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Home My WebLink About03-6108CAMP HILL SCHOOL DISTRICT FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2003 A. ^. REIDINGER (RETIRED) C. ED~Ar.D ROGEIUq JR. ^w zr & Com,^r,r , P.C. c~ eu~uc ~ccou~w~vs ~0 WEST MAIN STREET MECHANICSBURG, PENNSYLVANIA 17055 ~17) 76~763 F~ ~17) 766-2~31 INDEPENDENT AUDITORS'REPORT Board of School Directors Camp Hill School District Camp Hill, Pennsylvania We have audited the accompanying general purpose financial statements of Camp Hill School District as of June 30, 2003 and for the year then ended, as listed in the preceding index. 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 auditing standards generafly accepted in the United States of America. 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 Camp Hill School District as of June 30, 2003, the results of its operations and the cash flows of its Proprietary Fund Types and Nonexpendable Trust Funds for the year then ended, in conformity with accounting principles generally accepted in the United States of America. GREENAWAET & COMPAN~¢, October 10, 2003 Mechanicsburg, Pennsylvania -1- CAMP HILL SCHOOL DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 2003 Assets and other debits Cash and cash equivalents Delinquent taxes receivable (net of allowance for uncollectibles of $ 672,154) Due from other funds Intergovernmental accounts receivable State subsidies receivable Federal subsidies receivable Other accounts receivable Inventories Land and buildings Furnishings and equipment Food service equipment (net of accumulated depreciation of $10,489) Amounts available in debt service funds Amount to be provided for the retirement of general long-term debt General Governmental Fund Types Special Capital Revenue Projects $ 1,568,624 $ 49,543 $ 775,748 408,404 77,440 99,748 95,434 116,287 271,943 Total assets and other debits 3,500 Liabilities and other credits Accrued payroll and benefits Accounts payable Deferred revenues Due to other funds Prepayments from persons or firms Due to student organizations General obligation bonds and notes payable Capital lease obligations Accumulated compensated absences 19,600 Total liabilities $ 2,637,880 $ 53,043 $ 795,348 $ 749,830 $ $ 134,743 2,809 328,849 19,600 1,392 76,048 15,104 Fund equity Invested in general fixed assets Retained earnings Specific fund balance reserves Unreserved fund balances 1,248,126 4,201 76,048 Total fund equity 10,000 1,379,754 1,389,754 Total liabilities and other credits and fund equity $ 2,637,880 719,300 48,842 48,842 719,300 53,043 $ 795,348 The accompanying notes are an integral part of these financial statements. -2- Proprietary Fund Types Food Service $ 44,404 Fiduciary Fund Types Agency Trust (Activities) $ 148,720 $ 98,607 Account Groups General General Long-Term Fixed Assets Debt $ $ 160 433 2,968 44,525 17,973,803 4,912,282 $ 92,490 $ 148,720 $ 98,607 $22,886,085 10,667,800 $10,667,800 $ $ $ $ $ 320 1,215 1,535 98,607 98,607 10,370,000 35,816 261,984 10,667,800 90,955 148,720 22,886,085 90,955 92,490 148,720 $ 148,720 $ 98,607 22,886,085 $22,886,085 0,667,800 CAMP HILL SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES ~ ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2003 General Revenue Local$ources $ 9,338,640 State sources 1,694,791 Federal sources 169,202 Total revenue 11,202,633 Expenditures Instruction 6,340,793 Support services 3,479,780 Operation of nonJnstructional services 275,432 Facilities acquisition, construction and improvements 6,093 Debt service 927,102 Total expenditures Excess of revenue over (under) expenditures Other financing sources (uses) Interfund transfers in Sale of fixed assets Proceeds from capital lease financing Interfund transfers out Total other financing sources (uses) Excess of revenue and other financing sources over (under) expenditures and other financing uses Fund balances, July 1, 2002 Fund balances, June 30, 2003 11,029,200 173,433 2,545 (175,831) (173,286) 147 1,389,607 $ 1,389,754 Special Revenue $ 38,076 38,076 114,912 114,912 (76,836) 80,000 80,000 3,164 45,678 $ 48,842 Capital Projec~ $ 33,873 33,873 1,062,045 1,062,045 (1,028,172) 19,600 19,600 (1,008,572) 1,727,872 $ 719,300 The accompanying notes are an integral part of these financial statements, -3- CAMP HILL SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND AND ATHLETIC FUND YEAR ENDED JUNE 30, 2003 Revenue Local sources State sources Federal sources General Fund Budget Actual Total revenue $ 9,191,577 $ 9,338,640 1,629,680 1,694,791 206,004 169,202 Expenditures Instruction Regular programs Special programs Vocational education programs Other instructional programs Community College education programs Variance Favorable (Unfavorable) Total instruction $ 147,063 651111 (36,802) Support services Pupil personnel Instructional staff Administration Pupil health Business Operation and maintenance of plant services Student transportation services Central services Other support services 11,027,261 11,202,633 175,372 Total support services 4,664,475 4,708,823 (441348) 1,353,668 1,348,537 5,131 57,362 57,362 101,567 112,273 (10,706) 113,798 113,798 Operation of noninstructional services Student activities Community services 6,290,870 6,340,793 (49,923) Total operation of noninstructional services 555,962 558,527 523,011 574,810 806,794 817,292 148,751 148,635 227,572 228,459 988,974 1,050,088 74,905 74,905 14,673 14,673 13,143 13,143 Facilities acquisition, construction and improvement services (2,565) (51,799) (10,498) 116 (887) (61,114) (Continued) The accompanying notes are an integral part of these financial statements. 