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Home My WebLink About98-06982 j I I t :! ...... I .~: O! i --g! t."........ ~ . ..,. I ' I i a' I iiJ . i<l , I~ I 0/' ' 1-- 1:3 , ,v o i1 ~ tn ~ ..1 & 'C u: g r J Co ex:> ~ ~ I ~ 7u, '/ y- (., r; S'.2. c.u:i/ (.L-v-' ft I I I I I I I I I I I I I I I I I CARLISLE AREA SCHOOl, DISTRICT FINANCIAL REPORT JUNE 30, 1998 &milh Ellioll Kearns <0 Company. LLC CCILilicd Public ACY(1UnLanLI\ is COILI\U1LanL" -, 0EI(~D \".llIi! h l:lli, ,I \ l~,' I! I)', (,"j ( \ 'II!! ',l!l\', \.Il . :11:, I',: '.:,'. INDEPENDENT AUDITOR'S REPORT ~ . ( Board of Director> Carlislc Area School DistricI Carlisle, Pennsylvania We have audited the accompanying general purpose tinancial stalemems of Ihe Carlisle Area School District as of and for the year ended June 30, 1998, as listed in Ihe lable of coments, These general purpose financial statemems arc Ihe responsibility of Carlisle Area School District's managemcm, Our responsibility is 10 express an opinion on these general purpose financial statements based on our audit. '.', , . Except as discussed in the following paragraph, we conductcd our audil in accordance with generally accepted audiling slandards and the standards applicable 10 financial audits contained in Go\'ernlllelll Auditing Standords, issued by the Complroller General of the United States, Those slandards require that we plan and perform the audilto obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining. on a test basis, evidence supporting the amounlS and disclosures in the financial statements, An audit also includes assessing the accounting principles used and significam estimates made by management, as well as evaluating Ihe overall financial slatemem presentation, We believe Ihal our audit provides a reasonable basis for our opinion, As discussed in Note I 10 the financial statemenls, general fixed asselS consisting of property and equipment arc recorded predominantly al replacement cost as delermined by an appraisal company, This is nol in accordance with generally accepled accounting principles, which specify thaI Ihese assels be recorded at cost. In addition, the general purpose financial slatements referred to above do nOI include the Internal Servic,: Fund (Self Insurance Trust) described in Note 9, which should be included in order to conform with generally accepled accounting principles, If the omitted fund had been included, based on unaudiled information, Ihe assets, liabililies, and net loss of Ihe proprielary fund types would have increased hy $ 964,822; S 251; and $ 236,259, respectively, In our opinion, except fnr the effects of not recording general tixed assets at cost and the omission of the (mernal Service Fund, as disellssed in the preceding paragraph, the general purpose financial S;:ltcmcnt~ referred to .:lbove present fairly. in all material respects, the financial position of the Carlisle Area School DistricI as of June 3D, 1998, and the results of its operalions and Ihe cash flows of its proprietary fund types for the year then ended in conformity wilh generally accepted accounting principles, As discussed in Note 1 to the financial statements, the School District adopted Statemcnls of Governmelllal Accounting Standards Numbers 27 and 31 d~ring the year ended June 3D, 1998, In accordance with Go\'ernm""t Auditing Standards. we have also issued our report daled September 30, 1998 nn our consideralion of Carlisle Area School District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, n'gulations. contracts and grants. Our audit was perfonnod for the purpose of fonning an opinion on the gcneral pUlp"'e financial statements of Carlisle Area School District taken as a whole, The accompanying schedule of expenditures of federal awards is presellled for purposes of additional analysis as required by U,S, Omce of Managcmentand Budge! Circular A-133, Audits o/StattS, Lom! GOl'eTIlI!1emS, a1ld N01lprofit Orgoni:ariof1s. and is Ilot a required part of the gelleral pUl1'osc financial st.alemenls of the Carlble Schoel District. The detailed !o;chedules listed in the tahlt: of contcnts as accompanying information Jre :.llsn prcscnlcd fm purposes of additional analysis :md arc TK'i J required pari of the gellt'r.3l purpose fin:mcial stalem~ms. Such informatil)ll has hel"ll ~.uhjcclcJ In \he 3udil:Ot! procedures applil'd in the :mdil (\f the t:t'neral purpi'!se financial st;I.lCIllt'llts :mJ. in our opinj('Il. is fairly stated, in all material fl::-pe-rb. in n:latillll In th~ ~.t'Il...rJI rUrpl)~t: fill~ncial ~t2tC"l1lt'nts tJKell as 3 wht)k. ,..f C3rli~Je. PCllnsylvJniJ Soplemb<r 31l, 199H ~ dI;i/ ~4<<10/ {~7' lie .3- - CARLISLE AREA SCHOOL DISTRICT a COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS June 30, 1998 I - - - - - - - - - - - - - - - - GOVERNMENTAL FUND - _ _ _ _ _ _ _ _ _ _ _ __ TYPES SPECIAL CAPITAL CAPITAL B GENERAL REVENUE RESERVE PROJECTS ASSETS FUND FUNDS FUND FUND Cash and cash equivalents $ 1,881,903 $ 28,952 $ 51,937 $ 0 ~ .' Investmcnts 4,225.238 0 4,375,415 14,862,918 Accrued Interest 74.886 0 115.086 0 ~ Reccivables: Taxcs-(net of allowance for uncollectible taxes of $1,030. 976) 2,481,047 0 0 0 ] Due from other funds 220,521 0 900,000 0 Subsidics Federal 27,356 0 (J 0 ] Statc 338,620 () 0 0 OUler 24,815 () 750 0 Prepaid itcms 28,862 () 0 0 g Invcntory 0 0 0 0 Vocational Project 106.708 0 (J 0 Land and improvemcnts 0 0 0 0 y Buildings () 0 0 0 Fumiture and cquipmcnt - Net of accumulated depreciation in Cafcteria j] Fund of$543,980 0 0 0 0 Amount to be provided for rctirement of gcnerallong-term debt 0 0 0 0 'J Amount 10 be provided for accumulated .. compensated absences () 0 (J 0 ;..~ T Dial assets $ 9,409,956 $ 28,952 $ 5,443, I 88 $ 14.S62.918 r' LIABILITIES AND FUND EQUITY :j' U Accounts payablc $ 537,594 $ 4.766 $ 171.398 $ a Deferred Rcvenue 1,612.758 0 (J 0 Due to other funds 900.000 0 () 0 Accrued salaries :lJtd benefits 1.7 10.923 (I (I 0 Pa)TOII taxcs and withholdings (I 0 (I 0 Due to student groups (I (I () 0 General obligation bonds and notes payable (I 0 (I 0 Accumulated compensated absences (I (I () () ~ Tot,1lliabilities 4.7(,1,275 4.7(1() 171.398 0 A,:'l FlIJ\'D EQUITY t' Inl'estmenl in general fixed assets (I (I (I (J Retained earnings (de!icit) II II (I () Fund balances: RL'~I.T\'\:d tl 2.U81, 5.271,7'111 14,81,2.91\ lrnrt:~l'n'(,:d . llfH,k~lgll;I1L'd 4.l,,18N:I II () 0 Tot;} I j'JIId eyuu)' 4.