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HomeMy WebLinkAbout00-08599 OQ- P5'99 God, T~ . . . . . . . . . . (J-~(J. (jreCl1llwlllt k eCllHplllf!l, p.e. G'e4cjdd .9',dI,.:o s&:xA7~Za,.,.a . "' ~ .~ ~I . I " " u_',,, ':;,; ';,' ,ii;'- >'f,:,:.;;,r:'., ' , n__ ~AL .., . . . EAST PENNSBORO AREA SCHOOL DISTRICT . ENOLA, PENNSYLVANIA JUNE 30, 2000 . . . . . . . j"'" . . . . . . . . . . . . '^" -L I..' ,,~-'''' ,.'0_ , ~', '~-e.' ~, ",,'; \ ~,~""! ~,(, INDEX Page Number Independent auditors' report I Combined balance sheet - all fund types and account groups - June 30, 2000 2 Combined statement of revenue, expenditures and changes in fund balances -All Governmental Fund Types - year ended June 30, 2000 3 Combined statement of revenue, expenditures and changes in fund balances - budget and actual - General and Special Revenue Funds - year ended June 30, 2000 4 - 5 Combined statement of revenue, expenses and changes in retained earnings - All Proprietary Fund Types - year ended June 30, 2000 6 Combined statement of cash flows - All Proprietary Fund Types - year ended June 30, 2000 7 Notes to financial statements - June 30, 2000 8 - 21 o I; I' ....- ~ ,~' '>" ; :::-i;~",:;; , , ',i'~;';"" " ' L' . GREENAWALT & COMPANY, P.C. JAMES E. LYONS HOWARD R. GREENAWALT CREEDON R. HOFFMAN JOHN H, KLINGLER DImORAH J. KEU.Y R, A. GREENAWALT (19'&1983) A. A, Rl!lDINGER (RI!TIRED) C. EDWARD ROGERS, JR. CERTIF,IED PUBLIC ACCOUNTANTS 400 WEST MAIN STREET MECHANICSBURG, PENNSYLVANIA 17055 . (717) 766-4763 FAX (717) 766,2731 62 WE5T POMFRET STREET CARUSLE. PA 17013 (717) 24~22 FAX (717) 258-9372 INDEPENDENT AUDITORS' REPORT . Board of School Directors East pennsboro Area School District Enola, Pennsylvania . We have audited the accompanying general-purpose financial statements of East pennsboro Area School District as of June 30, 2000 and for the year then ended. These general-purpose financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on these general-purpose financial statements 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 East Pennsboro Area School District as of June 30, 2000, 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. . In accordance with Government Auditing Standards, we have also issued a report dated October 12, 2000 on our consideration of East Pennsboro Area School District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of our audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. . ~~I~,P.e. GREENAWALi)r COMPA~,~.C. . October 12, 2000 Mechanicsburg, Pennsylvania - 1 - . MEMBERS - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOllNTANTS - PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS ~"i,"~-rJ>ir;%:t'~irk;..\i--;-wmi~~i!"""","~i$;I~'B1'~@ffilR;i'~~"l'i";'ffi,"~u.iw,c;t;li!~liSi~!~,,;,." "~liii~'"-'"~ '-"I!illNlI~iiiilllIIlIil!'~~ o-~''Ii\IlUMI.a"'''''' EAST PENNSBORO AREA SCHOOL DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 2000 Assets and other debits Cash and cash equivalents Investments Delinquent taxes receivable! net Due from other funds State subsidies receivable Federal subsidies receivable Due from other governments Other accounts receivable Inventories Land Buildings Equipment and furnishings Food service equipment (net of accumulated depreciation of $ 195,533) Amount to be p~ovided for the retirement of general long-term debt Total assets and other debits Liabilities Accrued payroll and benefits Accounts payable Deferred revenUe Due to other funds Due to student organizations General obligation bonds and notes payable Accumulated compensated absences Total liabilities Fund equity and other credits Invested in general fixed assets Retained earnings Specific fund balance reserves Unreserved fund balances Total fund equity and other credits Total liability, fund equity and other credits General Governmental Fund Special Revenue $ 450,236 1,482,087 428,677 739,467 118,686 18,451 60,649 444,881 16,362 $ 1,690,730 2,052,404 16,362 2,052,404 16,362 $ 3,743,134 $ 16,362 The accompanying notes are an integral part of these financial statements. - , - 2 - .~.&. JIi;j -'" '"""'"""~~ ~ "1 , " j ~ , .1 ~ i I I .i I I I i I I .1 Types Capital Prolect $ 709 21,954,807 . I .1 o 1,198,477 . 20,757,039 20,757,039 . $ 21. 955, 516 . . ~~' ~"" " , " ,I I " , "". '0", , ---"--"'~~'" -r' . . Proprietary Fund Types Fiduciary Fund Types Account Groups Food Trust and General General Service Agency Activities Fixed Assets Long-Term Debt . $ 40,099 $ 178,448 $ 46,699 $ $ . 