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CJ ,..,. .".,~ ,~ - t-.. ~ ~ CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 1.2 FINANCIAL STATEMENTS Combined Balance Shect - All Fund Types and Account Groups 3-6 Combined Statement of Revenue, Expenditnrcs and Changes in Fund Balances - All Governmental Fund Types 7.8 Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 9 Statement of Revenue, Expenses and Changes in Retained Deficit/Fund Balanee - Proprietary Fund Type and Non-Expendable Trust Fund 10 Statement of Cash Flows - Proprietary Fund Type and Non-Expendable Trust Fund II 0 Notes to Financial Statements 12 - 25 SUPPLEMENTARY INFORMATION 0 General Fund Schedule of Revenue 26 - 27 Schedule of Expenditures 28 - 33 0 o -, .-:.;; ") In accordnnec with (j1Jl'1!1'I11111!1I/ AIlt/il/lIJ.i SIIIIIt/t1l'1ll', wc hllvc IIlso issllcd II rcport dlllcd Scplember 16, 1997, on our considcrntion of Shippcnsbllrg ArclI School Dislrict's intcrnlll conlrol ovcr Iinancinl reporting and 0111' tcsts of its compliancc with ccrtllin provisions of III\\'S, rcgllllltions, cOlltrncts and grants. Our audit was madc for thc purpose of forming an opinion onthc gcncral pllrposc Iinancial statcmcnts of Shippensburg Arca School District takcn liS a wholc. Thc sllpplcmcntnry informntion listed in the table of contents is prescnted for purposcs of ndditionnl nnnlysis nnd is not II rcquircd part of the gcneral purpose Iinnncial statcmcnts of the Shippensbllrg Arell School District. SlIch information has bcen subjectcd to thc alldit proccdurcs npplicd in thc IIl1dit of thc gencral purposc Iinancial statements, and in our opinion, is fnirly stated, in nil mllterial rcspects, in rclation to thc general purpose Iinancial statcments tnken as a whole. ~~dv Chambersburg, Pennsylvania September 16, 1997 2 SIIII'I'.:NSIIUKG '\It.:,\ SCIIOOI. ()(STKICT COMIIINEIl II,\I.,\NC.: SIIE.:T. '\1.1. .'UNII 'I'\'I'.:S ,\NII '\CCOUNT GltoUl'S Juno JO, 1997 Guvernmentnl Fuml T)'pcs Specllll Revenue Cupllul '\SSETS Geneml Alhletie ItcscfVC Conslruetlon Cnsh S 87.998 S 3(1,720 S 2.934 S Investments 3,324,952 4,737,923 Receivables Tn.'(cs . net 333,432 Doc from olher funds 19,785 528,918 I'ederal subsidies 45.385 Slale subsidies 227,600 Olher 49,357 50 Inventories Land and site improvements Buildings and improvemenls Furniture nnd equipment. net of accumulated depreciation In Enlerprise I'ond Amounllo be provided fur relirement of generallong.lenn debt Amount 10 be provided for eumpensaled absences '1'01818"01. S 4,088.509 S 36.720 S 531,852 S 4,737.973 See Notes to Financial Statcments. 3 Fldllelll!)' Flllld Type. I'ruprlelnry Tru'l nnd Agency Account Groups Fund Type NOli- Genenl! General TOlul, Enlerprlse Espendllhle Flsed I.ung:rcrm (Memomlldul1I Curelerlu Tru,1 Agellcy Assets Deht Only) $ 16.330 $ 874 $ 411,367 $ $ $ SS6,223 SO,I40 10,000 8,I23,OlS 333,432 S48,703 4S,38S 227,600 162 49,S69 29,731 29,731 SI,396 SI,396 36,411,969 36,411,969 111,712 S,2S9,SHO S.371,292 7,968.881 7.968,881 SS3,37S SS3,37S $ IS7,773 $ SI,I76 $ 421.367 $ 41,722,94S $ 8.S22,2S6 $ 60.270,S71 4 SIIII'I'!:NSIIlJRG AR!:,\ SCIIOOLIIIS"J'RIC"J' . COMUlNEll IIALANC!: sm:!:T. ALl. HJNI> n'I'!:s ,\NII ,\CCOtlNT GIWtll'S June 30,1997 L1AIIILlTIES AND FUND EQUI1\' L1ahllities Paynhles Dueto mher funds Intergovernmental Accounls Deferred revenues Accrued expenses Salaries and henefils Payroll withhuldings Amount available for student activities Ilond, puyahle Compensoled ahsenees payahle Capital lense obllgulion TOlalllabillll.. Fund Equity Contributed capitol Investment in general fixed assets Unreserved retained deficit Fond Ilalanccs Reserved for Alhlelic Capital reserve Construction Reading Non.expendabletruSl Unreserved Tolal fund balances Tolal fund equity TolalUabilllle, and fund equity See Notes to Financial Slatemcnts. (juvcrllll1cntul FunLl T)'I'1I:5 Spccllllltcvcnuc Cupitnl (icl1crnl Athletic I{cscr\'c Construction S 528.918 S S S 193.523 87.804 292.081 663,358 380.039 2,057,919 87.804 5 Flduclnl}' FUlld T)'pes I'roprletnry Trusl 8ml Agcl1c)' Account GroUJlS Fund Type Nnn- Gcncml General T(lIl1ls Enterprise Expendnble Fixed l.ong.Tcnn (Mcrnnrul1dum Cnrclcrin Tmsl "gene)' AsselS Debt (111)') $ $ $ 19,785 $ $ $ 5~8,703 220.688 220.688 60 500 281,887 1O,5~2 302,623 663,358 12~.416 504,455 56,478 56,478 7, 73~.000 7,734,000 553,375 553,375 234.881 234,881 10,602 500 421.367 8,522,256 1I,100.4~8 281,401 281.401 41,722.945 41,722,945 (I3~.230) ( 134.230) 50,676 36.720 531,852 4,650.169 1.562 50.676 2.029.028 7,300.007 50.676 147.171 50.676 41.722,9~5 49.170,123 $ 157,773 $ 51,176 $ 421,3(.7 $ 41,722.945 $ 8,522.256 S 60.270,571 6 SIIII'I't:NSIIUllG ,\IU:A SCIIOOI. IlISTllICT COMIIINt:1l STAn:MI:NT OFIU:Vt:Nta:, t:XI'ENIlITtJIU:S ,\NIl CIIANca:S IN FlINIlII,\I..