(I.H;.~I~: J :'~. J X(1 5,271.i'l(1 14.81,2.918 T()1.;lllJahlllll\:~ ~jJJJ fund 1.:qUll\ ~ \j,..j(Jl/.IJ:'!) S ~S,il5~ ~ ,',440,1\8 ~ 1,l,8tJ2,<J18 h Trie Notes to FInanCial St;JtementD are an Integra! part of thiS statement. , .~- ... ti.~ PROPRIETARY FIDUCIARY - - - -ACCOUNT GROUPS- - - - ',(ri FUND TYPE FUND TYPE GENERAL GENERAL TOTALS FIXED LONG- TERM (MEMORANDUM I':" CAFETERIA AGENCY ASSETS DEBT ONLY) $ 11,199 $ 79,992 $ 0 $ 0 $ 2,053,983 0 0 G 0 23,463,571 l..',1 0 0 0 0 189,972 0 0 0 0 2,481,047 0 0 0 0 1,120,521 10,108 0 0 0 37,464 1,069 0 0 0 339,689 4,024 0 0 0 29,589 0 0 0 0 28,862 48,537 0 0 0 48,537 0 0 0 0 106,708 0 0 1,23 I ,608 0 1,23 I ,608 0 0 60,634,5 I 2 0 60,634,512 93,343 0 13,528,607 0 13,621,950 0 0 0 20,705,000 20,705,000 0 0 0 1,163.963 1,163,963 $ 168,280 $ 79,992 $ 75.394,727 $ 21,868,963 $ 127,256,976 -- -- $ 10,345 $ 8,1 II $ 0 $ 0 $ 732,2 I 4 0 0 0 0 1.612,758 220,52 I 0 0 0 1,120,521 0 0 0 0 1.710,923 0 100 0 0 JOO 0 71.78 I 0 () 71,781 0 0 0 20,705.000 20,705.000 () () () 1.163.963 1.163.963 230.SC16 79,992 0 21.868,963 27,117.260 () () 75,394,727 0 75.394,727 62,586 ) (l () 0 (,2.586 ) 0 (I 0 (l 20.158,894 (l (/ 0 (I 4,(,48,(,8J ( ()2.~Kh ) (I 7-"..,Q.l, 7~7 (l luu,I.;".7Ih $ 168.280 $ 7~J.IJq2. $ 75.::'''4.727 s.: 21 .1'{f)S. Qh.; So 12i.2.:"h.l!j() ... kilo CARLISLE AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND ,,4 CHANGES IN FUND BALANCES. ALL GOVERNMENTAL FUND TYPES Year Ended June 30, 1998 TOTALS GENERAL SPECIAL CAPITAL CAPITAL (MEMORANDUM FUND REVENUE RESERVE PROJECTS ONLY) . .~ REVENUES Local sources $ 21,303.508 S 73,758 $ 231,RI3 S 349,852 S 21,958,931 State sources 13,500,795 0 0 0 13.500,795 Federal sOllrces 743,893 0 0 0 743,893 OTHER FINANCING SOURCES Transfers from other funds 0 0 1,100,012 0 1,100,012 Proceeds fTOrn sale of bonds 0 0 0 14,882,667 14,882,667 Refunds of prior years' expenditures 50.306 0 0 0 50,306 Total revenues and other financing snurees 35,598,502 73,758 1.33 I ,825 15,232,519 52,236,604 EXPENDITURES Instruction 21,023,112 0 0 0 21,023,112 Support services 9,942,611 0 0 0 9,942,61 I Opcration of noninstructional services 698,856 6 l,206 0 5,9RO 766,042 Facilities acquis'ition, construction and improvcments 0 0 702,953 0 702,953 Debt service 2,170,221 0 0 106,250 2,276.471 Bond issue costs 0 0 0 57,359 57,359 OTHER FINANCING USES Rcfund prior years' reccipts 26,112 0 0 0 26,112 Transfers to othcr funds J ,009,024 0 2(l,R07 200,012 1.229,843 Total expenditures and other financing uses 34 .R69, 936 61.206 723,7(,0 369,601 36,(124,503 Excess of rc\'enues and othcr financing sources o\'er (under) expcnditures and other financing uses 728,566 12.552 ('08,0(,5 14,862,918 16,212,101 Fund halancc - July I, 1997 (:IS restated) 3,920,115 I 1.63~ 4,1,(,3,725 0 8,595,474 Fund halance - June 30, 1998 S 4,!,4R,681 S 24.1 RIl S 5,27 I. 79\1 S 14,R(l2,91R S 2~.RU7.575 - The Notes to Financ:al Statements are an I/llegral part of t/1I5 statement .... ~ -~- ""'1 CARLISLE AREA SCHOOL DISTRICT STA TEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCE. BUDGET AND ACTUAL. GENERAL FUND Year Ended June 30, 1998 ,_... REVENUE Local sources Statc sources Federal Sources Other financing sources: Tuition from other LEA's Refunds of prior ycar cxpenditures To~1 revenue and other financing sources EXPENDITURES Instruction Regular programs Special programs Vocational education programs Othcr instructional progranls Adult education programs Community/junior college cducation programs To~llnstructioll Support Services Pupil pcrsonnel Instructional staff Administration Pupil health l3usiness Opcration & maintell:Ulce of plant Studcnt transport~tion Ccntral Other suppm1 sl:r\'icc~ TotJI ~llpport ~('f\ lC':~; BUDGET ACTUAL VARIANCE FA VORAI3LE (lJNFA VORAI3LE) $ 20.676,049 $ 21,303.508 $ 627,459 13,296.199 13,500,795 204,5% 612,174 743,893 131,719 0 39,27X 39,27X 0 11,028 11,028 34,584,422 35.59X,502 1,014,080 14,873,459 14,503,714 369,745 3,965,658 3,957,573 8,085 1.484,197 1,429,45 I 54,746 625,977 70 I ,956 ( 75,979 ) 71,427 57,079 14,348 350,000 373,339 ( 23,339 ) 21,370,718 21,023,112 347,606 I, I 85,823 1,156,342 29,481 1.291,916 1,I74,9i8 116,998 2,617,907 2,614,214 3,693 32 I ,414 2%,959 24,455 397.95 I 386,917 1 1.034 2.72(,.070 2,673.542 52,528 1.420,059 1.486,780 66,721 ) 950 1-1'1 801 1.17_8-1(, 152.7<lO 4,9-14 ) IO,109,',.{, <l_ll-12.rdJ 167.325 The Notes to Flnilnclai Statements ilre an integral pan of this statemenl, - .6. ~ I"" , i. "'I '.. I'" "',' , I , I " - NOTES TO FINANCIAL STATEMENTS Notc 1. Summary of Significant Accounting Policics The accounting policies of the School District conform to generally accepted accounting principles applicable to governmelllal units, The following is a summary of the more significant policies: Ba~is Of Prcsentation - Fund Accouuting The accounts of the School District arc organized on the basis of funds or account groups, each of which is considered a separate accounting elllity, The operations of each fund are accounted for with a separate set of self balancing accoulllS that comprise its assets, liabilities, fund balance/retained earnings, revenues, and expenditures/expenses, The various funds are summarized by type in the financial statemelllS, The following fund types and account groups are used by the School District: Governmcntal Fund Types Governmental Funds are those through which most governmental functions of the School District are financed, The acquisition, use and balances of the School District's expendable financial resources and the related liabilities (except those accounted for in the proprietary funds) are accounted for through governmental funds, The measurement focus is based upon determination of changes in financial resources, rather than upon net income determination, Gcncral Fund - The General Fund is the general operating fund of the School