the carrying amount of the Districts deposits was $2,183,323 and the bank balance was $2,288,659. Of the bank balance, $250,000 was covered by federal depository insurance, and $2,038,659 was exposed to custodial credit risk because it was uninsured and the collateral held by the depositorys agent was not in the Districts name. A portion of the Districts deposits are in the Pennsylvania School District Liquid Asset Fund (PSDLAF) and are disclosed under investments below. Investments Under Section 440.1 of the Public School Code of 1949, as amended, the District is permitted to invest funds in the following types of investments: Obligations of (a) the United States of America or any of its agencies or instrumentalities backed by the full faith and credit of the United States of America, (b) the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the commonwealth, or (c) any political subdivision of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the political subdivision. Deposits in savings accounts, time deposits or share accounts of institutions insured by the Federal Deposit Insurance Corporation to the extent that such accounts are so insured and, for any amounts above the insured maximum, provided that approval collateral as provided by law therefore, shall be pledged by the depository.
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NOTE 2 - CASH AND CASH EQUIVALENTS AND INVESTMENTS - CONTINUED
As of June 30, 2013, the District had the following investments:

Maturities PA School District Liquid Asset Fund (PSDLAF) GS Financial Square Federal Money Market Fund Certificates of Deposit Client Interest Program Oppenheimer Global Strategic Income Fund Oppenheimer Global Allocation Fund Class A US Government Securities Class B - American Funds Eaton Vance Floating Rate Advantage Fund Fidelity Advisor Government Income Fund Class A MFS Utilities Fund Class A Money Market Account $ 6 to 12 months Fair Value 6,908,974 441,166 3,746,925 2,250 6,529 22,431 21,160 19,714 25,106 14,546 9,405
Total Investments
$ 11,218,206
A portion of the Districts deposits are in the Pennsylvania School District Liquid Asset Fund (PSDLAF). Although not registered with the Securities and Exchange Commission and not subject to regulatory oversight, the funds act like money market mutual funds in that their objective is to maintain a stable net asset value of $1 per share, is rated by a nationally recognized statistical rating organization, and is subject to an independent annual audit. Interest Rate Risk The District does have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk The District has an investment policy that would limit its investment choices to certain credit ratings. As of June 30, 2013, the Districts investments were rated as: Standard Investments & Poor's
PA School District Liquid Asset Fund GS Financial Square Federal Money Market Fund Oppenheimer Global Strategic Income Fund Oppenheimer Global Allocation Fund Class A US Government Securities Class B - American Funds Eaton Vance Floating Rate Advantage Fund Fidelity Advisor Government Income Fund Class A MFS Utilities Fund Class A * Mutual funds not subject to credit rating
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AAA AAA * * * * * *
NOTE 2 - CASH AND CASH EQUIVALENTS AND INVESTMENTS - CONTINUED Concentration of Credit Risk The District does have a policy that would limit the amount they may invest in any one issue. All of the Districts investments are issued or guaranteed by the U.S. Government and investments in mutual pools are excluded from this risk. Custodial Credit Risk For an investment, custodial credit is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral security that are in the possession of an outside party. The District has no investment subject to custodial credit risk.
NOTE 3 - TAXES RECEIVABLE AND UNAVAILABLE REVENUE
Assessed values for real estate tax are established by the County Board of Assessment. All taxable real property was assessed at $237,120,300 and $669,820,059 for Lancaster and Chester County, respectively. The District tax rate for the year ended June 30, 2013 was 27.49 and 36.66 per $1,000 of assessed valuation for Lancaster and Chester County, respectively. The schedule for real estate taxes levied for each fiscal year is as follows:
July 1 July 1 - August 31 September 1 - October 31 November 1 - January 14 January 15
Levy date 2% discount period Face payment period 10% penalty period Lien date
The District, in accordance with generally accepted accounting principles, recognized the delinquent and unpaid taxes receivable reduced by an allowance for uncollectible taxes as determined by administration. A portion of the net amount estimated to be collectible which was measurable and available within 60 days was recognized as revenue and the balance reported as unavailable revenue under deferred inflows of resources in the fund financial statements.
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NOTE 3 - TAXES RECEIVABLE AND UNAVAILABLE REVENUE - CONTINUED
The balances at June 30, 2013 are as follows:

Net Estimated to be Collectible $ 1,296,745 26,038 181,874 $ 1,504,657
Gross Taxes Receivable Real estate tax Transfer tax Earned income tax $ 1,327,642 26,038 181,874 $ 1,535,554
Allowance for Uncollectible Taxes $ 30,897 30,897
Tax Revenue Recognized $ 266,857 26,038 181,874 474,769
Unavailable Taxes $ 1,029,888 $ 1,029,888
NOTE 4 - INTERGOVERNMENTAL RECEIVABLES
The following schedule represents intergovernmental receivables at June 30, 2013:

General Fund Commonwealth of PA - Retirement Commonwealth of PA - Social Security Commonwealth of PA - Rental Subsidy Commonwealth of PA - ACCESS Commonwealth of PA - Food Service Program Other LEAs Federal Subsidies - IDEA $ 169,704 61,759 151,200 77,113 5,440 89,857 555,073 Proprietary Fund $ 7,808 7,808
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NOTE 5 - CHANGES IN CAPITAL ASSETS
Capital asset balances and activity for the year ended June 30, 2013 were as follows: Governmental Activities
Beginning Balance Capital assets not being depreciated: Land Capital assets being depreciated: Site improvements Building and building improvements Fixtures and equipment Totals being depreciated Less accumulated depreciation for: Site improvements Building and building improvements Fixtures and equipment Total accumulated depreciation TOTAL CAPITAL ASSETS BEING DEPRECIATED, NET GOVERNMENTAL ACTIVITIES, CAPITAL ASSETS, NET Business-Type Activities Capital assets being depreciated: Fixtures and equipment Accumulated depreciation for: Fixtures and equipment BUSINESS-TYPE ACTIVITIES CAPITAL ASSETS, NET $ 4,202,324 $ Increase $ Decrease $ Ending Balance 4,202,324
1,211,350 86,503,504 8,685,665 96,400,519
779,708 320,214 1,099,922
1,211,350 87,283,212 9,005,879 97,500,441
1,026,159 14,089,102 6,619,949 21,735,210
17,954 1,750,603 668,406 2,436,963
1,044,113 15,839,705 7,288,355 24,172,173
74,665,309
(1,337,041)
73,328,268
$ 78,867,633
$ (1,337,041)
$ 77,530,592
395,199 373,345
21,729 16,150
416,928 389,495
21,854
5,579
27,433
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NOTE 5 - CHANGES IN CAPITAL ASSETS - CONTINUED
Depreciation expense was charged to functions/program of the governmental activities of the primary government as follows:
Instruction Support Services Noninstructional Services TOTAL DEPRECIATION EXPENSE GOVERNMENTAL ACTIVITIES
186,994 2,195,858 54,111
$ 2,436,963
NOTE 6 - LONG-TERM LIABILITIES
Bonds payable are as follows at June 30, 2013: General Obligation Bond - Series of 2009A: The District is liable for general obligation bonds dated March 15, 2009 in the original principal amount of $10,000,000. Principal maturities occur on June 1 through the year 2028. Interest rates range from 2.00% to 4.55%. The proceeds of this Bond were used for renovations and additions to the high school. General Obligation Bond - Series of 2009B: The District is liable for general obligation bonds dated March 15, 2009 in the original principal amount of $37,245,000. Principal maturities occur on June 1 through the year 2031. Interest rates range from 3.00% to 5.00%. The proceeds of this Bond were used to currently refund the General Obligation Bonds - Series of 2004 and pay the termination amount with respect to the termination of the swap agreement related to the 2004 Bonds. General Obligation Bond - Series of 2010A: The District is liable for general obligation bonds dated February 9, 2010 in the original principal amount of $10,000,000. Principal maturities occur on April 1 through the year 2029. Interest rates range from 1.00% to 4.30%. The proceeds of this Bond were used to finance various capital projects and the costs of issuing and insuring the bonds.
9,980,000
32,670,000
9,985,000
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NOTE 6 - LONG-TERM LIABILITIES - CONTINUED
General Obligation Bond - Series of 2010B: The District is liable for general obligation bonds dated February 9, 2010 in the original principal amount of $7,520,000. Principal maturities occur on April 1 through the year 2019. Interest rates range from 1.00% to 3.45%. The proceeds of this Bond were used to refund General Obligation Bonds Series 2001, Series A of 2003, Series B of 2003. General Obligation Bond - Series of 2011: The District is liable for general obligation bonds dated February 23, 2011 in the original principal amount of $7,500,000. Principal maturities occur on March 1 through the year 2030. Interest rates range from 1.00% to 4.375%. The proceeds of this Bond were used to finance various capital projects and the costs of issuing and insuring the bonds. General Obligation Bond - Series of 2013: The District is liable for general obligation bonds dated January 4, 2013 in the original principal amount of $6,850,000. Principal maturities occur on February 15 through the year 2018. Interest rates range from 1.00% to 3.00%. The proceeds of this Bond were used to currently refund General Obligation Bonds - Series 2008. The District realized a savings of $266,162 as a result of the refunding. Total Bonds Payable
3,975,000
7,225,000
5,810,000 $ 69,645,000
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NOTE 6 - LONG-TERM LIABILITIES - CONTINUED - CONTINUED
The future annual payments required to amortize all bonds payable for the years ending June 30 are as follows:
General Obligation Bonds, Series of 2009A 2014 2015 2016 2017 2018 2019 - 2023 2024 - 2028 2029 - 2031 $ 5,000 5,000 5,000 5,000 5,000 25,000 9,930,000 9,980,000 General Obligation Bonds, Series of 2011 2014 2015 2016 2017 2018 2019 - 2023 2024 - 2028 2029 - 2031 $ 255,000 265,000 270,000 265,000 250,000 230,000 2,055,000 3,635,000 7,225,000 $ $ General Obligation Bonds, Series of 2009B 1,210,000 1,360,000 1,415,000 1,505,000 1,635,000 18,805,000 5,135,000 1,605,000 32,670,000 General Obligation Bonds, Series of 2013 1,015,000 1,170,000 1,190,000 1,220,000 1,215,000 5,810,000 $ $ General Obligation Bonds, Series of 2010A 5,000 5,000 5,000 5,000 5,000 25,000 8,035,000 1,900,000 9,985,000 $ General Obligation Bonds, Series of 2010B 730,000 615,000 630,000 645,000 670,000 685,000 3,975,000
Total General Long-Term Debt 3,220,000 3,420,000 3,515,000 3,645,000 3,780,000 19,770,000 25,155,000 7,140,000 69,645,000 $
Total Interest 2,824,571 2,736,709 2,639,056 2,509,683 2,371,533 9,490,548 4,932,494 405,790 27,910,384
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NOTE 6 - LONG-TERM LIABILITIES - CONTINUED
Long-term liability balance and activity, except for the postemployment benefit obligation, for the year ended June 30, 2013 was as follows:
Beginning Balance Governmental Activities General Obligation Debt: Bonds payable Less deferred amounts: For issuance discounts For issuance premiums Other Liabilities: Compensated absences TOTAL GOVERNMENTAL LONG-TERM LIABILITIES Reductions/ Transfers Ending Balance Amounts Due Within One Year
Additions
$ 72,830,000 (150,786) 872,164 1,091,473 $ 74,642,851
$ 6,850,000 297,698 $ 7,147,698
$ 10,035,000 (15,296) 136,187 240,739 $ 10,396,630
$ 69,645,000 (135,490) 1,033,675 850,734 $ 71,393,919
$ 3,220,000 $ 3,220,000
Payments on bonds are made by the general fund. The compensated absence liabilities will be liquidated by the general fund. Total interest paid during the year ended June 30, 2013 was $2,969,631
NOTE 7 - EMPLOYEE RETIREMENT PLAN
