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Jll 99, m m m BOYER & RITTER CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS CAMP HILL • CARLISLE • LEWISTOWN CHAMBERSBURG • STATE COLLEGE ®• I I r) 10 SHIPPENSDURG AREA SCHOOL DISTRICT FINANCIAL REPORT JUNE 30, 1999 10 10 I0 v J CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 1 -2 FINANCIAL STATEMENTS Combined Balance Sheet - All Fund Types and Account Groups 3 -6 Combined Statement of Revenue, Expenditures and Changes in Fund Balances - All Governmental Fund Types 7 -8 fq Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 9 Statement of Revenue, Expenses and Changes in Retained Earnings(Deficit)/Fund Balance - N Proprietary Fund Type and Non-Expendable Trust Fund 10 Statement of Cash Flows - Proprietary Fund Type and Non-Expendable Trust Fund I I 4A Notes to Financial Statements 12- 25 REQUIRED SUPPLEMENTARY INFORMATION 26 SUPPLEMENTARY INFORMATION General Fund Schedule of Revenue 27 - 28 M Schedule of Expenditures 29 - 34 M V n CONTENTS A SUPPLEMENTARY INFORMATION (CONTINUED) Special Revenue Funds Combining Balance Sheet 35 Combining Statement of Revenue, Expenditures and Changes in Fund Balances 36 A Combining Statement of Revenue, Expenditures and Changes in Fund Balances - Budget and Actual 37- 38 Cafeteria Fund Schedule of Revenue 39 Non-Expendable Trust Fund Combining Balance Sheet 40- 41 Combining Statement of Revenue, Expenses and Changes in Fund Balance 42 - 43 Agency Funds Combining Balance Sheet 44 Student Activity Funds Combining Balance Sheet 45 49 Statement of Cash Receipts and Cash Disbursements - Earned Income Tax Fund 46 Independent Auditor's Report on Compliance and on to Internal Control over Financial Reporting Based on an Audit of General Purpose Financial Statements Performed in Accordance with Governnreni decliting Slanclarcly 47 - 48 Ilv ?I CONTENTS n SUPPLEMENTARY INFORMATION (CONTINUED) Independent Auditor's Report on Compliance with Requirements Applicable to the Major Program and h on Internal Control over Compliance in Accordance with OMB Circular A-133 49 - 50 Schedule of Findings and Questioned Costs 51 - 52 Schedule of Expenditures of Federal Awards 53 - 56 Notes to Schedule of Expenditures of Federal Awards 57 Summary Schedule of Prior Year's Audit Findings 58 B0 11it 11 L ,O ® BOYER & RITTER CERTIFIED Pciu.lc Accncvnvvrs Aw Cossclas%nrs INDEPENDENT AUDITOR'S REPORT Board of School Directors Shippensburg, Area School District Shippensburg_ Pennsylvania We have audited the accompanying general purpose financial statements of the Shippensburg Area School District, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the School 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 Stcnulardls, 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As explained in Note I to the general purpose financial statements, the School District has recorded General Fixed Assets at values as determined by an Industrial Appraisal Company Report. Under lA generally accepted accounting principles, General Fixed Assets should be recorded it cost or estimated historical cost. In our opinion, except for the departure from generally accepted accounting principles described in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Shippensburg Area School District, as of June 30, 1999, and the results of its operations and the cash flows of its proprietary fund type and non-expendable trust fund for the year then ended in conformity with generally accepted accounting principles. The Year 2000 supplementary information on page 26 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. + We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that the Shippensburg Area School District is or will become Year 2000 compliant, that Shippensburg Area School District's Year 2000 rcntediation efforts will be successful in whole or in part, or that parties with whom Shippensburg Area School District does business are or will become Year 2000 comp) i ant. CAMP bDl.r_ C:vlcl.lsl.lt CIIAMISERSMAK; LEWIST WN $'I':\'I'1: Col.l.rolt All Indrpcndrmly rpc[III l MCII U,cr •A the Malta trey N*CI%V0Fk r Kbdd,dde sm-we MrnuRh JISM 6ncm:mun:d 0 17 In accordance with Government Aedilin8 ,Slandarth, we have also issued a report dated August 6, 1999, on our consideration of the Shippcnsburg Area School District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Shippcnsburg Area School District taken as a whole. The accompanying Schedule of Expenditures of Federal Awards, as required by the U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Prrft Org(mizations, and the schedules on pages 27 through 46 are presented for purposes of additional analysis and are not a required part of the genera( purpose financial statements. Such information has been subjected to the auditing procedures applied in O 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. 0 Chambersburg, Pennsylvania August 6, 1999 10 I :J 0 HE SIIIPPENSBURG AREA SCHOOL DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS June30, 1999 041 Governmental Ivnd 'types Special Revenue Capital Project Capital ASSETS General Athletic Reserve Construction Cash S 151.358 S 46.755 S 4.554 S - Investments 4.399.952 - - 2.459,994 A Receivables Tares - net 338.811 - - - Due from other funds 47.362 - 424.999 - Federal subsidies 65.833 - - State subsidies 141.319 - Other 61,481 - - - A Inventories - - - Land and site improvements - - - Buildings and improvements Furniture and equipment - net of accumulated depreciation in Enterprise Fund - - - Amount to be provided for retirement of general long-term debt - Amount to be provided for compensated absences - - - - Total assets S 5.206.116 S 46.755 S 429.553 S 2,459.994 0 See Notes to Financial Statements. OI Q Q 3 n i p G IID Ifi ;i Fiduciary Fund Types Proprietary Trust and Agency Account Groups Pund'l'ypc Non- General General Totals Enterprise Gspendable Fixed Long-Term (Mcmomndum Cafeteria Tntst Agency Assets Debt Only) S 5.257 S 2.050 S 691.248 S - S - 3 901.222 - 59.471 10.000 - - 6'929,417 338.811 412 432 - - - 473,205 22.323 - - - - 88,156 1,824 - - - - 143,143 61,481 27.050 - - - - 27,050 51,396 - 51,396 38,043.526 - 38,043,526 65.770 - - 5.340,326 - 5.406.096 _ 17,027.355 17.027,355 - 604,673 604,673 S 122.636 S 61.953 S 701248 S 43.435.248 S 17,632.028 S 70.095,531 4 SIIIPPENSBURG AREA SCHOOL DISTRICT COMBINED BALANCE SHEET -ALL FUND TYPES AND ACCOUNT GROUPS June 30, 1999 Governmental Fund Types Special Revenue Capital Projecl Capital LIABILITIES AND FUND EQUITY General Athletic Reserve Construction Liabilities Due to other funds S 425.842 S - S - - $ Intergovernmental - - - Accounts payable 396,468 - 8,953 461.827 Deferred revenue 41.590 - - - Accrued expenses Salaries and benefits 681,097 - - - Payroll withholdings 235.988 - - - Amount available for student activities - Bonds payable - Compensated absences payable - - - Capital leaseobligation - Total liabilities 1,780.985 - 8.953 461.827 Fund Equity Contributed capital Investment in general fixed assets Unreserved retained deficit Fund Balances Reserved for Athletic Capital reserve Construction Reading Nan-expendable, trust Unreserved Total fund balances Total fund equity Total liabilities and fund equity See Notes to Financial Statements. - 46.755 - 420.600 - 1,998.167 3,320 3.421.811 - - - 3.425.131 46.755 420,600 1,998,167 3.425.131 46,755 420,600 1,998.167 S 5.206.1 16 S 46.755 S 429.553 S 2,459,994 5 C] *I 61 ®1 ®1 411 *1 151 tN_ .. e 0, Fiduciary Fund Types Propricury T7axl and Agency Account Groups Fund'fype Noll- General General Totals Enterprise Expendable Fixed Long=Term (Memomndum Cafeteria Trust Agency Assets Debt Only) $ 20.336 S - S 27.027 S - S S 473.205 9 _ - 474,173 - - 474,173 1.025 632 - - - 868,905 13.001 - - - - 54.591 681.097 143.387 - - 379,375 56,661 - - 56.661 16,945.000 16,945,000 604.673 604,673 82,355 82,355 34,362 632 701.248 - 17.632.028 20,620,035 0 281.401 - - - - 281,401 43.435.248 43.435.248 (193.127) - - - - (193.127) 0 46.755 420,600 1.998,167 3.320 61,321 - - - 61,321 3.421.811 61.321 5.951,974 88.274 61.321 - 43.435.248 S 122.636 S 61.953 S 701248 S 43.435.248 $ 17.632.028 S 70.095.531 G AI SUIPPENSBURG AREA SCIIOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES-ALL GOVERNMENTAL FUND TYPES Year Ended June 30, 1999 Governmental Fund Types Local sources Stale appropriations Federal appropriations Total revenue Expenditures Instructional Support services Operation of non-instructional services Debt service Capital outlay Total expenditures Excess (deficiency) of revenue over expenditures Other Financing Sources (Uses) Operating transfers in Operating transfers out Refund of prior years' expenditures Interest Proceeds from sale of equipment Other financing sources - net Excess (deficiency) of revenue and other financing sources over expenditures and other financing uses Fund Balances - July 1. 