\Nn:S. ALL GOVt:RNMt:NT,\I. FlINIl T\'I't:S \'enr t:"decl.l""e 30, 1997 (it)\'CrllI11CI1II1I FUlld '1)'IlC'S Specl"llle,e"ue Cupltul Cicllcrnl Athlelfe ItcsC'r\lc ({evenllc Luell! sources S 10,1(1).620 S J4.0S0 $ 639 Stnte uppruprllllluns 8A3S.319 Fedeml nppruprfnlious 398,(51) Total revenue 19.002.998 JoI,050 639 Espendltu",s Instruetlonnl 12,14S.118 Support services 5.404.781 Opcrution of non.instructionnl services 231.075 IJO.327 Debt service I.QS6.806 206.S36 Cnpltnl outlny 128.959 Totale.pendlture, 18,837.780 130,327 33S.495 Ese... (deneleney) of revenue over e.pendlture, 16S.218 (96.277) (334,856) Olher Finnncing Sourccs (Uses) Opcmting transfers in 82.749 607,529 Operating transfers out (690,278) Bond proceeds Refunds of prior )'carsl receipts (14.547) Refunds of prior )'cnrs' expenditures 3 Interest 272,467 Other fiounclng sources (uses) - net (432,355) 82,749 607,529 E.c... (denclency) of revenue and other financing sources over expenditures nnd other financing uses (267,137) (13.528) 272.673 Fund Unlnnces. July I, 1996 2,297.727 SO,248 259,/79 Fuud Unlnuces. June 30. 1997 S 2.030,S90 $ 36,720 S 531.852 See Notes to Financial Statcmenls. 7 ') Tlllllls (MclIlorllntlultl Cnnslrucllul1 Ollly) $ $ 10,20-1,309 8.435,319 398,059 19,037,687 12,145,118 117,178 5,521,959 361,402 1,263,342 505,3-14 634,303 622,522 19,926,124 (622,522) (888,437) 690,278 (690,278) 4,995,000 4,995,000 (14,5-17) 3 277,691 550,158 5,272,691 5,530,614 4,650,169 4,6-12,177 2,607,154 $ 4,650,169 S 7,249,331 8 SIIII'Pf:NSlIlJIW ,\IU:'\ SCIIOOl, IlIS'I'IlICT , ST^n:~":NT OF RI:Vf:Nm:, f:XI'I:NJllnllU:S ANII CII.\NGI:S IN flINIIIIAI.,\NCf:.IIUIIGI:T ANII ACTUAl.. m:NI:RAI. fllNII \'enr I:ndell ,'une 30, 1')')7 Vnrlullcc ':) Fllvurnhlc /lut/get Aellllll ( Unfuvnrnble) Itc\'cnuc I.ocnl sources $ 1(),36~,809 $ 10,169,620 $ ( 195,189) Stnh: upproprllltluns 8,27~,5 I 9 8,~H,319 I (,(),800 Fet/ernlnpproprintlons 362,58 I 398,059 35,478 Other n"uncing sources 272,470 272.470 TotAl revenue 19,001,909 19,275,~68 273,559 Hxpent/ilures Instructional 12,256,849 12,1~5,1 18 I I 1,731 Support services Sil65,276 5,~0~,781 60,495 Operation or non-Instructional services 235.402 231,075 ~,327 Other 1,82~,~60 1,761,631 62,829 Totnlnpendltures 19,781,987 19,542,605 239,382 Deficiency or revenue over expenditures $ (780,078) (267,137) $ 512,9~1 Fund Bnlnnee-July 1,1996 2,297,727 Fund Bnlnnee - JundO, 1997 $ 2,030,590 See Notes to Financial Statemenls. 9 ."' ...., SIIll'...:NSRURG AR.:A selloot "'STllICT ...., ST,\ n:~":NT Of' R.:V.:NtIf:. EXI'.:NS.:S, ANII CIIANm:s IN R.:TAINf:I) In:ncmnINIIIIAI,,\Nn: . PROI'R":TAR\' .'UNll TYI'.: ANII NON..:XI'.:NIIAIIU: TRUST .'lINII VOIr Endod Juno JO, 1997 PrurrlCllll)' r:jduciury "" !'uud'I)'po !'uudT)'po TOlllls Enterprise Nou.Espouduhle (McrnurundulII t'ufclcrin Tmsl Oul)') Gpemling Rc\'cl1tu: Soles S 505,328 S S 505,328 :) Gremling Expenses Donaled commodities used 37,641 37.641 I'ood ond milk 279,324 279,324 Lobor, In.,<cs nnd henenls 377,381 377,381 Professional services 1,375 1,375 Supplies 17,534 17,534 Tmsh removol 2,418 2,418 Extermination fees 1,256 1,256 Equipment repairs and mainlenance 7,328 7,328 Advertising 49 49 Trovel 859 859 Ulililies 20,000 20,000 Depreciation 28,071 28,071 Indirect costs 2,338 2,338 Total operating expenses 773,236 2,338 775,574 Oporating loss (267,908) (2,338) (270,246) Nonopcnlling Revenue Interest 10446 2,392 3,838 f'cdcml and state subsidies 188,557 188,557 Value of donated commodities 38,044 38,044 Sociol seeUril)' suhsid)' 10,685 10,685 Retirement subsidy 11,242 11,242 Contributions 20,150 20,150 Totol nonoperating revenue 249,97., 22,542 272,516 Not Ineomo (loss) (17,934) 20,204 2.270 Reloined DefieiV!'uud Rolonee. Jul)' I, 1996 (116,296) 300472 (85.824) Reluined DcficiVl'und Bolonce . June 30, 1997 S (134,230) S 50'(,76 S (83,554) Sce Notcs to Financial Statcments, 10 SIIII'PEN51lURG AR.:,\ SCIIOOl. IlISTRICT STATEM.:NT 0.' CASII .-LOWS. I'ROPR..:TARY ..t1NII '1'\'1'.: ANII NON..:XI'.:NII,\IlU: TRUST .'UNII Y..r .:nded June JO, 1997 l'cuprictlU)' Fldllclnl)' Fnnd 'I)'pe Flllld'l)'pe Tl1tllls Enterprise Nlln'E.\pendnhle (MCII1UnulI.llIIlI Cnfctcrin Trusl Dilly) CR."ih Fluws From Opcmllng ^cth'i~i~s Opemting luss S (267,1}()8) S (2,338) S (270,246) Adjnslmenls: Depreclatiun 28,071 28,071 USDA dunlltcd commodities 38,044 38,044 Changes in Rsscls unu liabilities: (lne..,ose) decreose In: Investments (20,140) (20,140) Receivables 23,07S (162) 22,913 Inventories (4,678) (4,678) (Dccrcn."ic) increase In: Pnynhles (16,70S) SOO (16,20S) Deferred revenue 403 403 Net co.h u.ed In operaUng neUville. ( 199,698) (22,140) (221,838) Cash Flows From Noncapilnl Financing Activities Federal and state subsidies I 88,SS7 188,SS7 50elnl security suhsidy 1O,68S 1O,68S /lelirement suhsidy 11,242 11,242 Contributions 20,ISO 20,ISO Netea.h nnw. provided by nonenpitnl IInnndng .eUvIUe. 