3,353,785 3,480,532 (126,747) 257,747 257,847 16,833 16,833 (lOO) 274,580 274,680 (lOO) 6,093 6,093 -4- Budget 33,500 Athletic Fund Variance Favorable Actual (Unfavorable) $ 37,876 $ (4,376) 33,500 37,876 (4,376) 148,145 114,912 33,233 148,145 114,912 33,233 CAMP HILL SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND AND ATHLETIC FUND (Cont'd.) YEAR ENDED JUNE 30, 2003 Expenditures (Cont'd.) Debt service Total expenditures Excess of revenue over (under) expenditures Other financing sources (uses) Interfund transfers in Sale of fixed assets Proceeds from capital lease financing Interfund transfers out Total other financing soumes (uses) Excess of revenue and other financing sources over (under) expenditures and other financing uses Fund balances, July 1, 2002 Fund balances, June 30,2003 GeneralFund Budget Actual $ 927,102 $ 927,102 10,852,430 11,029,200 174,831 173,433 1,000 2,545 (175,831) (175,831) (174,831) (173,286) 147 1,389,607 $ 1,389,754 Variance Favorable (Unfavorable) $ (176,770) (1,398) ,545 1,545 147 1,389,607 $ 1,389,754 The accompanying notes are an integral part of these financial statements. -5- Budget 148,145 (114,645) 114,645 Athletic Fund Actual $ 114,912 (77,036) 80,000 Variance Favorable (Unfavorable) $ 33,233 37,609 (34,645) 114,645 80,000 2,964 30,184 33,148 (34,645) 2,964 30,184 $ 33,148 CAMP HILL SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS/FUND BALANCES PROPRIETARY FUND TYPES AND NONEXPENDA6LE TRUST FUNDS YEAR ENDED JUNE 30, 2003 Proprietary Fund Type Food Service Operating revenue Local Sources - food service revenue Local sources - interest income $ 170,576 Total operating revenue 170,576 Operating expenses Food and milk Salaries and wages Employee benefits Contracted services Materials and supplies Depreciation Scholarships and awards 102,540 88,831 37,615 1,097 8,104 4,977 Total operating expenses 243,164 Operating income (loss) (72,588) Nonoperating revenue (expenses) Interest income Contributions Federal sources State sources 189 8,236 7,423 Total nonoperating revenue (expenses) 15,848 (56,740) Income (loss) before transfers Fund transfers General Fund contributed services 76,231 Net income 19,491 71,464 $ 90,955 Retained earnings/fund balances, July 1, 2002 Retained earnings/fund balances, June 30, 2003 Fiduciary Fund Type Nonexpendable Trust Fund $ 1,999 1,999 3,821 3,821 (1,822) 102,076 102,076 100,254 t00,254 48,466 $ 148,720 The accompanying notes are an integral part of these financial statements. -6- CAMP HILL SCHOOL DISTRICT COMBINED STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPES AND NONEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 2003 Operating activities Cash received from users Cash received from earnings on investments Cash payments to employees for services Cash payments to suppliers for goods and services Cash payments for other operating expenses Net cash provided by (used in) operating activities Non-capital financing activities Grants and subsidies Federal sources State sources Contributions Net cash provided by non-capital financing activities Capital and related financing activities Purchases of equipment Net cash used for capital and financing activities Investing activities Interest earned Net increase (decrease) in interfund balances Net cash used for investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, July 1, 2002 Cash and cash equivalents, June 30, 2003 Proprieta~ Fund Type Food Service $ 171,791 (50,666) (102,675) (8,750) 9,700 7,803 7,263 15,066 (42,526) (42,526) 190 (3,599) (3,409) (21,169) 65,573 44,404 Fiducia~ Fund Type Nonexpendable Trust Fund $ 1,999 (3,821) (1,822) 102,076 102,076 100,254 48,466 $ 148,720 (Continued) The accompanying notes are an integral part of these financial statements. -7- CAMP HILL SCHOOL DISTRICT COMBINED STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPES AND NONEXPENDABLE TRUST FUNDS (Cont'd.) YEAR ENDED JUNE 30, 2003 Reconciliation of operating loss to net cash provided by (used in) operating activities Operating income (loss) Adjustments to reconcile operating loss to net cash provided by (used in) operating activities Depreciation Contributed services paid by General Fund Decrease (increase) in assets Inventories Increase (decrease) in liabilities Accounts payable Deferred revenue Net cash provided by (used in) operating activities Proprieta~ Fund Type Food Service Fiduciary Fund Type Nonexpendable Trust Fund $ (72,588) $ (1,822) 4,977 76,231 (455) 32O 1,215 9,700 $ (1,822) The accompanying notes are an integral part of these financial statements. -8- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 REPORTING ENTITY Camp Hill 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 within the boundaries of the Borough of Camp Hill. 