1998 Fund Balances - June 30. 1999 See Notes to Financial Statements. Special Revenue Capital General Athletic Reserve S 11.437.541 S 52.353 S 50 9.106.322 451.268 20.995,131 52.353 50 M1 P? MI 12.644.466 5,894.067 - - r) 232.312 144.173 - 1.909.665 - - 8,953 20.680,510 144,173 8,953 C) 314.621 (91.820) (8,903) 82.749 (82.749) - ?y 693 323,528 1.452 - 242.924 82.749 Q 557.545 (9.071) (8.903) 2,867.586 55.826 429.503 v S 3.425.131 S 46.755 S 420.600 7 V CJ n Capital Project Totals (Memorandum Construction Only) S S 11.489.944 - 9.106.322 A _ 451.268 - 21.047.534 - 12.644.466 A - 5.894.067 4.696 381.181 - 1,909.665 8,140.409 8.149.362 8.145,105 28.978.741 (8,145.105) (7.931207) 82.749 - (82.749) - 693 356.760 680,288 1.405 2.857 358,165 683.838 (7.786.940) (7.247,369) 9.785.107 13.138.022 S 1.998.167 $ 5.890.653 ev N `' 8 SIIIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL-GENERAL FUND Year Ended June 30, 1999 Variance Favorable Actual IM IA gM r Ito lei v Local sources State appropriations Federal appropriations Total revenue Expenditures Instructional support services Operation of non-instructional services Other Total expenditures Excess (deficiency) of revenue over expenditures Other Financing Sources (Uses) Operating transfers out Refund of prior years' expenditures Interest Proceeds from sale of equipment Other financing sources - net Excess (deficiency) of revenue and other financing sources over expenditures and other financing uses Fund Balance -July 1. 1998 Fund Balance - June 30. 1999 See Notes to Financial Statements. S 12920,008 S 11.437.541 S 517.533 8,925.412 9.106.322 180.910 354.025 451:268 97,243 20.199.445 20.995.131 791686 12 983,169 11,644,466 338.703 5.995.570 5,894.067 101,503 235.2110 232,312 2.888 1967.347 1.909.665 57.682 21.181.286 211,GRU.510 500,776 (981.841) 314.621 1,296.462 (82.749) (821749) - 693 693 225.000 323.528 98.528 - 1.452 1,452 142,251 242.924 _ 100.673 S (839,590) 557,545 5 1,397,135 2,867.586 S 3.425.131 9 0 I'll) 1.0 Ill «1 li l u 1 'J SIIIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS (DEFICIT)/FUND BALANCE. - PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND Year Ended June 30, 1999 Proprietary Fiduciary Fund Type Fund Type Totals Enterprise Non-Expendable (Memorandum Cafeteria Trust Only) Operating Revenue Sales S 544.453 S - S 544.453 Operating Expenses - 976 33 Donated commodities used 33.976 , Food and milk 324.129 - 324,129 taxes and benefits Labor 404.062 - 404.062 , Professional and technical services 3.717 - 3,717 21.706 21,706 Supplies 258 3 3,258 Trash removal . 066 1 Extermination fees 1.066 - , 131 - 131 Communications 780 - 8 - 8,7R0 Equipment repairs and maintenance . 534 - 534 Advertising 810 Travel 810 - Dues and fees 990 - 990 28.351 - 28,351 Depreciation - 3,632 3,632 Scholarships 510 831 3.632 835,142 Total operating expenses . Operating loss (287.057) (3.632) (290,689) Nonoperating Revenue 1.912 3.251 5,163 Interest Federal and state subsidies 200.065 - 200.065 Value ofdonatedcommodities 37.324 - 37.324 Social security subsidy 12.129 12.129 Retirement subsidy 7.884 - 7,884 - 1.535 1,535 Contributions 314 259 4.786 264,100 Total nonoperating revenue . Net income (loss) (27.743) 1.154 (26,589) Retained Earnings(Detici0/Fund Balance - July 1. 1998 (165.384) 60.167 (105.217) Retained Famings(Delicit)/Fund Balance - June 30.1999 S (193.127) S 61.321 S (131,806) See Notes to Financial Statements. 10 0 SHIPPENSRURO AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE AND D Year Ended June 30, 1999 Proprietary Fund"type Enterprise Cafeteria I ti 10.6 1100 111 40 111 v 111 *' ION-EXPENDARLF.TRUST FUND Fiduciary Fund Type Totals Non-lispendablc (Memorandum Trust Only) Cash Flows From Operating Activities 7 S 63 ) S (3 -094689) ( ) $ 287.(15 ( _ . Operating loss Adjustments: 28.351 - 28.351 Depreciation 324 37 37 304 USDA donated commodities . Changes in assets and liabilities: (Increase) decrease in: - (2.229) (2.229) Investments (24.559) - (24.559) Receivables (3.847) ' (3 847) Inventories (Decrease) increase in: 23.761 (2.568) 1.193 Payables Net cash used in operating activities (226.027) (8,429) (234.456) Cash Flows From Noncapital Financing Activities 200 065 Federal and state subsidies 200.065 , 129 12 Social security subsidy 2.129 1 . 7 884 Retirement subsidy 7,884 ' 1.535 1,535 Contributions Net cash provided by noncapital 078 220 1,535 221.613 financing activities . Cash Flows From Investing Activities - 5 1 I_) Purchases of property and equipment (5.112) 251 3 . 5.163 1.912 . Interest Net cash provided by (used in) SI investing activities (3.200) 3,251 Net decrease in cash (9.149) (3.643) (12.792) 14.406 5.693 20.099 Cash -July I, 1998 S 5.257 S 2.050 S 7.307 Cash -June 30. 1999 See Notes to Financial Statements. if iw Iv 10 I* 1011 1• lu lu SIIIPPENSBURC AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies The accounting policies of the Shippensburg Area School District conform with generally accepted accounting principles as applicable to governmental units. The following is a summary of the School District's significant accounting policies: Reportinu Entity: The Shippensburg Area School District's financial statements include the operations of all organizations for which the School Board exercises oversight responsibility. Oversight responsibility is demonstrated by financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters. The Shippensburg Area School District is the lowest level of government which has oversight responsibility and control over all activities related to public school education in the Commonwealth of Pennsylvania. The District receives funding from local, state and Federal government sources and must comply with the requirements of these funding-source entities. However, the District is not included in any other governmental "reporting entity" since the School Board members are elected by the public and have decision-making authority, the power to designate management, tine ability to significantly influence operations and primary accountability for fiscal matters. Additionally, the District does not exercise oversight responsibility over any other entities, and consequently, no other entities have been included in the accompanying financial statements. Basis of Presentation - Fund Accounting: The accounts of the School District are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue and expenditures or expenses. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and tine means by which spending activities are controlled. The various funds are summarized by type in the financial statements. The following fund types and account groups are used by the School District: Governmental Fund Types Governmental Funds are those through which most governmental functions of the School District are financed. The acquisition, use and balances of the School District's expendable financial resources and tine related liabilities (except those accounted for in Proprietary and Payroll Funds) are accounted for through Governmental Funds. The measurement focus is upon determination of changes in financial resources rather than upon net income determination. 