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STATE
S
BOAR
RD OF A
ACCOU
UNTS
302 West
W Washingt
W
ton Streeet
Roo
om E418
IND
DIANAP
POLIS, INDIA
ANA 462204-27669
FINANCIAL
L STATEMEN
NT AND
FEDERAL
F
SIN
NGLE AUDIT REPORT
OF
SCHOOL TO
OWN OF MU
UNSTER
LAKE CO
OUNTY, INDI ANA
July 1, 201
11 to June 30
0, 2013
FILED
03/14/2014
TABLE OF CONTENTS
Description
Page
3-5
6-7
Financial Statement:
Statement of Receipts, Disbursements, Other Financing Sources (Uses), and
Cash and Investment Balances Regulatory Basis .............................................................
11
34-36
38-39
40
41-48
49
50-56
57
58
-1-
SCHEDULE OF OFFICIALS
Office
Treasurer
Superintendent
of Schools
President of the
School Board
Official
Term
Richard A. Sopko
Janice Swanson
07-01-11 to 06-30-12
07-01-12 to 06-30-14
William Pfister
Richard A. Sopko
07-01-11 to 06-30-12
07-01-12 to 06-30-14
Paula Nellans
John E. Friend
Judith Florczak
07-01-11 to 12-31-12
01-01-13 to 12-31-13
01-01-14 to 12-31-14
-2-
STATE
S
OF IND
DIANA
AN
A EQUAL OP
PPORTUNITY
Y EMPLOYER
R
STAT
TE BOARD OF A
ACCOUNTS
302 WE
EST WASHINGT
TON STREET
ROOM E4118
INDIANA
APOLIS, INDIA
ANA 46204-2769
9
Teelephone: (317) 2232-2513
F
Fax: (317) 232-44711
Weeb Site: www.in.gov/sboa
IN
NDEPENDENT
T AUDITOR'S
S REPORT
TO: THE OFFICIALS OF THE SCH
HOOL TOWN OF MUNSTE
ER, LAKE CO
OUNTY, INDIA
ANA
n the Financ
cial Statemen
nt
Report on
We
W have auditted the accom
mpanying fina
ancial statem
ment of the Scchool Town o
of Munster (S
School
Corporatio
on), which com
mprises the financial position and resultss of operation
ns for the perio
od of July 1, 20
011 to
June 30, 2013,
2
and the
e related note
es to the finan
ncial statemen
nt.
ment's Respo
onsibility forr the Financia
al Statementt
Managem
Management
M
is responsible
e for the preparation and fa
fair presentatiion of this fina
ancial statem
ment in
accordanc
ce with the financial reporting provisions
s of the Indiana
a State Board
d of Accounts as allowed byy state
statute (IC
C 5-11-1-6). Managemen
nt is responsible for and h
has determin
ned that the rregulatory ba
asis of
accounting, as establis
shed by the In
ndiana State Board
B
of Acco
ounts, is an accceptable bassis of presenttation.
Managem
ment is also res
sponsible for the design, im
mplementation
n, and mainten
nance of interrnal control relevant
to the pre
eparation and
d fair presenta
ation of a fina
ancial statem
ment that is frree from mate
erial misstate
ement,
whether due
d to fraud or
o error.
s Responsibiility
Auditor's
Our
O responsibiility is to expre
ess an opinio
on on this fina ncial stateme
ent based on o
our audit. We
e conducted ou
ur audit in acc
cordance with auditing stan
ndards genera
ally accepted in the United
d States of Am
merica
and the sttandards appllicable to finan
ncial audits co
ontained in G
Government Au
uditing Stand
dards, issued b
by the
Comptroller General off the United Sttates. Those standards req
quire that we p
plan and perfo
orm the audit to obonable assura
ance about wh
hether the fina
ancial statem
ment is free of material missstatement.
tain reaso
An
A audit involve
es performing
g procedures to
t obtain auditt evidence about the amounts and disclo
osures
in the financial stateme
ent. The proce
edures selecte
ed depend on
n the auditor'ss judgment, inccluding the asssessment of th
he risks of matterial misstate
ement of the financial statem
ment, whethe
er due to fraud or error. In m
making
those risk assessments
s, the auditor considers
c
inte
ernal control re
elevant to the S
School Corpo
oration's prepa
aration
o
to desig
gn audit proce
edures that are
e appropriate in the
and fair prresentation off the financial statement in order
circumsta
ances, but no
ot for the purpose of exp
pressing an o
opinion on th
he effectivene
ess of the S
School
Corporatio
on's internal control.
c
Acco
ordingly, we ex
xpress no succh opinion. A
An audit also includes evalu
uating
the appropriateness of accounting po
olicies used and
a the reason
nableness of significant acccounting estim
mates
made by management
m
, as well as evaluating
e
the overall prese
entation of the
e financial sta
atement.
We
W believe tha
at the audit evidence we ha
ave obtained iss sufficient an
nd appropriate
e to provide a basis
for our audit opinion.