Multi-Employer Defined Benefit Pension Plan Plan Description The District contributes to a governmental cost-sharing, multiple-employer defined benefit pension plan administered by the Commonwealth of Pennsylvania Public School Employees Retirement System (PSERS). Benefit provisions of the Plan are established under the provisions of the PSERS Code ("the Code") and may be amended by an act of the Pennsylvania State Legislature. The Plan provides retirement, disability and death benefits, legislatively mandated ad hoc cost-of-living adjustments, and healthcare insurance premium assistance to qualifying plan members and beneficiaries. It also provides for refunds of a member's accumulated contribution upon termination of a member's employment in the public school sector. PSERS issues a publicly available financial report that includes financial statements for the Plan. That report may be obtained by writing to PSERS, PO Box 125, Harrisburg, PA 17108-0125. The publication is also available on the PSERS website at www.psers.state.pa.us/publications/cafr/index.htm.
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NOTE 7 - EMPLOYEE RETIREMENT PLAN - CONTINUED
Funding Policy The contribution policy is set by the Code and requires contributions by active employees and by participating employers. Active members who joined the system prior to July 22, 1983, contribute at 5.25 percent (Membership Class TC) or at 6.50 percent (Membership Class TD) of the members qualifying compensation. Members joining PSERS on or after July 22, 1983 and who were active or inactive as of July 1, 2001, contribute at 6.25 percent (Membership Class TC) or at 7.50 percent (Membership Class TD) of the members qualifying compensation. Members joining PSERS after June 30, 2001 and who were active or inactive as of June 30, 2011 contribute at 7.50 percent (automatic Membership Class TD). For all new hires and for members who elected Class TD membership, the higher contribution rates began with service rendered on or after January 1, 2002. Members joining PSERS on or after July 1, 2011 contribute at 7.50 percent (Membership Class TE) or at 10.30 percent (Membership Class TF). Both membership classes TE and TF contain a shared risk which allows for an increase in the contribution percentage up to an additional 2.00 percent based on market results. The contributions required of participating employers are based on an actuarial valuation and are expressed as a percentage of annual covered payroll during the period for which the amount is determined. For the fiscal year ended June 30, 2013, the rate of employer contributions was 12.36 percent of covered payroll. The 12.36 percent rate is composed of a pension contribution, 11.50 percent of pension benefits and 0.86 percent of healthcare insurance premium assistance. The District's contributions to PSERS for the years ended June 30, 2013, 2012, and 2011 were $2,243,052, $1,553,739, and $1,119,081, respectively. 403(b) Tax Shelter Plan The District has established a 403(b) tax shelter plan permitting the establishment of accounts for school employees to voluntarily set aside monies to supplement their retirement income. All school employees are eligible to participate. The District does not contribute to the Plan.
NOTE 8 - POSTEMPLOYMENT BENEFITS PLAN
Plan Description: Octorara Area School District administers a single-employer defined benefit healthcare plan (the Retiree Health Plan). The Plan provides healthcare insurance for eligible retirees and their spouses through the Districts health insurance plan, which covers both active and retired members until the member reaches Medicare age. Benefit provisions are established through negotiation with the District and the unions representing the Districts employees. The Retiree Health Plan does not issue a publicly available financial report.
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NOTE 8 - POSTEMPLOYMENT BENEFITS PLAN - CONTINUED
Funding Policy: Contribution requirements also are negotiated between the District and union representatives. The required contribution is based on pay as you go financing. The District currently provides the following plans: Administrators: The former superintendent and his family receive medical, prescription drug, dental, and vision insurance at 100 percent premium paid by the District. If insurance premiums increased more than ten percent or the inflation rate, the member must pay the difference in premium. After age 65, the member must pay 100 percent of the premium for all insurances listed above. The District offers the current superintendent and his family prescription drug, dental, and vision coverage at 100 percent premium paid for by the District. The member must pay 20 percent of the premiums for medical insurance up to age 65. After age 65, the member must pay 100 percent of the premium for all insurances listed above. The former business manager has prescription drug, dental, and vision at 100 percent premium paid for by the district at the single rate until age 65. The member must contribute 20 percent of the premium for a single individual for medical insurance with the district paying the other 80 percent. Spouse and dependents may continue coverage at 100 percent premium to the member. After age 65, the member must pay 100 percent of the premium for all insurances listed above. Former and current other administrators who have reached 58 years of age and has at least ten years of District service and is eligible for PSERS retirement has the following contributions from the District based on years of service for medical, prescription drug, dental and vision coverage:
Between 10 - 14 years of service Between 15 - 19 years of service Between 20 - 24 years of service 25 year of service of more
25% 50% 75% 100%
All percentages noted above relate to the District contributions for the medical, prescription drug, dental, and vision insurance premiums based on a single patron in the year of retirement. The member is responsible for the remaining percentage of the premium plus any increased in subsequent years along with 100 percent of the premium for their spouse and eligible dependents. If the administrator does not meet the qualifications noted above, then they are eligible under Act 110/43 noted below.