12 <1 SIIIPPENSBURC AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) Basis of Presentation - Fund Accounting (Continued): Governmental Funds: General Fund The General Fund is used to account for all financial transactions not accounted for in another fund. Revenue is primarily derived from local property, per capita and occupation 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 non-instructional services are accounted for in this fund. Special Revenue Funds Special Revenue Funds are used to account for specific governmental revenue (other than major capital projects) that are legally restricted to expenditures for specified purposes. 191 The Athletic Fund is authorized by Section 511 of the Public School Code of 1949 to account for the revenue and expenditures of athletic activities. The Capital Reserve Fund (Section 2932 is authorized by P.L. 145, Act of April 30, 1943, known w as Section 2932 School Laws of Pennsylvania) accounts for (1) monies transferred during any fiscal year from appropriations made for any particular purpose which may not be needed, and (2) surplus monies in the General Fund of the School District at the end of any fiscal year. This fund is included in the financial statements as a Special Revenue Fund. Capital Project Fund V The Capital Project Fund is used to account for financial resources available for the acquisition or construction of major capital facilities (other than those financed by proprietary and trust funds). d 13 O SIIIPPENSDURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Politics (Continued) Basis of Presentation - Fluid Accounting (Continued): Proprietary Fund Types Proprietary Funds are used to account for the School District's ongoing activities which are similar to to those often found in the private sector. The measurement focus is upon determination of net income and capital maintenance. Proprietary Fund: 0 Enterprise Fund The Cafeteria Fund accounts for all revenue and expenses pertaining to cafeteria operations since such operations are financed and operated in a manner similar to a private business enterprise. It is the intent of the governing body that the cost of providing such goods or services to the students on a continuing basis be financed or recovered primarily through user charges or cost reimbursement plans. Fiduciary Fund Types Fiduciary Funds are used to account for assets held by the School District in a Trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. Fiduciary Fund: Trust and Agency Funds Trust and Agency Funds are used to account for assets held by the School District in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. Agency funds are custodial in nature and do not involve measurement of results of operations. Agency funds include the student activity fund, payroll fund and earned income tax fund. The Trust Fund includes the non-expendable scholarship funds. The Activity Fund accounts for the monies authorized by Section 511 of the Public School Code of 1949 for school publications and organizations. The Activity Fund is an Agency Fund but is separated from other Agency Funds because of legal requirements. 0 40 14 O SIIIPPENSBURC AREA SCIIOOL DISTRICT IN C) NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) Basis of Presentation - Fund Accounting (Continued): Account Groups: !I r„f General Fixed Assets Account Group This account group is used to record all property, plant and equipment of the School District except that which is accounted for in the Enterprise Fund. General Long-Term Debt Account Group A This account group presents principally the balance of long-term debt which is backed by the full faith and credit of the School District. Long-term debt accounted for in the Enterprise Fund is excluded. I Basis of Accounting: !l The District applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary funds apply Financial Accounting Standards Board (FASB) pronouncements, Accounting Principles Board (APB) opinions and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedures issued on or before November 30, 1989, unless those pronouncements conflict 0 with or contradict GASB pronouncements, in which case, GASB prevails. Basis of accounting refers to when revenue and expenditures are recognized in the accounts and reported in the financial statements. V All Governmental Funds utilize the modified accrual basis of accounting. Under this method, revenue is recorded when susceptible to accrual, i.e., both measurable and available. "Available" means collectible within the current period or soon enough thereafter to pay current liabilities. Such revenue items, which are accrued in the year to which they apply, are principally property taxes and inter-governmental revenue. V Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt which arc recognized when due. Disbursements for inventory-type items and prepaid expenses are considered expenditures at the time of purchase. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Agency Funds are also accounted for using the modified accrual basis of accounting. 15 10 10 SRIPPENSBURC AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) Q Basis of Accounting (Continued): The Cafeteria Fund uses the full accrual method of accounting: Furniture and equipment utilized by the Cafeteria Fund is recorded as fixed assets of that Fund (at 0 cost), and is depreciated therein on a straight-line basis over an estimated useful life of 12 years. The fixed assets, net of accumulated depreciation, are a component of retained earnings. Donated commodities received by the Cafeteria Fund are inventoried at estimated cost to purchase comparable products locally or at cost figures provided by the Federal government if comparable 9 products are not locally available. Inventories are valued on a first-in, first-out basis; remainder inventories at year-end are a component of retained earnings. The School District does not attempt to allocate "building-wide costs" to the Cafeteria Fund. Titus, General Fund expenditures which partially benefit the Cafeteria Fund (utilities, janitorial services, insurance, etc.) are not proportionately recognized within the Cafeteria Fund; similarly, the Cafeteria Fund does not recognize a cost for the building space it occupies (no rental-of-facilities expense). Budgets and Budgetary Accounting: ?I 0 The School District adopts an annual budget for the General Fund. The budget is maintained on a modified accrual basis by function and object, with expenditures controlled by line item. Appropriations lapse at the end of each year and must be reappropriated. The School Board approves budget transfers between and within departments of the School District's General Funds. Budgeted amounts are as originally adopted or as amended by the School Board at various times. Cash and Cash Equivalents: For purposes of the statement of cash flows, cash equivalents include time y deposits, certificates of deposit, and all highly-liquid debt instruments with original maturities of three months or less. Investments: Investments are stated at fair value, which approximates cost. Allowance for Estimated Uncollectible Taxes and Deferred Tax Revenue: The allowance for estimated r uncollectible taxes is based upon an historical estimate of delinquent taxes that will not be collected. Deferred tax revenue is based upon an historical estimate of delinquent taxes expected to be collected subsequent to the first sixty days of the following fiscal year. III 16 f% A SHIPPENSBURG AREA SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) A Use of Estimates: The preparation of general purpose financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. General Fixed Assets: A General Fixed Assets are recorded at replacement values as determined by an Industrial Appraisal Company Report dated December 31, 1998, except for land, which is recorded at cost. Generally accepted accounting principles require General Fixed Assets to be recorded at historical or estimated historical cost. Original-purchase and replacement equipment are charged to the appropriate General p/ Fund expenditure account as prescribed by the Pennsylvania Department of Education. No depreciation has been provided on General Fixed Assets. General Lone-Tenn Debt: 1 @0 The General Long-Term Debt Account Group consists of. 1. Sick leave and vacation payable. 