210,484 20,ISO 230,634 Cash Flows From Investing Activities Interest 1.446 2,392 3,838 Net increuse In cash 12,232 402 12.634 Cosh - July I, 1996 4,098 472 4,S70 Cosh - June 30, 1997 S 16,330 S 874 S 17.204 See Notes to Financial Statements. II SIIIPPt:NSIIURG ARt:A SCIIOOL IlISTRICT NOTES TO FINANCIAl, STA n:M t:NTS Note 1. Summury ofS1nnlncnnl Accounllnn Pollclcs The accounting policies of the Shippcnsburg Area School District conform to gcnerally accepted accounting principles as applicable to govcrnmcntal units. The following is a summary of the School District's signilicant accounting policies: Reporting Entitv: Thc Shippensburg Area School District's linancial statements include the operations of all organizations for which the School Board exercises oversight rcsponsibility. Oversight responsibility is demonstrated by linancial interdependency, selection of governing authority, designation of management, ability to signilicantly iufluence operations, and accountability for fiscal mattcrs, The Shippensburg Area School District is the lowest level of government which has oversight responsibility and control over all activities related to public school education in the Commonwealth of Pennsylvania, The District reccives funding from local, state and Federal government sources and must comply with the requircments of these funding source entities, However, the District is not includcd in any other governmental "reporting entity" since the School Board members are elected by the public and have decision-making authority, the power to designate management, the ability to signilicantly influence operations and primary accountability for liscal mattcrs, Additionally, the District docs not exercise oversight responsibility over any other entities, and consequently, no other entitics have been included in the accompanyinglinancial statements. Basis of Presentation - Fund Accounting: The accounts of the School District arc organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of cach fund arc accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue and expenditures or expenses, Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled, The various funds are summarized by type in the linaneial statements. The following fund types and account groups are used by the School District: Governmental Fund Types Governmental Funds are those through which most governmental functions of the School District are linanced. The acquisition, use and balances of the School District's expendable linancial resources and the related liabilities (exccpt those accounted for in Proprietary and Payroll Funds) arc accounted for through Governmental Funds, Thc measurement focus is upon determination of changes in financial resources rather than upon net incomc dctcrmination, Proprietary Fund Types Proprietary Funds arc used to account for the School District's ongoing activitics which arc similar to those often found in the private sector, The measurement focus is upon determination of net income and capital maintenance, 12 SIIIPPENSDURG AREA SCHOOL DISTRICT NOTES TO .'INANCIAL STATEMENTS Note 2, Cosh ond Investments (Continued) The District's investments are categorized below to give an indication of Ihe level of risk assumed at June 30, 1997 (based on bank balances): Category Non- I 2 3 Catcgorizcd U,S, Government Sccurities $ 3,324,952 $ $ $ Mutual Funds 4,738,640 $ 3,324,952 $ $ $ 4,738,640 Note 3, Property Taxes Property taxes are Icvied on July I. Taxcs arc collcctcd at a discount until August 31. at their face amount from Septembcr I until Octobcr 31, and includc a pcnalty thcrcaftcr. Thc taxes are billcd and collected by clectcd tax collcctors, The County Tax Burcaus collect dclinqucnt real estatc taxcs for thc School District. 18 ,"' SIIIPPENSBURG ,\Rt:A SCIIOOl, DISTRICT NOTES TO nNANCI,\L STATEMt:NTS Notc 4. TlIxcs Rccelvllblc IInd Dcfcrrcd Revcnuc ^ summary of the taxes reccivablc and relllted accouuts are as follows: Uncollcctcd taxcs - real cstatc Uncollected taxcs - pcrsonal Amount $ 363,445 (30,013) $ 333,432 $ 69,345 292,081 (27,994) $ 333,432 Taxcs Receivablc - Nct Taxcs to be collectcd within 60 days Dcfcrred revenue - dclinquent taxcs Allowancc for uncollectiblc taxcs Taxcs Reccivablc - Net Defcrred Rcvcnue Delinquent taxes Donated commodities - Cafeteria Fund $ 292,081 10,542 302,623 $ Note 5. Accrued SlIllIries IInd Benefits Accrued salaries and benefits lit June 30, 1997 consist of the following: Accrued salaries Retirement Socilll security Workers' compensation $ Amount 566,306 49,483 43,322 4,247 663,358 $ Accrued salaries represent teachers' salaries earned during the 1996-97 school yellr which will be paid subsequent to June 30, 1997. Accrued rctiremcnt represents thc public school employccs' rctircment board contribution for the sccond quartcr of elllendar year 1997, includiug the portion pertaining to accrucd salarics at Junc 30, 1997, Accrued social security represents the District's liability arising from accrucd salarics lit June 30, 1997, 19 SIIIPpt:NsnURG AREA