59,875 o o 36,253,676 o $ 98,443 $ 178,448 $ 46.699 $ 36.253.676 $ 42,923.307 . . " , ,"- I " , "<" ~.,' ~;' ,'" :;, l , . .. "c,i;; . . EAST PENNSBORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2000 . Special Capital General Revenue Proi8cts Revenue Local sources $ 15,098,261 $ 32,773 $ 1,277,992 State sources 6,014,440 Federal sources 108,540 . Total revenue 21,221,241 32,773 1,277,992 Expenditu:res Instruction 12,996,681 181,722 Support services 5,566,187 . Operation of noninstructional services 322,024 80,791 Facilities acquisition, construction and improvements 58,132 7,801,834 Debt service 2,565,581 10,661,628 Total expenditures 21,508,605 80,791 18,645,184 . Excess of revenues under expenditures (287,364) (48,018) (17,367,192) Other financing sources (uses) Receipts from other LEA's 66,560 Refunds of prior years' expenditures 19,397 . Interfund transfers in 369,654 62,800 Interfund transfers out (70,117) (369,654) Net proceeds from the issuance of long-term debt 14,728,474 Total other financing . sources (uses) 385,494 62,800 14,358,820 Excess of revenues and other financing sources over (under) expenditures and other financing uses 98,130 14,782 (3,008,372) . Fund balances, July I, 1999 1,954,274 1,580 23,765,411 Fund balapces, June 30, 2000 $ 2,052,404 $ 16 , 362 $ 20,757,039 "" c''JiI The accompanying notes are an integral part of these financial statements, - 3 - '11 r" ""~'""'''",..._ilil..." - ',-,,,,,,,,,,,,,,,,,--,,,,,,,,,,,, ',","" . k ""'11.-' l. ""'-""'""~' , . EAST PENNSBORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2000 . (Continued) . - 4 - . , ~ __"? ,~, '''rJ.,~, . "~~.~ ~ ,,~ ,v,"" , ~"<. I" ,~" , . .. JI " - ~ . . . . . . . . . . ~ , ~'d ;1;, , ,<,..,. ''';.1..0" ,'~ --'C , , '.'" ~- " " "~ , " -', , Special Revenue Fund Variance Favorable Budqet Actual (Unfavorable) $ 27,850 $ 27,850 o o 32,773 $ 4,923 32,773 4,923 o o o o I~'k""",,' '-jilllfill ..-' J~i.lii~~~~~"'~~~c <, :~'-Il~~~~;rl€:l~Jtlt<'o-~~1.~(Mti<i;:<_ ~';""'l~trnn - '~_-- " '" ~'" ~', EAST PENNSBORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS (Cont'd.) YEAR ENDED JUNE 30, 2000 Budqet Expenditures and other financing uses (Cant' d,) Operation of noninstructional services Student activities Community services $ 320,278 26,430 Total operation of non- instructional services 346,708 Facilities acquisition, construction and imprOvement services 64,895 Debt service 2,568,901 Total expenditures 21,818,888 Excess of revenue over (under) expenditures (663,394) Other financing sources (uses) Receipts from other LEA's Refunds of prior year expenditures Interfund transfers in Interfund transfers out Budgetary reserve o 5,000 (78,800) (732,115 ) Total other financing sources (uses) (805,915) Excess of revenues and other financing sources over (under) expenditures and other financing uses (1,469,309) Fund balance, July 1, 1999 1,840,524 Fund balance, June 30, 2000 $ ,371. 215 General Fund Actual $ 296,728 25,296 . . .i Variance Favorable . (Unfavorable) . $ 23,550 1,134 322,024 58, 132 2,565,581 21,508,605 (287,364) 66,560 19,397 369,654 (70,117) 385,494 98,130 1,954,274 $ 2,052,404 24,684 . 6,763 3,320 310,283 . 376,030 66,560 14,397 369,654 8,683 732,115 . 1,191,409 . 1,567,439 113,750 . $ 1.681.189 The accompanying notes are an integral part of these financial statements. - 5 - '-",,1, "",,~',,". \ '''''''''','''~~=,=,_~_,' , _ ~.,~'^'''~, '. """~,,':"',,, . ,"",..'":'"- o"t,>' " ~, "'""",~~" " , " " . . -"" ,~ ,- ^,","~-~= ,~- . , '-__c.'"" . . Special Revenue Fund Budget Actual Variance Favorable (Unfavorable) . ill $ 90,000 $ 80,791 $ 9,209 90,000 80,791 9,209 ,. 0 0 0 0 0 0 . 90,000 80,791 9,209 (62,150) (48,018) 14,132 . 62,800 62,800 . 62,800 62,800 o 650 14,782 14,132 . o 1,580 1,580 $ 650 $ 16,362 $ 15,712 . . . . EAST PENNSBORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES YEAR ENDED JUNE 30, 2000 . . Total operating revenue Food Service $ 393,072 393,072 553,191 33,774 9,545 8,469 604,979 (211,907) 3,585 12,976 125,553 33,774 175,888 (36,019) 7,317 (28,702) 88,577 $ 59.875 Operating revenue Local sources - food service revenue ~ Operating expenses Payments to food service contractor Donated commodities consumed Supplies Depreciation Total operating expenses Operating income (loss) . Nonoperating revenue (expenses) Earnings on investments State sources Federal sources Federal donated