District. This fund is used to account for an financial transactions except those required to be accounted for in another fund, Spccial RCI'CIIlIC Fund - These funds arc used to account for proceeds of specific revenues (other than major capital projects) that are legally restricted to expenditures for specific purposcs or used to finance specific activities as required by administrative regulation. Capital Rcscr"\'C Fund - This fund was created under Article Xl, Municipal Law Code Section 1431, for the purpose of funding capital improvements to facilities and purchase educational equipment. Capital Projccts Fund - This fund is used to accnunt for financial resources to be used for the acquisition or construction of major capital facilities, Proprietary' Fund Types Proprietary funds are used to accoUIll for the School District's ongoing activities which arc similar to those often found in the pri\'ate seclOr. Caji'lena Fund _ The Cafel<'ria Fund ,lCCOUllIS for all re\'Cllues and expemes penaining to the cafeteria operations since such operati(lns ale financed and operated in a manner similar to a pri\'ate business enterprise, h is the intenl of the governing body that the coot of providing SUdl rood!\ or ~er\,jcc~ to the sludl'lll~ nn J continuing basis l'e fin:mccd or n:co\'l'H:d primarily th10Ut'h u~t'r ch;UfcS llt fl'ueral/qatc ~(l\'tTllmen~31 funding. .10. Note I. ~ \, , r" I! r r; f~ I. ~; 1: ~: I: ~: t: ( [ I' I I I SUuullal'Y of Siguilic:lIlt Accountiug Policies (Coutiuued) Fiducial')' Fuud Types Fiduciary Funds arc used to accoulll for assets held by the School District in a trustee capacity or as an agelll for individuals, privale organizations. other governmelllal uuits and/or othcr funds, These funds are held by the School District. which acts in an agency capacity with respect to the payroll wilhholdings and the Student Activity Funds, The funds arc custodial in nature and do not involve measurement of results of operations, Account Groups Gel/eral Fixed Assets Accol/llt Grol/p - This accoulll group is used to record all property and equipment of the School District, except that which is accounted for in the Cafeteria Fund, General Fixed Assets consist of property and equipment and are recorded predominalllly at reproduction cost as determined from Industrial Appraisal Company report dated June 22, 1995 (last updated report), To be in accordance with generally accepted accounting principles, general fixed assets should be recorded at cost. All costs for original purchase and replacement equipment are charged to the appropriate General Fund expenditure accounts, These purchases amoulIled co $ 309,815 for the year ended June 30, 1998, In addition, property and equipment expenditures amounted 10 $ 702,953 in the capital reserve fund, There were no significant general fixed asset deletions during the year, Gel/eral Lollg-Term Debt Accol/I/t Grol/p - This account group presellls the balance of long-term debt which is backed by the full faith and credit of the School District. Principal and interest on long-term debt is expensed on the date such debt service requirements are paid to the trustee, Accumulated sick pay is also included in this account group. Governmental And Fiduciary Fund Types All governmellla! and fiduciary funds are accounted for using the modified accrual basis of accounting, Revenues are recorded as received in cash cxcept for rcvcnues susccptible to the accrual and material rcvcnues thaT. arc not rcceived at normal times, Delinquent taxcs reccivable are reported on the balance sheet, net of an allowance for uncollectible taxes. Expenditures arc recorded on the accrual basis except for prepaid expenses, which are normally not recorded, and cxccpt for principal and inter"st on long-tern] debt, which are expenditures when due, Fixed assets and materials and supplies arc charged to operations whcn purchased, I , I I f Revenues from federal, state and other grants designatcd for payment of spccific School District expenditures arc rccognizcd when thc relatcd cxpenditures arc incurred, Any excess of rcvenues or cxpcnditures at thc fiscal ycar cnd is recorded as deferred revenue or a receivable, respcctively, Proprietary Fund TnlC The Proprietary Fund type, consisting of the Cafe""ia Fund, utilizes the accrual hasis of accounting in which revenues arc recognizcd in the accoullling period III which they arc earned; expenses are recognized at the time they arc incurred. Proprietary funds oppJy Financi:;J Accounting Standards BO:lId t FA SIl) pron"UnCellll":m and Acwunting Principles Board (Al'll) opinions issued on "r before NilI'embcr ~O, I'!S'!, unle" those pronouncements conflict with or wntr:,dict GASIl pn'noulllements, in wlllch c"se. GASH [lIel'311s, Significant aLwunting policies f,1t this lund include: -11- Note 1. Summar)' of Significant Accnuntiug I'olicies (Continued) Pl'Oprictar}' Fuud TnX' (Continued) ;... Equipment utilizcd hy thc Cafeteria Fund is rccordcd as fixed assets of that Fund (at cost), and is depreciated on a straight-line has is over an cstimated useful life of 5 - 12 years, ;... Donatcd commoditics received hy thc Cafcteria Fund a,,~ inventoried at cost figurcs provided by thc Federal Governmcnt. ;... Food and supplies inventories arc valued at cost on a first-in, first-out basis, \'.l The School District docs not allempt to allocatc "building-wide costs" to the Cafeteria Fund, Thus, General Fund expenditures which partially hcnefit thc Cafeteria Fund (utilities, janitorial services, insurance, etc,) arc not proportionately recognized within the Cafell:ria Fund; similarly, the Cafetcria Fund docs not rccognize a cost for tlte building space it occupies (no rcntal-of-facilities expense), ;,1 Budgets And Budgetary Data The School District adopts a hudget for the General Fund on a basis consistent with generally accepted accounting principles by function and object; expenditures are controlled by line item, Appropriations lapse at the end of each year and must be reappropriated, Budget transfers between departments are approvl~d within the General Fund, No budgets are required or utilized for