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Teachers: The District offered teachers with a minimum of 15 years of service with the District and eligible for PSERS retirement an early retirement incentive if they retired between July 1, 2005 and June 30, 2006 or July 1, 2008 and June 30, 2009. The incentive included a $3,000 per year contribution from the District to a Health Reimbursement Account to be used toward premiums for medical, prescription drug, dental, and vision premiums for a period of five years. The District will make the deposits to the account whether the member has deferred or elected coverage of health benefits. After five years, the member may continue coverage by paying 100 percent of the premiums. The District also offered teachers with a minimum of 15 years of service with the District and eligible for PSERS retirement an early retirement incentive if they retired between July 1, 2009 and June 30, 2010. The incentive included a $10,000 per year contribution from the District to a health reimbursement account to be used toward premiums for medical, prescription drug, dental, and vision premiums for a period of three years. The District will make the deposits to the account whether the member has deferred or elected coverage of health benefits. After three years, the member may continue coverage by paying 100 percent of the premiums. Under Act 110/43, any employee who is eligible; age 60 with 30 years of service, age 62 with one year of service or 35 years of service regardless of age; is allowed to continue coverage for themselves and their dependents until the member reaches Medicare age. The retiree is responsible for payment equal to the premium determined for the purposes of COBRA. Any individual not in a group noted above and meeting the Act 100/43 requirements are eligible for this coverage. For the fiscal year ended June 30, 2013, the District contributed $271,445 to the Plan related to retirees.
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Annual OPEB Cost and Net OPEB Obligation The Districts annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the Districts annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Districts net OPEB obligation:
Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB Cost Contributions made (estimated) Estimated increase in net OPEB obligation Net OPEB obligation - beginning of year Net OPEB obligation - end of year $ 434,376 35,690 (48,690) 421,376 (271,445) 149,931 793,111 $ 943,042
The Districts annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation was as follows:
Percentage of Annual OPEB Cost Contributed 64.4% 54.5% 54.1%
Fiscal Year Ended 6/30/2013 6/30/2012 6/30/2011
Annual OPEB Cost $ 421,376 416,507 419,664
Net OPEB Obligation $ 943,042 793,111 603,708
Funded Status and Funding Progress As of July 1, 2012, the most recent actuarial valuation date, the plan was unfunded. The actuarial accrued liability for benefits was $4,470,488 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $4,470,448. The covered payroll (annual payroll of active employees covered by the plan) was $16,150,493, and the ratio of the UAAL to the covered payroll was 27.68 percent.
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OCTORARA AREA SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2013 NOTE 8 - POSTEMPLOYMENT BENEFITS PLAN - CONTINUED
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about actuarial value of plan assets and actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2012 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 4.5 percent investment rate of return (net of administrative expenses) and an annual healthcare cost trend rate of 7.5 percent initially, decreasing 0.5 percent per year to an ultimate rate of 5.5 percent in 2016. Rates gradually decrease from 5.3 percent in 2017 to 4.2 percent in 2089 and later based on the Society of Actuaries Long-Run Medical Cost Trend Model. The unfunded actuarial accrued liability is being amortized using single period amortization as of the end of the year based on level dollar, thirty-year open period. NOTE 9 - INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The District had the following interfund receivable/payable at June 30, 2013:
Interfund Receivable General Fund Enterprise Fund - Food Service $ $ 12,442 12,442 $ $ Interfund Payable 12,442 12,442
Interfund balances between the general and food service fund represent temporary loans recorded at year end and subsequent to a final allocation of expenses. The balances are repaid shortly after yearend. There were no interfund transfers for the year ended June 30, 2013.
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NOTE 10 - JOINT VENTURE
The District is one of twelve member school districts of the Chester County Technical College High School (CCTCHS; formerly the Center for Arts and Technology). CCTCHS is controlled and governed by a joint board, which is composed of representative school board members of the participating schools. Direct oversight of CCTCHS operations is the responsibility of the joint board. The District is not responsible for deficits, nor is the District entitled to operating surplus. The District is a guarantor of outstanding debt, but the amount is immaterial. The District's share of annual operating and capital costs for CCTCHS fluctuates based on the percentage of enrollment and is reflected as intergovernmental expenditures of the General Fund. Since there is no clear residual equity, no asset has been reflected in the District's financial statements. Summary financial information as of June 30, 2012 (the most recent information available) is as follows: CCTCHS - Governmental Activities Total Assets Total Liabilities Total Net Position $ 8,226,969 5,375,616 $ 2,851,353
Separate financial statements of the Chester County Technical College High School have been prepared and are available at the Centers administrative offices. The Districts share of annual operating and capital costs were $1,168,784.
NOTE 11 - CONTINGENT LIABILITIES AND COMMITMENTS
The District receives federal and state funding through a number of programs. Payments made by these sources under contractual agreements are provisional and subject to redetermination based on filing reports and audits of those reports. Final settlements due from or to these sources are recorded in the year in which the related services are performed. Any adjustments resulting from subsequent examinations are recognized in the year in which the results of such examinations become known. District officials do not expect any significant adjustments as a result of these examinations. Subsequent to year-end, the District entered into a master lease purchase agreement for 1,200 iPads. The lease commences on July 5, 2013 with three annual payments of $186,043.
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NOTE 12 - RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Significant losses are covered by commercial insurance for all major programs except for workers' compensation, for which the District retains risk of loss. The District monitors its insured programs and increases insurance coverage as needed. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. The District has no unfunded liability. Currently, the District is self-insured for medical, dental, and prescription insurance for employees and their dependants. The District uses a third-party administrator to provide consulting and administrative services to process claims. All claims are accounted for in the general fund. For the year ended June 30, 2013, the District has coverage for claims in excess of $175,000 per person with no annual aggregate limit. The following table presents the components of Districts benefit obligation and the related changes in the Districts benefit obligations at June 30, 2013: Benefit obligation at June 30, 2013:
Claims payable $ 252,399
Changes in benefit obligations are as follows for the year ended June 30, 2013:
Claims payable, beginning of year Benefits earned Claims paid Claims payable, end of year $ 429,948 2,912,746 (3,090,295) 252,399
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NOTE 13 - FUND BALANCE
Details of the Districts governmental fund balance reporting and policy can be found in Note 1, Summary of Significant Accounting Policies. Fund balance classifications for the year ended June 30, 2013 are as follows: General Fund The general fund has nonspendable funds of $7,039 relating to prepaid expenditures, assigned funds of $846,140 for health insurance increases, $1,344,800 for retirement rate increases, $312,890 for extraordinary building/ground repairs, $20,000 for increasing utility prices, $20,000 for increasing diesel fuel prices, $40,000 for improvements in technology, $812,589 for interest expense on bond issuances, $1,415,500 for contingencies related to the high school construction project, and unassigned fund balance of $3,561,021. The assignments were authorized by the Districts finance committee. Capital Projects The capital projects fund has restricted funds of $2,418,813, consisting of unspent bond proceeds.
NOTE 14 - RESTATEMENT OF BEGINNING NET POSITION
Effective July 1, 2012, the District adopted Governmental Accounting Standards Board Statements No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and No. 65, Items Previously Reported as Assets and Liabilities, to be in conformity with generally accepted accounting principles. Statement No. 63 establishes guidance for reporting deferred outflows of resources, deferred inflows of resources, and net position in a statement of financial position. The statement provides a framework that specifies where deferred outflows of resources and deferred inflows of resources, as well as assets and liabilities, should be displayed. The statement also discusses how net position, no longer net assets, should be displayed. Statement No. 65 establishes guidance to improve financial reporting by clarifying the appropriate use of the financial statement elements deferred outflows of resources and deferred inflows of resources to ensure consistency in financial reporting. This statement also restricts the use of the term deferred only to those items designated as deferred outflows or deferred inflows of resources by the standards. The adoption of this standard resulted in the District restating beginning net position as of July 1, 2012, in governmental activities for $901,927 for the elimination of net bond issuance costs which no longer qualifies as an asset.
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NOTE 15 - NEW ACCOUNTING PRONOUNCEMENTS
The Government Accounting Standards Board (GASB) has issued the following standards which have not yet been implemented: Statement No. 67, Financial Reporting for Pension Plans, which is required to be implemented by the year ending June 30, 2014. The objective of this statement is to improve financial reporting by enhancing financial statement note disclosure and required supplementary information for government pension plans. Statement No. 68, Accounting and Financial Reporting for Pensions, which is required to be implemented by the year ending June 30, 2015. The objective of this statement is to improve accounting and financial reporting by governments for pensions. This statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expenditures. This statement also enhances note disclosure and required supplementary information for government pension plans. This pronouncement applies to employers that have a legal obligation to make contributions directly to a pension plan.
The District has not yet completed the analysis necessary to estimate the financial statement impact of these new pronouncements.
44
REQUIRED SUPPLEMENTARY INFORMATION
OCTORARA AREA SCHOOL DISTRICT BUDGETARY COMPARISON SCHEDULE FOR THE GENERAL FUND For the Year Ended June 30, 2013 Variances Final to Actual
REVENUES REVENUES Local Sources State Sources Federal Sources TOTAL REVENUES EXPENDITURES EXPENDITURES - INSTRUCTION Regular Programs - Elementary/Secondary Special Programs - Elementary/Secondary Vocational Education Programs Other Instructional Programs - Elementary/Secondary Higher Education Programs TOTAL INSTRUCTION SUPPORT SERVICES Pupil Personnel Instructional Staff Administration Pupil Health Business Operation and Maintenance of Plant Services Student Transportation Services Central Other Support Services TOTAL SUPPORT SERVICES OPERATION OF NONINSTRUCTIONAL SERVICES Student Activities Community Services TOTAL OPERATION OF NONINSTRUCTIONAL SERVICES Debt Service Refund of Prior Year Revenues TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES
Budgeted Amount Original Final
Actual (GAAP) Basis
$ 32,449,126 11,897,722 1,217,688 45,564,536
$ 32,449,126 11,897,722 1,217,688 45,564,536
$ 33,258,094 11,744,866 1,238,489 46,241,449
808,968 (152,856) 20,801 676,913
18,380,167 7,474,351 1,580,766 600,887 28,036,171
17,915,330 7,516,853 1,637,305 658,393 27,727,881
17,629,774 6,902,208 1,575,206 546,514 26,653,702
285,556 614,645 62,099 111,879 1,074,179
1,321,520 539,555 2,621,763 489,244 511,935 2,787,308 2,870,964 685,811 52,236 11,880,336
1,400,333 608,411 2,838,637 506,166 582,129 3,004,290 2,802,757 705,792 52,236 12,500,751
1,298,223 500,851 2,390,560 438,359 521,413 2,522,364 2,863,456 681,480 45,760 11,262,466
102,110 107,560 448,077 67,807 60,716 481,926 (60,699) 24,312 6,476 1,238,285
163,679 -
178,146 -
506,422 10,196
(328,276) (10,196)
163,679 6,098,588 46,178,774
178,146 6,025,536 46,432,314
516,618 5,954,673 23,361 44,410,820
(338,472) 70,863 (23,361) 2,021,494
(614,238)
(867,778)
1,830,629
2,698,407
See note to required supplementary information
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OCTORARA AREA SCHOOL DISTRICT BUDGETARY COMPARISON SCHEDULE FOR THE GENERAL FUND - CONTINUED For the Year Ended June 30, 2013 Variances Final to Actual
Budgeted Amount Original Final OTHER FINANCING SOURCES (USES) Transfers From (To) Other Funds (Net) Sale of Capital Assets Budgetary Reserve TOTAL OTHER FINANCING SOURCES (USES) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES FUND BALANCE - JULY 1, 2012 FUND BALANCE - JUNE 30, 2013
Actual (GAAP) Basis
(235,600) (250,000) (485,600)
(232,060) (232,060)
4,030 4,030
232,060 4,030 236,090
$ (1,099,838)
$ (1,099,838)
1,834,659 6,545,320 $ 8,379,979
2,934,497
See note to required supplementary information
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OCTORARA AREA SCHOOL DISTRICT SCHEDULES OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS POSTEMPLOYMENT BENEFITS PLAN
Schedule of Funding Progress Actuarial Accrued Liability (AAL) Entry Age (b) $ 4,470,488 3,915,302 3,686,719 UAAL as a Percentage of Covered Payroll ((b - a) / c) 27.68% 22.34% 21.65%
Actuarial Valuation Date Total Total Total 7/1/2012 7/1/2010 7/1/2008
