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Home My WebLink About98-05933 ~ I ~ ~ .c, ~ Of ;" ~ ct it' , :J I~ , 1 . CIl , u I ". I ~ I C I"'! I '" ~ " I~ H ~ ~' -' . . .. .~ i .. ' ~ CC'\ ""'\ ~ \() ~. ~ ~' ... GREENAWALT & COMPANY, P.C. JAMD l I. '(ON\ HOWAlD. GilD'NAWAIT CllZOON . IIOnMAN PCN H WNCLD D!IOlAII) Itn.J.Y I. It. GIf>>I"WAlT f1V"bll,flJl II ^ lDDINGD NT1lfj)l C mw AID .oem, ,fa CUUlrl[D rUUIC .CCou~l..,t. PO BOl 6 400 West M..,t4 SUtf:t:f MCO'4NIC!.OlJRO PtN~""l\lANl" 17055 1711171\6 "'&1 fA.l11l7t 766 27)1 toJ ~T roMrJI" nun (AJll5U. PA 17011 (7I'J14)....11 fAX (111, num .., I rllJEpENlJElJT AtJlJ 1 TOli[;:_~~EPOHT .., Board of School Director" Mechanicaburg Area School DiGtrict Mechanicshurg, Pennsylvania We have audited the accompanying general purpose financial otatemento of r"echanicshurg Area Sch~ol District as of June 30, 1990, and for the year then ended. Theoe general-purpose financial statements are the responsibility of the Diotrict'o management. Our responsibility is to express an opinion on these general-purpose financial otatements based on our audit. We conducted our audit in accordance with generally accepted auditing standards 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 general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general-purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the accompanying general-purpose financial statements present fairly, in all material respects, the financial position of Mechanicsburg Area School District at June 30, 1998, the results of its operations and the cash flows of its Food Service Fund for the year then ended in conformity with generally accepted accounting principles. Our audit for the year ended June 3D, 1998 was conducted for the purpose of forming an opinion on the general purpose financial statements of Mechanicsburg Area School District taken as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. Such information has been subjected to the same auditing procedures applied in the audit of the general-purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. ,-' In accordance with Government Auditing Standards, we have also issued reports dated July 30, 1998, on our consideration of Mechanicsburg Area School District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. ~( Gree~a-wall of ~fM!::JJ . I GREENAWALT & COMPANY, P,C, 'v July 30, 1998 Mechanicsburg, Pennsylvania . 1 . '<J MEMHERS _ AMERICAN INSTITUTE OF CERTIPIW I'LTRl.lr ACCot:NTANTS - PENNSYL\'ANIA INSTITUTE OF CEUTIFlEO puauc ACCOUNTANTS MECHAlIICSBURG AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITUREf. AND CHAIIGES IN FUND BALANCES ALL GOVERNMEIITAL FUIID TYPES YEAR ENDED JUNE 30, 1990 . . Athletic: General Anoocilltion ConGtruction Revenue Local sources $ 10,706,721 $ 00,990 $ 33,539 State sources 6,950,020 ,,' Federal sources 160,637 Sale of fixed assets 357 Refund of prior years' expenditurca 7,759 Incoming transfers 21.142 29.000 Total revenue 25,062.636 109.990 33,539 '. Expenditures Instruction 15,094,185 , ~ Support services 6,882,925 Operation of noninstructional services 611,494 112,040 Facilities acquisition, construction and irnprovemant services 109,700 ! ! Other financing uses 42,156 Transfers to other funds 2,217.894 Total expenditures 25,648,654 112,040 109.700 . Excess of revenue over (under) 'I expenditures I 213, 982 (2,050) (76,161) Fund balances, July 1, 1997 2,841.519 5,777 686,364 Fund balances, June 30, 1998 $ 3,055,501 $ 3,727 $ 610 ,203 The accompanying notes are an integral part of these financial statements. - 3 . ~, .. } ~, . MECHANICSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUE, EY.PENDIT1JRES AND CllAHGES IN FUND BALANCES . ACTUAL IIIlD BUDGET ALL GOVERNMENTAL FUND TYPES YEAR EllDED .JUNE 30, 199 B - ,. General Fund Variance Favorable Actual Budqet (Unfavorable) Revenue ro, Local sources $ 18,'706,721 $ 18,171,786 $ 534,935 State 90urces 6,958,020 6,904,386 53,634 Federal sources 168,637 118,286 50,351 Sale of fixed assets 357 357 Refund of prior years' expenditures 7,759 7,759 Incoming transfers 21.142 21.142 Total revenue 25,862,636 25.194,458 668,178 Expenditures Instruction 15,894,185 16,086,153 191,968 Support services 6,882,925 6.986,458 103,533 operation of noninstructional services 611.494 625.058 13,564 Other financing uses 42,156 42,211 55 Transfers to other funds 2.217,894 1,629.170 (588 , 724) Total expenditures 25,648,654 25,369,050 (279,604) Excess of revenue over lunderl expenditures 213,982 (174,592) 388.574 Fund balances, July I, 1997 2.841.519 2,285,737 555,782 Fund balances, June 30, 1998 $ 3.055,501 $ 2,111,145 $ 944,356 The accompanying notes are an integral part of these financial statements. . 