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 significanfly 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 four jointly-governed operations, each of which is a separate legal entity that offers educational and/or related services to the District and its residents. Each of these entities serves many school districts and are therefore not included as part of Camp Hill School District's reporting entity. These other entities are as follows: Capital Area Intermediate Unit - provides special education services and programs. Cumber[and-Perry Area Vocational-Technical School - provides vocational and technical education services and programs. Harrisburg Area Community College - provides community college education services and programs. West Shore Tax Bureau - provides earned income tax and occupational privilege tax collection services. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting records of Camp Hill 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. -9- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) Fund accounting 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, liabilities, fund balance/retained earnings, revenues and expenditures/expenses as appropriate. The fund types and the account groups utilized by Camp Hill School District are as follows: 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 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 included in this category are: 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, residence, occupation and 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 resoumes to be used for the acquisition or construction of capital facilities. Prol~rietarv Fund Types Proprietary Funds account for operations that are financed and operated in a manner similar to private business enterprises: Food Service Fund - The Food Service Fund is used to account for the financial transactions associated with the operations of the cafeterias. -10- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) Fund accounting (Cont'd.) Fiduciarv Fund 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 entitles. Nonexpendable Trusts are accounted for in essentially the same manner as Proprietary Funds. Agency Funds are custodial in nature and do not involve measurement of the results of operations. Trust Accounts - Account for contributions to and interest earnings on funds donated to the District, and for payments made from such funds. 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. Account Groul3s Account groups are not funds. They are only concerned with the measurement of financial position and are not invorved with the measurement of results of operation. General Fixed Assets - accounts for the District's investment in land, buildings and equipment. 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 the different funds is based on their measurement focus, which determines when revenues and expenditures are recognized. Governmental Fund Tvoes These funds are accounted for using a "current financial resources" measurement focus (a modified accrua] 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. -If- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) Basis of accounting (Cont'd.) Governmental Fund T¥1oes (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 pumhase. Fiduciary Fund Types Trust and Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. These funds are accounted for in essentially the same manner as Governmental Funds. Proprietary Fund Tvpes The Food Service Fund uses the 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. Food service equipment is capitalized, with depreciation (computed on the straight-line method using estimated useful lives of 5 to 12 years) recorded as an operating expense. Account Groups Land, buildings, furnishings and equipment are stated at historical cost, or at estimated historical cost for those items for which the original cost is unknown. Depreciation is not provided on these assets. Long-term debt is offset by an amount to be provided by future taxation or other revenue sources. General obligation notes and bonds payable in future years are recorded as Distdct debt. Interest on these notes is recognized when such interest is due. Compensated absences (those for which employees receive pay) are presented 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 has no recorded liability in advance of the