-3-
-4-
-5-
STATE
S
OF IND
DIANA
AN
A EQUAL OP
PPORTUNITY
Y EMPLOYER
R
STAT
TE BOARD OF A
ACCOUNTS
302 WE
EST WASHINGT
TON STREET
ROOM E4118
INDIANA
APOLIS, INDIA
ANA 46204-2769
9
Teelephone: (317) 2232-2513
F
Fax: (317) 232-44711
Weeb Site: www.in.gov/sboa
INDEP
PENDENT AU
UDITOR'S RE
EPORT ON IN
NTERNAL CO
ONTROL OVE
ER FINANCIA
AL REPORTIN
NG
AND
D ON COMPL
LIANCE AND OTHER MAT
TTERS BASE
ED ON AN AU
UDIT OF THE
E FINANCIAL
L
STAT
TEMENT PER
RFORMED IN
N ACCORDAN
NCE WITH G OVERNMENT AUDITING STANDARD
DS
HOOL TOWN OF MUNSTE
ER, LAKE CO
OUNTY, INDIA
ANA
TO: THE OFFICIALS OF THE SCH
We
W have audited, in accorda
ance with aud
diting standarrds generally a
accepted in th
he United Sta
ates of
America and
a the standa
ards applicable to financial audits
a
contain
ned in Govern
nment Auditing
g Standards, isssued
by the Co
omptroller Ge
eneral of the United
U
States
s, the financia
al statement of the Schoo
ol Town of Mu
unster
(School Corporation),
C
which
w
compris
ses the financ
cial position an
nd results of operations for tthe period of JJuly 1,
2011 to Ju
une 30, 2013,, and the relatted notes to th
he financial sttatement, and
d have issued
d our report thereon
dated Jan
nuary 9, 2014,, wherein we noted
n
the Sch
hool Corporattion followed a
accounting prractices the In
ndiana
State Boa
ard of Accountts prescribes rather
r
than ac
ccounting prin
nciples genera
ally accepted iin the United S
States
of America.
C
Overr Financial Re
eporting
Internal Control
In
n planning and performin
ng our audit of the finan
ncial statement, we considered the S
School
Corporatio
on's internal control
c
over fin
nancial reportting (internal ccontrol) to dettermine the au
udit procedure
es that
are appropriate in the circumstances
c
s for the purpo
ose of expresssing our opinio
on on the finan
ncial statemen
nt, but
not for the
e purpose of expressing an opinion on the effectivenesss of the Scho
ool Corporatio
on's internal co
ontrol.
According
gly, we do not express an opinion
o
on the
e effectivenesss of the School Corporation's internal co
ontrol.
A deficiency in internal control exists whe
en the design or operation of a control does not allow
w mannctions, to pre
agement or
o employees
s, in the norma
al course of pe
erforming theiir assigned fun
event, or detecct and
correct, misstatements
m
on a timely basis. A materrial weaknesss is a deficienccy, or combina
ation of deficie
encies
in internal control, suc
ch that there is
i a reasonab
ble possibilityy that a material misstatem
ment of the e
entity's
s
will not be preve
ented, or dete
ected and corrrected, on a ttimely basis. A significant deficfinancial statement
iency is a deficiency or combination of
o deficiencies
s in internal co
ontrol that is le
ess severe tha
an a material w
weakness, yet important eno
ough to merit attention by those charge
ed with govern
nance.
Our
O considerattion of interna
al control was
s for the limite
ed purpose de
escribed in the
e first paragra
aph of
this sectio
on and was no
ot designed to
o identify all deficiencies
d
in
n internal conttrol that mightt be material w
weaknesses orr significant de
eficiencies. Given
G
these lim
mitations, durring our audit we did not identify any defficiencies in inte
ernal control th
hat we consider to be material weaknessses. Howeverr, material wea
aknesses mayy exist
that have not been iden
ntified. We did
d identify certain deficienci es in internal control, described in the acccompanying Schedule
S
of Findings and Questioned
Q
Co
osts that we co
onsider to be ssignificant defficiencies. We
e consider the deficiencies
d
described
d
in th
he accompanying Schedul e of Findings and Question
ned Costs as items
2013-001 and 2013-00
02 to be signifficant deficien
ncies.
nce and Othe
er Matters
Complian
As
A part of obta
aining reasona
able assuranc
ce about whe
ether the Scho
ool Corporatio
on's financial statement is fre
ee of material misstatemen
nt, we perform
med tests of itts compliance
e with certain provisions off laws,
regulation
ns, contracts, and grant agreements, no
oncompliance with which could have a d
direct and ma
aterial
-6-
-7-
-8-
FINANCIAL STATEMENT
The financial statement and accompanying notes were approved by management of the School
Corporation. The financial statement and notes are presented as intended by the School Corporation.