4 - Athletic Anoociation Actual BudQet Variance Favorable (Unfavorable) $ 80,990 $ 71,600 $ 9,390 29,00Q 45 , 000 06.000) 109,990 116 , 600 16 , 610) 112,040 116,600 4,560 112,040 116.600 4,560 (2,050) .0. (2,050) 5,777 .0. 5,777 $ 3,727 $ .0. $ 3,727 ",." MECHlINICSBURG AREA SCHOOL DISTRICT STATEMENT OF REVEllUE, ~;XPENSES AIm CHANGES III FUND BAI,AJ1CE/RETAI NED EAllNIlIGS ALL PROPRIETARY FUND TYPES YEAR ENDED JUliE 30, 1998 Food Service Operating revenue Sales $ 590,704 Operating expenses Food and milk Labor Custodian wages Supplies and services Repai rs and maintenance Employee benefits Utilities and fuel Administrative salaries Depreciat.ion 373,389 331,510 12,265 22,634 6,758 115,731 51,480 68,020 19,015 Total operating expenses 1. 000 ,802 Operating loss (410.098) .1 Nonoperating revenue State sources Meal subsidies Social security and retirement subsidies Federal sources Meal subsidies Donated commodities Interest earned Total nonoperating revenue 24,795 30,474 118,909 54,134 9,290 237,602 (172,496) 142,006 21,539 (8,951) 109,853 $ 100,902 Loss before transfers Services contributed by General Fund Equipment purchases by Capital Reserve Fund Net loss Fund balance/retained earnings, July 1, 1997 Fund balance/retained earnings, June 30, 1998 The accompanying notes are an integral part of these financial statements. . 5 - MECH/tJllC5BlJRG IIREA SCHOOL DISTRICT STATEMEIIT OF CASH FLOWS I,LL PROPRIETARY FUlID TYPES YE/,R EllIJED JUliE 30, 1998 Operating activities Operating loss Adjustments to reconcile operating loss to net cash used in operating activities Depreciation Donated commodities consumed Services contributed by General Fund Decrease (increase) in assets Accounts receivable Inventory Increase (decrease) in liabilities Due to other funds Deferred revenue Compensated absences Net cash used in operating activities Noncapital financing activities Subsidies Investing activities Earnings on investments Net decrease in cash and cash equivalents Cash and cash equivalents, July 1, 1997 Cash and cash equivalents, June 30, 1998 Food Service $ (410,098) 19,015 54,134 142,006 (2,605) (4,709) (2,698) 2,374 2,508 1200.073) 174,178 9 ,290 (16,605) 53.593 $ 36,988 The accompanying notes are an integral part of these financial statements. .6. '" MI':<:IIMIIC~;IIUHG ,\HE^ ~l'1I001, 1J1!;THlC"T 1I01'E[; TO FIIIllIlCII.I, ~;Tl.Tf;r~Elrr:; ,IUIIF: lO, 199B 1. Reporting erltity ,... " Mech.UllC'ubUJ'g An~'" School [Hlltrict 11:> thl' If~v(ol of ~JOVf'IIiITl"nt 'il.'hich h.u] oversight l'(~f1ponlJiLillty .Uld control UVl"l .lcti'Jitl~O lc14ltclt t.o publlf.' tJchool ~ducAtion. The report lncludc~ ner':iccr: provided bi' tllC' Di,arlcl tv !~tddt!ntu within itu boundarieo: the Cumbet'land Count}' communitlcu of UJlP~r Allen Townohip, Shi remanotown and Mechanicoburg Dorough. !if'llVl cell Plovided include a comprehenoive curriculum for primary and nccond.u"j.' educ.ltlon .10 well ao opecial education and vocational education programo. The Oiutrict receiveo revenue from local, atate and federal Gourcen and muot compl:,' \ldth the requirements of these funding sources. -, Criteria established in Governmental Accounting Standards Board Statement Number 14 were used in determining the entities to be included in the reporting entity. These criteria include basic itemo ouch aD financial interdependency, selection of governing authority, designation of mallagement, ability to significantly influence operations, accountability for fiscal mattern, scope of public service and special financing relationships. All operationo of the District are included in the reporting entity. There are no component units that meet the above criteria for inclusion in this reporting entity. However, the District is a participant in three jointly- governed operations, each of which is a separate legal entity that offers educational services to the District and its residents. Each entity serves several s::hool districts, so the following entities are not included in this reporting entity. Capital Area Intermediate Unit provides special education services and programs. Cumberland-Perry Area Vocational-Technical School provides vocational and technical education services and programs. Harrisburg Area Community College provides community college education services and programs. 