sabbatical. -12- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) Cash and cash equivalents For purposes of the Food Service Fund and Nonexpendable Trust Fund statement of cash flows, the District considers aJJ deposits purchased with an original maturity of three months or less 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. Because the District did not adopt a budget for all Special Revenue Funds, the actual-to-budget comparison for Special Revenue Funds contains information for the Athletic Fund only. Revenue - Local sources Real estate, per capita, residence and occupation taxes are levied as of July 1 with a legal, enforceable claim against the taxpayer and/or property. These taxes are recognizable as current revenue when received during the fiscal year and also estimated to be received within sixty days after the close 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. Revenue - State sources State subsidies due the District as current fiscal year entitlements are recognized as revenue in the current fiscal year. Revenue-Federalsources Federal program revenues are recorded as deferred revenue when the program is approved, and is recognized as income when the related program or expenditures are incurred. -13- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 20O3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) 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 reflected in the respective statements of revenue and expenditures/expenses, based on management's estimates. The District does not attempt to allocate all costs which benefit the other funds due to the difficulties associated with the measurement of such benefits. CASH AND CASH EQUIVALENTS AND INVESTMENTS The District's cash and cash equivalents and investments have been categorized to indicate the level of risk assumed by the District. Category 1 includes cash and cash equivalents and investments that are insured or registered, or securities held by the District or by its agent in the District's name. Category 2 includes uninsured or unregistered, with securities held by the counterpart's trust department or agent in the District's name. Category 3 includes uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the District's name, including public funds collateralized as permitted by Act 72 of the Commonwealth of Pennsylvania. Carrying Amount/ Bank Cateqorv Market Value Balance 1 2 3 Demand deposits Repurchase agreements $ 307,221 $ 478,917 $ 100,000 $ - $ 378,917 188,519 188,519 188,519 495,74O PooPed accounts PSDLAF 25O PA Treasurer's INVEST 1,805,382 PLGIT 384,273 667,436 $ 25O 1,804,112 384,273 100,000 $ - $ 567,436 $ __2,685,645 $ 2,856,071 -14- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 CASH AND CASH EQUIVALENTS AND INVESTMENTS (Cont'd.) Cash and cash equivalents, in the proprietary funds statement of cash flows, consists of a demand deposit account. The types of authorized investments are limited by State regulations. Investment policies followed during the year did not significantly alter the categorizations shown above. The pooled investments funds are required to be operated in accordance with state laws and regulations. DELINQUENT TAXES RECEIVABLE As explained in the summary of significant accounting policies, taxes are recorded as revenue only when received, or, in the case of delinquent real estate taxes, available within sixty days. The remaining balance of delinquent taxes receivable are recorded as deferred revenue in accordance with school accounting policies. Deferred tax revenue amounted to $ 327,883 at June 30, 2003. Delinquent taxes receivable as reflected on the June 30, 2003 balance sheet consist of the following: Total Real Estate Personal 1997-98 and prioryears $ 407,729 $ 13,359 $ 394,320 1998-99 74,482 8,880 65,602 1999-00 58,285 5,942 52,343 2000-01 63,693 6,670 57,023 2001-02 104,323 35,429 68,894 2002-03 372,046 103,930 268,116 1,080,558 174,210 906,348 Less: Allowance foruncolle~ibles 672,154 15,668 656,486 Total ~ 408,404 $ . 158,542 $ 249,862 LOANS RECEIVABLE - RELATED PARTIES In 1996, the District purchased a truck for use by the Camp Hill Band Boosters at a cost of $16,500, and agreed to advance up to $ 2,000 in additional funds for improvements to the truck. The Band Boosters are to repay at least 15% of the total advance annually until this interest-free loan is repaid. As of June 30, 2003 the outstanding balance on this loan was $1,650. -15- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 LAND, BUILDINGS, FURNISHINGS AND EQUIPMENT A summary of the changes in land, buildings, furnishings and equipment for the year ended June 30, 2003 is as follows: Beginning End of Year Increases Decreases of Year General fixed assets Land and buildings Furnishings and equipment $ 10,974,023 $ 6,999,780 $ - $ 17,973,803 4,802,100 112,727 (2,545) 4,912,282 Total $ 15,776,123 $_ 7,112,507 $ (2.545) $ 22,886,085 Food Service Fund - fixed assets