commodities . Total nonoperating revenue (expenses) Income (loss) before transfers Operating transfers Noncash contributions from General Fund . Net income (loss) Retained earnings, July 1, 1999 Retained earnings, June 30, 2000 . The accompanying notes are an integral part of these financial statements. . - 6 - . ,^ ~ , . . . . . . . . . . . '"-' '~ EAST PENNSBORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES YEAR ENDED JUNE 30, 2000 Cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation Donated commodities consumed Noncash contribution of supplies Decrease (increase) in Inventory Receivables Decrease in Accounts payable Deferred income Net cash used in operating activities Cash flows from noncapital financing activities Subsidies received State Federal Net cash provided by non capital financing activities Cash flows from investing activities Earnings on investments Net cash provided by investing activities Net increase (decrease) in cash Cash and equivalents, July 1, 1999 Cash and equivalents, June 30, 2000 Supplemental disclosure of noncash financial activities Donated commodities received $ Noncash contributions from General Fund Total . ~', Food Service $ (211,907) ",,"":'"'~__;i'" ,,;,"i The accompanying notes are an integral part of these financial statements. - 7 - 8,469 33,774 7,317 (568) 1,365 (5,561) (303) (167,414) 12,976 125,553 138,529 3,585 3,585 (25,300) 65,399 $ 40,099 33,471 7,317 $ 40,788 "'~'" L' ,,' " ,,- ',"- , '~'c,',.,,", , ,,,", " ' ',i ~,',,";: . "- - '~',; ~ . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 1. Reporting entity . East Pennsboro Area School District is the level of government which has oversight responsibility and control over activities related to public school education. The report includes services provided by the District to residents wi thin the Cumberland County community of East pennsboro Township. Services provided include a comprehensive curriculum for primary and secondary education as well as special education and vocational education programs. The District receives revenue from local, state and federal sources and must comply with 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 items such as financial interdependency, selection of governing authority, designation of management, ability to significantly influence ,operations, accountability for fiscal matters, scope of public service and special financing relationships. All operations of the District are included in the reporting entity, Based on the foregoing criteria, the District has not included any component units in the reporting entity since no component units fully meet the criteria for inclusion. . 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 of these entities serves many school districts and are therefore not included as part of East pennsboro Area School District's reporting entity. These other entities are as follows: . Capital Area Intermediate Unit - provides special education services and. programs , Cumberland-Perry Area Vocational-Technical School vocational and technical education services and programs. provides . Harrisburg Area Community College education services and programs. provides community college 2. Summary of significant accounting policies . The accounting records of East Pennsboro 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 follows, . - 8 - . ,'^' ',I ,-~, ' " ;./--,-'":.':'--:. -,;,'" . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 2. Summary of significant accounting policies (Cont'd.) . Fund accounting .'Il The accounting records 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, lia.bilities, fund balance/retained earnings, revenues and expenditures/expenses as appropriate. The fund types and the account groups utilized by East Pennsboro Area School District are as follows: Governmental Fund Types :8 Governmental Funds are those through which most governmental functions of the School District are financed, The acquisition, use and balances of the District's expendable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is upon determination of changes in financial resources, rather than upon net income determination. The funds of the District included in this category are: 'Il General Fund - The General Fund is used to account for all financial transactions not accounted for in another fund. Revenues are primarily derived from local property, per capita, occupation, earned