2. Summary of significant accounting policies The accounts of Mechanicsburg Area School District are maintained on the basis of accounting practices prescribed or permitted by the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems, issued by the Pennsylvania Department of Education in accordance with the provisions of the School Laws of Pennsylvania. These practices are in conformity with generally accepted accounting principles as applicable to governmental units. A summary of the more significant accounting policies is as follows: Fund accounting The accounts of the District are organized on the basis of fund types and account groups. Each fund type may consist of several different funds. Each fund is a separate entity with self-balancing accounts which comprise its assets, liabilities, fund balance/retained earnings, revenues and expenditures/expenses, as appropriate. . 7 . MECIUUIICSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont' d. I JUNE 30. 1998 2. Summary of aignificant accounting policies (Cont'd.) Fund account i ng (Cont' d. ) The fund types and account groups utilized by Mechanicsburg Area School Distriet are as follows: Governmental Fund Tvoen - These are the funds through which most governmental functions are provided. The acquisition, use and balances of the District's expendable financial resources and related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. General Fund - The General Fund is used to account for all financial resources except those required to be accounted for in another fund. The majority of District activities, including instruction, administration and other services are accounted for in this fund. Construction Funds - The Construction Funds are used to account for the proceeds of bond issues and their corresponding expenditures. The fund balances at June 30, 1998 will be used for capital improvements. Capital Reserve Fund - The Capital Reserve Fund is used to account for special capital projects. Special Revenue Fund - Special Revenue Funds are used to account for the proceeds of specific revenues that are restricted to expenditures for specified purposes. The Athletic Association Fund is a Special Revenue Fund. Debt Service Fund - The Debt Service Fund is used to account for the receipt and disbursement of funds for payments on the General Obligation Bond issues. proorietarv Fund Tvoes - These funds account for operations that are financed and operated in a manner similar to private business enterprises: Food Service Fund - The Food Service Fund is used to account for the financial transactions associated with the operations of the cafeterias. . 8 . . '" NECIWIICSBURG AREA SCHOOL DISTRICT 1l0TES TO FINAIlCIAL STATEMENTS (Cant' d. ) JUNE 30, 1998 2. Summary of significtlnt ~lccounting policies (Cont'd.) Fuou accounting (Cont' d. , FidUciary Fund Tvoes (Trust and Aqencv Funds) _ These funds account for assets held in a trustee capacity or as an agent for other funds or entities: Activity Fund - Accounts for programs operated and sponsored by various clubs and organizations within the schools. Payroll Fund - The Payroll Fund accounts for salaries earned by District employees. It proceDses payments to the employees and to taxing and other agencies on their behalf. Account GroUDs - These account groups are not funds, They are only concerned with the measurement of financial position and are not involved with the measurement of results of operations. General Fixed Assets account for the District's investment in fixed assets. General Long.Term Debt accounts for general obligation bonds payable and accumulated compensated absences payable in future years. Basis of presentation The accounting and financial presentation methods applied by the different fund types are based on their measurement focus, which determines