2. Outstanding General Obligation Bonds - Series of 1996 issued on July 15, 1996. 3. Outstanding General Obligation Note - Series of 1997 (refinancing of Series of 1991) issued on January 16, 1997. 4. Outstanding General Obligation Bonds - Series of 1997 issued on December 3, 1997. 5. Signet Leasing - computer system. 4 Totals- Memorandum Only: The columns on the combined financial statements are not necessary for a fair presentation of the financial statements in conformity with generally accepted accounting principles. They are presented to facilitate financial analysis. Aggregation of this data is not comparable to a consolidation as interfund eliminations have not been made. Its Note 2. Cash and Investments The cash and investment policies of the District are governed by statute. Cash must be held in insured depositories approved by the School Board and must be fully collateralized. Permissible investments V include United States Treasury Bills and short-term obligations of the United States Government or its agencies or instrumentalities, shares of an investment company whose investments are restricted to the preceding categories and which are invested in the above government instruments, and fully-insured or collateralized certificates of deposit issued by banks or savings and loan associations. 17 a A SIIIPPENSUURC AREA SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 2. Cash and Investments (Continued) Cash The District's carrying amount of cash deposits at June 30, 1999, for all funds amounted to $969,968. Of the total bank balance of $1,657,447, $217,645 was covered by Federal depository insurance. The of remainder of $1,439,802 is covered by pooled collateral maintained in conformity with Act 72. The carrying amount of cash and investments as presented on the balance sheet includes petty cash of $725. Act 72 is an act standardizing the procedures for pledges of assets to secure deposits of public finds with • banking institutions pursuant to other laws; establishing a standard rule for the types, amounts, and valuations of assets eligible to be used as collateral for deposits of public funds; permitting assets to be pledged against deposits on a pooled basis; and authorizing the appointment of custodians to act as pledgees of assets. m• ®• 1• I• Investments Certain of the District's investments which may be classified (under standards set by the Governmental Accounting Standards Board) are either insured, registered, or securities which are held by the District's agent in the District's name. Accordingly, all such items are classified in Category I. Investments may also be categorized as Category 2, which is defined as uninsured or unregistered investments for which the securities are held by the broker's or dealer's trust department or agent in the District's name, and Category 3, which is defined as uninsured or unregistered investments for which the securities are held by the broker or dealer or by its trust department or agent but not in the District's name. The District has no investments which would be classified in Categories 2 or 3. However, the District does have investments which are not in any of the three defined categories because securities are not used as evidence of the investment. The District's investments are categorized below to give an indication of the level of risk assumed at June 30, 1999 (based on bank balances): Category Non- 2 7 Categorized U. S. Government Securities $ 4 399,952 $ $ $ Mutual Funds - 2,459,994 $ 4,399.952 $ $ $ 2,459,994 18 i r ti 6 A a SIIIPPENSRURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 3. Property Taxes Property taxes are levied on July 1. Taxes are collected at a discount until August 31, at their face amount from September I until October 31, and include a penalty thereafter. The taxes are billed and collected by elected tax collectors. The County Tax Bureaus collect delinquent real estate taxes for the School District. Note 4. Taxes Receivable and Deferred Revenue • A summary of the taxes receivable and related accounts are as follows: Amount Uncollected taxes - rea! estate $ 295,658 Uncollected taxes - personal 43,153 ~ Taxes Receivable - Net $ 338,811 Taxes to be collected within 60 days $ 355,624 Deferred revenue - delinquent taxes 10,129 i Allowance for uncollectible taxes (26,942) Taxes Receivable - Net $ 338,811 Deferred Revenue O Delinquent taxes $ 10,129 Grants 26,040 COBRA/health insurance 5,421 Donated commodities - Cafeteria Fund 13,001 $ 54,591 Subsequent Event: On July 21, 1999, the District collected $201,455 of delinquent real estat e taxes from the sale of the Microwood Property. The receipt of the funds decreased both deferred revenue and delinquent taxes by a similar amount. This collection resulted from the purchase of the property by r Floffinan Mills during the year ended June 30, 1999. 19 lA 1 09 IA Is Is is 10 Q1 SIIIPPENSBURC AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 5. Accrued Salaries and Benefits Accrued salaries and benefits at June 30, 1999 consist of the following: Accrued salaries Retirement Social security Workers' compensation Amount $ 602,585 27,895 46,098 4,519 $ 681,097 Accrued salaries represent teachers' salaries earned during the 1998-99 school year which will be paid subsequent to June 30, 1999. Accrued retirement represents the public school employees' retirement board contribution for the second quarter of calendar year 1999, including the portion pertaining to accrued salaries at June 30, 1999. Accrued social security represents the District's liability arising from accrued salaries at June 30, 1999. Note 6. Cafeteria Fund Inventory The composition of Cafeteria Fund inventory is as follows: Materials and supplies Purchased food Donated food Amount $ 4,499 9,550 13,001 $ 27,050 20 A SIIIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 7. Fixed Assets A A summary of changes in fixed assets for the year ended June 30, 1 999 follows: July 1, 1998 Changes June 30, 1999 General Fixed Assets A Land and site improvements $ 51,396 $ $ 51,396 Buildings and improvements 37,602,469 441,057 38,043,526 Furniture and equipment 5,324,907 15,419 5,340,326 $ 42,978,772 $ 456,476 $ 43,435,248 A Enterprise Fund Fixed Assets Machinery and equipment $ 356,567 $ 5,112 $ 361,679 Accumulated depreciation (267,558) (28,351) (295,909) $ 89,009 $ (23,239) $ 65,770 N The net changes in fixed assets are combinations of new assets purchased and increases in the appraisal values of all assets. However, the balances in the General Fixed Assets do not reflect the increases in the insurable values for construction-in-progress and renovations to the Junior and Senior High Schools for which the District spent approximately $13,000,000 over the past two years. These increases will be reflected as of June 30, 2000, as a consequence of that fiscal year's industrial appraisal. Note 8. General Long-Term Obligations A summary of the reporting entity's general long-term obligations as of June 30, 1999, and transactions y during the year then ended follows: Balances July 1, 1998 Increase Decrease Balances June 30, 1999 General Long-Term Obligations: N General Obligation Bonds - Series of 1996 $ 4.990,000 $ $ 5,000 $ 4,985,000 General Obligation Note - Series of 1997 1,819,000 939,000 880,000 General Obligation Bonds - v Series of 1997 11,080.000 - 11,080,000 Signet Leasing - computer system 160,580 78,225 82,355 Compensated absences payable 535,680 68,993 - 604,673 $ 18,585,260 $ 68.993 $ 1,022,225 $ 17,632,028 0 21 .1 (D 1e!) IA IA is iw 1• Is Ito it Iv SIIIPPENSRURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 8. General Long-Term Obligations (Continued) General Obligation Bonds - Series o1' 1996 - On July 15, 1996, the School District issued General Obligation Bonds 'in the principal amount of $4,995.000, The bonds bear annual interest with rates ranging from 4.60% to 515%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging front $5,000 to $825,000 through November 15, 2006. General Obligation Note - Series of 1997 - On January 16, 1997, the School District issued a General Obligation Note in the principal amount of $2,739,000. The note bears an annual interest rate of 411%. Interest is payable semi-annually on September I and March I, and the note matures serially from $880,000 to $939,000 through March I, 2000. General Obligation Bonds - Series of 1997 - On December 3, 1997, the School District issued General Obligation Bonds in the principal amount of $11,080,000. The bonds bear annual interest with rates ranging from 4.00% to 5.10%. Interest is payable semi-annually on November 15 and May 15, and the bonds nature serially in amounts ranging from $100,000 to $1,645,000 through November 15, 2012. Signet Leasing - computer system - On August 31, 1995, the School District entered into a capital lease for certain computer equipment costing $373;288 which is included in the General Fixed Asset Account Group. The lease bears an annual interest rate of 5.28%. Equal, annual payments of $86,703, including interest, are due through August 31, 1999. The following is a schedule of principal and interest to service long-tern bond, note, and capital lease obligations of the School District: Year Principal Interest Total 1999-2000 $ 1,067,355 $ 795,844 $ 1,863,199 2000-2001 r .J,000 749,446 1,719,446 2001-2002 1,015,000 704,961 1,719,961 2002-2003 1,065.0(10 657,048 1,722,048 2003-2004 1,115,0()0 605,565 1,720,565 Thereafter 11,795,000 2,614,518 14,409,518 $ 17.027.355 $ 6.127,382 $ 23,154,737 22 LLLTA 0 ry SHIPPENSBURC AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 9. Compensated Absences H Upon retirement, employees are paid for unused sick days at rates varying with length of service and job classification subject to various maximums. These amounts are recorded as expenditures in the period taken or in the year of separation. The amount presented in the general long-term debt account group is an estimate. 9 All teachers and administrators retiring with at least 25 years of service in the Pennsylvania Public School Employees' Retirement System (PSERS) and 15 years of service in the District, are paid by the District for 40% of their accumulated unused sick days (to a maximum of 100 days) at the rate of $50 per day. ® Support staff with at least 15 years of service with PSERS and the District will receive payment for 100% of their accumulated unused sick days at $50 per day, up to a maximum of $4,500. Support staff supervisors with at least 25 years of service with PSERS and 15 years of service with the District receive payment for 100% of their unused sick days at a rate of $50 per day up to a maximum of $5,500. . For the year ended June 30, 1999, benefits attributed to employees retiring during the 1998-99 year amounted to $30,020 for 9 participants. Note 10. Due To/From Other Funds Individual fund receivable and payable balances at June 30, 1999 were as follows: Itl General fund Payroll Ethel Clever scholarship fund Capital reserve Cafeteria Earned income tax fund 0 Receivables Payables $ 47,362 $ 15,277 432 424,999 - 412 20,336 - 11,750 $ 473,205 $ 473,205 23 O H SHIPPENSBURG AREA SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 11. Post-Employment Benefits Under the Consolidated Onmibus Reconciliation Act (COBRA), the District provides healthcare benefits to eligible former employees and their dependents. Requirements arc outlined by the Federal Government for this coverage. The premium plus a 2% administrative fee is paid in full by the eligible participant. This program is offered fitr it duration of up to 18 months or 36 months after an employee's termination date. At June 30, 1999, there were 20 participants covered under COBRA. Note 12. Participation in Risk Sharlug Pool The District is it participant in it risk sharing pool to provide workers' compensation coverage. The expense for this coverage for the 1998.94) year was $25.175, comprised of a self-insured retention of $5,683 and a contribution to the Central Fund of $19,192. Actual claims during the year are first paid out of the self-insured retention. Claims that exceed rite sell' insured retention are satisfied by the Central Fund. The Central Fund maintains excess insurance to cover any claims tl.at exceed $400,000 per accident. 'there are approximately 79 districts participating in the pool. If there is a deficiency in the pooled funds, each member is assessed it proportionate share. Upon withdrawal by an individual nicntber from rite pool, the lerminnting member has no rights to funds in the pool. Note 13. Defined-Iienclit Pension Plan Plan Description The School District contributes to the statewide Public School Employees Retirement System (the System), it governmental cost-sharing multiple-employer defined-benefit pension plan administered by the System. In addition to regular retirement benefits, the System also provides for disability and death benefits. Membership fn the System is mandatory for substantially all full-time public school employees in the Commonwealth of Pennsylvania (Commonwealth). State statutes assign the authority to establish and amend henclil provisions of the Pennsylvania Public School Employees' Retirement Code (the Code) to the Pennsylvania General Assembly. The Public School Employees' Retirement System issues it Publicly available financial report that includes financial statements and required supplementary information for the defined-benefit pension plan. That report may be obtained by writing to Public School Enq:loyees' Retirement System of Pennsylvania, P.O. Box 125, Harrisburg, Pennsylvania, 17108 or by calling 717-787-8510. M 24 0 n IA 10 10 10 B9 11:. SIIIPPENSBURC AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 13. Defined-Benefit Pension Plan (Continued) Funding Policv: The contribution policy is set by the Code and requires contributions by the active employees, School District and the Commonwealth. The current contribution rate for active employees joining the System before July 22, 1983 is set by law at 5.65% of their annual covered salary. For active employees joining the System on or after July 22, 1983, the rate of contribution is 6.25% of their annual covered salary. Prior to July 1, 1995, the School District and the Commonwealth shared equally the contribution rate. Effective July 1, 1995, the School District is required to pay the entire contribution rate. The School District will be 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), which is at least one half of the total School District rate. The School District's contributions to the Plan for the years ended June 30, 1999, 1998, and 1997 were $673,146, $932,303, and $1,106,696, respectively, which were equal to the required contributions for each year. Note 14. Risk Management The Shippensburg Area School District is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets and errors or omissions. Significant losses are covered by commercial insurance for all major programs. For insured programs, there have been no significant reductions in settlement coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. 