income taxes and State and Federal distributions. Many of the more important activities of the School District, including instruction, administration of the School District and certain noninstructional services are accounted for in this fund. . Special Revenue Fund - Special Revenue Funds are used to account for the proceeds of specific revenues that are restricted to expenditures for specified purposes. . Capital Projects Fund - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of capital facilities. Proprietary Fund Types . Proprietary Funds account for operations that are financed and operated in a manner similar to private business enterprises: Food Service Fund - The financial transactions cafeterias. Food Service Fund is used to account for the associated with the operations of the . - 9 - . :-~ .~ ,.1' ;.:,' ~ " - 'q ; .:-..;,,-:..~ '", I;; ",,',~' -i>~ ;'~' '" ;, 'J U;,;':ic: "~".-';l;'i' .."-",, _ ,:t. . u', . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 2. Summary of significant accounting policies (Cont'd.) Fund accounting (Cont'd.) . Fiduciary Fund Types . Fiduciary Funds (Trust and Agency Funds) are used to account for assets held by a governmental unit in a trustee capacity or as an agent for other funds or entities. Agency Funds are custodial in nature and do not involve measurement of the results of operations: . Trust and Agency Account - Accounts for proceeds from activities open to the entire student body and faculty. Agency funds also include a central payroll fund. The payroll fund accounts for salaries earned by District employees. It handles the disbursing of such amounts to the employees and to taxing and other agencies on their behalf. Activity Fund Accounts for programs operated and sponsored by various clubs and organizations within the schools. Activity funds are Agency Funds which are separately accounted for because of legal requirements. it Account Groups Account groups are not funds. They measurement of financial position and measurement of results of operations. are only are not concerned involved with with the the . General Fixed Assets - accounts for the District's investment in land, buildings, equipment and furnishings. General Long-Term Debt - accounts for notes, bonds, capital leases and compensated absences payable in future years. . Basis of accounting The accounting and financial reporting treatment applied by is based on their measurement focus, which determines expenditures are recognized. the different funds when revenues and . Governmental Fund Types These funds are accounted for using a "current financial resources" measurement focus (a modified accrual basis of accounting). . 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, - 10 - :I It' -j -, ,-;.~o ".'~ " ","--,<'" ";;!/",, " ,~,>,;,,;,< . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 . 2. Summary of significant accounting policies (Cont'd.) Basis of accounting (Cont'd.) Governmental Fund Types (Cont'd.) . 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 which is recognized when due. Disbursements for inventory type items and prepaid expenses are considered expenditures at the time of purchase. .. Proprietary Fund Types The food Service Fund uses the "flow of economic resources" measurement focus, which is a full accrual method of accounting. ~ This fund accounts for operations using accounting pronouncements required for private business enterprises, unless those pronouncements conflict with or contradict governmental accounting pronouncements. . Donated commodities are inventoried at an estimated cost value when received. Inventories (valued on the first-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 useful lives of 5 to 12 years) recorded as an operating expense. . Fiduciary Fund Types . Trust and Agency Funds are liabilities), and do not operations. These funds are manne~ as Governmental Funds. custodial in nature (assets equal involve measurement of results of accounted for in essentially the same Account Groups . Land, buildings, equipment and furnishings are recorded at historical cost or at estimated historical cost if actual historical cost is not available. Depreciation is not provided on these assets, . Long-term debt is taxation or other notes payable in Interest on bonds due, offset by an amount to be provided by future revenue sources. General obligation bonds and future years are recorded as District debt. and notes is recognized when such interest is - 11 - . ",,0' :L _~:i' ~<" "C', ,;" -'o'~ M ," "" --', . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 . 2. Summary of significant accounting policies (Cont'd.) Basis of accounting ICont'd.) Account Groups (Cont'd,) . . Compensated absences (those for which employees receive pay) are recorded using the termination payment method. A liability is recorded through the use of estimates which apply historical data to current factors. The District maintains records of unused leave and applies the contracted rate for employees eligible for termination payments. The District allows only restricted sabbatical leave and therefore does not present any liability in advance of the sabbatical. Cash and cash equivalents .. The District pools cash resources of certain funds in order to facilitate the management of cash. Cash and cash equivalents applicable to a particular fund a.re readily identifiable,. The balances in the pooled cash management accounts a.re available to meet current operation requirements. . for purposes of the Food Service Fund statement of cash flows, the District considers all deposits purchased with an original maturity of three months or Jess to be cash or cash equivalents. Budgets . The District adopts, prior to the beginning of each fiscal year, an annual budget for the General Fund and Athletic Fund. A part of this budget process is the adoption of local tax rates, subject to various legal restrictions. The District approves subsequent budget revisions (primarily transfers between expenditure categories) as necessary. Unused appropriations expire at the end of each year. Revenue - Local sources . Real estate, occupation and residence taxes are levied as of July 1 with a legal, enforceable claim against the taxpayer and/or property. These taxes are ~ecognized as revenue when received during the fiscal year and also estimated to be received wi thin sixty days after the end of the fiscal year. Amounts estimated to be received between sixty days and one year after the end of the fiscal year are recorded as deferred revenue. An allowance for uncollectibles is recorded for taxes estimated not to be collectible within one year after the end of the fiscal year. . Other tax revenues, including taxpayer-assessed revenues such as earned income taxes, are recognized as revenue when received during the fiscal year or soon enough thereafter to be susceptible to accrual. . - 12 - . . . . . ,. if . . . . . , ~'L ~ '-';0___" ~";,,>,,:,,,,_ '_0'-'-',- 'j', , -, ^ :- ~'}~I ". .', '-, ,"'. EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 2. Summary of significant accounting policies (Cont'd.) Revenue - State sources State subsidies due the District as current fiscal year entitlements are recognized as revenue in the current fiscal year. Revenue - Federal sources Federal program funds applicable to expenditures in the current fiscal year but expected to be received in the next fiscal year are recognized' as revenue in the current fiscal year, 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 recognizes expenditures or expenses equal to its contractually-required contributions, subject to the modified accrual basis of accounting in governmental funds. Inter-fund transactions Expenditures by the General Fund for the benefit of other funds are in the respective statements of revenue and expenditures/expenses, management's estimates. The District does not attempt to allocate which benefit the other funds due to the difficulties associated measurement of such benefits. reflected based on all costs wi th the 3. Cash and investments The District's cash and cash equivalents consist of cash balances deposited in financial institutions and repurchase agreements purchased by the District from the financial institutions as part of a cash management account. Cash and cash equivalents at June 30, 2000 are categorized as follows: Carrying Bank Cash and cash equivalents Value Balance Change funds $ 500 $ Insured (FDIC) 200,000 200,000 Collateral held in the District's name Collateral not held in the District's name 532,053 964,265 Total $ 732.553 $ 1.164.265 - 13 - ~r.- r,', .~ ,;" 'I - , ^o"- . "'; '~ ,,<, ",'-,~,; " '.',~. ,"'.A , ~'""/,~ , ';".. ,'" . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd) JUNE 30, 2000 . 3. Cash and investments (Cont'd.) Investments are categorized into these three categories of credit risk: . 