SCIIOOl.llISTIUCT NOTES TO t'lNANCIAl, STAn:~H:NTS Note 6, Cafeteria Fund Inventory The composition of Cafeteria Fund inventory is as follows: Materials and supplies Purchased food Donatcd food $ Amount 4,421 14,768 10,542 29,731 $ Note 7. Fixed Assets A summary of changes in fixed asscts for the year cnded June 30, 1997, follows: July I, 1996 Changes June 30, 1997 Gcneral Fixed Asscts Land and site improvcments $ 51,396 $ $ 51,396 Buildings and improvcments 35,998,634 413,335 36,411,969 Furniture aad equipmcnt 5,220,318 39,262 5,259,580 $ 41,270,348 $ 452,597 $ 41,722,945 Entcrprisc Fund Fixed Asscts Machincry and equipmcnt $ 351,206 $ $ 351,206 Accumulated depreciation (211,423) (28,071 ) (239,494) $ 139,783 $ (28,071) $ 111,712 Thc net changcs in fixcd assets are combinations of new assets purehascd and increases in thc appraisal valucs of all assets. 20 'i SIIIPPENSBURG ARE,\ SCHOOL IlISTRICT NOTES TO FINANCIAL STATEMENTS Note 8, Generlll Long-Term Obllglllions ::"l A summary ofthc rcporting cntity's gcncrallong-tcrm obligations as of June 30, 1997, and transactions during thc ycar thcn ended follows: Balancc Balancc ') July I, 1996 Incrcasc Decrcasc Junc 30, 1997 Gcncral Long- Tenn Obligations: General Obligation Bonds. Scrics of 1991 $ 3,490,000 $ $ 3,490,000 $ Gcncral Obligation Bonds- Serics of 1996 4,995,000 4,995,000 Gcncral Obligation Notc - Scrics of 1997 2,739,000 2,739,000 Compensated abscnees payable 548,118 5,257 553,375 Signet Leasing - eomputer system 313,288 78,407 234,881 $ 4,351,406 $ 7,739,257 $ 3,568,407 $ 8,522,256 General Obligation Bonds - Scries of 1991 - On Deeember I, 1991, the School District issued General Obligation Bonds in the prineipal amount of $6,165,000, The bonds bear annual interest rates ranging from 4,25% to 5,65%. Interest is payable at maturity, and the bonds maturc serially in amounts ranging from $785,000 to $920,000 through September I, 1999, Tbese bonds were refinaneed with the General Obligation Note. Series of 1997, General Obligation Bonds - Series of 1996 - On July 15, 1996, the School District issued General Obligation Bonds in the principal amount of $4,995,000, The bonds bear annual interest rates ranging from 4,65% to 5,25%, Interest is payable semiannually on November 15 and May 15, and the bonds mature serially in amounts ranging from $625,000 to $825,000 through November 15, 2006. General Obligation Note - Series of 1997 - On January 16, 1997, the School District issucd a General Obligation Note in thc principal amount of $2,739,000, The note bears an annual interest rate of 4,21 %, Interest is payable semiannually on Septembcr 1 and March I, and the notc matures serially from $880,000 to $939,000 through March 1,2000, Signet Leasing - computer system - On August 31, 1995, the School District entcrcd into a capital lease for certain computer cquipment having a cost of $373,288 and included in thc General Fixed Asset Account Group, The Icasc bears an annual interest rate of 5,28%. Equal annual paymcnts of $86,703, including interest, are due through August 31, 1999, 21 SIIIPPENSBURG ,\REA SCIIOOL DISTRICT NOTES TO FINANCIAL STATE~";NTS Note 8, General Long-Term Obliglltions (Continued) The following is a schedule of principal and interest to service long-term bond, note. and capital lease obligations of the School District: Year Principal Interest Total 1997-1998 $ 999,30 I $ 356,077 $ 1,355,378 1998-1999 1,022,225 312,792 1,335,017 1999-2000 967,355 270,141 1,237,496 2000-200 I 610,000 233,124 843.124 2001-2002 640,000 203,894 843,894 Thereafter 3,730,000 497,271 4,227,271 $ 7,968,881 $ 1,873,299 $ 9,842,180 Note 9. Due To/From Other Funds Individual fund receivable and payable balances at June 30, 1997 were as follows: Receivables Payables General Fund $ 19,785 $ 528,918 Payroll 10,100 Capital rescrve 528.918 Earned income tax fund 9,685 $ 548,703 $ 548,703 Note ]0, Compensated Absences Upon retirement, employees arc paid for unused sick days at rates varying with length of scrvice and job classification subject to various maximums, These amounts arc rccorded as expenditures in the period taken or in the year of separation, The amount presented in the general long-term debt account group is an estimate, ( I I I, ! i r, ['I !