Furnishings and equipment Accumulated depreciation $ 12,489 $ 42,525 $ - $ 55,014 (5,512) (4,977) f10,489) Total $ 6,977 $ 37,548_ $. - $ 44,525 GENERAL LONG-TERM DEBT A. General obligation notes and bonds payable A summary of changes in general obligation notes and bonds payable for the year ended June 30, 2003 is as follows: Payments Beginning and other End of Year Increases Decreases of Year General Obligation Notes Series A of 1998, interest rate of 4.45% Series AA of 1998, interest rate of 4.6% $ 1,320,000 $ - $ 365,000 $ 955,000 2,380,000 25,000 2,355,000 General Obligation Bonds Series of 2000, interest rates of 4.30% to 5.35% 7,065,000 5,000 7,060,000 Total $ 10,765~000 $ $ 395,000 $ 10.370.000 -16- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 GENERAL LONG-TERM DEBT (Cont'd.) A. General obligation notes and bonds payable (Cont'd.) Total scheduled debt service payments for all general obligation debt as of June 30, 2003 are as follows: Total Principal Interest 2003-2004 $ 929,622 $ 415,000 $ 514,622 2004-2005 931,104 435,000 496,104 2005-2006 931,693 455,000 476,693 2006-2007 931,045 475,000 456,045 2007-2008 934,200 500,000 434,200 2008-2013 4,916,119 3,180,000 1,736,119 2013-2018 5,085,726 4,335,000 750,726 2018-2019 590,381 575,000 15,381 Totals $ 15,249~890 $ 10,370.000 $ 4,879,890 Total interest paid on all general obligation debt for the year ended June 30, 2003 totaled $ 532,102, of which $ -0- was capitalized as part of construction costs. B. Capital lease obligation In September, 2001, the District entered into a capital lease obligation for the purchase of computers and related equipment. The cost of the equipment subject to the lease totaled $107,400. Payments on the capital lease are made annually. A summary of the changes in capital lease obligation payable for the year ended June 30, 2003 is as follows: Balance, July 1 $ 69,891 Additions Payments C34,075) Balance, June 30 $ 35.816 The balance of the lease obligation plus $1,831 in interest is due during the year ending June 30, 2004. Total interest paid on capital lease obligations for the year ended June 30, 2003 totaled $ 3,572. -17- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 GENERAL LONG-TERM DEBT (Cont'd.) C. Compensated absences At June 30, 2003, the General Long-Term Debt Group of Accounts includes a liability for compensated absences of $ 261,984. 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, the District's payout policy with regard to each type of unused compensated absence Js as follows: Emergency and personal - no payout required. Vacation (administrative personnel only) - unused vacation days (not to exceed 5 days) are paid at the time of separation. Sickness - a retiring employee receives payment for unused accumulated sick days determined as a percent of substitute teachers' per diem rate for professional staff and a percent of per diem salary rate for support staff, both based on the number of years of service to the District up to a maximum of 270 days and 55% of the per diem amount. Retirement with 15 or more years of service - retiring professional employees with at least 30 years of experience including at least 15 years of continuous full-time employment with the District are entitled to a retirement incentive payment of between $ 5,000 and $10,000 depending on total years of experience. A summary of the changes in compensated absences for the year ended June 30, 2003 are as fellows: Balance, July 1 Net increase (decrease) $ 262,956 ~972) Balance, June 30 $ 26!,984 SPECIFIC FUND BALANCE RESERVES AND DESIGNATIONS Specific fund balance reserves at June 30, 2003 consist of the following: Capital General Projects Fund Fund Trust Fund Reserved for encumbrances Reserved for capital projects Reserved for trust account expenditures $ 10,000 $ $ 719,300 148.720 Total specific fund balance reserves $ 10,000 $ 7!9~300 $ 148,720 -18- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 SPECIFIC FUND BALANCE RESERVES AND DESIGNATIONS (Cont'd.) In addition to the reserves above, the District has designated $14,821 of the General Fund balance for various purposes, and $15,695 of the Special Revenue Fund balance for band equipment and uniforms. OPERATING LEASES The District has entered into several operating lease agreements in which it has agreed to tease certain small pieces of equipment for various lengths of time. The agreements contain various termination and "lease-up" trade- in provisions which could allow the District to effectively change the terms of the agreements. Total operating lease payments included in General Fund expenditures for the year ended June 30, 2003 amounted to $ 52,098. Minimum lease commitments for future years, assuming no voluntary terminations, are as follows at June 30, 2003: 2003-2004 $ 47,923 2004-2005 40,865 2005-2006 23,802 2006-2007 8,662 Total $ _ 121,252 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. The District contributes to The Public School Employees' Retirement System (the System), a governmental cost shadng multiple-employer defined benefit plan. The plan is under the authority of the Public School Employees' Retirement Code (the Code), as amended. The plan provides retirement and disability, legislatively 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 System at PO Box 125, Harrisburg, PA 17108-0125, or by accessing the System's website at www.