1. Insured or registered or securities held by the District or its agent in the District's name. 2. Uninsured and unregistered, with securities held by the counterparty IS trust department or agent in the District's name. . 3. Uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the District's name. This includes public funds which are secured by pooled collateral as permitted by Act 72. The investments, whose market value approximates cost due to the short term nature of the investments, are categorized as follows: . Insured Collateral held in the District's name Collateral not held in the District's name Total $ 0 1,482,086 17,160,811 4,793,997 $ 23.436.894 . Pooled investments: PA Local Government Investment Trust PA Local Government Investment Trust Arbitrage Rebate Management Program Chase Manhattan Money Reserve Fund . 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. . . - 14 - . -'~:;:-- ,~, I: '",--" c,.- " o~'--",;:.~~:,~;~,:,;::d:~~ ;,~',- ' ",,,,-",',t'1 . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd,) JUNE 30, 2000 4. Delinquent taxes receivable . Delinquent taxes receivable at June 30, 2000 consist of the following: . Real Total Estate Personal Current year in process of collection $ 621,449 $ 187,114 $ 434,335 Held by delinquent collectors 1,196,979 139,789 1,057,190 Delinquent taxes receivable 1,818,428 326,903 1,491,525 Less: allowance for uncollectibles (1,389,751) (146,714) (1,243,037) Net delinquent taxes receivable $ 428.677 $ 180.189 $ 248.488 . 5. Land, buildings, equipment and furnishings . As explained in Note 2, buildings and equipment are reflected on the balance sheet under the General Fixed Assets Group of Accounts stated at historical cost or estimated historical cost if actual historical costs are not available. A surrunary of changes in fixed assets for the year ended June 30, 2000 is as follows: - 15 - . (' -- ~ L - 'e'_;.'_;'". -, -tid''''....,o';, ~_'''''._'. ",'ij . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 6. General obligation bonds and notes payable . A summary of changes in general obligation bonds and notes payable for the year ended June 30, 2000 is as follows: Payments Beginning and other End of Year Additions Decreases of Year . General Obligation Bonds Series A of 1997, 3.80% to 5.05%, maturing 9/1/2011 $ 8,025,000 $ $ 235,000 $ 7,790,000 Series AA of 1997, . 4.00% to 4.20%, maturing 9/1/2001 1,115,000 355,000 760,000 Series of 1998, 3.60% to 4.30%, maturing 9/1/2006 4,875,000 615,000 4,260,000 Series A of 1998, . 4,10% to 4.70%, maturing 2/15/2015 9,780,000 5,000 9,775,000 Series of 1999, 4.15% to 5.60%, maturing 8/15/2020 4,995,000 4,995,000 Series of 2000, . 5.10% to 5,70%, maturing 8/15/2018 9,995,000 9,995,000 23,795,000 14,990,000 1,210,000 37,575,000 General Obligation Notes, . Series A of 1998, Variable rate, maturing 1/2/2001 10,000,000 10,000,000 Series of 1999, Variable rate, maturing 2/1/2018 5,000,000 175,000 4,825,000 . 15,000,000 0 10,175,000 4,825,000 $ 38,795,000 $ 14,990,000 $ 11. 385, 000 $ 42,400,000 . - 16 - . . . . . . . . . . . " "",,., ~. '~ " ."':"J ~ "~ " )" ,,'^ ,,~-- .~, , '-, . . ~- . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 6. General obligation bonds and notes payable (Cont'd.) Total scheduled debt service payments for all general obligation debt as of June 30, 2000 are as follows: Year Total Principal Interest 2000-2001 $ 3,429,773 $ 1,435,000 1,994,773 2001-2002 3,417,433 1,500,000 1,917,433 2002-2003 3,634,560 1,775,000 1,859,560 2003-2004 3,635,432 1,850,000 1,785,432 2004-2005 3,637,109 1,930,000 1,707,109 2005 and thereafter 47,000,889 33,910,000 13,090,889 Totals $ 64.755.196 $ 42.400.000 $ 22,355.196 In November 1999, the District borrowed $ 4,995,000 through the issuance of General Obligation Bonds, Series of 1999. Interest on these bonds range from 4.15% to 5.60% and mature from 2001 through 2020. The net proceeds of the bonds were used to finance the cost of planning, designing, constructing and equipping of high school projects and capital improvements to District athletic facilities. In March 2000, the District borrowed $ 9,995,000 through the issuance of General Obligation Bonds, Series 2000, Interest on these bonds range from 5.10% to 5.70% and matures from 2001 through 2018. Net proceeds from these bonds will be used for alterations, additions and/or renovations to the existing high school, including technology, furnishings