25 0 11q 11A Is REQUIRED SUPPLEMENTARY INFORMATION IA IM r v I10 SHIPPENSBURG AREA SCHOOL DISTRICT n YEAR 2000 REQUIRED SUPPLEMENTARY INFORMATION The Year 2000 Issue is the result of shortcomings in many electronic data processing systems and other electronic equipment that may adversely affect the District's operations as early as fiscal year 1999. The Shippensburg Area School District has completed an inventory of computer systems and other electronic equipment affected by the Year 2000 Issue and that are necessary for conducting the School District's operations. The District has remedied all hardware problems encountered. A Financial reporting, tax collection, payroll, personnel and student record systems are provided by Effective Software Products of Chambersburg, Pennsylvania (ESP). ESP's president provided information on the status of ESP's Year 2000 compliance awareness, assessment, remediation, and validation of its systems. The District is relying on ESP's assurances as to the Year 2000 readiness of its !s financial reporting, tax collection, payroll, personnel and student records systems. Energy Management Systems have been updated with Year 2000 compliant controls and computers. Because of the unprecedented nature of the Year 2000 Issue, its effects and the success of related remediation efforts will not be fully determinable moil the Year 2000 and thereafter. Management cannot assure that the School District is or will be Year 2000 ready, that the School District's remediation efforts will be successful in whole or in part, or that parties with whom the School District does business will be Year 2000 ready. I0 V 26 D 0 O SUPPLEMENTARY INFORMATION no 1m 10 I n, 40 ?l '4 n1. SHIPPENSBURG AREA SCIIOOL DISTRICT GENERAL FUND- SCHEDULE OF REVENUE Year Ended tune 30, 1999 Revenue Local sources Real estate laves Current S 7.343,528 Interim 65.380 Public utility tax 129,161 Payments in lieu ollaxcs 6,906 Current per capita taxes 679 50,250 511 50.250 Occupational privilege tax 35.550 Earned income tax 1,213,202 Occupation tax 1,157.374 Real estate transfer taxes 207,044 Delinquent real estate taxes 728.940 Delinquent per capita taxes 679 6,516 511 6.516 Delinquent occupation tax 168,546 Rentals 980 Tuition 8,898 Contributions 4,660 Reading recovery 8.000 Miscellaneous 245,840 Total revenue from local sources 11.437,541 State appropriations Basic instructional subsidy 5,775.496 Section 1305 and 1306 24,551 Performance incentives 10.890 Homebound instruction 743 Vocational education 29,407 Driver education 2.975 Special education 1.021.528 Transportation 621.089 (Continual) t'r l ell hl Pr r. C> F. 0V Cr I wI 27 01 10 @N la it SHIPPENSRURG AREA SCHOOL DISTRICT GENERAL FUND -SCHEDULE OF REVENUE (Continued) Year Ended June 30, 1999 ievenuc (Continued) State appropriations (Continued) Rentals and sinking fund payments Medical and dental services Social security reimbursement Retirement reimbursement Alternative education Department of Agriculture Link to Learn Spending analysis and management Total state appropriations Federal appropriations Title 1 Title II Drug-free schools Title VI Medical assistance reimbursement (ACCESS) Impact Aid IDEA Total Federal appropriations Other financing sources Refund of prior years' expenditures Interest Proceeds from sale of equipment Total other financing sources Total revenue 694,769 56.036 440,322 331.106 1.910 2.500 88.000 5,000 9.106.322 334.171 10.170 12.842 9.892 13,329 18.835 52.029 451.268 693 323,528 1.452 325,673 S 21.320,804 28 n SIIIPPENSDURG AREA SCHOOL DISTRICT 4D GENERAL FUND -SCIIEDULE OF EXPENDITURES Year Ended June 30, 1999 Expenditures Instructional Regular programs Salaries $ 6.611.314 Employee bcncrits 1.399.573 ® Purchased services Professional and technical 29.924 Property 72.229 Other 172.058 Supplies 295.549 Property 33,990 • Other objects 42.647 Total regular programs 8.657.284 Special programs • Salaries 1.322.309 Employee benefits 318.715 Purchased services Professional 829.932 Property 37 Other 39.044 • Supplies 19.511 Property 6.852 "rotas special programs 2,536,400 Vocational education programs • Salaries 315.925 Employee benefits 66.514 Purchased services Property 440 Other 463.239 Supplies 14.533 Properly 1.939 Tond vocational education programs 862390 1D (Continued) 0 29 i ?i } SHIPPENSBURG AREA SCIIOOL DISTRICT A GENERAL, FUND. SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 1999 A Iispenditures(Cominucd) Instructional (Continued) Other instructional Pmgnms 426,614 Salaries 89,536 Employee bencOts purchased services 1,585 ® Professional and technical 6,058 Otter 7,723 Supplies 300 Otherobjects 531,816 Total other instructional Programs Adult education programs 40,283 Salaries 9.653 Employee benefits Purchased services 238 Other 737 Supplies 50,911 Total adult education programs 5,465 Community college education program 12,644,466 Total instructional Support Services pupil personnel 404,338 N Salaries 92,157 Employee benefits Purchased services 96,892 Professional and technical 75 Property 1,410 Other 6,323 r Supplies 5.254 Property 767 Other objects 607,216 Total pupil personnel (Continued) `? 30 0 Sf11PPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 1999 R Expenditures (Continued) Support Services (Continued) Instructional staff 394,029 Salaries SR,746 Gmployec benefits Purchased services 3.070 Professional and technical 5,774 Property 13.447 Other 94,502 Supplies 514,796 Property 16,233 Other objects 1,134,607 'foal instructional staff Administration 854,838 ® Salaries 177,326 Employee benefits Purchased services Prolcssional and technical 131'613 1,496 Property 48,280 Other 8,157 O Supplies 19,257 Property 11.543 Other objects 1,252,510 Total administration Pupil health 113,847 Salaries 26,715 Employee benefits Purchased services Professional and technical 12'985 74 to Property ,499 Supplies 1 1,237 Property 158,358 Total pupil health V (Continued) 1 1 I Iv 31 , 0 SIIIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND-SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 1999 !9 Expenditures (Continued) Support Services (Continued) Business Salaries 167,507 Employee bencfils 44.322 Purchased services Professional and technical 2.172 Property 121 Other 18,560 Supplies 4,904 Property 12,346 Other objects 530 Total business 250,462 Operation and maintenance of plant services Salaries 559,295 Employee benefits 141.774 Purchased services Property 348.790 Other 85.776 Supplies 187.214 tb Property 20.958 Other objects 130 Total operation and maintenance of plant services 1,343,937 Student transportation services Purchased services Professional and technical 1.021 Property 6,375 Other 1.058.613 Supplies 489 Other objects 130 Total student transportation services 1.066.628 (Continued) V 32 s • SIIIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND-SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 1999 Expenditures (Continued) Support Services (Continued) Central service Purchased services Professional and technical 22.984 ® Property 17.739 Other 302 Supplies 2.433 I Property 17.198 Total central service 60.656 Other support services 19,693 Total support services 5.894.067 ® Operation of Non-Instructional Services Student activities Salaries 174,872 Employee benefits 21,942 Purchased services Professional and technical 100 M Property 13.051 Other 4,536 Supplies 6.548 Property 660 Other objects 85 w Total student activities 221.794 (Continued) V v to 33 r 10 I'll SHIPPENSDURG AREA SCHOOL DISTRICT GENERAL FUND-SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 1999 Expenditures (Continued) Operation of Non-Instructional Services (Continued) Community services Salaries 4,952 Employee benefits 715 Supplies 151 Other objects 4.700 Total community services 10.518 Total operation of non-Instructional services 232.312 Other Debt service 1.909.665 Operating transfers out 82.749 Total other 1.992.414 Total expenditures S 20.763.159 V.0 4 M iv 34 ,. INS O A A A A SIIIPPENSBURG AREA SCHOOL DISTRICT SPECIAL REVENUE FUNDS -COMBINING BALANCE SHEET June30, 1999 Cush LIABILITIES AND FUND BALANCES Fund balances Total liabilities and fund balances Juniorlligh Senior Iligh AthlcticFund Athletic Fund Total S 16.293 S 30.462 S 46,755 S 16.293 S 30.462 $ 46.755 S 16293 S 3D,462 S 46.755 v 35 7 SIIIPPENSBURG AREA SCHOOL DISTRICT 7 SPECIAL REVENUE FUNDS- CONIBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended June 30, 1999 n m tM 14 144 10 Junior I ligh Senior I ligh Athletic Fund Athletic Fund Total Revenue Local sources Expenditures operation ornon-instructional services Deficiency of revenue over expenditures other Financing Sources Operating transfers in Excess (deficiency) of revenue and other financing sources over expenditures Fund Balances-July I. 1998 Fund Balances-June 30. 1999 S 10.034 S 42,319 S 52.353 29.056 115,117 144.173 (19.022) (72.798) (91.820) 20,101 62,648 82.749 1.079 (10,150) (9.071) I5?14 40.612 55,826 S 16.293 S 30,462 S 46,755 J I _? 