-9-
Cash and
Investments
07-01-11
-11-
General
Debt Service
Exempt Debt
Exempt Retirement/Severance Bond Debt Service
Capital Projects
School Transportation
School Bus Replacement
Rainy Day
Retirement/Severance Bond
Construction
School Lunch
Textbook Rental
Self-Insurance
Levy Excess
Scholarships and Awards - Niksic
Scholarships and Awards - Underwood
Donation
High Ability Grant
Medicaid Reimbursement
Non-English Speaking Programs P.L. 273-1999
School Technology
Title I
Drug Free Schools
Medicaid Reimbursement - Federal
Improving Teaching Quality, No Child Left, Title II, Part A
Title III, Language Instruction
Education Jobs
Payroll Deductions
Totals
Receipts
(7,081,392) $
1,343,416
2,597,138
189,284
246,001
694,234
169,488
3,165,000
2,612,097
2,125,579
572,784
161,247
2,057,124
69,535
5,400
2,530
1,060
9,100
3,689
4,814
(558)
(30,228)
178,154
9,095,496
Disbursements
Other
Financing
Sources (Uses)
26,929,548
6,482,282
11,873,696
1,194,462
5,208,230
3,248,103
833,537
2,639,916
151,991
1,535,529
1,094,692
3,371,529
27
11
106,948
41,313
3,294
14,663
37,456
209,824
1,765
6,676
63,383
20,621
460,297
20,925,088
29,165,071
3,841,408
8,268,548
1,130,672
5,003,831
2,910,004
678,124
3,578,716
2,239,996
1,477,558
1,486,826
3,543,589
1,027
500
74,103
35,453
4,808
37,522
243,272
1,765
50,908
20,491
495,081
20,924,439
2,300,000 $
(24,000)
69,535
(2,300,000)
24,000
(69,535)
(12,500)
18,000
(18,000)
-
86,454,881
85,213,712
(12,500) $
Cash and
Investments
06-30-12
Receipts
Disbursements
Other
Financing
Sources (Uses)
Cash and
Investments
06-30-13
(7,016,915) $
3,960,290
6,202,286
253,074
450,400
1,101,868
324,901
865,000
1,673,297
37,574
630,755
(206,887)
1,885,064
4,400
2,041
20,345
5,860
3,294
10,915
9,034
(11,759)
6,676
(711)
(428)
(65,012)
178,803
28,149,954
5,068,910
10,218,941
905,360
3,725,640
2,831,314
387,307
3,164,540
1
1,529,168
1,119,971
4,131,659
13
6
92,984
44,024
7,832
14,024
35,082
265,595
16,008
68,223
17,040
142,939
19,901,323
31,140,227
4,873,750
10,215,480
1,122,257
4,833,310
2,873,760
535,973
3,918,413
37,575
1,512,825
1,108,434
3,883,039
1,013
250
86,953
42,680
10,566
19,564
44,116
290,487
2,019
52,263
21,318
77,927
19,934,261
- $
(18,891)
18,891
(25,000)
18,000
(18,000)
-
(10,007,188)
4,136,559
6,205,747
36,177
(657,270)
1,059,422
176,235
865,000
919,424
647,098
(176,459)
2,133,684
3,400
1,797
1,376
7,204
560
5,375
(18,651)
20,665
(2,751)
(4,706)
145,865
10,324,165
81,837,858
86,638,460
(25,000) $
5,498,563
The notes to the financial statement are an integral part of this statement.
Note 1.
-12-
-13-
Note 2.
Budgets
The operating budget is initially prepared and approved at the local level. The fiscal officer of the
School Corporation submits a proposed operating budget to the governing board for the following
calendar year. The budget is advertised as required by law. Prior to adopting the budget, the governing board conducts public hearings and obtains taxpayer comments. Prior to November 1, the
governing board approves the budget for the next year. The budget for funds for which property
taxes are levied or highway use taxes are received is subject to final approval by the Indiana
Department of Local Government Finance.
Note 3.
Property Taxes
Property taxes levied are collected by the County Treasurer and are scheduled to be distributed to
the School Corporation in June and December; however, situations can arise which would delay
the distributions. State statute (IC 6-1.1-17-16) requires the Indiana Department of Local
Government Finance to establish property tax rates and levies by February 15. These rates were
based upon the preceding year's March 1 (lien date) assessed valuations adjusted for various tax
credits. Taxable property is assessed at 100 percent of the true tax value (determined in
accordance with rules and regulations adopted by the Indiana Department of Local Government
Finance). Taxes may be paid in two equal installments which normally become delinquent if not
paid by May 10 and November 10, respectively.
-14-
Note 4.
Note 5.
Risk Management
The School Corporation may be exposed to various risks of loss related to torts; theft of, damage
to, and destruction of assets; errors and omissions; job related illnesses or injuries to employees;
medical benefits to employees, retirees, and dependents; and natural disasters.
These risks can be mitigated through the purchase of insurance, establishment of a self-insurance
fund, and/or participation in a risk pool. The purchase of insurance transfers the risk to an independent third party. The establishment of a self-insurance fund allows the School Corporation to set
aside money for claim settlements. The self-insurance fund would be included in the financial
statement. The purpose of participation in a risk pool is to provide a medium for the funding and
administration of the risks.