-"''' All teachers and administrators retiring with at least 25 years of scrvicc in the Pennsylvania Public School Employees' Retirement System (PSERS) and 15 years of service in the District, arc paid by the District for 40% of their accumulated unused sick days (to a maximum of 100 days) at the rate of $50 per day. 22 -:'I SIIII'PENSDURG ,\REA SCIIOOI, 'I/STR/CT , Non:s 1'0 FINANCIAl, STA n;~";NTS Note 13, Delined-Benelit Pension J'llln The School District participates in the stale-wide Pnblie School Employees' Relirement System (the System), The School Dislriet's payroll lor the year cnded June 30, 1997, for covered employecs was $10,440,530; the District's total payroll was $10,824,033, All fUll-time District employees lire eligible 10 participate in the System, Employees arc cntitled to monthly retirement benefits upon reaching (a) age 62 with at least I ycar of crcdited service; (b) age 60 wilh 30 or more years of credited service or (c) 35 or more years of service rcgardless of agc. The Pennsylvania School Employec's Retirement ("the Code"), currently permits District employees with at least 30 years of credited service to retire without a reduction in benefits until June 30, 1997 (retroactive to July I, 1993), This law does not require a minimum age in conjunction with length of service to be eligible for full benefits, In addition to early retirement, Act 29 provides for thc following benefit changes: granted a cost-of-Iiving adjustment beginning July I, 1994 for those who retired on or before June 30, 1992 (excluding those employees who retired under the "Mellow Bill" Act 186 of 1992); allowed employees who terminated service between May 15, 1992 and July I. 1992 to becomc eligible for an additional 10% service credil, Benefits are generally equal to 2 percent of the employeels final average salary (as defined) multiplied by the number of years of credited service, After completion of 10 years of service, an employee's right to the defined benefit is vested and early retirement benefits may be elected, The System also provides for death benefits and disability rctirement benefits, The contribution policy is set by the Code and requires contributions by active employees, districts and the Commonwealth, The rate of contribution for most active members joining the System before July 22, 1983 is set by law at 5.25 percent of the employee's compensation, For employees joining the System on or after July 22, 1983, the rate of contribution is 6,25 percenl, The contributions required of districts and the Commonwealth arc based upon an actuarial valuation using the "entry age normal" method computed as a percentage of the total compensation of all active employees during thc period for which the amount is determined, The combined amount required from the districts and Ihe Commonwealth was 10,60 percent of covered payroll for all activc districts for the year ended June 30, 1997. The 10,60 percent rate is composed of a pension conlribution rate of 10,00 percent for pension benefits and ,60 percent for health insurance premium assistance, The school districts pay the Commonwealthls share ofthc contribulion rate rather than share such costs equally. The Districts will be reimbursed by the Commonwealth in an amount equal to the Commonwealth's share as determincd by the income aid ratio, The contribution requiremcnt for the year ended Junc 30, 1997, was $ 1,701,365, which consisted of $1,1 06,696 from the District and $594,669 from the employees, Thesc contributions represenled 10.60 percent and 5.69 percent of covered payroll, respectively. , , " , , ' I' 24 SIIII'I't:NSIIURG AREA SCIIOOl.IlISTRICT GENERAL t'UND. SCIIEDUU: OF Rt:Vt:NtlE \'e.r Ended June 30, 1997 Revenue Loco! sources Renl eslule luxes Currenl Interim Publie ullllly lax Paymenls In lieu oflaxe, Current per capltll hL'I(CS 679 511 Oeeupalional privilege lux Earned income tax Oeeupation Inx Reol estote tronsfer 1n.'I(cs Delinquent real estate tmccs Delinquenl per cuplln laxes 679 511 Delinquenl occupation tax Renlnls Tuition Contributions Rending recover)' Miscellaneous Totnl revenue from local sources State appropriations Basic instruclional subsid)' Section 1305 and 1306 Instructionnl support Icuchel' Ilomebound inslruction Vocotional education Driver education Special education Tron'ponation $ 6,907,457 77.231 125,065 6,995 42,634 42,634 57,346 1,\02,384 1,066,472 167,842 392,295 4,048 4,048 94,844 2,004 12,017 36 4,000 60,268 10,169,620 5,425,296 12,791 29,000 949 18,845 3,465 948,205 583,651 (Colllinued) 26 SIIIPPENSIIURG ,\Rt:A SCIIOOL JIISTlUCT m:Nt:RAL FUNIl. scm:lluu: OF Rt:Vt:NUt: (Continued) \'ear Ended June 30, 1997 Revenue (Continued) Slalc npprnprillliul1s (Continued) Renlnls nnd sinking rund pnl'",enls Medical and delltlll services Social security reimbursement Retirement relmhursement O,A,R.E, "enming links Visual arts Alternative education Total stale appropriations 36K,334 57,479 395,415 540,073 4,039 44,000 724 J,053 K,435,319 355,K37 3,767 15,482 9,499 3,474 10,000 398,059 3 272,467 272,470 $ 19,275,468 Fcdcrul appropriations Tille I Tille II Orug.rree sehuols Title VI Medieal assislunee reimhursemenl (ACCESS) Gouls 2000 TOlul Fedeml npproprintions Other linancing sources Refunds orprior )'cnrs' expenditures Interest Total other linancing sources Total revenue 27 SIIII'I'.:NSIIIJRG ,\R.:,\ SCIIOOl.IJISTRICT m:N.:RAI. .'UNIl. scm:lluu: m' .:XI'.:NIIITlJR.:S \'ur .:nd.d ,'un. 30, 11)97 Hsrendltllres IlIslrlletloolll Regulnr prugrlllns SlIlorles Hmr",)'ee beoeOts Purchnsed services