Actuarial Value of Assets (a) $ -
Unfunded AAL (UAAL) (b - a) $ 4,470,488 3,915,302 3,686,719
Funded Ratio (a / b) 0.00% 0.00% 0.00%
Covered Payroll (c) $ 16,150,493 17,525,012 17,026,257
Schedule of Employer Contributions Fiscal Year End 6/30/2013 6/30/2012 6/30/2011 6/30/2010 6/30/2009 Annual OPEB Cost $ 421,376 416,507 419,664 410,717 414,555 Employer Contributions $ 271,445 227,104 227,081 233,710 180,437 % of OPEB Cost Contributed 64.4% 54.5% 54.1% 56.9% 43.5% $ Net OPEB Obligation 943,042 793,111 603,708 411,125 234,118
See note to required supplementary information.
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OCTORARA AREA SCHOOL DISTRICT NOTE TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2013
BUDGETARY DATA The budget for the general fund is adopted on the modified accrual basis of accounting which is consistent with generally accepted accounting principles.
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SUPPLEMENTARY INFORMATION
OCTORARA AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2013 Federal CFDA Number Federal Pass-Through Grantor's Number Grant Period Beginning/ Ending Date Program or Award Amount Total Received for Year Accrued or (Unearned) Revenue at July 1, 2012 Revenue Recognized/ Expenditures Accrued or (Unearned) Revenue at June 30, 2013
Grantor/Program Title U.S. Department of Education Passed through the State Department of Education: Title I - Grants to Local Education Agencies - Basic Title I - Grants to Local Education Agencies - Basic Subtotal Title II(a) Improving Teacher Quality Title II(a) Improving Teacher Quality Subtotal Title III Language Instructional LEP ARRA - Education Jobs Fund Passed through Chester County Intermediate Unit: IDEA Cluster IDEA - B Special Education Grants to States IDEA - B Special Education Grants to States Section 619 IDEA - B Special Education Grants to States Total IDEA Cluster TOTAL U.S. DEPARTMENT OF EDUCATION U.S. Department of Health and Human Services Passed through the Pennsylvania Department of Welfare: Medical Reimbursement for Administration, Revenue Code 8820 Medical Reimbursement for Administration, Revenue Code 8820 Subtotal U.S. Department of Agriculture Passed through the State Department of Education: Child Nutrition Cluster School Breakfast Program School Breakfast Program National School Lunch Program National School Lunch Program Subtotal Passed through the PA Department of Agriculture: National School Lunch Program TOTAL CHILD NUTRITION CLUSTER AND U.S. DEPARTMENT OF AGRICULTURE TOTAL FEDERAL AWARDS Source Codes: I = Indirect, D = Direct
Source Code
Transfers
I I
84.010 84.010
013-12-0308 013-13-0308
07/06/11-09/30/12 07/01/12-09/30/13
793,272 793,272
148,768 822,826 971,594 34,324 130,419 164,743 13,036 6,441
144,664 144,664 29,377 29,377 6,441
12,000 12,000 (12,000) (12,000) -
4,104 831,749 835,853 4,947 115,879 120,826 13,036 -
(3,077) (3,077) (2,540) (2,540) -
I I
84.367 84.367
020-12-0308 020-13-0308
07/06/11-09/30/12 07/01/12-09/30/13
130,340 130,419
I I
84.365 84.410
020-13-0308 140-1339282
07/01/12-09/30/13 07/01/11-06/30/12
13,036 6,441
I I I
84.027 84.027 84.173
N/A N/A N/A
07/01/11-06/30/12 07/01/12-06/30/13 07/01/12-06/30/13
321,084 336,964 2,697
56,467 247,107 2,697 306,271 1,462,085
56,467 56,467 236,949
336,964 2,697 339,661 1,309,376
89,857 89,857 84,240
I I
93.778 93.778
N/A N/A
07/01/11-06/30/12 07/01/12-06/30/13
26,743 15,917
5,785 10,478 16,263
5,785 5,785
15,917 15,917
5,439 5,439
I I I I
10.553 10.553 10.555 10.555
N/A N/A N/A N/A
07/01/11-06/30/12 07/01/12-06/30/13 07/01/11-06/30/12 07/01/12-06/30/13
N/A N/A N/A N/A
1,864 76,301 2,892 293,433 374,490
1,864 2,892 4,756
78,077 299,133 377,210
1,776 5,700 7,476
10.555
N/A
07/01/12-06/30/13
N/A
42,416
(9,080)
43,282
(8,214)
416,906 $ 1,895,254 $
(4,324) 238,410 $
420,492 $ 1,745,785 $
(738) 88,941
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OCTORARA AREA SCHOOL DISTRICT NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2013
NOTE 1 - BASIS OF ACCOUNTING
The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is the same basis used for the basic financial statements.
NOTE 2 - FOOD COMMODITIES
Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed. At June 30, 2013, the District had $8,214 of food commodity inventory
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Independent Auditors 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
We have audited, 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, the financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of Octorara Area School District, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Octorara Area School Districts basic financial statements, and have issued our report thereon dated November 18, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Octorara Area School Districts internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Octorara Area School Districts internal control. Accordingly, we do not express an opinion on the effectiveness of Octorara Area School Districts 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 entitys financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters As part of obtaining reasonable assurance about whether Octorara Area School Districts financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Districts internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Districts internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
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Independent Auditors Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by Circular OMB A-133
Report on Compliance for Each Major Federal Program We have audited Octorara Area School Districts compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Octorara Area School Districts major federal programs for the year ended June 30, 2013. Octorara Area School Districts major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Managements Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors Responsibility Our responsibility is to express an opinion on compliance for each of Octorara Area School Districts major federal programs based on our audit of the types of compliance requirements referred to above. 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 OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Octorara Area School Districts compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Octorara Area School Districts compliance. Basis for Qualified Opinion on Title II(a) - Improving Teacher Quality As described in the accompanying schedule of findings and questioned costs, Octorara Area School District did not comply with requirements regarding CFDA 84.367 Title II(a) Improving Teacher Quality as described in finding number 2013-001 for allowable activities and allowable costs and 2013-002 for Special Tests. Compliance with such requirements is necessary, in our opinion, for Octorara Area School District to comply with the requirements applicable to the program.