Note 6.
Pension Plans
A. Public Employees' Retirement Fund
Plan Description
The Indiana Public Employees' Retirement Fund (PERF) is a defined benefit pension plan.
PERF is an agent multiple-employer public employee retirement system, which provides
retirement benefits to plan members and beneficiaries. All full-time employees are eligible to
participate in this defined benefit plan. State statutes (IC 5-10.2 and 5-10.3) govern, through
the Indiana Public Retirement System (INPRS) Board, most requirements of the system, and
give the School Corporation authority to contribute to the plan. The PERF retirement benefit
consists of the pension provided by employer contributions plus an annuity provided by the
member's annuity savings account. The annuity savings account consists of members' contributions, set by state statute at 3 percent of compensation, plus the interest credited to the
member's account. The employer may elect to make the contributions on behalf of the member.
INPRS administers the plan and issues a publicly available financial report that includes
financial statements and required supplementary information for the plan as a whole and for its
participants. That report may be obtained by contacting:
Indiana Public Retirement System
1 North Capital Street, Suite 001
Indianapolis, IN 46204
Ph. (888) 526-1687
-15-
Note 7.
-16-
Note 8.
Holding Corporation
The School Corporation has entered into a capital lease with the Munster Building Corporation (the
lessor). The lessor was organized as a not-for-profit corporation pursuant to state statute for the
purpose of financing and constructing or reconstructing facilities for lease to the School
Corporation. The lessor has been determined to be a related party of the School Corporation.
Lease payments during the years 2012 and 2013 totaled $9,246,548 and $9,727,480, respectively.
Note 9.
-17-
-18-
-19-
General
Cash and investments - beginning
Receipts:
Local sources
Intermediate sources
State sources
Federal sources
Temporary loans
Interfund loans
Other
-20-
Total receipts
Disbursements:
Current:
Instruction
Support services
Noninstructional services
Facilities acquisition and construction
Debt services
Nonprogrammed charges
Interfund loans
Total disbursements
Excess (deficiency) of receipts over
disbursements
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Excess (deficiency) of receipts and other
financing sources over disbursements
and other financing uses
Cash and investments - ending
Debt
Service
Exempt
Retirement/
Severance
Bond
Debt
Service
Exempt
Debt
$
2,597,138
Capital
Projects
189,284
School
Bus
Replacement
School
Transportation
246,001
694,234
Retirement/
Severance
Bond
Rainy
Day
169,488
3,165,000
Construction
(7,081,392) $
1,343,416
2,612,097
907,266
30
22,074,929
2,600,000
1,347,323
5,116,282
1,366,000
-
7,953,696
3,920,000
-
1,194,462
-
3,233,230
1,975,000
-
2,281,695
901,000
65,408
506,537
327,000
-
39,916
2,600,000
-
151,991
-
26,929,548
6,482,282
11,873,696
1,194,462
5,208,230
3,248,103
833,537
2,639,916
151,991
18,369,854
7,635,182
500,371
59,664
2,600,000
3,841,408
-
8,268,548
-
1,130,672
-
1,488,644
1,308,187
2,207,000
-
1,852,004
1,058,000
-
161,124
517,000
-
978,716
2,600,000
2,239,996
-
29,165,071
3,841,408
8,268,548
1,130,672
5,003,831
2,910,004
678,124
3,578,716
2,239,996
(2,235,523)
2,640,874
3,605,148
63,790
204,399
338,099
155,413
(938,800)
2,300,000
-
(24,000)
69,535
-
(2,300,000)
2,300,000
(24,000)
69,535
(2,300,000)
3,605,148
63,790
204,399
407,634
155,413
(2,300,000)
64,477
2,616,874
(7,016,915) $
3,960,290
6,202,286
253,074
450,400
1,101,868
324,901
865,000
(2,088,005)
63
(63)
-
(938,800)
$
1,673,297
2,125,579
(2,088,005)
$
37,574
School
Lunch
Cash and investments - beginning
Receipts:
Local sources
Intermediate sources
State sources
Federal sources
Temporary loans
Interfund loans
Other
-21-
Total receipts
Disbursements:
Current:
Instruction
Support services
Noninstructional services
Facilities acquisition and construction