other funds, AccullluIated Sick and Vac.1tion Lea\'e Vacation leave only applies to twelve 1110nth employees; only five days of vacation leave is allowed to be carried over at year end, but must be used by August 15 or is lost. Vacation leave earned in 1997-98 is credited to the employees on July I, 1\198, and is expensed as paid, Sick leave is granted as appropriate, and medical evidence may hl~ required, Provision is l11ade annually in the budget for the cost of substitute personnel. There is limited payment for unused sick leave at the time of retirement, the amount of which is reflected in the general long-term deht account group using the vcsting mcthod undcr GASH Statement No, 16. Rrtirrmrlll Plal/s In November 1994, the GASH issued Statcrnent No, 27, ACCOllllfillg for Pel/siollS by Slate alld Local GO\'l'fIl/1/elllal E/1/ployers (GASH Statcment No, 27), GASH Statement No, 27 cstablishes standards for the measuremcnt, recognition, and display of pension expense and related liabilities, assets, and nOle disclosures. The School District adopted this stalement in J997/1998. which only impacted the note disclosurcs since the plan is a multi-employer agent plan, See NOlc 6, Investments In March 1997, the GASH i"ued Statcment No, 31. AcwlIr1fillli alld Fillal/cial Reponil/g/or Certaill 11I1''',II/1/I'I1IS al/dfor EIII'rtil11 11/\'(,1//1/<'111 Poois (GASH Slatement No, 31), The Statement cstahlishes fair v;tlue stand;uds f,n certain invcstlllents held hy governmcntal entities ;lIld eXle'J1al il1l'l"S1lllelll ptlols. The effect of adl'l'ting this statelllelll on June 30, 1998 !,en"ral fund inenllle was an increase "f S 117.401. Th,' cUlllulative effect on the June 30, J4'17 funJ h,,!ance of the gCllCl,,1 funJ II'''S a dec,,'ase "I' $ 140.X47, which has heen restated In h:Oed lhi~ dl;m!'e See: :iJdilj(\IUI inf(lrm:Hinll at ~{lIL' :!. -12- "" Notc I. SlUl1mllry of Signilic:mt Accounting Policics (Continucd) Priuciplcs Used in Dctenl1iniug thc Rcporting Entity ,,~ Thc Carlislc Area School District is the lowest level of government whidl has ovcrsight responsibility and control over all activitics relatcd to public school cducation, Thc District rcceives funding from local, state and federal government sources and must comply with the rcquircments of thcsc funding sourcc cntitics, All opcrations of thc School District arc included in the reporting cntity, I"." ~.,'1 The School District is affiliated with Harrisburg Area Community Collcgc (HACC), along with numcrous other member school districts in a joint vcnturc arrangcmcnt, The mcmbcr school districts participate in providing oversight responsibility to this entity through the following: 1,,>( r Appointing of Board mcmbers who are also Board members of thc participating schnols r Approval and funding of operating budget r Long-term agreement to providc funding for capital expcnditures Thc District has an ongoing financial rcsponsibility to fund its proportionate share of the operating budgcts of this entity, but has no cquity intercst in it. Scparate financial statements are prepared for and availablc from HACC. Scc additional information rcgarding payments to thc above affiliatcd organization at Note 7, Thc District is also affiliated with thc South Central Region School Employees Benefit Welfare Trust (the Trust), a public entity::k pool which provides employees medical insurance, Since the District appoints the Trustees of the Trust and since Carlisle Area School District is one of only two participating members in the Trust at June 30, 1998, the Trust is deemed a component unit of the School District undcr governmcntal accounting principles. See Note 9 for further information, Cash And Cash Equimlcnls For purposes of the statement of cash flows presented for the Proprietary Fund Type. the Schonl District considcrs time deposits and all highly-liqnid dcbt instruments with original maturities of three months or less to be cash equivalcnts, Total Columns On Combined Statcmcnts . , Total columns on the combined financial statemenlS arc not nccessary for a fair prcsentation of the financial statemcnts in confonnity with gencrally accept cd accounting principles, They are present cd to facilitate financial analysis, The aggregation of this data is not comparable to a consolidation as intcr-fund eliminations havc not bccnmadc, :'\olc 2. Cash And hJ\'cstmcnts Deposits - At June 30, 19'IS. the carrying amount of the School's deposits WaS $ 137.465 and the nank nalance was $ 554_6~S. The Diqrict's deposits arc covered hy fed,'ral depository insurance ($ 100/rOO) <'r by pooled, pledged a',sels O\(\t inlhe name of the District} '.If the various depositories pursuant to Al't n IS 454.6~S) -13- .>~ Notc 2, Cash And 111\'cslments (Continued) All invcslments arc held in safekceping by outside agents and backcd by the lJ.S, Govcrnment and its agencies, The CMO's and Pass Through CCl1ificate pay fixed intcrest rates ranging from 4-6% and were purcha:,ed scvcral years ago 10 maximize investment return, Thesc invcstments arc subject to inlerest rate risk primarily in times of rising ratcs, since thesc investments wcre purchased in 1993 whcn ratcs werc generally low, Therc is no long-term risk to principal as long as the investments l\re held to maturity, which varics from 2020 to 2023. Principal paydowns arc expected to occur significantly f:lster than statcd maturity, Invcstmcnts arc categorized as either (I) insured or registercd, or for which the sccuritics arc held by thc government or its agent in the government's name, (2) uninsurcd and unregistcred for which thc sccurities arc hcld by the broker's or dealer's tl'llst dcpartmcnt or agent in the govcrnment's name or (3) uninsured and unregistercd for which the securities arc held by thc broker or dealer, or by its trust department or agent but not in the government's name, Investmcnts in the Pcnnsylvania INVEST program and Pcnnsylvania Local Government Investment Trust (PLGIT) arc not categorized sincc they have the characteristics of a mutual fund. 