36 SIIIPPENSBURG AREA SCHOOL DISTRICT SPECIAL REVENUE FUNDS - COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CILANGES IN FUND BALANCES- BUDGET AND ACTUAL Year Ended June 30, 1999 Junior I ligh Athletic Fund Variance Favorable Iiudgcl Actual (Unfrvonble) Itcvcnuc Local sources S 6,865 $ 10,034 $ 3,169 Expenditures Operation or non-instructional services 1-5.981 29,056 (3,075) Deficiency of revenue over expenditures (19.116) (19.022) 94 Other Financing Sources Operating transfers in - 10.101 20,101 Excess (deficiency) of revenue and other financing sources over expenditures S (19,116) 1,079 S 20,195 Fund Balances -July 1, 1998 15 214 Fund Balances - June 30, 1999 S 16,293 w A r~ 4 O! C5 V V } r l 37 n Total A Senior I ligh Athletic Fund Variance Variance Favorable Favorable Actual (Unfavorable) Budget Actual (Unfavorable) Budget 319 S 42 6.919 S 42.265 $ 52.353 5 10,088 q . S 31.400 S 118,667 115,117 3.550 143.648 144.173 475 A (83.267) (72.798) 10.469 (102.383) (91.820) 10,563 62.648 62.648 - 82.749 821749 (10 150) S 67 73.117 S (102383) (9,071) S 93.312 . ) S (83.2 55.826 40,612 S 46.755 S 30,462 1140 11%0 ilu 38 .???nnm11Th'iia114 A A A W c1 II ?? I -" SDIPPENSRURC AREA SCHOOL DISTRICT CAFETERIA FUND - SCIIEUULE OF REVENUE Year Ended June 30,1999 Operating Revenue Lunches Regular Students S 277,882 Adults 14,196 A la carte 219,993 Miscellaneous 32,382 Total operating revenue 544,453 Nonoperating Revenue Interest 1,912 Federal subsidies 184.638 State subsidies 15,427 Value ordonated commodities 37,324 Social security subsidy 12,129 Retirement subsidy 7,884 Total nonoperating revenue 259,314 Total revenue S 803.767 39 41 SIIIPPENSBURG AREA SCHOOL DISTRICT NON-EXPENDABLE. TRUST FUND-COMBINING BALANCE: SHEET Junc30,1999 Class of 1936 Class of 1950 1i01cl Travis H. Clever Griffith ASSETS Cash S 715 S 10 $ - S 12 Investments 6.930 31.684 - 10.326 Receivables - due from other funds - - 432 - Total assets S 7.645 S 31.694 S 432 S 10,338 LIABILITIES AND FUND EQUITY Liabilities - Accounts payables S 200 S - S 432 $ Fund Balance 7.445 31,694 - 10,338 Total liabilities and fund equity E 7.645 S 31.694 S 432 S 10,338 01 F eV. r of OI 0.1 dl v? 40 0 a Cl 0 O iJ B David R. Larry Carq• Landis. Jr. Music Total S 13 S 1.300 S 2,050 10.531 - 59,471 - - 432 S 10,544 S 1.300 S 61953 3 - S - S 632 10,544 1.300 61,321 S 10,544 S 1.300 S 61.953 41 A I'- SNIPPENSBURG AREA SCHOOL DISTRICT A NON-EXPENDABLE TRUST FUND- COMBINING STATEMENT OF REVENUE., EXPENSES AND CHANGES IN FUND BALANCE Year Ended June 30, 1999 Class or Class of Ethel Travis E t 1936 1950 Clever Gri0ith . Gperating I:Xpcnses Scholarships $ 200 S 2.100 S 432 S 500 Total operating expenses 200 2.000 43T 511() + Nonopcraling Revenue Interest 385 1.686 - 580 M Contributions 200 35 - - Total nonoperating revenue 585 1.721 - 580 Net income (loss) 385 (279) (432) 80 Fund Balance-July 1. 1998 7.060 31,973 432 10,258 Fund Balance - June 30, 1999 S 7 445 S 31 694 S , . - $ 10.338 01) Q) I 1 ' r f i L I?i ?i ) l.. 1 i i 7 f ] 42 10 im A David R. Larry Carcy Landis, Jr. Music Tmal s 500 $ - S 3.632 500 3.632 A 600 3.251 - 1,300 1.535 600 1.300 4.786 A 100 1,300 1.154 10,444 - 60,167 S 10.544 S 1.300 $ 61,321 ob YI i/ r i 43 O O SBIPPENSBURC AREA SCIIOOL DISTRICT AGENCYFUNDS - COMBINING BALANCE SHEET June30, 1999 Student Activity Fund Payroll Fund Earned Income Tax Fund Total ASSETS Cash S 46,661 S 158.664 $ 485.923 S 691,248 Investments 10.000 - 10.000 Total assets S 56,661 S 158.664 S 485.923 S 701,248 LIABILITIES Due to other funds S - S 15,277 S 11,750 S 27,027 Intergovernmental - - 474,173 474,173 Payroll withholdings - 143.387 - 143,387 Due to student groups 56.661 - - 56.661 Total liabilities S 56.661 S 158,664 S 485,923 S 701.248 10 IQ IJ 1 V 44 • 0 ?41 SIIIPPENSDURC AREA SCHOOL DISTRICT STUDENT ACTIVITY FUNDS - COMBINING BA LANCE. SI1 EET June 30, 1999 Elementary Junior Iligh Senior I ligh Activity Fund Activity Fund Activity Fund Total ASSETS Cash S 6.408 S 8,267 S 31.986 S 46.661 Investments - - 10,000 10,0()0 Total assets S 6.408 S 8,267 S 41.986 S 56.661 LIABILI E' ii If r 0 014 4 A me 0r 1 it 140 E d SIIIPPENSBURC AREA SCHOOL DISTRICT STATEMENT OF CASH RECEIPTS AND CASH DISBURSEMENTS - EARNED INCO31E TAX FUND Year Ended June 30, 1999 Earned income tax collections Occupation tax collections Interest from temporary investments Miscellaneous income - net of reimbursements Total cash receipts Cash Disbursements Earned income tax collections distributed to municipalities and districts Shippcnsburg Area School District I lopewell Township Newburg Borough Shippensburg Borough Shippcnsburg Township Southampton Township Cumberland County Franklin County Orrstown Borough Outside districts Occupation tax collections distributed to municipalities and districts Hopewell Township Shippensburg Area School District Shippcnsburg Borough Shippensburg Township Southampton Township - Cumberland Chambersburg Wage'l'mx Board Refunds Interest distributions Total cash disbursements Excess of cash receipts over cash disbursements S 3.365,01 1 107.282 23,496 (2123) 3,493,566 1113.202 133.334 19,743 257,329 104,317 296,320 393.648 8.344 729,165 722 35,550 14.993 8,733 1.831 1,040 28.397 20,968 3.267.636 5 225,930 46 BOYER & RITTCR Gsrrlrmo PUBLIC ACCoCYre%xis Am) Cnssccc%xrs INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS Board of School Directors Shippensburg Area School District Shippensburg, Pennsylvania We have audited the general purpose financial statements of the Shippensburg Area School District as of and for the year ended June 30, 1999, and have issued our report thereon dated August G, 1999. In our report, our opinion was qualified because the School District has recorded General Fixed Assets at values • as determined by an Industrial Appraisal Company Report. Under generally accepted accounting principles, General Fixed Assets should be recorded at historical or estimated historical cost. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Amdiling Sramlarcls, issued by the Comptroller General of the United States. • Compliance As part of obtaining reasonable assurance about whether the Shippensburg Area School District's general purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the 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 Amdiling,Sltntdurtls. it Internal Control Over Financial Reporting In planning and performing our audit, we considered the Shippensburg Area School District's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide 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 financial reporting 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 does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the general purpose financial 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 financial reporting and its operation that we consider to be material weaknesses. C:valr Ilu.l. C.%IU.tshla Cunanuaeslwwr I_hwlsn.nax Sr:crls Cuu.ecnt An hu lependenily Own,-, %ICmhvr f,I the )ICtaudn:y \Ct%,. Ilk WMI-M IV SCf%1C1- nlnltigh HS]I II1t,matlnrl:d SO me This report is intended for the information and use of the Board of School Directors, management and Federal awarding agencies and pass-through entities, and is not intended to be and should not be used by S anyone other than these specified parties. 1e 1• 1® 1* IV 4) Chambersburg, Pennsylvania August 6, 1999 48 ® BOYER & RrrrER GaliTminD PUBLIC A(:cut:.,rr:\srs Am) Co.NsCCG\.vrs A INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 N Board of School Directors Shippensburg Area School District Shippensburg, Pennsylvania 0 Compliance We have audited the compliance of Shippensburg Area School District with the types of compliance requirements described in the U. S. Office rf Management and Budget (0AfB) Circular A-133 Compliance Supplement that are applicable to its major Federal program for the year ended June 30, O 1999. Shippensburg Area School District's major Federal program is 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 grants applicable to its major Federal program is the responsibility of the District's management. Our responsibility is to express an opinion on the District's compliance based on our audit. tl We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing StamlGrds, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of Stater, Local Governments, rind Non-Profrt Organizations. 