Debt services
Nonprogrammed charges
Interfund loans
Total disbursements
Excess (deficiency) of receipts over
disbursements
572,784
Levy
Excess
2,057,124
69,535
5,400
High
Ability
Grant
Donation
2,530
Non-English
Speaking
Programs
P.L. 273-1999
Medicaid
Reimbursement
-
1,060
1,037,456
57,236
-
3,371,529
-
27
-
11
-
106,948
-
41,313
-
3,294
-
14,663
-
1,535,529
1,094,692
3,371,529
27
11
106,948
41,313
3,294
14,663
51,459
1,426,099
-
1,486,826
-
31,298
3,512,291
-
1,027
-
500
-
7,656
53,947
12,500
-
35,453
-
1,060
3,748
-
1,477,558
1,486,826
3,543,589
1,027
500
74,103
35,453
4,808
(1,000)
(489)
32,845
5,860
3,294
9,855
(392,134)
(172,060)
24,000
-
(69,535)
(12,500)
24,000
(69,535)
(12,500)
5,860
3,294
9,855
57,971
$
161,247
SelfInsurance
Scholarships
and
Awards
- Underwood
1,053,612
31,815
450,002
100
57,971
Textbook
Rental
Scholarships
and
Awards
- Niksic
630,755
(368,134)
$
(206,887) $
(172,060)
1,885,064
(69,535)
$
(1,000)
$
4,400
(489)
$
2,041
20,345
$
20,345
5,860
3,294
10,915
School
Technology
Cash and investments - beginning
Receipts:
Local sources
Intermediate sources
State sources
Federal sources
Temporary loans
Interfund loans
Other
-22-
Total receipts
Disbursements:
Current:
Instruction
Support services
Noninstructional services
Facilities acquisition and construction
Debt services
Nonprogrammed charges
Interfund loans
Total disbursements
Excess (deficiency) of receipts over
disbursements
Title I
9,100
4,814
Title III,
Language
Instruction
$
Education
Jobs
(558) $
Payroll
Deductions
(30,228) $
Totals
178,154
9,095,496
209,824
-
1,765
-
6,676
-
63,383
-
20,621
-
460,297
-
20,925,088
26,974,544
30
22,240,820
1,212,568
8,489,000
5,200,000
22,337,919
37,456
209,824
1,765
6,676
63,383
20,621
460,297
20,925,088
86,454,881
37,522
-
186,081
57,191
-
1,522
243
-
49,345
1,563
-
20,491
-
416,915
78,166
-
20,924,439
-
19,039,032
13,965,415
1,926,470
3,607,847
17,022,628
24,452,320
5,200,000
37,522
243,272
1,765
50,908
20,491
495,081
20,924,439
85,213,712
(33,448)
6,676
12,475
130
649
1,241,169
20,798
(2,798)
(18,000)
2,414,396
(2,426,896)
18,000
(18,000)
(12,500)
(15,448)
6,676
(5,525)
130
(11,759) $
(66)
$
3,689
Medicaid
Reimbursement Federal
19,886
17,570
-
(66)
Drug
Free
Schools
Improving
Teaching
Quality,
No Child
Left,
Title II, Part A
9,034
6,676
(711) $
(428) $
(34,784)
(34,784)
(65,012) $
649
178,803
1,228,669
$
10,324,165
Debt
Service
General
Cash and investments - beginning
Receipts:
Local sources
State sources
Federal sources
Temporary loans
Interfund loans
Other
Total receipts
-23-
Disbursements:
Current:
Instruction
Support services
Noninstructional services
Facilities acquisition and construction
Debt services
Nonprogrammed charges
Interfund loans
Total disbursements
Excess (deficiency) of receipts over
disbursements
Capital
Projects
School
Bus
Replacement
School
Transportation
Retirement/
Severance
Bond
Rainy
Day
Construction
3,960,290
746,354
22,264,409
3,875,000
1,264,191
3,457,910
1,611,000
-
7,173,941
3,045,000
-
905,360
-
2,387,312
1,315,000
23,328
1,881,554
910,000
39,760
134,307
253,000
-
39,540
3,125,000
-
1
-
28,149,954
5,068,910
10,218,941
905,360
3,725,640
2,831,314
387,307
3,164,540
19,135,014
7,569,811
497,356
63,046
3,875,000
4,873,750
-
10,215,480
-
1,122,257
-
1,625,035
1,233,275
1,975,000
-
1,972,760
901,000
-
208,973
327,000
-
793,413
3,125,000
37,575
-
31,140,227
4,873,750
10,215,480
1,122,257
4,833,310
2,873,760
535,973
3,918,413
37,575
195,160
3,461
(148,666)
6,202,286
253,074
(216,897)
450,400
(1,107,670)
1,101,868
(42,446)
324,901
865,000
1,673,297
(753,873)
37,574
(37,574)
(18,891)
(18,891)
(2,990,273)
$
Exempt
Debt
(7,016,915) $
(2,990,273)
Exempt
Retirement/
Severance
Bond
Debt
Service
(10,007,188) $
176,269
4,136,559
3,461
$
6,205,747
(216,897)
$
36,177
(1,107,670)
$
(657,270) $
(42,446)
1,059,422
(148,666)
$
176,235
865,000
(753,873)
$
919,424
(37,574)
$
School
Lunch
Cash and investments - beginning
Receipts:
Local sources
State sources
Federal sources