when revenues and expenditures are recognized. Governmental Fund Tvoes - These funds use the "current financial resources" measurement focus, which is a modified accrual method. Revenues are recorded when susceptible to accrual (both measurable and available). Available means collected within the current period or Soon enough thereafter to pay current liabilities. Expenditures are generally recognized when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt whieh is recognized when due. Disbursements for inventory type items and prepaid expenses are considered expenditures at the time of purchase. - 9 - '" MECHfJlIC5BUHG AR,:A SCHOOL DI5TRICT IIOTES 1'0 FIllAllCIAL STf,TEMEllTS ICont'd.1 JUliE 30, 199B 2. Summary of significant account ing pol icico (Cont' d. ) Basis of presentation (Cont'd.' Proorietarv Fund Tvnes - The Food Service Fund uses the "flow of economic resources" measurement focus, which is a full accrual method. Donated commodities are inventoried at an estimated cost value when received. Inventories (valued on the fir5t~in, first-out method) are recorded as an asset, and the portion represented by donated commodities is recorded as deferred revenue. Food service equipment is capitalized, with depreciation (computed on the straight-line method using an estimated ~seful life of 12 years) recorded as an operating expense. The equipment (net of accumulated depreciation) is offset by a reserved portion of retained earnings. Compensated absences are recognized as operating expenses and the cumulative amount is recorded as a liability within the Fund. The liability is offset by a reduction in the reserved portion of retained earnings. Fiduciarv Fund Tvoes (Trust and Aqencv Funds) - These funds use a modified accrual method. They are custodial in nature (assets equal liabilities), and are not involved with the measurement of results of operations (revenues and expenditures) . Acco~nt Groups - Land, buildings and equipment are presented at cost. Depreciation is not computed on these assets. Long-term debt is offset by an amount to be provided by future taxation or other revenue sources. Bonds payable in future years are recorded as District debt. Interest on bonds is recognized when such interest is due. Interest on Capital Appreciation Bonds is accreted annually and added to the amount of bonds outstanding. Compensated absences are presented using the vesting method. Unused vacation leave is minimal. Sick leave is granted as appropriate, and medical evidence may be required. Provision is made annually in the budget for the cost of substitute personnel. There is limited payment for accumulated sick leave at the time of retirement. The gross amount of unused compensated absences is recorded in the General Long- Term Debt group of accounts, General Fund and Food Service Fund. - 10 - . :.' MECIlANICSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1996 2. Summary of significant accounting policieo (Cont'd,l Inter-fund tr~nn~ction5 Expenditures by the General the respective otatements management's estimates. The benefit the other funds due of such benefits. Fund for the benefit of other funds are reflected in of revenue and expenditures/expenses, based on District does not attempt to allocate all costs which to the difficulties associated with the measurement Utilities, salaries, etc. paid by the General Fund for the benefit of the Food Service Fund amounting to $ 142,006 have been reflected on the respective statements of revenue and expenditureo for the year ended June 30, 1998, based on rnanagementls estimates. Materials and supplies General Fund materials and supplies are expensed as paid. Food Service Fund materials and supplies are expensed as used. Food Service Fund inventories are reflected on the balance sheet at cost, first-in. first-out method. Pension plan Substantially all full-time and part-time employees of the District participate in a cost-sharing multiple employer defined benefit pension plan. The District implemented GABB Statement No. 27, "Accounting for Pensions by State and Local Governmental Employersll, in the year ended June 30, 1997. That Statement requires an employer that participates in such a plan to recognize annual pension expenditures or expenses equal to its contractually-required contributions, subject to the modified accrual basis of accounting in governmental funds. 