and equipment! capital improvements to District's athletic facilities and capitalizing a portion of interest in the bonds, Total interest paid on all General Obligation Debt for the year ended 2000 approximated $ 1,513,000 of which $ -0- was capitalized as construction projects. June 30, part 0 f 7. Compensated absences At June 30, 2000, the General Long-Term Debt Group of Accounts includes a liability for compensated absences of $ 523,307. Payments for compensated absences are made through General Fund expenditures in the year the absence is used or the employee retires. When an employee retires with unused compensated absences, the District's payout policy is as follows: Emergency and personal - no payout required - 17 - , ~,,- :1' - ":". ^-"= ",'^" ,-;/_~",,:", U-k'-'^",,'~" . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 . 7, Compensated absences (Cont'd,) Vacation (administrative days (not to exceed 5 separation personnel days) are only) paid - unused vacation at the time of . Sickness - no payout required Personal days - unused personal days are paid at a rate equal to the substitute teachers (not to exceed 5 days) average rate paid to . Retirement with at least seven years of service - retiring professional employees with at least seven consecutive years of District employment immediately prior to retirement are eligible to receive a severance payment equal to $ 150 times the number of continuous years of service to the District up to a maximum amount of $ 3,000 (20 years) . . Retirement with 30 or more years of service - retiring full time professional employees with at least 30 years of experience, including at least 15 years with the District, may be entitled to a retirement incentive bonus of between $ 1,000 and $ 10,000 depending on age and total years of experience. Changes in compensated absences were as follows: . Balance July 1, 1999 Net Increase (Decrease) Vacation pay Severance payments Retirement incentives $ 9,893 388,832 155,016 $ 2,130 (25,029) (7,535) Totals $ (30,434) $ 553,741 . 8. Lease commitments Balance June 30, 2000 $ 12,023 363,803 147,481 $ 523,307 At June 30, 2000, the District was leasing photocopying machines pursuant to various lease agreements which are being accounted for as operating leases. Total lease rental payments during the year ended June 30, 2000 were $ 54,717, Minimum net lease rental payments for future periods are expected to be as follows: . . 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 $ 48,073 28,883 26,855 23,123 9,695 - 18 - . "'-",,-,;."0 --.~ , '- ~ ,'- " -"" -- ,',,,- "" ~ ""-,,,~., , "",~' -'" ;';"';:ij . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 9. Pension plan . The District contributes to The Public School Employees' Retirement System (the System), a governmental cost sharing multiple-employer defined benefit pension plan. The plan is under the authority of the Public School Employees' Retirement Code (the Code), as amended. The plan provides retirement and disability, legislative mandated ad hoc cost-of-living adjustments, and healthcare insurance premium assistance to qualifying annuitants. The System issues a comprehensive annual financial report that includes financial statements and required supplementary information for the plan. A copy of the report may be obtained by writing to The Public School Employees' Retirement System, P.O. Box 125, Harrisburg, PA 17108-0125. . . The contribution policy is established by the Code and requires contributions by active members, employers and the Commonwealth. Active members are required to contribute 5.25 percent of their qualifying compensation if they joined the system prior to July 22, 1983, and 6.25 percent if they joined on or after that date. Contributions required of employers are based upon an actuarial valuation. . For the fiscal year ended June 30, 2000 the employer contribution rate was 4.61 percent of covered payroll, composed of 4.36 percent for pension benefits and .25 percent for health insurance premium assistance. The District's contributions to PSERS for the years ending June 30, 2000, 1999 and 1998 were $ 515,379, $ 656,559 and $ 938,331, respectively, Those amounts are equal to the required contribution for each year. . 