Qualified Opinion on Title II(a) - Improving Teacher Quality In our opinion, except for the noncompliance described in the Basis for Qualified Opinion paragraph, Octorara Area School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on Title II(a) Improving Teacher Quality for the year ended June 30, 2013. Unmodified Opinion on Each of the Other Major Federal Programs In our opinion, Octorara Area School District 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 other major federal programs identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2013. Other Matters The results of our auditing procedures disclosed another instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item 2013-003. Our opinion on each major federal program is not modified with respect to this matter. Octorara Area School Districts response to noncompliance findings indentified in our audit is described in the accompanying schedule of findings and questioned costs. Octorara Area School Districts response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the Octorara Area School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Octorara Area School Districts internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Octorara Area School Districts internal control over compliance. Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses and significant deficiencies.
54
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 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. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2013-001 and 2013-002 to be material weaknesses. 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. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2013-003 to be significant deficiency. Octorara Area School Districts response to the internal control over compliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. Octorara Area School Districts response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. 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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
55
OCTORARA AREA SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2013 Section I - Summary of Auditor's Results Financial Statements Type of Auditor's Report Issued: Internal Control Over Financial Reporting: Material weakness(es) identified? Significant deficiency(ies) identified not considered to be material weaknesses? Noncompliance material to financial statements noted? Federal Awards Internal Control Over Major Programs: Material weakness(es) identified? Significant deficiency(ies) identified not considered to be material weaknesses? Type of Auditor's Report Issued on Compliance for Major Programs: Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? Identification of Major Program(s): CFDA Number(s) 84.367 Name of Federal Program or Cluster Title II(a) - Improving Teacher Quality IDEA Cluster IDEA - B Special Education Grants to States Section 619 IDEA - B Special Education Grants to States $300,000 no Unmodified yes yes yes X X X no none reported no
X X
yes yes
no none reported
Modified
X yes
no
84.027 84.173
Dollar threshold used to distinguish between Type A and Type B Programs: Auditee qualified as low-risk auditee? X yes
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OCTORARA AREA SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2013
Section II - Financial Statement Findings There were no financial statement findings.
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Section III - Federal Award Findings and Questioned Costs 2013-001 UNALLOWABLE ACTIVITIES/COSTS
Federal Program: Title II(a) Improving Teacher Quality 84.367 - Contracts 020-120308 and 020-130308 Criteria Allowable activities and costs for professional development and hiring are identified in Section 2123(a) of the Elementary and Secondary Education Act. Examples of allowable activities for Title IIA improving teacher quality include: (1) professional development to teachers and where appropriate administrators and paraprofessionals; (2) developing and implementing a wide variety of strategies and activities to recruit, hire, and retain highly qualified teachers and principals; (3) developing and implementing initiatives to promote retention of highly qualified teachers and principals; (4) carrying out professional development programs to assist principals and superintendents in becoming outstanding managers and educational leaders; and (5) carrying out teacher advancement initiatives that promote professional growth and emphasize multiple career paths and pay differentiation, and establish programs and activities related to exemplary teachers. LEAs also may use funds to hire teachers to reduce class size. Condition The District utilizes a portion of the Title II(a) allocation to pay for substitutes when classroom teachers attend trainings. Teachers are required to enter into a portal an administrative day for their leave and enter the description of the training into the notes section of the portal. Substitutes are required to note the teacher they are substituting for on their timecards. All timecards are approved by a building administrator and coded by the administrator for proper accounting. Context A selection of 37 timecards were selected from the population of 142 timecards coded to the Title II(a) program. Our testing disclosed that four timecards tested included activities and costs that were not allowable under Title II(a) requirements. Deviations noted included sick days, personal days, IEP meetings or Title I related expenditures coded to the Title II(a) program. All timecards examined were approved by an administrator. Questioned Costs Under $10,000 Cause Three of the four timecards tested contained activities and costs that were both eligible and ineligible to be charged to the Title II(a) program. In the three instances, the entire timecard was charged to the Title II(a) program. The fourth timecard was for a Title I literacy night and was improperly coded to the Title II(a) account. With the changes in payroll clerks throughout the year, certain items were not properly input into the proper account code within the general ledger system and therefore were improperly charged to the grant.
58
2013-001
UNALLOWABLE ACTIVITIES/COSTS - CONTINUED
Effect The District has unallowable activities and costs charged to the Title II(a) program. Recommendation We recommend the District develop a system to better identify substitutes that are eligible to be charged to Title II(a). In order for the payroll clerk to properly charge the substitutes to the proper account it is imperative that the individuals eligible to be charged to the program are properly identified at the school building level through the use of accounts codes, descriptions or highlighting of the approved substitute timecards. It is also recommended that the classroom teacher should be more diligent in noting what training they are attending in the notes section of their administrative leave request to ensure that the training is allowable under Title II(a) requirements. Management Response See corrective action plan included in this report package.
2013-002
SPECIAL TESTS AND PROVISIONS - ASSESSMENT OF NEED
Federal Program: Title II(a) Improving Teacher Quality 84.367 - Contract 020-130308 Criteria The assessment of needs is defined under Section 2122(c)(2) of the Elementary and Secondary Education Act. This section of the code states that to be eligible to receive a subgrant under this subpart, a local educational agency shall conduct an assessment of local needs for professional development and hiring, as identified by the local educational agency and school staff. Such needs assessment shall be conducted with the involvement of teachers, including teachers participating in programs under part A of Title I, and shall take into account the activities that need to be conducted in order to give teachers the means, including subject matter knowledge and teaching skills, and to give principals the instructional leadership skills to help teachers, to provide students with the opportunity to meet challenging State and local student academic achievement standards. Condition During our audit procedures we noted that no evidence existed to confirm that the assessment of need was performed for the 2012-2013 school year as stipulated under the above regulation. Context Through the conclusion of the 2011-2012 school year, the assistant superintendent was the administrator responsible for the federal programs authorized through the Elementary and Secondary Education Act (Title I and Title II(a)). The assessment of need is traditionally performed within the second half of the year preceding the award year. With the transition of the federal program oversight to the superintendent commencing in the 2012-2013 school year, no evidence could be located to confirm that the assessment of need was performed.
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2013-002
SPECIAL TESTS AND PROVISIONS - ASSESSMENT OF NEED - CONTINUED
Questioned Costs None noted. Cause Turnover in federal program coordinators lead to the failure to provide documentation that an assessment of need was performed. Effect The District is not in compliance with the program requirements stated in the Elementary and Secondary Education Act to receive Title II(a) funding. Recommendation We recommend that the District develop a schedule that will allow the federal program coordinator to know what requirements are needed for each program and what requirements have been performed. We also recommend that evidence of the completed requirements be kept for future audit needs. Management Response See corrective action plan included in this report package.
2013-003
TRANSFERABILITY OF FEDERAL FUNDS
Federal Program: Title II(a) Improving Teacher Quality 84.367 - Contract 020-130308 Criteria Transferability of funds is authorized under subpart 2 of Part A of Title VI of the Elementary and Secondary Education Act of 1965 and allows a local education agency to transfer up to 50 percent of the funds allocated to it for a given fiscal year for Title II(a) - Improving Teacher Quality, Title II(d) Educational Technology Grant, Safe and Drug Free Schools and Title V - State Grants for Innovative Purposes. The Commonwealth of Pennsylvania consolidated federal programs administrative manual for 2012-2013 requires that the district notify the Pennsylvania Department of Education (via the transferability worksheet in eGrants) of their intent to transfer funds prior to conducting any activities with the transferred funds. Condition For the 2012-2013 school year, the District applied for a transfer of funds from Title II(a) - Improving Teacher Quality to Title I - Grants to Local Education Agencies to fund a kindergarten outreach program that was held in August 2012. The transferability worksheet in eGrants was not completed until September 2013.
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2013-003
TRANSFERABILITY OF FEDERAL FUNDS - CONTINUED
Context The Commonwealth of Pennsylvania consolidated federal programs administrative manual for 20122013 requires the District to complete the use of funds worksheet in eGrants to notify the Pennsylvania Department of Education of the intent to transfer funds from one federal program to another before expenses are incurred for the transferred funds. The District completed a two week kindergarten outreach program in August 2012 which was to be funded under Title I with transferred funds from Title II(a). During our procedures we requested the transferability worksheet in eGrants and had noted it was not timely completed before the kindergarten outreach program was conducted. Questioned Costs None noted. Cause A turnover in the federal programs coordinator commencing in the 2012-2013 school year lead to a lack of communication with the accounting department to properly and timely complete the applicable paperwork to notify the Pennsylvania Department of Education of the intent to transfer funds. Effect The District was not compliant with the guidance related to the transferability of federal funds received through the Pennsylvania Department of Education. Recommendation We recommend the District continues to take steps to improve the communication between the accounting department and the federal programs coordinator. Management Response See corrective action plan included in this report package.
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OCTORARA AREA SCHOOL DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2013
Section III - Federal Award Findings and Questioned Costs There were no prior year federal findings.
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Octorara Administration Office