Temporary loans
Interfund loans
Other
Total receipts
-24-
Disbursements:
Current:
Instruction
Support services
Noninstructional services
Facilities acquisition and construction
Debt services
Nonprogrammed charges
Interfund loans
Total disbursements
Excess (deficiency) of receipts over
disbursements
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Excess (deficiency) of receipts and other
financing sources over disbursements
and other financing uses
Cash and investments - ending
Textbook
Rental
630,755
(206,887) $
SelfInsurance
Scholarships
and
Awards
- Niksic
Levy
Excess
1,885,064
Scholarships
and
Awards
- Underwood
4,400
High
Ability
Grant
Donation
2,041
20,345
Non-English
Speaking
Programs
P.L. 273-1999
Medicaid
Reimbursement
5,860
3,294
10,915
1,048,258
30,462
450,348
100
1,062,089
57,882
-
3,381,659
750,000
-
13
-
6
-
92,984
-
44,024
-
7,832
-
14,024
-
1,529,168
1,119,971
4,131,659
13
92,984
44,024
7,832
14,024
52,470
1,460,355
-
1,108,434
-
36,561
3,096,478
750,000
1,013
-
250
-
8,376
78,577
-
42,680
-
10,566
-
8,649
10,915
-
1,512,825
1,108,434
3,883,039
1,013
250
86,953
42,680
10,566
19,564
16,343
11,537
248,620
(1,000)
(244)
6,031
1,344
(2,734)
(5,540)
18,891
-
(25,000)
18,891
(25,000)
16,343
30,428
248,620
(18,969)
1,344
647,098
(176,459) $
2,133,684
(1,000)
$
3,400
(244)
$
1,797
1,376
7,204
(2,734)
$
560
(5,540)
$
5,375
School
Technology
Cash and investments - beginning
Receipts:
Local sources
State sources
Federal sources
Temporary loans
Interfund loans
Other
Total receipts
-25-
Disbursements:
Current:
Instruction
Support services
Noninstructional services
Facilities acquisition and construction
Debt services
Nonprogrammed charges
Interfund loans
Total disbursements
Excess (deficiency) of receipts over
disbursements
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Excess (deficiency) of receipts and other
financing sources over disbursements
and other financing uses
Cash and investments - ending
Title I
9,034
Medicaid
Reimbursement Federal
16,008
-
68,223
-
13,932
3,108
-
142,939
-
19,901,323
22,305,266
22,473,669
946,221
7,134,000
7,750,000
21,228,702
35,082
265,595
16,008
68,223
17,040
142,939
19,901,323
81,837,858
44,116
-
241,859
48,628
-
646
1,373
-
50,756
1,507
-
21,318
-
77,927
-
19,934,261
-
19,547,035
13,601,822
1,957,711
1,333,896
19,414,487
23,033,509
7,750,000
44,116
290,487
2,019
52,263
21,318
77,927
19,934,261
86,638,460
(9,034)
(24,892)
13,989
15,960
(4,278)
65,012
18,000
-
(18,000)
36,891
(61,891)
18,000
(18,000)
(25,000)
(6,892)
13,989
(2,040)
(4,278)
(2,751) $
(4,706) $
20,665
(711) $
(428) $
(65,012) $
Totals
265,595
-
(18,651) $
Payroll
Deductions
(6,022)
41,104
-
6,676
Education
Jobs
Title III,
Language
Instruction
(11,759) $
(9,034)
$
Drug
Free
Schools
Improving
Teaching
Quality,
No Child
Left,
Title II, Part A
(32,938)
65,012
-
178,803
(4,800,602)
(32,938)
$
145,865
10,324,165
(4,825,602)
$
5,498,563
Lessor
-26-
Governmental activities:
U.S. Bank - 2003A Elliott
U.S. Bank - 2003B WW Classroom
U.S. Bank - 2004 Service Center
U.S. Bank - 2005 WWMS Gym
U.S. Bank - 2005 Eads Refinance
U.S. Bank - 2007
Peoples Bank - 1998 Refinance
Peoples Bank - Eads/MHS
Peoples Bank - 2009 MHS
Peoples Bank - 2011A MHS
Peoples Bank - 2011B WWMS
Annual
Lease
Payment **
Purpose
New Building
Building Addition
New Building
Building Addition
Refinance of debt
Roofs & Parking Lots
Refinance of debt
Eads School demolition/MHS Fields/renovations
Pool
Pool demolition/classrooms
Pool demolition/classrooms
930,505
166,500
247,000
130,850
1,035,822
241,000
3,530,500
508,000
2,707,000
423,000
86,000
10,006,177
Lease
Beginning
Date
Lease
Ending
Date
07-17-03
11-26-03
11-24-04
12-15-05
09-07-05
12-19-07
05-15-08
12-23-08
07-09-09
06-14-11
06-14-11
12-31-28
12-31-28
12-31-28
12-31-28
12-30-26
12-31-17
01-05-21
12-30-23
12-30-20
12-31-20
06-30-21
**Annual lease payments vary each year so the amount listed is due in the 2013-2014 School Year.
Description of Debt
Type
Governmental activities:
Notes and loans payable
General obligation bonds
General obligation bonds
Tax anticipation warrants
Totals
Purpose
Referendum Anticipation Levy Note
2002 Pension Bonds
2006 Pension Bonds
Ending
Principal and
Interest Due
Principal
Balance
Within One
Year ***
240,000
5,745,000
7,134,000
360,864
246,576
639,775
7,194,260
13,119,000
8,441,475
*** - Includes the Referendum Anticipation Levy Note, which was not issued until September 11, 2013.
-27-
Ending
Balance
Governmental activities:
Buildings
Improvements other than buildings
Machinery, equipment, and vehicles
Total capital assets
60,148,750
3,684,577
11,463,549
75,296,876
Fund
General
Capital Projects
Textbook Rental
$ 10,007,203
657,270
176,459
Over four of the past five years, the General Fund has had increasing negative cash balances at June
30. The following table presents the overdrawn cash balance of the General Fund as of June 30 for the last
five years:
Date
June
June
June
June
June
Amount
Overdrawn
All the other funds of the School Corporation are restricted funds and can be used only for specific
purposes, such as debt service, construction, school lunch, internal service, pension debt, or specific grant
purposes. The General Fund, Capital Projects Fund, and Textbook Rental Fund cash deficits have been
covered by these restricted funds in total, so as to not overdraw bank accounts. Decreased state funding has
contributed to this problem.
In addition, the School Corporation has current (due within one year) debt obligations totaling
$18,447,652 including principal and interest on capital leases ($10,006,177), pension bonds ($886,351), tax
anticipation warrants ($7,194,260), and referendum levy note payable ($360,864). In May 2013, the voters
approved a referendum to increase the taxes collected for the General Fund by $0.199 per $100 of assessed
valuation for the next seven years. The School Corporation has also implemented some General Fund cost
saving measures.
A similar comment appeared in prior Report B40058.
The cash balance of any fund may not be reduced below zero. Routinely overdrawn funds could be
an indicator of serious financial problems which should be investigated by the governmental unit. (Accounting
and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)
-28-
APPROPRIATIONS
The records presented for audit indicated the following expenditures in excess of budgeted appropriations, for the years ending December 31:
Fund
Years
Excess
Amount
Expended
General
Debt Service
Debt Service
Capital Projects
Capital Projects
2012
2011
2012
2011
2012
$10,644,655
3,210
3,998
869,321
1,157,407
The General Fund's approved 2011 and 2012 budgets were $25,818,130 and $14,769,758,
respectively. The Department of Local Government Finance decreased the 2012 General Fund budget, as
compared to the 2011 budget, due to the $7,081,392 cash deficit balance in the General Fund as of June 30,
2011. The School Corporation did not record the 2012 approved budget amount for the General Fund in its
disbursement ledger but relied upon an internally determined budget of $22,890,000 instead.
Indiana Code 6-1.1-18-4 states in part: ". . . the proper officers of a political subdivision shall
appropriate funds in such a manner that the expenditures for a year do not exceed its budget for that year as
finally determined under this article."
TRANSFER TUITION
The School Corporation completes a transfer tuition form (Form 515, Transfer Tuition Statement) that
has been developed for school corporations to use to compute the amount charged for transfer tuition in
accordance with State statute. However, the School Corporation is also charging an annual $700
assessment for capital costs concerning technology and computers. Per transfer tuition memos, dated March
8, 2011, and April 2, 2012, "This fee includes computers, fiber optic lines, and phone lines associated with
providing these sources through local property taxes as well as the costs associated with recent bond
construction projects."
A similar comment appeared in prior Report B40058.
-29-
-30-
-31-
-32-
SUPPLEMENTAL AUDIT OF
FEDERAL AWARDS
-33-
STATE
S
OF IND
DIANA
AN
A EQUAL OP
PPORTUNITY
Y EMPLOYER
R
STAT
TE BOARD OF A
ACCOUNTS
302 WE
EST WASHINGT
TON STREET
ROOM E4118
INDIANA
APOLIS, INDIA
ANA 46204-2769
9
Teelephone: (317) 2232-2513
F
Fax: (317) 232-44711
Weeb Site: www.in.gov/sboa
IN
NDEPENDENT AUDITOR'S
S REPORT ON
O COMPLIA
ANCE FOR EA
ACH MAJOR
R FEDERAL
PROGRAM AND
D ON INTERN
NAL CONTRO
OL OVER CO
OMPLIANCE
TO: THE OFFICIALS OF THE SCH
HOOL TOWN OF MUNSTE
ER, LAKE CO
OUNTY, INDIA
ANA
n Complianc
ce for Each Major
M
Federa
al Program
Report on
We
W have auditted the Schoo
ol Town of Mu
unster's (Scho
ool Corporatio
on) compliancce with the typ
pes of
complianc
ce requiremen
nts described
d in the U.S. Office of Man
nagement and
d Budget (OM
MB) Circular A
A-133
Compliance Suppleme
ent that could have
h
a direct and
a material e
effect on each
h of its major fe
ederal program
ms for
the period
d of July 1, 2011 to June 30
0, 2013. The School
S
Corpo
oration's major federal prog
grams are iden
ntified
in the Sum
mmary of Aud
ditor's Resultts section of the
t accompa nying Schedu
ule of Finding
gs and Questtioned
Costs.