3. Cash and investments Cash (other than $ 60 cash on hand) consists of checking and savings accounts in financial institutions and a treasury management account with a financial institution, and is categorized as follows: Carrying Bank Value Balance Insured (FDIC) $ 100,000 $ 100,000 Collateral held in District's name -0- -0- Collateral not held in District's name 197,317 204,642 297,317 304,642 Pooled investment (treasury management account) 1,630,616 1,749,275 $ 1.928,135 $ 2,053,917 - 12 - ... -. MECIWIICSOURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STf.TEMENTS ICont' d. ) JUllE 3D, 1998 3. Cash and investmento {Cont'd,l '", For purposeo of the Food Service Fund statement of cash flows, cash conoists of a checking and oavingo account, aD the Fund doeo not have any cash equivalents. Investments of the District at June 30, 1998 include the following: PA Treasurer's Investment Program for Local Governments Certificateo of depooit Pennsylvania School District Liquid Asset Fund Pennsylvania Local Government Investment Trust $ 2,058,862 500,000 343,139 1.849.096 $ 4,751,097 cost due to the short. term nature Carrying Investment Value Balance $ 500,000 $ 500,000 -0- -0- -0- -0- 500,000 500,000 4,251,097 4.254,497 $ 4.751. 097 $ 4,754,497 The investments, whose market value approximates of the investments, are categorized as follows: Insured or federal guaranty Collateral held in District's name Collateral not held in District's name Pooled investments The types of authorized investments are limited by state regulations. Investment policies followed during the year did not significantly alter the categorization of investments shown above. 4. Accounts receivable General Fund accounts receivable at June 30, 1998 consist of the following: Subsidies Due from other governmental units Other $ 267,427 558,008 5,570 $ 831,005 - 13 - " MECHANICSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.l JUNE 30, 1998 S. Delinquent taxes receivable Delinquent taxes receivable at June 30, 1998 include real estate taxes of $ 233,389 and per capita, residence and occupation taxes of $ 217,284. An allowance for uncollectible taxes of $ 112,668 has been established at June 30, 1998. In addition, $ 244,505 in tax revenue has been deferred in accordance with school tax accounting policies. 6, Property, plant and equipment The schedule below presents estimated historical cost of property I plant and equipment. These amounts were obtained, i.n the most part, from a valuation report prepared as of June 30, 1994 and updated by management to June 30, 1998, It includes equipment held in the Food Service Fund. July 1, 1997 Additions Deletions June 30, 1998 Land $ 400,963 $ 16,020 $ $ 416,983 Land improvements 1,062,869 21,610 1,084,479 Buildings 12,521,639 188,608 12,710,247 Equipment 6,172,191 251,377 58 , 092 6,365,476 " $ 20,157,662 $ 477,615 $ 58,092 $ 20,577,185 7. Bonds payable A summary of changes in bonds payable for the year ended June 30, 1998 is as follows: Beqinninq Additions Payments Endinq General Obligation Bonds :J Series of 1992 $ 7,022,059 $ 419,924(a)$ 1,025,000 $ 6,416,983 Series of 1993 4,060,000 235.000 3,825,000 $ 11,082,059 $ 419,924 $ 1.260.000 $ 10.241.983 (al Represents accreted interest on Capital Appreciation Bonds. ,,I The Series of 1993 General Obligation Bonds are due semi-annually through September 1, 2009, and have an average coupon rate of 4.858%. The Series of 1992 General Obligation Bonds consist of Capital Appreciation Bands. Interest accreted through the March 1 payment date of each year on the Capital Appreciation Bonds is added to the carrying value. The bonds are due semi -annually through September 1, 2005 and have an average coupon rate of 6.23%. - 14 - "I f.lECHAHICSIlUI<O AH"A SCHOOL DISTRICT IIOTES TO f'lNANCIAL STATEMENTS ICont' d.) JUNE 30, 1998 ." 7. Bonds payable (Cont'd.) Future maturitieD and debt uervice requircmentD are aD folloWD: " SerieD of 1993 Year Total Princioal Interest 1998-1999 $ 1,448,243 $ 245,000 $ 178,243 1999-2000 1,4.48,738 255,000 168,738 2000-2001 1,448,266 265,000 158,266 2001-2002 1,446,786 275,000 146,786 2002-2003 1,449,135 290,000 134,135 2003-2010 6,003,882 2.495,000 483,882 Totals $ 13,245,050 $ 3,825,000 $ 1,270,050 II) Reflects final maturity value of Capital Appreciation Bonds. 