pron:sshmnl Dnd lechniclI! I'rorert)' Olher Supplies P"'perty Olher ohJeels TOIIII regul.r p"'grams $ 6,246,701 1,713,611 31,391 68,463 181,304 198,607 39,187 1,692 8.480,956 1,075,894 337,189 730,982 1,074 28,984 9,881 3,129 2,187,133 298,172 82,253 874 563,868 9,697 1,677 956,541 Speei.1 p"'grums S.I.rles Emrloyee beneflls Purchased services Professional I''''perty Olher Sllpplies I''''perty Tolol speel.1 progrums Vocational education progrnms Salaries Hmployee heneflls Purchased services Property Olher Supplies Property TOIDI vocational educntion programs (Continued) 28 SIIII"'.:NSlltlIIG ,\11.:,\ SC:II00l. II'STlUCT GEN.:II,\L .'tJNII. Sc:m:lltJU; ot' .:X".:NII'TlJlU:S (Continued) Y.or .:nd." ,'un. JO, 1997 o Hxpelldilures (Coullllued) IlIslruellolllll (Cllulllluedl Drlll:r Inslrllclinl1ul prngr1ll1ls SlIlurles Hmployee hellenls fJurchllscd scryiccs !'rupeny Olher Supplies TOlal olher instructional progmrns Adull edoellliulI prugmms Salaries Hmpluyee hellenls Purchased services Olher Supplies TUlol odull educoliulI p"'grums Community college education progrom Totollnstructioll.' Suppon Scrvices !'upil pCrsOIlIlC/ Slllnrics Empluyec hellenls Purchllscd services ProCessional nnd (echnical !'ropcny Glher Supplies Property Glher uhjecls TOlul pupil personnel (Cumillocd) 29 463,958 36,700 12,251 50,174 6,356 /2,145,118 388,032 " 7,362 94,262 180 3,260 8,250 2,264 656 614,266 350,924 1ll2,I40 41 2,402 8,451 281 942 SIIIPPENSDURG AREA SCIIOOl. DISTRICT GENERAl. FUND. SCIIEDUU; OF EXPENDITURES (Conllnucd) VOIr Ended June 30, 1997 J:xpendilurcs (Continued) Snpport Services (Conlinued) Business Snlnries Employee benefils I)urchnsed services Professionnl nnd technienl Property Other Supplies Property Olher objects Student transportation services Salaries J:mployee benefils Purchased services Professional ami technical Olher Supplies 153,331 53,139 1,697 225 17,478 4,182 3,122 315 233.489 506,559 180,901 300,144 80,770 204,138 2.403 ~, 100 1,275,015 1 4,290 815 I' \ 4,832 /~ 1,052,561 11,688 1,074,186 if ;1 , -., ~ I . :(", Tolnl business Operation nnd maintenance orpln"t services Salaries Employee benefits Purchased services Property Other Supplies Propert)' Other objects Total opcmtion and ml1intenunce of plant services Totul student lransportation services (Continued) 3\ SIIIPPENSnURG AR.:A SCHOOL DISTRICT GENERAL .'UND. SCHEDULE m' EXP.:NI>ITUR.:S (Continued, V..r Endod Juno 30, 1997 H'pendilures (Continued) Support Services (Conlinued) Centml service Purchnscd services Professionnl nml technicul Property Other Supplies Property Olher obJeels 18,568 25,624 1,901 18,847 6,732 250 Totnl centrol service 71,922 Other support services 16,037 Total .upport .0..lc.. 5.404,781 Opemlin" of Non.lnstructionol Services Student activities Salnries Hmployee benefils Purchased services Property Olher Supplies Property Olher objects 168.497 27,777 12,390 6,206 2,788 380 100 TOlnl student activities 218,138 (Continued) 32 I l~ I [, [, \ ' [ i: " I I,r ,:' , ; J'"p +... i . \... ~ SIIII'I't:NSIIURG AIU;,\ SCIIOOl.IlISTRICT GENt:RAI. t'UNll - scm:nuu; 0.. t;XI't:NllITURES (Continued. V..r t:nded ,June JO, 1997 I;xpendilures (Coutlnoed) Operutlun orNon-lnstroellounl Services (Continued) Conllnunll)' services Snlnries Employee henelits Supplies Olher ohJeets Tolal opera lion of non-In,truetlonal ,eIVleo, 6,340 834 1,063 4,700 12,937 231,075 1,056,806 690,278 14,547 1,761,631 $ 19,542,605 Totol community services Daher Oeht service. othcr ohJecls Operating transfers out Refunds of prior years' receipts Totar olher Total expenditure, 33 SIIIPPENSBURG AREA SCIIOOL DISTRICT SPECIAL REVENUE FUNDS. COMBINING BAI,ANCE SIIEET Juno JO, 1997 Junlorlligh Scnlor IIlgh Athlctic Fund Alhlcllc Fund Total ASSETS Cash S 12,886 S 2J,834 S 36,720 LIABILITIES AND FUND BALANCES Fund balances TolalUoblllUos and rund bolonco. s s 34 12,886 S 12,886 S 23,834 S 23,834 S 36,720 36,720 ..... SIIJPN:NSIIURG MU;A SCIIOOI. II/STRICT ..... SPECIAL REVENUE FUNDS. COMII/NING STA nMENT OF REVENUE, EXI'ENDITURES AND CIIANGES IN FUND IIAI.ANCES Ve.r Ended June 30, 1997 ~ Junior /lIBh Senior IIigh Alhlelie Fund Athlelie Fund Total Revenue Locol sources S 6,985 S 27,065 S 34,050 0 Expenditures Opernlion of non.inslrucdonnl services 29,700 100,627 130,327 Deficiency of revenue over expenditures (22,715) (73,562) (96,277) Olher financing Sources Opemling tmnsfees in 20,091 62,658 82,749 0 Deficiency of revenue and other financing sources over expenditures and other financing Uses (2,624) (10,904) (/3,528) Fund nalanees. July I, 1996 15,510 34,738 50,248 Fund nalanees . June 30, 1997 S 12,886 S 23,834 S 36,720 35 ':) Selllnr IlIgh Alhlelle FilII" TIIIIII VllrillllCC Vurlllncc J:nvuruhlc Fuvoruhlc IlII"gel Aellllll (Ullfllvoruhle) Ihlllgel I\CIUlIl ( Ullfi,vnruhle) $ 29,050 $ 27,ll65 $ (1,985) $ 33,51111 $ J.I,1l511 $ 550 106,(.34 Illll,627 6,Oll7 131,175 1311,327 8~8 (77,58~) (73,562) ~,1l22 (97,675) (96,277) 1,398 78,632 62,658 (15,97'1) 78,632 82,7~9 ~,I 17 $ I,O~8 (1O,90~) $ (11,952) $ (19,1l43) (13,528) $ 5,515 3~, 738 50,248 $ 23,83~ $ 36,720 37 f') I SIIlI'rf:NS/lURG AR.:,\ SCIIOOI.IlISTRICT C) NON..:XI'ENllA/lU: TRUST ."UNDS. COMIIINING 8,\/,,\NCE Sm:ET June 30, 1997 Clussof David It Tntvis H. ::) 1950 I.nndis, Jr, Orimlh TUlnl ASSETS Cnsh $ 526 $ 348 $ $ 874 Inveslments 311,1l00 JO,1411 Ill,llllll 50,1411 0 Rcccivllhlcs .. olher 162 162 Total assets $ 311,526 $ 1ll,6511 $ 1ll,llllO $ 51,176 () LIA81LITIES AND FUND EQUITY l.Iabllilies I'aynbles . uther $ $ 5011 $ $ 500 Fund balance 311,526 10,150 1ll,llOll 50,676 TOlnllh.bllilie. and fund equily $ 311,526 $ 10,650 $ JO,IlIlO $ 51.176 39 ....... SIlIPPENSBURG AREA SCHOOL DISTRICT NON-EXPENDABLE TRUST FUNDS - COMBINING STATEMENT OF REVENm:, EXPENSES, ANI> CHANGES IN FUND BALANCE Year Ended June 30,1997 Class nf David R, Trnvis E. 1950 Landis, Jr, Grimlh Tnlal Opemling Expenses Indirect costs $ 2,000 $ 338 $ $ 2,338 Total operaUng e.penses 2,000 338 2,338 Nonoperating Revenue Interest 2,054 338 2,3'/2 Contributions 10,150 10,11110 20,1511 Total nonoperaUng revenue 2,054 10,488 10,11110 22,5-12 Net Income 54 10,150 10,111111 20,211,1 Fnnd Balanee . July I, 1996 30,472 30,0172 Fund Balance. June 30, 1997 $ 30,526 $ 10,1511 $ 10,11110 $ 511,67f, 40 SIIIPPENSBURG AREA SCIIOOL DISTRICT AGENCY FUNDS. COMBINING BALANCE SIIEET Jun. 30, 1997 Slu~cnl Payroll Enmcd Inc()m~ Activit)' Fun~ Fun~ Ta" I:un~ Tolal ASSETS C..,h $ 46,478 $ 134,516 $ 230,373 $ 411,367 Investments Ill,OOO 10,000 Tolal a...ls $ 56,478 $ 134,516 $ 230,373 $ 421.367 LIABILITIES Payroll wlthholdlugs $ $ 124,416 $ $ 124,416 Due 10 other run~s 10,100 9,685 19,785 Due to sludent groups 56.478 56.478 Due to other governments 220,688 220.688 Tolalllablllll.s $ 56.4 78 $ 134,516 $ 230,373 $ 421,367 41 SIIIPPENSBURG AREA SCIIOOL DISTRICT o STUDENT ACTIVITY FUNDS - COMBINING BALANCE SIIEET June 30, 1997 ::) Elementary Jllnlor IlIgh Senl", IlIgh Activit)' I'nnd Activit)' Fllnd '\elll'lI)' 1'11I111 Tolnl ASSETS Cnsh $ S,303 $ IS,2fJK $ 2~,'1U7 ~ ,11.,,17K In'/cstmcnts 11I,01111 10,111111 Total assel. S S,303 $ 1S,2fJK $ .15,'1U7 \ ".,,17K o LIABILITIES Due to sludenl groups Totalllabllllle. $ $ S,303 S S,303 $ ,'t',2fJK $ tS,2I,K $ H,'J1I7 S H,'J1I7 S SIJ,47K SIJ,,17K o o o ..:) 42 SIIIPPENSIIIIRG AREA SCIIOOl. DISTRICT STATEMENT OF C.\SII RECt:II'TS AND CASII J)JSlltlRSt:~":NTS. t:,\ltNEIlINCOMt: TAX FIINIl Ycar Endcd Junc 30, 1997 Cllsh Ileceipts Earned income lux cullectiuns Occ~pnlinn tit'" collections Interest from h:mpornl")' investments Miscellaneous income. net uf reimbursements Total cash receipts $ 2,9)8,121 98,9118 19,)(.9 1.444 ),1l57,842 Cn.'ih Disbursements carned income lax collections distributed to municipalities and districts Shlppenshurg Area Schou I District Ilopewell Township Newburg Dorough Shippensburg Borough Shippcnsburg Township Soulhmnplon Township Cumberland Cuunly Fronklln Cuunly Orrsto\\'n Dorough Outside districts Occupntion In.,< collections distributed to municipalities and districts lIopewell Township Shippcnsburg Arcn School District Shippcnsburg Borough Shippensburg Township Soulhamplon Tuwnship - Cumberland Rcfunds Interest distributions Total cash disbursements Excess orcDsh rCJ:cipts over cash disbursements 1,102,)84 124,628 18,227 2.10,215 92,l911 258,691 )611,789 7,277 69),829 1,347 57,257 19,1l80 15,787 5,20) 27.992 18,898 ),1l43,994 $ 13,848 43 f"\ ,..., I " , :) ';) ..J ;;j o '~ 1fl8R1 BOVEH & RITTEH CElt rW1H1J PI'IU,Il: I\CCCII':'li""SlS INDEI'ENI>ENT AUlllTOR'S REI'ORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF GENERAL I'URPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of School Dircctors Shippcnsburg Arca School District Shippcnsburg, Pcnnsylvania Wc havc auditcd thc gcneral purposc financial statcmcnts of Shippcnsburg Arca School District as of and for thc year cndcd Junc 30, 1997, and havc issued our rcport thcrcon datcd Scptcmbcr 16,1997, In our rcport, our opinion was qualificd bccausc thc School District has rccordcd Gcncral Fixcd Asscts at valucs as dctcrmincd by an Industrial Appraisal Company Rcport, Undcr gcncrally acccptcd accounting principlcs, Gcncral Fixed Assets should be recorded at cost. Wc conductcd our audit in accordancc with gcncrally acccptcd auditing standards and thc standards applicablc to financial audits containcd in Govemmelll Auditil/g Stal/dardl', issucd by thc Comptrollcr Gencral ofthc Unitcd States, Comoliancc As part of obtaining rcasonablc assurancc about whcther Shippcnsburg Arca School District's gcncral purpose financial statcmcnts arc frcc of material misstatcmcnt, we perform cd tcsts of its compliancc with ccrtain provisions of laws, rcgulations, contracts and grants, noncompliancc with which could havc a dircct and matcrial cffcct on the dctcrmination of financial statcmcnt amounts, Howcvcr, providing