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 M 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 District's compliance with those requirements and performing 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 District's compliance with those requirements. ® In our opinion, the Shippensburg Area School District complied, in all material respects, with the requirements referred to above that are applicable to its major Federal program for the year ended June 30, 1999. I.AAI(' 1'111.1- C::\1(1151.1° CI I:\dlln3ns,UJIm Lli\\'IS'I'O\\:? S'f:\'rli CULLIi(ai .\n Innepcndcnn)'r))cncd \IcmUcr ut Illc \ICt ihdreY S'cl%mrk \C"1111"I'lc Scntcc'Ihrnul;h nS\I Infernatlonal 'n Ie) IA Internal Control Over Compliance The management of the Shippensburg Area School District is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Fcderal programs. hi planning and performing our audit, we considered the District's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in A the internal control 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 does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program 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 compliance and its operation that we A consider to be material weaknesses. This report is intended for the information and use of the Board of School Directors, management and Federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties. IN IW IW Chambersburg, Pennsylvania August 6, 1999 50 U-,- IA Shippensburg Area School District Schedule of Findings and Questioned Costs Year Ended dune 30, 1999 Section 1-- Summary of Auditor's Results Ie Financial Statements Type of auditors report issued: Qualified Internal control over financial reporting: e Material weakness identified: _ Yes X No Reportable condition(s) identified that are not considered to be material weakness(es)? _ Yes X None Reported ! Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major program: e Material weakness identified? _ Yes X No Reportable condition(s) identified that is not considered to be a material weakness(es)? _ Yes X None Reported M Type of auditor's report issued on compliance for the major program: Unqualified Any audit findings disclosed that are required to be reported in accordance with Section .510(a) of Circular A-133? _ Yes X No it W u d 51 11 I® 00 Shippenshurg Area School District Schedule of Findings and Questioned Costs Year Ended June 30, 1999 Identification of the major program: r TMA Number(s) Name of Federal 94.010 ride 1 Low Income Dollar threshold used to distinguish between type A and type B programs $300,000 Auditee qualified as low-risk auditee? _ Yes X No i® N® Section If -- Financial Statement Findings A. Reportable Conditions in Internal Control There were no findings relating to the financial statement audit required to be reported. B. Compliance Findings No No There were no compliance findings relating to the financial statement audit required to be reported. Section III -- Federal Award Findings and Questioned Costs A. Reportable Conditions in Internal Control O There were no findings relating to the Federal awards as required to be reported in accordance with Section .510(x) of OMB Circular A-133. B. Compliance Findings U V There were no findings relating to the Federal awards as required to be reported in accordance with Section .510(a) of OMB Circular A-133. 52 0 SHIPPENSBURG AREA SCHOOL DISTRICT n SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 1999 Pass Federal Through Source CY.D.A. Grantor's Grant n GrantorProgrin'fitle Code Numher Number Period U. S. Department of Education Impact Aid D 84.041 N/A 97.98 Impact Aid D 84.041 N/A 98.99 h Passed through the Pennsylvania Deparntenl of Education: 'Title I Low Income 1 84.010 13.8387 97.98 'Title I Low Income 1 84.010 13.0387 98.99 Tide VI SD/IU 1 84.298 11-8387 97-98 Title VI SD/IU 1 84.298 11-0387 98.99 Thic II - Eisenhower Math and Science Basic Education 1 84.281 20-8387 97.98 'title II - Eisenhower Math and Science Basic ? Education 1 84.281 20.0387 98.99 Passed through the Lincoln Intermediate Unit Consortium Drug-Free Schools 1 84.186 100-8812 97-98 Drug-Free Schools 1 84.186 100-9908 98.99 d Total U. S. Department of Education U. S. Department of Health and Human Services Passed through the Pennsylvania Department or n Educatio Medical Assistance Program 1 93.778 44-8387 97-98 Medical Assistance Program 1 93.778 44-7387 98.99 Total U. S. Department of Health and Iluman Services L' v C; 53 !* !dq ~ Program or Annual Award Total Received (Refunded) in Fiscal Year Accrued (Deferred) Revenue at 7.01-98 Revenue Recognized apeaditures Accrued (Deferred) Revenue at 6.30-99 $ 19,563 S 856 S 856 S - $ $ - S 18,835 18,835 - 18,835 18,835 - A $ 331.183 220,856 215.407 5.449 5.449 - $ 329.673 263.738 - 328.722 328,722 64,984 9 S 10.845 3,615 2.578 1.037 1,037 S 10,606 7.778 - 8.855 8,855 1.077 S 12,789 5,032 3.945 1.087 1,087 - $ 13,755 11.004 - 9.083 9,083 (1,921) S 16.973 7.167 3.260 3.907 3.907 - $ 17,247 7,242 - 8.935 8,935 1,693 546.123 226.046 385.910 385,910 65.833 S 26,743 - (11,501) 11.501 11.501 - $ 18,247 18.247 - 1.828 1,828 (16.419) 18,247 (11.501) 13.329 13.329 (16,419) G 0 54 SHIPPENSBURG AREA SCIIOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Year Ended June 30, 1999 Pass Federal 'T'hrough Source C.F.D.A. Grantors Grant Grantor Program Tide Code Number Number Period U. S. Department of Agriculture Passed through the Pennsylvania Department of Education: National School Lunch Program I (F) 10.555 N/A 98.99 National School Lunch Program I (S) NIA NIA 98.99 Special Milk 1 (F) 10.556 NIA 98.99 Passed through the Pennsylvania Department of Agriculture: Food Distribution (a) I (F) 10.550 NIA 98.99 Total U. S. Department of Agriculture Total Federal Awards Expended Source Codes: Legends: D - Direct Funding (a) Donated commodities valued at 1 - Indirect Funding local market values. (F) - Federal Share (b) Total amount of commodities received (S) - State share from Department of Agriculture. (c) Inventories at July I, 1998. (d)'Ibtal amount of commodities used. (c) Inventories at June 30, 1999. * - denotes Major Program 55 0 A Accrued Accrued Program Total Received (Deferral) (Deferred) p or Annual (Refunded) in Revenue at Revenue Revenue at Award Fiscal Year 7.01-98 Recognized Iispcnditures 6.30-99 p N/A 159.232 159.232 159.232 N/A 13.604 - 13.604 13.604 N/A 3.083 - 3.083 3.083 • N/A (b) 43.416 (c) (6.909) 37.324 (d) 37,324 (c) (13.001) 219.335 (6.909) 213.243 213,243 _ (13.001) S 783.705 5 207,636 S 612 .482 S 612.482 S 36.413 Test of 50% Rule: 'I'ota) Expenditures $ 612.482 y Less Stale Expenditures (13.604) Total Federal Expenditures S 598.878 Program selected for testing as a major program -Title I Low Income S 334.17115598.878=55.80% ®M ¦1 w o1 V oil u Sec Notes to Schedule of Expenditures of Federal Awards. 56 :I0 SHIPPENSBURG AREA SCHOOL DISTRICT n NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note 1. Significant Accounting Policies A The accompanying Schedule of Expenditures of Federal Awards is a summary of the activity of the District's Federal award programs and presents transactions that would be included in financial statements of the District presented on the accrual basis of accounting, as contemplated by generally accepted accounting principles. • Note 2. Title I Low Income The Title I Low Income Program has been audited in accordance with OMB Circular A-133. • Note 3. Restatement of Prior Year's Accrued Revenue Accrued revenue at July I, 1998 was reduced to adjust for Federal awards reported by the Capital Area Intermediate Unit. • • 00 !r • i 57 a 10 SHIPPENSBURG AREA SCHOOL DISTRICT 1n SUMMARY SCHEDULE OF PRIOR YEAR'S AUDIT FINDINGS Year Ended June 30, 1999 I" There were no prior audit findings for the year ended June 30, 1998. IA 10 u 58 0 0 0 0 0 0 0 f1 Cry J_;?"F,ri1?w 1Y 99p?r,-l AtSti?'?n cull. j•r.i.? CL V?oo Pa 0