'll ~~ " ~ L" ". , , The School's investments arc categorizcd as follows underGASB Statcment No, 3: Fair '. Catcgory I Category 2 Catcgory 3 Cost VaIuc FNMA Rcmic Trust CMO, matures 10/25/2020 $ 107,352 $ 0 $0 $ 107,352 $ 91,149 FNMA Remic Pass Through Certificate, matures 4/25/2023 89,995 0 0 89,995 82,741 FNMA Discount Note, matures 8/15/99 0 623,500 0 623,500 626,686 FHLB Discount Note, matures 6/11/99 0 1,50 I ,400 0 1,501,400 1,501,385 FFCB Discount Note, natures 9/2/98 0 1,449,547 0 1,449,547 1,449,547 U.S, Treasury Note, matures 81\ 5/0 I 0 4, 172,011 0 4,172,01 I 4,249,607 U.S, Treasury Note, matures I 1/15/00 0 4,736,639 0 4,736,639 4,719,323 U,S, Trcasury Strip, maturities from 5/15/99 to 5/15/01 0 8,091.852 ~ 8,09 I ,852 8,186,071 $J~Z.H7 UQ.5]1.2.49 $~Q 20,772,296 20,906,509 pA INVEST 1,541,063 1,541,063 pLGIT 2,925,455 2,925,455 Money market with broker 7,062 7,062 $o2~.2j5,8,2Q $~J5.:l~Q,Q82 Section 440, I ofthc Pennsylvania School Code authorizes thc School District to invest in the following: ~ U.S. Treasury Bills. ~ Short~h~nn obligations of the U.S. Govcrnment and Fedcral agencics. ;.. Insured savings and checking accoums and cCl1ificates of deposit in banks, savings and loan as:-:nciations and credit unions. ;.. General obligations of the Federal GOl'Crnment. the Commonwcalth of Pennsylvania or any st;lle agency, or of any Pennsyh'ania political suhdivision as long as the obligations arc backed by the full faith and credit oftlw respective gOI'Crnmental entity, , Shan:s (If ill\'c~tnH.'nt comp:l.I1ics "Iw~c in\'(.'strnl'1l1~ arc rc~tricled to the aho\'c categories. -14- -, , . , , Notc 5, Gcncral Long-Tcrm Dcht (Continued) Matnrities of Gcncl'llI Ohligation Bonds ami Nolcs The following is a schedule by years and in the aggrcgate of minimum dcbt service requircments as of June 30, 1998: GENERAL OIlLlGATION BONDS GENERAL OBLIGATION BONDS GENERAL OllUGAT10N NOTES GENERAL OBLIGATION NOTES Ycur Euding Junc 30 1999 2000 2001 2002 2003 Total minimum paymcnts i1,67S,443 $ 1.439,385 U5lL.250 S 11.194.400 $ 22,840.478 Minimum dcbt scrvicc requiremcnts include interest cxpense of $ 2,135.478, Scries of 1992 $ 1,982,910 1,979.463 713.070 o --~ Scries of 1993 $ 186.433 191,005 934.259 127.688 o Scric.\ of 1997 S 212,500 212,500 5,106,250 o o Series of 1998 $ 399,800 399,800 10,394,800 o o Totals $ 2,781.643 2,782.768 17,148.379 127.688 o A) Gcncral Obligation Bonds PayabIc Scries of 1992 On Fcbruary 15. 1992, thc School District issucd General Obligation Bonds - Serics of 1992, in the principal amount of S 9.400,000, Thc procccds wcre uscd to rcdeem thc rcmaining outstanding balancc of thc Series of 1985 Bonds, as well as $ 6,010,000 of the Scrics of 1988 Bonds, Principal installmcnts ranging from $ 410,000 to S 1.895.000 arc duc through Scptcmbcr 1. 2000; intcrest rates vary from 3.00% to 5,20%, Series of 1993 On April 13, 1993, the School District issucd Gcncral Obligation Bonds - Scries of 1993, in the aggregate principal amount of $ 5,385.000, The proceeds were uscd to redecm the rcmaining balaucc of thc Scrics of 1988 Bonds, The remaining procccds, nct of bond issuance costs. were used \0 financc the 1993 Capital Projcet Plan. which was substantially completcd in thc 1993-1994 fiscal yea!'. Intercst, at ratcs ranging from 2,25% to 4,30% per annum, is payable semi-annually on March 1 and Septembcr 1, Bonds in various principal amounts mature through Scptember I, 2001. Scrics of 1997 On November 15,1997, the School District issued TempMary Gcneral Obligation Notc. Serics of 1997, in the principal amOUlll of S 5,000,000, The proceeds will provide funds for various school building additions and reno\'ations, Imerest on thcsc bonds at 4,25% is payable semi3nnuall\' on May 15 and N()\'ell1ber 15, with principalll1alUring No\'cmber 15, 2000, Scril'S of 1998 On !\larch 15, 1998, the School DhlJict i"urJ Tellll'l'rary General Ohliration Note - Series ()f 19'18, in the princip:i! amount of ~ '1,lJ45.lHlll. The pr(),rtJs will provide funds for \'arjl\U~ \cholll1"Jild1l1g aJ~jilli\n" J.IlG ll'lh)\'J.linnl.,. Intcft:~t on th::~c hOlllh at 4.00~ i!-l paY;Jhk ,,'mlannu;ll1y on \1;,1'" 15 '11ld Scpt,'mhcr 15, with prinCIpal m"tunnr \\3rch 15, 2001. -16- - r'\' It Note 6. Retirement PIm. r.,;~ Plall Descriptioll, The School District contributes to the Pllblic School Employees Retirement System (PSERS), a cost-sharing multiple-employer defined benefit pension plan, PSERS provides retirement and disability benefits, and legislative mandated ad !IOC cost-of-Iiving adjustments to plan members and heneficiaries, It also provides healthcare insurance premium assistance to qualifying annui!;!nts, Authority for the plan is provided by The Public School Employees' Retirement Code (Act No, 96 ofOC,lOber 2,1975, as amended) (24 Pa, C.S, 8101- 8535), The system issues a publicly available financial report that includes financial statements and required supplementary information for the plan, That report may be obtained by writing to Wendy F, Hoover. Bureau of Fiscal Control, Public School Employees' Retirement System, P. 0, Box 125, Harrisburg, PA 17108-0125, ... ~:.. , I ""f FUlldillg Policy, The contribution policy is set by the Public School Employees' Retirement Code and requires comributions by active members, employers, and the Commonwealth of Pennsylvania, For members who joined the System prior to July 22, 1983, their contribution rate is 5,25% of compensation, The rate is 6,25% for members who joined on or after that date, h.J , , The contributions required of employers and the Commonwealth arc based upon an actuarial valuation. In accordance with Act 29 of 199~, the Commonwealth of Pennsylvania must pay school entities for contributions made to PSERS based on the formula provided in Act 29. but not less than one-half of the school entities' contributions. For the year ended June 30. 1998. the School District contributed at the rate of 8,76% of covered payroll. The 8,76% rate is composed of a pension contribution rate of 8.61 % for pension benefits and, 15% for health insurance premium assistance, The contribution requirements and amounts actually contributed for the School District are as follows: , ' Contribution Required Actual Contribution As a Percentage June 30, 1998 June 30. 