ment's Respo
onsibility
Managem
Management
M
is
s responsible for complianc
ce with the req
quirements of laws, regulatiions, contractts, and
grants applicable to its federal progrrams.
s Responsibiility
Auditor's
Our
O responsibiility is to expre
ess an opinion
n on complian
nce for each of the School C
Corporation's major
federal prrograms base
ed on our audit of the types
s of compliancce requireme
ents referred tto above. We
e conducted ou
ur audit of com
mpliance in acc
cordance with
h auditing stan
ndards genera
ally accepted iin the United S
States
of America
a; the standarrds applicable
e to financial audits
a
contain ed in Governm
ment Auditing
g Standards, isssued
by the Comptroller General of the
e United Sta
ates; and OM
MB Circular A
A-133, Auditss of States, Local
Governme
ents, and Non
n-Profit Organ
nizations. Tho
ose standardss and OMB Circular A-133 rrequire that we
e plan
and perform the audit to
o obtain reaso
onable assura
ance about w
whether nonco
ompliance with the types off compliance re
equirements referred
r
to ab
bove that cou
uld have a d irect and ma
aterial effect o
on a major fe
ederal
program occurred.
o
An audit include
es examining, on a test bassis, evidence about the Scchool Corpora
ation's
complianc
ce with those requirements
s and perform
ming such othe
er proceduress as we consid
dered necesssary in
the circum
mstances.
We
W believe tha
at our audit pro
ovides a reas
sonable basis for our opinio
on on complia
ance for each major
federal pro
ogram. Howe
ever, our auditt does not provide a legal de
etermination o
of the School Corporation'ss compliance.
pinion on Ch
hild Nutrition
n Cluster
Basis forr Qualified Op
As
A described in
n item 2013-00
04 in the acco
ompanying Scchedule of Findings and Questioned Costs, the
School Co
orporation did
d not comply with requirem
ments regardiing Suspension and Deba
arment and Special
Tests and
d Provisions - Paid Lunch Equity
E
that are
e applicable to
o its Child Nutrition Clusterr. Compliance with
such requ
uirements is necessary,
n
in our opinion, for the Scho
ool Corporatio
on to comply with requirem
ments
applicable
e to that progrram.
-34-
-35-
-36-
-37-
Department of Agriculture
Child Nutrition Cluster
School Breakfast Program
Federal
CFDA
Number
Pass-Through
Entity (or Other)
Identifying
Number
-38-
47,231
-
59,129
47,231
59,129
521,091
-
510,512
521,091
510,512
568,322
569,641
31,624
178,200
-
43,840
221,755
209,824
265,595
10.555
FY2012
FY2013
Department of Education
Title I, Part A Cluster
Title I Grants to Local Educational Agencies
Total
Federal Awards
Expended
06-30-13
10.553
FY2012
FY2013
Total
Federal Awards
Expended
06-30-12
84.010
FY2010/11
FY2011/12
FY2012/13
The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards.
Federal
CFDA
Number
Pass-Through
Entity (or Other)
Identifying
Number
-39-
Total
Federal Awards
Expended
06-30-12
Total
Federal Awards
Expended
06-30-13
4708-4710
2,194
FY2010/11
1,765
FY2010/11
FY2011/12
FY2012/13
2,216
18,404
-
3,108
13,932
20,620
17,040
2,732
51,301
9,350
-
12,769
48,438
7,016
63,383
68,223
460,297
-
142,939
460,297
142,939
755,889
495,991
84.048
84.186
84.365
84.367
09-4740
10-4740
11-4740
12-4740
84.410
11-4740
12-4740
The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards.
1,324,211
1,065,632
Note 1.
Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity
of the School Town of Munster (School Corporation) and is presented in accordance with the cash
and investment basis of accounting used in the preparation of the financial statement. Accordingly,
the amount of federal awards expended is based on when the disbursement related to the award
occurs except when the federal award is received on a reimbursement basis. In these instances
the federal awards are considered expended when the reimbursement is received.
Circular A-133 requires an annual audit of nonfederal entities expending a total amount of federal
awards equal to or in excess of $500,000 in any fiscal year unless by constitution or statute a less
frequent audit is required. In accordance with Indiana Code (IC 5-11-1 et seq.), audits of school
corporations shall be conducted biennially. Such audits shall include both years within the biennial
period.
Note 2.
Noncash Assistance
The School Corporation expended the following amount of noncash assistance for the years
ending June 30, 2012 and 2013. This noncash assistance is also included in the federal expenditures presented in the schedule.
Program Title
2012
-40-
9,833 $
108,486
2013
12,382
106,910
Adverse as to GAAP;
Unmodified as to Regulatory Basis
no
yes
no
Federal Awards:
Internal control over major programs:
Material weaknesses identified?
Significant deficiencies identified?
yes
none noted
yes
no
-41-
-42-
-44-
-45-
-47-
-48-
-49-
-50-
-51-
-52-
-53-
-54-
-55-
-56-
-57-
-58-