an opinion on compliancc with thosc provisions was not an objectivc of our audit, and accordingly, wc do not cxpress such an opinion, Thc rcsults of our tcsts discloscd no instanccs of noncompliancc that arc rcquircd to bc rcportcd under Govemmelll Auditing Stal/dardv, Intcrnal Control Ovcr Financial Rcoortinl! In planning and pcrforming our audit, wc considcred thc Shippensburg Arca School District's internal control over financial reporting in ordcr to determinc our auditing procedurcs for thc purpose of expressing our opinion on the gencral purposc financial statemcnts and not to providc assurancc on the internal control over financial reporting, Our considcration of the internal control over financial reporting would not neccssarily disclosc all matters in the internal control ovcr financial reporting that might be matcrial weaknesses, A material wcakness is a condition in which the design or operation of one or more of thc internal control componcnts docs not rcduce to a rclatively low level the risk that misstatcments in amounts that would bc matcrial in rclation to the gencral purpose financial statements bcing auditcd may occur and not bc detectcd within a timcly period by cmployecs in the normal course of perform ing their assigned functions, Wc noted no mattcrs involving the internal control over financial rcporting and its opcration that we consider to bc matcrial wcaknesscs, 44 SIIII'I'.:NSIIURG ,\In:,\ SCIIOlll.IIISTRICT SC...:IlUU: 0.. EXP.:NIlW n:m:R,\I.'\ W,\IUlS V..r .:nde" ,Jun. 30,1997 I.ns~ Fcdcrnl Through Snllrc~ C.F.Il.A Cimnlnr's Grunt Grnntor Prugnull TltI~ Cnde Numher Numher Perlud U.S. Deportmenl nrEducnliun I'ossed Ihrough Ihe Pennsylvanlo Depnrtmenl of "dncolinn: Tille I Low Income 84.OIll 13.6387 95.96 Tille I Low locome 84.lllll 13.7387 9(,.97 Tille V I SOil U 8.1.298 11.6387 95.96 Tille VI SD/IU 84,298 11.7387 96.97 Tille II - Eisenhower MOlh and Sclcnce Jlnslc Education 84.281 20.6387 95.96 Tille II - Eisenhower Mnlh ond Sclcne. Jlosl. "dneoUon 84.281 20.7387 96-97 Goals 2000 8.1.276 40.5987 95.9(, Passed through the Lincoln Intermediate Unit Consortium Drug-Free Schools 84.186 100.6812 95.96 Drug-Free Schools 84.186 100.7812 96.97 Passed IhrouSh Ihe Capitol Area Inlermediole Unit Gools 21100 84.276 4ll.6515 96-97 '1'0101 U.S. Deportmenl of "dueoUon U.S. Department of lleahh ond lIuman Services Passed through the I'ennsylvanla Deportmenl of Educollon Medical Assistance Progrnm 93.778 44-7387 9(,.97 51 TollIl '\cerued Accnu:d Prngmm I\ceclved (lJcfcrrc,l) (Deferred) nrAnnulI1 (I\enmdcd) In H.C\'CllllC ot Itc\'cmu: Ihwcnuc lit AWllrd Fiscal Yellr 7.01-% Rccugnllcd Expenditures 6.JO.97 $ 320,JJ I $ 80,08J $ J7,248 $ 42,8J5 $ 42,835 $ $ 321,195 267,(,6J JIJ,002 J IJ,002 45,JJ9 $ 12,056 2,009 2,009 $ 9,499 7,916 9,499 9,499 1,58J $ 10,112 5,065 2,472 2,593 2,59J $ 11,270 J,757 1,175 1,175 (2,582) $ 10,000 6,667 (J,JJJ) 10,000 10.000 $ $ IJ,582 1J,7JJ 2,649 12,8J2 2,649 12,832 2,649 12,832 $ 1,645 1,645 (1,645) J90,286 J8,J96 394,585 J94,585 42,695 $ 4,055 4,055 4,055 4,055 52 .". SIIIPPENSlIlIRG ,\R.:,\ SCIIOOJ.IIISTRICT SCIIEDUI.E 0.' EXP.:NIlEIl .'Ela:R,\I. ,\ W,\RIlS (Conllnued) Ve.r Ended June 30, 1997 Grunlor Progrum Tllie U.S. Dcportmenl or Agriculture Passed Ihrough Ihe Pellos)'lvllnio Deportmenl of Educulion: NnUoool Schuoll.uoch Progrum Nalionol Schooll.uoch Progmm 'Nalionnl School Lunch Progmm NaUonnl School Lunch Progrum Source Code Fedeml C.F.D.A. Numher 11n!i!C Through Gmntur's Numher Grunt Period Spccinl Milk 'Spcciol Milk 1(1') 10.555 N/A 95.96 I(S) N/A N/A 95-96 1(1') 10.555 N/A 96.97 I(S) N/A NIA 96.97 1(1') 1ll.556 N/A 95-96 1(1') 10.556 N/A 96-97 Pnsscd through Ihe Pennsylvania Deportmcnl of Agricuhure: Food Distrihution (0) 1(1') 10.550 N/A 96.97 Total U.S. Deportmcnt of Agricuhure TOlol Federal Progmms Source Codes: Legends: 0- Direct Funding 1- IndireelFunding (F) - Fedcral Shore (S) - Slate Shore (a) Donaled commodities valued at local market values. (h) Tololomount of commodities receivcd from Deportment of Agricuhure. (c) Invenlorles ollul)' I, 1996 (d) '1'0101 nmounl of commodities used. (c) Invenlories 01 JuncJO, 1997. . - denoled Mnjor Program 53 Al.:cruell Accruell I'rognun TollllReccll'ed (IMmoll) (Dererred) or AnnulIl (Refunded) In Itc\'cnue ul Itc\'c:nllc Itc\'cnuc nt AWlIrd Flselll Yellr 7.01.1)(, Itccngllllcd Expendllures 6.30.97 N/A $ 20.S24 $ 20,524 $ $ $ N/A 2.041 2,041 N/A 168,145 168.145 168,I4S N/A 16,S08 16,S08 16,SOR NtA 510 SIO N/A 3.IJ04 3,904 3.904 N/A 38.447 (c) 38.044 (c) (1ll,1J9) 38.044 (d) (h) 2S0,ll79 12.936 226,60 I 226,c,u1 $ S 1.332 $ 62S.24I $ 1>44,420 $ 62S.24I $ TeSI of SU% Rule: Total I:spenditures Less Slate Expcnditures TUlnl Fedeml Expenditures Progrum sclectcd for lesling Tille 1 Low Income lInd Nnliollul School I,unch Progrum und Special Milk $ 62S.241 (16.S08) $ 608,733 $ 527.886/$608.733=86.72% 54 (lO,S42) (10,542) 32.IS3