1997 June 30. 1996 $ 1,701,521 1.965,245 2,127,885 100% 100% 100% For the year ended June 30, 1998, the Commonwealth of Pennsylvania reimbursed the School District for one-half of its retirement expense, Note 7. Affiliates As explained in Note 1, the Carlisle Area School District is affiliated with the Harrisburg Area Community College (IIACC). Total payments to HACC during the year ended June 30, 1998 were $ 373,339, Note 8. Commitments The School District is currently commilled to $ 192,068 in future facilities and capital equipmem upgrades to be funded by the Capital Reserve Fund, Note 9. Risk Manaj:cmcnt - htsur:mcc The Dimict's risk mallagemenl acti\'ities arc re(;orded in the general fund and arc related to administering employee life. health, property and liahility, worker's compensation, unemployment :lI1d disahility insuralKe programs, The District's. risk managemel1l activities do not constillJte a transfer of ri"k from the District. Selllcmem amounts have nOl exceeded ill~UraliC'c ((wcr;lfl' for tlH: curn:nt year llT thrcl' prior yt'ar~. -17- ,.., "" .. ! , !;"~ ... CARLISLE AREA SCHOOL DISTRICT COMBINING BALANCE SHEET. AGENCY FUNDS Year Ended June 30, 1998 I'A VIWLL STUOENT ACTIVITIES ASSETS Cash s s 79,892 100 TUTAL S 79,992 Liabilities Accounts Payable S 0 S 8,1 I I S 8.111 Payroll taxes and withholdings 100 0 100 Due to student groups 0 71.781 71.781 Total liabilities S 100 $ 79.892 S 79.992 . -19- PI! CARLISLE AREA SCHOOL DISTRICT .' SCHEDULE OF REVENUES - BUDGET AND ACTUAL GENERAL FUND Year Ended June 30, 1998 ,.. VARIANCE ~.\ ~. FAVORABLE BUDGET ACTUAL (IJNFA VORAIlLE) ~.':lI REVENUEFRO~1LOCALSOURCES 'q'l Rcvcnue From Taxation Real cstatc $ 14,035,032 $ 13,944,298 ( $ 90,734 ) Pcr capita 88,820 87,439 ( 1,38 I ) 1,'1 Resident 91,000 90,307 ( 693 ) Eamed Income 2,123,317 2,285,151 161,834 Rcal cstate transfcrs 245,000 370,115 125,115 Occupation 2,499,6 17 2,479,306 ( 20,31 I ) Payments in licu of taxes J4,563 15,098 535 Delinquent 500,000 846,255 346,255 Occupation privilege 105,000 119,532 14,532 Public utility la.X 235,000 248,278 13,278 Tuition and othcr paY111ents from patrons 65,700 46,335 19,365 ) Earnings from investmcnts 501,000 626,191 J25,\91 Rcntals 22,000 15,6\0 ( 6,390 ) Contributions from private sources 25,000 23,092 ( 1,908 ) Athlctics revenuc 30,000 31,854 1,854 Misccllaneous Rcvcnue 95.000 74,647 ( 20,353 ) Total Revcnuc from local sources 20,676,049 21.303.508 627.459 REVENUE FROM STATE SOURCES Basic instructional subsidy 8,590,878 8.59 I ,897 1.019 Homebound instruction 1,000 1.096 96 Special education 1.430.000 1,548.331 118.331 Transportation 558,56\ 553,586 4,975 ) Vocational educ.ation 46,.111 68.389 21,978 Rcntals and sinking fund payments 939,460 951.336 I I.876 Driver education 10,000 8.275 1.725 ) Nurse ser\'ices 97.131 96.5 79 552 ) Social security 748.84 I 739.602 9.239 ) Retirement 853,717 826,47'1 27,240 ) Tuition - Section 1305 and Ll0C, 0 0 0 A!tentative educ.ation 20.000 21,600 1.600 Oth", state grants 200 93,(,27 93.427 Tot31 fl.'\'I.,'IHJL' from ~~t~lh: ~\ll1rCl'~~ 1 ~.~tj('.lqq 13,500.7115 204,5% - .20. "'I I ... I ... ~. ~". ~"',"I , I CARLISLE AREA SCHOOL DISTRICT SCHEDULE OF REVENUES - BUDGET AND ACTUAL GENERAL FUND (CONDNUED) Year Ended June 30, 1998 REVENUE FROM FEDlmAL sOImn:s BUDGET ACTUAL VARL\NCE FA VORABLE (UNFA VOlUBLE) $ ( ( 133,OS3 18,611 ) 5.767 ) 23,014 Impact Aid ESEA Title I ESEA Title VI Other federal grants $ 135,000 312.514 27,793 136.867 $ 268,OS3 131.719 "'I Tuition from other LEA's 0 39,278 39,27X Refunds of prior ye:!r's cxpenses 0 1I.02S 11,028 0 50,306 50,306 Total re\'enues and other financing sources $ 34,584.422 $ 35,59S,502 $ 1,014,OSO 293,903 22,026 159.X~ 1 Total revenues from li:deral sourccs 612,174 743,893 OTHER FINANCING SOURCES .2t~ m CARLISLE AREA SCHOOL DISTRICT 1 I SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - 1);\ BUDGET AND ACTUAL. GENERAL FUND Year Ended June 3D, 1998 ~'." VARIANCE ~, FA VGRABLE BUDGET ACTUAL (UNFAVORABLE) EXPENDITURES H INSTRUCTIONAL Regular programs Salaries S 10,971,630 S 10,627.443 $ 344.187 Employee benefits 3,207.J J6 3.155.112 52,004 Purchased services: Professional and te:hnical 18.484 21.611 ( 3,127 ) , . Property 46,376 35,568 10.808 Other 81.840 184,673 102,833 ) Supplies 487,851 450,913 36,938 Property 60,162 28.394 31,768 Total regular programs 14,873.459 14,503,714 369,745 Special Programs Salaries 2,313,822 2.249,731 64,091 Employee benefits 704,749 628,575 76,174 Purchased services: Professional and technical 812,691 937,323 124,632 ) Property 6,046 4.350 1,696 Other 25,500 70,766 45,266 ) Supplies 77.300 55.319 21,981 Property 25,550 11,509 14,041 Total special programs 3.965,658 3.957,573 8,085 Vocational Educatiolll'rograms Salaries 993.586 1,006.985 13,399 ) Employee benefits 283,98 I 280,692 3,289 Purchased services: Professional and technical 1,200 400 800 Property 8,()~O 19,414 11.384 ) Other 16,600 2.436 13,664 Suppl ies 104,300 87.4 79 2 !.X2 I Property 71.500 ~ 1,545 ~9. 955 TOI3.1 \'oc:.Jtil.lllal cJUCJtj<'1l program' 1.4,4,197 1.429,45J 54.iO:6 .22. '""\ CARLISLE AREA SCHOOL DISTRICT ~ SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES. BUDGET AND ACTUAL. GENERAL FUND (CONTINUED) Year Ended June 3D, 1998 VARIANCE ~.,~ FA VORAnLE BUDGET ACTUAL (UNF A VORAnLE) EXPENDITURES INSTRUCTIONAL - CONTINUED -.", Othcr Instructional Programs Salaries S 481,039 S 512.599 ( S 31,560 ) Employec benefits 121,343 112,624 8,719 ,., ~ Purchased services: Other 3,288 47,824 ( 44,536 ) Supplies 20,003 18,278 1,725 Property 304 10,631 10,327 ) Total other instructional programs 625,977 701,956 75,979 ) Adult Educ.'