10, Management services . The cafeteria facilities of the District were operated by a third party vendor. Under the terms of the contract, the vendor provides for the operation and maintenance of food services as required by law, with the policies subject to the approval of the District. Operating costs, management fees and administrative costs are billed monthly to the District. 11. Other post-employment retirement benefits . The District offers one post-employment benefit to retired professional employees other than pension benefits as discussed in Note 9. For employees with twenty or more years of service to the District, the District will pay the basic medical insurance premiums for five years (excluding family coverage) following retirement, This benefit amounted to approximately $ 49,000 during the year ended June 30, 2000 and covered 27 eligible retired employees. The District does allow other employees not eligible for this benefit to remain in its group medical insurance plan upon payment by the retired employee of the cost of such coverage. . - 19 - . ,,'1 _-,_', J:. '. . ~ ~ __, ;,;.,--,.-,0,''''''''",,,",' ~, ,,-- ,,,,o~'- {', .-" ,-, '-'ii! . . EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 12, Risk management . The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. 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 purposes of State unemployment compensation laws, the District has elected not to be covered by the pennsylvania Unemployment Compensation Fund. Any unemployment claims are paid by the District on a quarterly basis as incurred. . The District is a member of a group of School Districts who have joined together to self-insure their workers' compensation exposure. The District pays annual contributions to the group based on a formula utilizing the District's own claim experience and annual payroll. Claims in excess of the District's retention experience are paid by a Central Fund wi thin the group and, if necessary, by an insurance company carrying excess liability coverage. ,. 13. Commitments and contingencies The collective bargaining agreement between the District and the teaching staff expired on August 31, 2000. As of October 12, 2000, no new contract has been approved. . In the normal course of preparing for the subsequent school has awarded bids for various supplies, fuel contracts, commitments in excess of routine requirements have been made year, the District etc. No major by the District. . The District participates in numerous state and federal grant programs which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and review by the grantor agencies; therefore, any findings or adjustments by the grantor agencies could have an effect on the recorded grants receivable and/or deferred grant revenues, and on the related grant revenues and expenditures. . As part of its ongoing capital projects, the District has entered into contract commitments totaling approximately $ 3,422,000 for various construction and improvement proj ects at June 30, 2000. In addition, the District's School Board has accepted bids on new construction projects at the high school, with total costs of approximately $ 17,539,000, . - 20 - . ," . . . . . . . . . . . -,c '.--,-"-. - ~,-- ",-,,-' "C-.h-' --"I ""'t,,! ",'" -.,--'-' EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2000 The District is contingently liable for repayment of East Pennsboro School District Authority Revenue Bonds, Series of 1965, 1968 and 1973. Those issues were refunded by the deposit of funds into an irrevocable escrow account in amounts sufficient to retire the bonds and interest when due. Because of the refunding, these bonds are not included as general obligation debt on the District's balance sheet, At June 30, 2000, the amount of Authority Bonds still outstanding totaled $ 1,310,000. The District, during the normal course of business, is subject to numerous disputes and claims. At June 30, 2000, the District is named as a party in actions for which the potential liability cannot presently be determined. District management feels that the actions are generally without merit and they intend to vigorously contest the claims. It is management I s opinion that the ultimate outcome of the actions will not have a material affect on the District's financial position. - 21 - :';'", , .""";i'~.:,,d.':";~ -":,-i . ~~~"I ~~'"'::.::"-;:?~~ ",U ','1,1" ,T'RY --,,1"\ '" I'" . , J ~ j ~ "( ....). C", I , " . j. ,'~..4 . , ,,;~L}ND ()-iUf\!iV ; ".},JNSYL' \lfl.~~'f I I tr~,t Xl!", . . 4 . (VG~ fi ~ ~ ~ __ 0 19 ~-U ~ ~ p::: -r e t f!.- J0 '" ~ , :~ . . . . . .