228 HIGHLAND ROAD, SUITE 1, ATGLEN, PA 19310-1603 Fax: (610) 593-6425
Thomas L. Newcome II, Ed.D.

Superintendent
(610) 593-8238
Daniel R. Carsley
Business Manager
(610) 593-8214
CORRECTIVE ACTION PLAN June 30, 2013
U.S. Department of Education: The Octorara Area School District respectfully submits the following corrective action plan for the year ended June 30, 2013. Name and address of independent public accounting firm: Herbein + Company, Inc., 2763 Century Boulevard, Reading, PA 19610. Audit period: June 30, 2013 The findings from the June 30, 2013 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section II - Financial Statement Findings There were no financial statement findings. Section III - Federal Award Findings and Questioned Costs 2013-001 UNALLOWABLE ACTIVITIES/COSTS
Federal Program: Title II(a) Improving Teacher Quality 84.367 - Contracts 020-120308 and 020-130308 Condition The District utilizes a portion of the Title II(a) allocation to pay for substitutes when classroom teachers attend trainings. Teachers are required to enter into a portal an administrative day for their leave and enter the description of the training into the notes section of the portal. Substitutes are required to note the teacher they are substituting for on their timecards. All timecards are approved by a building administrator and coded by the administrator for proper accounting. Context A selection of 37 timecards were selected from the population of 142 timecards coded to the Title II(a) program. Our testing disclosed that four timecards tested included activities and costs that were not allowable under Title II(a) requirements. Deviations noted included sick days, personal days, IEP meetings or Title I related expenditures coded to the Title II(a) program. All timecards examined were approved by an administrator.
63
2013-001
UNALLOWABLE ACTIVITIES/COSTS - CONTINUED
Questioned Costs Under $10,000 Cause Three of the four timecards tested contained activities and costs that were both eligible and ineligible to be charged to the Title II(a) program. In the three instances, the entire timecard was charged to the Title II(a) program. The fourth timecard was for a Title I literacy night and was improperly coded to the Title II(a) account. With the changes in payroll clerks throughout the year, certain items were not properly input into the proper account code within the general ledger system and therefore were improperly charged to the grant. Recommendation We recommend the District develop a system to better identify substitutes that are eligible to be charged to Title II(a). In order for the payroll clerk to properly charge the substitutes to the proper account it is imperative that the individuals eligible to be charged to the program are properly identified at the school building level through the use of accounts codes, descriptions or highlighting of the approved substitute timecards. It is also recommended that the classroom teacher should be more diligent in noting what training they are attending in the notes section of their administrative leave request to ensure that the training is allowable under Title II(a) requirements. Management Response The District acknowledges the coding errors in the Federal Programs noted above. New procedures have been implemented that include the running of a Payroll Entry Proof that will be reviewed prior to the completion of payroll for each pay period. All Federal Program substitute timesheets will be approved by the Director of Curriculum and Instruction. 2013-002 SPECIAL TESTS AND PROVISIONS - ASSESSMENT OF NEED
Federal Program: Title II(a) Improving Teacher Quality 84.367 - Contract 020-130308 Condition During our audit procedures we noted that no evidence existed to confirm that the assessment of need was performed for the 2012-2013 school year as stipulated under the above regulation. Context Through the conclusion of the 2011-2012 school year, the assistant superintendent was the administrator responsible for the federal programs authorized through the Elementary and Secondary Education Act (Title I and Title II(a)). The assessment of need is traditionally performed within the second half of the year preceding the award year. With the transition of the federal program oversight to the superintendent commencing in the 2012-2013 school year, no evidence could be located to confirm that the assessment of need was performed. Questioned Costs None noted.
64
2013-002 SPECIAL CONTINUED
TESTS
AND
PROVISIONS
ASSESSMENT
OF
NEED
Cause Turnover in federal program coordinators lead to the failure to provide documentation that an assessment of need was performed. Recommendation We recommend that the District develop a schedule that will allow the federal program coordinator to know what requirements are needed for each program and what requirements have been performed. We also recommend that evidence of the completed requirements be kept for future audit needs. Management Response The District acknowledges the needs assessment could not be located for the 2012-13 school year. New procedures have been implemented that include needs assessments being completed on a quarterly basis during in-service days.
2013-003
TRANSFERABILITY OF FEDERAL FUNDS
Federal Program: Title II(a) Improving Teacher Quality 84.367 - Contract 020-130308 Condition For the 2012-2013 school year, the District applied for a transfer of funds from Title II(a) Improving Teacher Quality to Title I - Grants to Local Education Agencies to fund a kindergarten outreach program that was held in August 2012. The transferability worksheet in eGrants was not completed until September 2013. Context The Commonwealth of Pennsylvania consolidated federal programs administrative manual for 2012-2013 requires the District to complete the use of funds worksheet in eGrants to notify the Pennsylvania Department of Education of the intent to transfer funds from one federal program to another before expenses are incurred for the transferred funds. The District completed a two week kindergarten outreach program in August 2012 which was to be funded under Title I with transferred funds from Title II(a). During our procedures we requested the transferability worksheet in eGrants and had noted it was not timely completed before the kindergarten outreach program was conducted. Questioned Costs None noted. Cause A turnover in the federal programs coordinator commencing in the 2012-2013 school year lead to a lack of communication with the accounting department to properly and timely complete the applicable paperwork to notify the Pennsylvania Department of Education of the intent to transfer funds.
65
2013-003
TRANSFERABILITY OF FEDERAL FUNDS CONTINUED
Recommendation We recommend the District continues to take steps to improve the communication between the accounting department and the federal programs coordinator. Management Response The District acknowledges the transferability of funds worksheet was not completed prior to expenses being transferred or incurred. All transferability eligible services will be reviewed prior to budget approval and worksheet completed at this time.
If the Department has any questions regarding this plan, please feel free to contact me.
Sincerely,
Daniel R. Carsley
Daniel Carsley Business Manager
66

Octorara Area School District - Financial and Compliance Report

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Octorara Area School District - Financial and Compliance Report

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FINANCIAL AND COMPLIANCE REPORT Year Ended June 30, 2013

MembersofPKFNorthAmerica,PennsylvaniaInstituteofCPAs, AmericanInstituteofCertifiedPublicAccountantsPrivateCompaniesPracticeSection www.herbein.com

INDEPENDENT AUDITOR'S REPORT

HERBEIN+COMPANY,INC. 2763CenturyBoulevardReading,PA19610Telephone:6103781175Facsimile:6103780999 reading@herbein.com OtherOffices:PITTSBURGHGREENSBURG

Reading, Pennsylvania November 18, 2013

Management Discussion and Analysis

Basic Financial Statements

Required Supplementary Information

Government-wide Financial Statements

Fund Financial Statements

Notes to the Financial Statements

Required financial statements.

Statement of net position Statement of activities.

Balance Sheet Statement of revenues, expenditures, and changes in fund balance.

Accounting basis and measurement focus. Type of asset/liability information.

Modified accrual accounting and current financial resources focus.

Accrual accounting and economic resources focus.

All assets and liabilities, both short-term and longterm.

Type of inflowoutflow information.

3,220,000 67,323,185 943,042 850,734 75,996,564

3,159,475 70,411,378 793,111 1,071,998 79,753,382

3,220,000 67,323,185 943,042 850,734 76,009,595

3,159,475 70,411,378 793,111 1,071,998 79,765,854

9,854,953 358,212 6,748,552 $ 16,961,717

8,329,109 297,617 5,164,210 $ 13,790,936

27,433 283,569 311,002

21,854 224,905 246,759

9,882,386 358,212 7,032,121 $ 17,272,719

8,350,963 297,617 5,389,115 $ 14,037,695

$4,108,887 $2,871,831 $562,811 $10,397 $2,899,257

$58,585 $1,069,817 $119,800 $5,535 $0

($3,990,176) ($1,802,014) ($398,007) ($4,862) ($2,211,903)

($3,990,176) ($1,802,014) ($398,007) ($4,862) ($2,211,903)

($4,691,944) ($1,646,019) ($359,635) ($36) ($2,411,749)

General Capital Projects Total

Fund Balance June 30, 2012 $ 6,545,320 $ 2,818,112 $ 9,363,432

Fund Balance June 30, 2013 $ 8,379,979 $ 2,418,813 $ 10,798,792

Increase (Decrease) $ 1,834,659 $ (399,299) $ 1,435,360

Budget 45,564,536 46,664,374 (1,099,838)

Actual 46,241,449 44,406,790 1,834,659

Variance 676,913 2,257,584 2,934,497

32,449,126 11,897,722 1,217,688

33,258,094 11,744,866 1,238,489

808,968 (152,856) 20,801

$4,202 $185 $72,414 $2,066 $78,867

$4,202 $167 $71,444 $1,718 $77,531

$4,202 $185 $72,414 $2,088 $78,889

$4,202 $167 $71,444 $1,745 $77,558

43 103 12,885 13,031

9,854,953 358,212 6,748,552 $ 16,961,717 $

27,433 283,569 311,002

9,882,386 358,212 7,032,121 $ 17,272,719

See accompanying notes.

Charges for Services

$ 17,563,886 6,962,778 1,583,342 549,928 26,659,934

$ 2,145,900 2,053,464 24,084 50,302 4,273,750

$ (15,241,144) (4,909,314) (1,559,258) (499,626) (22,209,342)

$ (15,241,144) (4,909,314) (1,559,258) (499,626) (22,209,342)

91,842 99,804 143,227 82,908 33,426 58,585 1,069,817 21,446 1,601,055

562,811 10,397 2,899,257 3,472,465 43,110,177

45,004 45,004 281,972

119,800 5,535 125,335 6,000,140

687,354 687,354 687,354