\tion Programs Salaries 34,360 40,453 ( 6,093 ) Employee benefits 14,780 4,495 10,285 Other purchased services 16,900 3,926 12,974 Supplies 5,387 8,205 2,818 ) Total adult education programs 71,427 57,079 14,348 Community Collcge Education Programs Other purchased services 350,000 373,339 ( 23,339 ) Total instrJctional programs 21.370,718 21,023,112 347,606 SUPPORT SERVICES Pupil PcrsonncI Salaries 876,742 890,889 14,147 ) Employee benefits 251,328 231,851 19,477 Purchased services: Professional and technical 34,306 14,974 19,332 Supplies 7.000 5,414 1.586 Property 0 1,550 ( 1,550 ) Other ohjects 16,447 11.664 4,783 Total pupil pers'llllld 1.l85.823 1,156.342 29.481 -23. U: CARLISLE AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES. n BUDGETANDACTUAL.GENERALFUND(CONnNUE~ Year Ended June 30, 1998 fi' VARIANCE FA VOlUBLE BUDGET ACTUAL (UNFA VORAIlLE) n~ EXPENDITURES SUPPORT SERVICES - CONTINUED [ Instructional Staff Salaries S 764,215 S 690.432 S 73,783 Employee benefits 219,312 192,561 26,751 [ Purchased services: ProfessioJlal al1G technical 50,300 59,358 ( 9,058 ) Property 5,166 9,551 ( 4,385 ) r Other 111,380 61,727 49,653 Suppl ies 89,543 110,068 ( 20,525 ) I' Property 52,000 51,221 779 i, Total other instructional programs 1,291,916 1,174,918 116,998 Administration !: Salaries 1,686,580 1,758,087 ( 71,507 ) Employee benefits 480,510 425.489 55,021 I, Purchased services: Professional and technical 181,985 146,990 34,995 Property 71,567 94,781 ( 23,214 ) Other 31,221 65,854 ( 34,633 ) Supplies 63,339 42,726 20,613 Property 42.437 44,882 ( 2,445 ) Other objects 60,268 35,405 24,863 Total administration ~.617.907 2,614,214 3,693 Pupil Health Salaries 238.721 221,838 16,883 Employee benefits 71.393 64,195 7,198 Purchased services: Professional and technical 5,000 3,072 1,928 Property 2S0 155 95 Olher 550 180 370 Supplies 5,000 6,102 ( I.l 02 ) Property SOO 1.417 ( 917 ) Total pupil heahh 321.414 296,959 24,455 .24- - CARLISLE AREA SCHOOL DISTRICT , SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES _ -- BUDGETANDACTUAL-GENERALFUND(CONnNUED) Year Ended June 30, 1998 VAIHANCE FA VC)({AIlLE IllJDGET ACTUAL (UNFA VORAIILE) EXPENDITURES ..., SUPPORT SERVICES - CONTINUED .- Business Salaries S 229.376 S 23R,811 ( S 9.435 ) Employee bencfits 65,371 65,709 ( 338 ) ~"'l Purchased services: Professional and technical 35,909 20,730 15,179 Properly 4,050 2,126 1,924 ~F'~ Olher 2.400 2,340 60 Supplies 37,960 27.842 IO,I18 Property 22,885 29.359 ( 6.474 ) , . Total business 397,951 386,917 11,034 ,.\ Operation and Maintenance of Plant Services Salaries 926,774 935.418 ( 8,644 ) , . Employee benefits 291,193 272.404 18,789 , . Purchased serviccs: Property 397,600 362.997 34,603 Other 132,963 133,846 ( 883 ) Supplies 952,040 942.654 9,386 Property 25.500 26,223 ( 723) Total opcration and maintenallcc plant services 2,726,070 2,673.542 52,528 i, Transpor1ation Services Purchased services: Property 125,000 220,275 ( 95,275 ) I. Other ] ,236.459 1,262..l2J ( 25,962 ) Supplies 58,600 4,084 54,516 I I I Total transportation services 1,420,059 1,486,780 ' . ( 66,721 ) I Central l Supplies 950 149 XOI 1 Total cCl1lral 950 149 801 L. 1 i I" L -25- I-~. CARLISLE AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES. BUDGET AND ACTUAL. GENERAL FUND (CONTINUED) Year Ended June 30, 1998 BlJDGET VARIANCE FA VORAIlLE ACTUAL (UNFA VORAHLE) ..,.... EXPENDITURES Debt Service Interest Principal S 320,224 1,870,180 S 320,22 I 1,850,000 S 3 20,180 .,.,~ Total debt service 2, I 90.404 2,170,221 20,183 OTHER FINANCING USES Transfers to other funds 106,620 1,009,024 ( 902.404 ) Refund of prior years' receipts 0 26,112 ( 26,112 ) Budgetary Reserve 610,000 0 610,000 Total other financing uses 716,620 1,035,136 ( 318.516 ) Total expenditures and other financing uses S 35,003.409 S 34,869.936 S 133.473 -27- n NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS "" Notc 1. Rcfercnces to ScheduIc of Federal Financial Assistance ". 0 - Direct funding I - Indirect funding ).-.. S - State share ,',-<II (B) - Based on USDA valuation Notc 2. Dctenllination of Major Programs j,,1, Program , ;1 ESEA Title I National school lunch/breakfast program cluster: Breakfast program Lunch program Special milk program Impact Aid Donated commodities IDEA Vocational education Adult basic education Title VI Drug free schools Titlc II Tech, prep, hcalth/medical assistaJ1ls Goals 2000 Total federal expenditures State expcnditurcs Total cxpcnditurcs - Schedule of FFA CFDA No. Amount Percenl $ 293,902 . 26,9 36,537 249.334 6,165 292,036 26,8 268.083 24,6 54.451 5,0 51,432 4,7 38,175 3,5 31,337 2.9 22,026 2,0 19,728 1.9 10,854 1.0 4,642 A 3,713 -.2 1,090,379 1000 _ 32,S75 S Ll1oU~~~ 84,010 10,553 10,555 10,556 84,041 10,550 84,027 84,048 84,002 84,298 84,186 84,281 84.002 84,276 * Sdectcd for testing as a major program under 25 ~;; ruk for lo\\' risk auditees - Rcpresents 26,9% of total fedcral cxpenditur'.'s, .31. ... ..... 0E~ (~!IIi111 VIIi, ,I I L "1111" (.", \ "'III! ;111\', I.I,~ "'!; ;[\ ..,., REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I..n ". Board of Directors Carlisle Area School District Carlisle, Pennsylvania We have audited the financial statements of Carlisle Area Scllool District as of and for tile year ended June 30, 1998, and have issued our report thereon dated September 30, 1998, We conducted our audit in accordance with generally accept':d auditing standards and the standards applicable to financial audits contained in Govemme11l Auditing Standards, issued by tile Comptroller General of the United States, Compliance As part of obtaining reasonable aSsurance about wllether tile School District's fmancial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grams, noncompliance with wllich could have a direct and material effect on tile determination of financial statement amounts, However, providing an opinion on compliance with those provisions waS not an objective of our audit and, accordingly, We do not express such an opinion, The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards_ Internal Control Over Financial Reporting In planning and performing our audit, we considered Carlisle Area School District's internal control Over financial reponing in order to determine our auditing procedures for tile purpose of expressing our opinion on the general purpose financial statements and not to plOvide assurance on the internal control over financial reporting, Our consideration of the internal control over financial reporting would not necessarily disclose: all matters in the internal control over