8. Contribution to Food Service Fund Series of 1992 Capital Appreciation Bonds el) $ 1,025,000 1,025,000 1,025,000 1,025,000 1,025,000 3,025,000 $ 8,150,000 "Contribution to Food Service Fund" for the year ended June 30, 1998 includes the following estimated expenses charged to the Food Service Fund and paid through the General Fund: Custodian wages Supplies Employee benefits Utilities and fuel Administrative salaries Social security subsidy Retirement subsidy $ 12,265 4,605 10,751 51,480 68,020 (3,071) (2,044) $ 142 , 006 9. Inter-fund transfers The combined statement of revenue and expenditures for the year ended June 30, 1998 includes the following inter-fund transfers and contributions from the General Fund to the following funds which are recorded in the General Fund as bUdgetary expenditures: Food Service Fund Student activities (Athletic Association) Capital Reserve Fund Debt Service Fund $ 142,006 29,000 600,000 1.446,888 $ 2.217.894 - 15 . MECIINIIC5BURG AREA 5CIIOOL DWTRICl' NOTES TO FINANCIAL 5Tl,n:MENTS (Cont' d. JUNE 30, 1998 10. Compenoated abocnceo The General Long.Term Debt group of accounto includeo a liability of $ 8,314,960 which represents the eotimated gross amount of compensated aboenccD, primarily sick leave, which would be pa}'able to all Di.trict employee. if they were to use this ac(,,:umulated leave prior to retirement. It wan calculated by multiplying each employee'R accumulated leave time by their per diem rate. If an employee retires with unused compensated absences, the payout policy io aD followa: Emergency and personal No payout. Vacation (Administrative personnel) Paid at per diem rate. Sick.ness Paid at the per diem rate paid to a substitute teacher at time of retirement, based on a formula involving a percentage of accumulated sick days and years of service. The maximum is 50% of accumulated sick days after 20 years of service for the year ended June 30, 1998, Changes in long. term compensated absences were as follows: Julv 1, 1997 Net Chanqe June 30, 1998 Administrators and support staff $ 1,045,304 $ 262,628 $ 1,307,932 Teachers 6,862,507 144 , 521 7,007,028 $ 7,907,811 $ 407,149 $ 8,314,960 11, Pension plan The District contributes to a governmental cost-sharing multiple-employer defined benefit pension plan administered by 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, P.O. Box 125, Harrisburg, PA 17108-0125. - 16 - MECIUUJICSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.l JUNE 30, 1999 11, Pension plan ICont'd,) The contribution policy is set by the Code and requires contributions by active employees and by participating employers. Plan members are required to contribute 5,25 percent of their compensation if they joined the plan before July 22, 1993. and 6.25 percent if they joined on or after that date. The contributions required of participating employers are based on an actuarial valuation and expressed as a percentage of annual covered payroll during the period for which the amount is determined. Districts pay the entire employer contribution rate and are reimbursed by the Commonwealth in an amount equal to the Commonwealth's share as determined by the income aid ratio (as defined in Act 29 of 1994), whieh is at least one-half of the total employer rate. The District's contributions to PSERS for the years ending June 30, 1999, 1997 and 1996 were $ 1.252.455. $ 1,501,951 and $ 1,596,718, respectively. Those amounts are equal to the required contribution for each year. 12. Post-employment benefits other than pension benefits The District does not offer any post-employment benefits to retired employees other than pension benefits as discussed in Note 11. The District will, however, allow retired employees to remain in its group medical insurance plan upon payment by the retired employee of the cost of such coverage. 13. 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. The District maintains commercial insurance coverage covering each of those risks of loss. Management believes such coverage is sufficient to preclude any significant uninsured losses to the District. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. For State unemployment compensation laws, the District is self-insured, which is a common practice for local governmental units. Any unemployment claims are paid by the District on a quarterly basis as incurred. - 17 - MECIIANICSIlURG AREII SCHOOL DISTRICT NOTES TO FIlJANCIIIL STIITEMEllTS (Cont'd.) JUNE 30, 1998 14. Commitmento and contingencies At June 30, 1998, the District was committed to construction contracto totaling approximately $ 413,265. These amounts will be paid from the Construction and Capital Reserve Funds. The District's contract with its teaching staff is scheduled to expire June 30, 2001. In the normal course of business, the District is subject to legal disputes and claims. The District does not anticipate any material losses from any pending or threatened litigation. In the normal course of preparing for the subsequent school year, the District has awarded bids for various supplies, fuel contracts, etc. No major commitments in excess of routine requirements have been made by the District. The District is also audited by the State's Department of the Auditor General, Findings, if any, from these audits could result in the repayment of funds, or the receipt of additional funds. The District is contingently liable for outstanding lease rental debt of the Harrisburg Area Community College. - 18 - MECIIANICS/lURG AREA SCHOOL DISTRICT GENERAL FUND STATEMENT OF REVENUE YEAR ENDED JUNE 30, 1998 , " Local sources Current real estate taxes Public utility realty tax Current per capita taxes Current Act 511 per capita taxes Occupation privilege taxes Current occupation taxes Real estate transfer taxes Earned income taxes Delinquent taxes, all levies Taxes Tuition and other payments from patrons Earnings from temporary deposits and investments Student activities Rent from School and other facilities Community services activities Miscellaneous revenue State sources Basic instructional subsidy Homebound instruction Vocational education Migratory children Special education Transportation Rentals and Sinking Fund payments Driver education Health services Social security Retirement Extra grants Tuition - Court placed students Instructional support teams Link to learn Revenue Variance Favorable (Unfavorable) Budqet $ 11,883,632 $ 11,871,855 $ 11,777 209,952 215,302 (5,350) 76,009 77,570 (1,561) 76,009 77,570 (1,561) 64,877 61,798 3,079 2,641,746 2,691,665 (49,919) 373,641 257,244 116,397 2,241,249 2,083,382 157,867 543 , 394 340,000 203,394 18,110,509 17,676,386 434,123 14,372 11,000 3,372 365,000 79,284 16,300 (2,156) 11,900 2,411 90,000 17,141 1,200 760 495,400 100,812 4,179,740 (535) 64 9,861 1,730 37 1,041,500 20,615 200,000 35,252 148,274 2 7,000 (1,150) 84,000 1,485 568,845 (4,210) 650,166 (39,037) 200 15,000 (11,819) 29,000 22,000 6.904.386 53,634 444,284 14,144 14,311 107,141 1.960 596 ,212 4,179,205 64 11,591 37 1,062,115 235,252 148,276 5,850 85,485 564,635 611,129 200 3,181 29,000 22 ,000 6,958,020 (Continued) - 19 - ..., MECllAlIICSD\1RG AREA SCHOOl, DISTRICT GENERAl, F\111D STATEMENT OF REVf:lIUE (Cant' d. ) YEAR ENDED JUlIE 30, 1998 Variance -, Favorable Revenue Budqet (I1nfavorable) Federal sources Impacte:d areas $ 3,132 $ $ 3,132 IDEA Part B 20,915 20,915 Title I 105,425 94,192 11,233 Ti tIe VI 8,637 9,345 (708) Title II 11,385 11,385 Drug free schools 19,143 14 ,749 4,394 168,637 118 ,286 50.351 Other Sale of fixed assets 357 357 Refund of prior years' expenditures 7,759 7,759 Transfers from other local education agencies in Pennsylvania 21.142 21,142 29,258 -0- 29,258 Total revenue $ 25,862,636 $ 25,194,458 $ 668,178 See accompanying report on supplementary information. - 20 - MECHANIC~RURO AREA ~CIlOOL 01 ~TR ICT GEIIERAL FUND STATEMENT Or EXPENDITURE~ YEAR ENDED JUliE 30, 1996 Regular programs Personnel services ~ salaries $ Personnel services - employee benefits Purchased professional and technical services Other purchased services Supplies Property Other obj ects Special programs Personnel services - salaries Personnel services - employee benefits Purchased professional and technical services Other purchased services Supplies Other obj ects vocational education programs Other purchased services Other instructional programs Personnel services - salaries Personnel services - employee benefits