~)sers.state.13a.us. The contribution policy is established by the Code and requires contributions by active members, employers and the Commonwealth. Active members are required to contribute as follows: -19- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 3O, 2O03 PENSION PLAN (Cont'd.) Active members who joined the System prior to July 22, 1983, contribute at 5.25 percent (Class TC) or at 6.50 percent (Class TD) of the member's qualifying compensation. Members who joined the System on or before July 22, 1983, who were active or inactive as of July 1, 2001, contribute at 6.25 percent (Class TC) or at 7.50 percent (Class TD) of the member's qualifying compensation. Members who joined the System after June 30, 2001, contribute at 7.50 percent (automatic Class TD). For all new hires and for members who elected Class TD membership, the higher contribution rates begin with service rendered on or after January 1, 2002. Contributions required of employers are based upon an actuarial valuation. For the fiscal year ended June 30, 2003 the employer contribution rate was 1,15 percent of covered payroll, composed of 0.18 percent for pension benefits and 0.97 percent for healthcare insurance premium assistance. The District's contributions to PSERS for the years ending June 30, 2003, 2002 and 2001 were $ 72,804, $ 70,027 and $ 118,228, respectively. Those amounts are equal to the required contributions for each year. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS The District's contract with the Camp Hill Education Association and its compensation plan for administrators provide for postemployment health and hospitalization benefits for full-time teachers and administrators who have 25 or more years of service with the District. The benefit is paid by the District toward the retirees' health insurance premium ranging from $ 750 to $ 1,000 per year per retiree for a period of 2 to 7 years. Both the contribution amount and the number of years of payment depend on the retirees' years of service. The benefit is paid only until the year in which the retiree is eligible for full social security benefits. The District finances this benefit on a pay-as-you-go basis. For the year ended June 30, 2003, there were five retirees receiving this benefit at a total cost to the District of $ 4,290. INTER-FUND TRANSFERS General Fund expenditures include inter-fund transfers of $175,831 summarized as follows: Athletic Fund Capital Projects Fund Food Service (non-cash transfers) 80,000 19,600 76,231 Total $ 175.831 -20- CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 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 commemial coverage in any of the past three fiscal years. For purposes of 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 within the group and, if necessary, by an insurance company carrying excess liability coverage. NEW ACCOUNTING PRONOUNCEMENTS During the year beginning July 1, 2003, the District will be required to implement GASB 34, "Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments". The effect of GASB 34 will significantly affect how the District presents its financial statements. The District receives information from various sources, including the Pennsylvania Department of Education, and expects to be ready to satisfactorily implement this accounting standard. COMMITMENTS AND CONTINGENCIES The District's collective bargaining agreement with its teaching staff is scheduled to expire June 30, 2004. In the normal course of preparing for the subsequent school year, the District has awarded bids for various supplies, fuel contracts, etc. No major commitments in excess of routine requirements have been made by the District. The District 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 remaining contract commitments totaling approximately $ 225,000 for various construction and improvement projects at June 30, 2003. -21 - CAMP HILL SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 2003 COMMITMENTS AND CONTINGENCIES (Cont'd.) The District is named as a defendant in various lawsuits, all in the ordinary course of business. The District intends to vigorously defend itself against these actions. Legal counsel for the District has advised that they cannot offer an opinion es to the probable outcome of all such actions. In the opinion of management, the ultimate liabilities, if any, resulting from these claims will not have a material adverse effect on the financial position of the District. - 22 -