financialleponing that might be material weaknesses, A material weakness is a condition in which the design or operation of one or more of the internal control components docs not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation 10 the general purpose tinancial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions, We noted no matters involving the internal control over tinancial reponing and its operation that we consider to be material weaknesses, This report is intended for the informat;\)J1 of the Board of Directors, management and federal awarding agencies and pass-through entilies, lIowever, this report is a matter of public record ;md its distribution is not limited. Carlisle, Pennsylvania September 30, 1998 ~ ~~/)~;r tlL -32- - 0E~ ,\'!lIilll !.lli,11 L "llll,;\:,.;t,','IIIj\l1l\'.IH' , I " ",,' ,", REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 ,"~ Board of Directors Carlisle Area Schonl District Carlisle, Pennsylvania Compliance We have audited the compliancl: of Carlisle Area School District with the types of compliance requiremellls described in the U.S, Office of Mallagemellt alld Budget (OMB) Circular A-133 Compliance Supplemellt that are applicable tn each of its major federal programs for the year ended June 30, 1998, The School District's major federal programs arc identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs, Compliance with the requirements of laws, regulations, contracts and grallls applicable to each of its major federal programs is the responsibility of the School District's management. Our responsibility is to express an opinion on the School District's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Go\'emmellt Audirillg Sralldards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audirs of Stares. Local GOI'ertllllents, alld NonProfit Organi:ariolls, Those standards and OMB Circular A-133 require that We plan and perform the audit to obtain reasonable aSSUrance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School District's compliance with those requirements and perfonlling such other procedures as we considered necessary in the circumstances, We believe that our audit provides a reasonable basis for our opinion, Our audit does not provide a legal determination on the School District's compliance with those requirements, In our opinion, Carlisle Area School District complied, in all material respects, with the requirements referred to ahove that arc applicahle to each of its major federal programs for the year ended June 30, 1998, Internal Control Over Compliance The managemwt of Carlisle Area School District is responsible for estahlishing and maintaining effective internal control ovcr ('ompliance with requirements of laws, regulations, contracts and grants applicable to federal programs, In planning and performing our audit, we considered the School District's internal contn.1 over c()mJ'Ii;!t1l:e with wjuirements that could have a direct and m~terial dfect on a major federal program in ",der h. determine our ;wditing prl.cedures for the purpose of I;;'xprcssing our npinil)J1 on compli:mcl: ;1I'Jd 10 tcsf and re-port \'11 inl<:rnal ciJntrol over compliance in accordance with OMIl CIrcular A. I :<:,. -33. BOard of Directors Carlisle Area School District report to all taxing diSlricts for which taxes are collected, The bill also provides for an annual audit of the tax collector's books and records, as follows: "The tax collector's final accounts and records, monthly or other periodic returns and payments and duplicates shall be audited annually by the controller or auditors of the taxing district or, at the request of the taxing district, by an independent certified public aCCOUnlant or public accountant. If the audit is conducted by a certified public accountant or public accountant, the audit shall be conducted in accordance with generally accepted auditing standards", The provisions of the bill arc currently in effect. If you would like us to perfOrlll the required audits of the District's real estate tax collectors, please let us know, Year 2000 Issue On January I, 2000, infornlation technology experts believe that many application systems will fail as a resuh of erroneous calculations and data integrity problems, The situation, conmlonly known as the Year 2000 (or Y2K) issue, will occur because many computers and application software products (both commercial and in-house developed systems) were originally designed to acconullodate only a two digit date position to represent the year (for example, "97" for the year 1997), The School District must devote the necessary resources to evaluate its systems and make them Year 2000 compliant. This will ensure that the systems will be able to process dale inforlnation on and after January I, ~OO(l, 00 .""'V. '" ~ .. Board of Dircctors Carlislc Area School District I'~ Investments Duc to devclopments relatcd to significant losses incurred by scvcral Pennsylvania school t<;" districts from thc John Black/Devon Casc, proper investmcnt managemcnt has bccome a "hot topic" of 1/'. statc auditors and rcgulators, Wc suggest that thc School District dcvclop, approvc and implement an invcstmcnt policy to cnsurc that thc board is exercising propcr ovcrsight and is fully infonncd of ,'. invcstmcnt dccisions, Somc of the arcas that should be addrcsscd in this policy arC: ~ Lcgality ii ~ Safcty ~ Liquidity ~ Yicld ~ Diversification ~ Minimization of uninvcsted balanccs ~ Types and tcrms of invcstmcnts allowed ~ Custody of sccurities ~ Required information from investment advisors ~ Pcriodic rcvicw of investmcnt activity This report is intended solely for the usc of management and sllOuld not he used for any other purpose, We acknowledge and appreciate the courtesy and assistance extended to our representatives by the School District's personnel during our audit. The :!bove Cllllllnents and SUHeqions arc made hecause we arc illlerested inlhe cOl1linued success of the Carlisle Arc:! School Diqrict. We will he ple:!sed ...,. (0 funht:r di~cu!>.s thc:!>.c (ommc:nts :md rccornmcndJ.tinl1" at your convL'nience. ",,'" ~~tI~ /~1?'tLC ..