Purchased professional and technical services Supplies Adult education programs Personnel services salaries Personnel services - employee benefits Community College education programs Other purchased services (Continued) - 21 - Exoendituren 9,415,633 2,464,310 106,695 56,256 451,165 34,416 33,349 12,564,226 1,391,502 437,029 626,109 124,684 14,563 1,269 2.597,176 199,416 126,594 33,028 15,626 19,953 197,201 -0- 336,164 Budq"t Variance Favorable IUnfavorable) $ 9,429,661 2,523,992 $ 13,828 59,682 108,900 56,296 512,917 34,422 36,063 12,702,271 5 40 61,752 4 2,734 136,045 ...; 1,400,553 9,051 437,063 54 635,062 6,953 125,000 316 15,363 820 , 1,300 11 I , 2,614,361 17,205 i OJ 225 , 967 26,569 il 129,566 972 35,074 2,046 15,660 34 21.170 1.217 201,470 4,269 5,000 5,000 654 854 5,654 5,854 336.190 26 MECllAllICSBURG AREA SCHOOL DISTRICT GENERAL FUND STATEMENT OF EXPENDITURES ICont'd.1 YEI~ ENDED JUNE 30, 1999 Variance Favorable Exoenditures Budoet (Unfavorable ) Support services - business Personnel services - salaries $ 159,977 $ 161,592 $ 2,615 Personnel services - employee benefits 49,517 49,519 1 Purchased professional and technical services 29,396 29,485 99 Other purchased services 4,898 7,366 2,469 Supplies 19,420 27,031 7,6ll Other obj ects 4,933 6,191 1,258 266,131 280,183 14,052 Operation and maintenance of plant services Personnel services - salaries 692,264 696,441 4,177 Personnel services - employee benefits 233,892 234,355 463 Purchased property services 509,3ll 509,8ll 500 Other purchased services 48,176 50,469 2,292 Supplies 474,686 479,512 4,826 Property 13,600 13,600 Other objects 10,607 10,643 36 1.982,536 1,994,830 12,294 Student transportation services Personnel services - salaries 16,956 17,033 77 Personnel services - employee benefits 3,948 4,098 150 Other purchased services 772,941 773,648 707 Supplies 34,844 39,000 3,156 Property 339 750 412 929,027 833.529 4 ,502 Central services Supplies 6,324 7,000 676 Other support services Other purchased services 77 , 4ll 77,432 21 (Continued) - 23 - MeCHAlIIC~UURG AReA SCHOOl, DISTRICT Gl':ZIf;RAL FUND STATEMeNT 01" EXPeNDITURES tCOllt' d.) YEAR ElIDeD JUZIl': 30, 1998 Varianee Favorable Expenditures Budqet (Unfavorable) Student activities Personnel services - salaries $ 261,365 $ 261,465 $ 100 Personnel services - employee benefits 47,413 53,468 6,055 Purchased professional and technical services 9,400 9,400 Other purchased services 17,540 17,585 45 Supplies 31,356 31,432 76 Property 1,000 1,000 Other objects 28,789 29,190 401 395,863 403.540 7,677 Community services Personnel services . salaries 104,239 104,293 54 Personnel services - employee beneU ts 24,891 24,975 84 Purchased professional and technical services 70,134 70,500 366 Other purchased services 6,361 10,000 3,639 Supplies 1,016 2,750 1,734 Other objects 8,990 9,000 10 215,631 221,518 5,887 ) Debt service CAW debt payment 33,983 34,033 50 Refund of prior year' 5 receipts 8.173 8,178 5 42,156 42 , 211 55 Transfers to other funds 1,617,894 1,629,170 11,276 Transfer to Capital Reserve 600,000 (600,000) 2,217,894 1,629,170 (588,724) Total expenditures $ 25,648,654 $ 25,369,050 $ (279,604) See accompanying report on supplementary information. - 24 - "' _! MECIIANICSBURG AREA SCIIOOI, DISTRICT SPECIAL REVENUE FUND . ATIILETIC ASSOCIATION STATEMENT OF REVENUE AIID EXPEUDITURf;S YEAR ElIDED JUliE 30, 1998 Revenue Season tickcto Football gate Jr. High gate Basketball gate Soccer gate Volleyball gate Wrestling gate Program sales Lost equipment Golf tournament Program ads General Fund Concession stand Sports calendar donation $ Total revenue Expenditures Football Jr. High football Girls' sports Basketball Wrestling Swimming Baseball Soccer Track and cross country Golf and tennis Weight room State tournament allowance Training supplies Dues, subscriptions and meetings Purchased services Miscellaneous Supplier Golf tournament Jr. High other sports Concession stand Total expenditures Excess of expenditures over revenue $ See accompanying report on supplementary information. - 25 - 10,531 31,430 2,093 9,538 3,594 1,286 7,264 3,830 746 4,418 1,885 29,000 4,275 100 109,990 18,946 7,087 20,683 3,898 4,792 2,175 8,443 4,725 5,920 3,380 268 3,201 4,334 2,888 1,300 253 655 5,237 13,727 128 112.040 (2,050)