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Home My WebLink About99-00100i. ,..~ i. ,` .~ ~i ~; ~., ci ry r+~ N~. 94- ioa EAST pENNS9OR0 AREA SCHOOL DISI`RICT ENOLA, PENNSYLVANIA Jl7NE 30, 1948 1 ~rceanwalt ~ Co~paHy, ~? ~U. ---.__ _---- ______ ~ ._____.~~ ~rrle~e~ ~~ul~i•- .y3'~~+k~xlrsnlJ G9 Page N~O~~ Independent auditors' report i Combined balance sheet - all fund typee and account groups - June 30, 1998 2 Combined ,statement of revenue, expenditures and changes in fund balances - A1.1 Governmental Fund Types - year ended June 30, 1998 ~ Combined ptatement of xevenue, expenditures and changes in fund balances - budget and actual - General and Special Revenue Funds - year ended June 30, 1498 9 ,, S Combined statement of revenue, expenses and changes in retairad earnings - All Proprietary Fund Types - year ended June 30, 1998 8 Combined statement of cash flows - All Proprietary Fund Types - year ended June 30, 1998 ,~ ,.. '. Notes to financial statements - June 30, 7.998 g 21 ~,. '~l GItEENAWALT & COMPANY, p.C. gtRY1FIt0 pUOLIO AOCpUNTANT• ,1AMO F LYON! p.~. BnX ~ 400 W[tT MAIN STRRET 1417MAta [, 0[RNANALT ~ CimON t. MOFIMAN M[CMAWIp[URO FtNNSYLNANa 17G'~b N N. [IYIOIDI , ). [[LLY 17171 711.471] [, A. OttR'lAWALT nYfA1911}I IAA 17171711•[711 A. A. a110[¢Ola RI[ntml C. C1WAlID [00[[1, JII. It„~DEpENDENT AUDITORS' REPORT A7 MOT NNAMUfI' 7fl1[[F gA[17y,[, PA 1701} 11171 NNt77 pA141711171t9}/7 Board of School Directors East Penneboro Area School District Eno1a, Pennsylvania CJ f (,/ l We have audited the accompanying general-purpose financial statements of East Penneboro Area School District ae of June 30, 1998 and Eor the year than ended, Theee general-purpose financial atatamenta are the responsibility of the District's management. Our. 7-eaponsibility is to express an opinion on these general.-purpose financial statements based on our audit. We conducted our audit in accordance with yens rally accepted auditing ecandards and the standards applicable to .financial audits contained in Government auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpgae 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 aseesaing 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-puzpose financial atatamenta present fairly, in all material respects, the financial position of F.aet Penneboro Area School District as of June 30, 7.998, the results of its operations and the cash flows of its Mood Service Fund fox the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standazde, we have also issued a report dated October 23, 1998 on our consideration of East Penneboro Aroa School Aietrict's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. GREENAWALff COM P.C. Getober 23, 1998 Merhani.caburg, Pennsylvania . 1 . M[MRY.R9 - AMF.RIfAN INST1T117F. OF L'P.RTIFIEO IMIRLR: ACL'611NTANT9 - I'6NNSYI,VANIA INNTITUTB OF CRRTIp1Ep FIINLIC ACL'OIINTANI'5 • EAST PENN880R0 AREA 9CH001, DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPE3 AND ACCOUNT OROUP9 RUN E 30, 1995 ~~ ~_ doV ermm~ntnl c ~ Tvoes Special Capital ~, a al Revenue Proieat ~ Aesete' -. Cash and cash equivalents ~ $ 231,143 $ 2 257 $ 6 Investments, aL- cost 2,048 034 , 02 Due from other funds , 137,896 10,406,245 Accounke receivable 731,970 _ _ Delinquent taxee receivable (net of _ e allowance for unaollectibles, $ 971,885) 376,502 Inventory _ Land Buildings _ Equipment and furnishings _ - Food service equipmenk (net of _ ~ aceumulaked depreciation of $ 17 5,047) - _ Amount to be provided for the _ retirement of general long-term debt Total $ 3526,553 $ X57 S 10, 4,~06~, 847 Liabilitiep Accrued payroll and benefits $ 1,160,427 $ _ $ _ Accounts payable 407,770 Cash overdraft Deferred revenue 352,036 Due to other funds 186 498 • Uue to student organizations , _ - 92,970 deneral obligation bonds and nokae payable' - _ Accumulated rompeneated abeencee _ Total liabilities 2,106,731 -0- __92,9ryQ Fund equity Invested in general fixed assets _ Retained earninys _ _ _ Specific fund balance reserves - 10,313 877 Unreserved fund balances 1.419,822 2,287 , _ Total fund equity 1,419.522 2.257 10,313.877 Total $ 3.526,553 $ 2.257 ..$ 10,406,847 The accompanying notes are an inks ral g part oP these financial statements. ~ _ 2 _ Proprietary Fund Twae Fiduciary Fund Twe = A Food ~erviee Trust and _ ccou f3anaral nt Clrouue ~aneral Agancv vi i,~ F1xad Aaacge Long-T`pebY~ $ 102,833 $ 44,926 $ 38,936 $ _ $. 186,498 3 , 517. _ - 23,304 • ' - 325,856 _ 21,?,48,255 3; 853, 242 _ 35,158 " -' ~ ~ - __.__ 24, 787, 766 "1 $ 1~~8~ $ 2r $ _~ 3~, • 936 $ 25, 427, 353 - $ 24.7766 . 68,358' . 4,284 - 182,214 _ - ~3 19, 195 _ _ ' 44, 926 - ' • - 38, 936 _ 24,215,228 ~T '~- - 572,538 _ 87,553 231.924 38,936 '-0- 24,787.766 77,259 _ - 25,427,353 ' t~ - _ 77.25h -0- __ -0- 25.427.353 .0_ $ _ 16812 $ __ 24?q $ __38,936 $ 25.953 $ 24;766 u EAST PENNSBORO AREA SCHOOL DISTRICT CORIBINED BTATEMEN9' OF REVENUE, EXPF.NDITl1RE9 AND CNANOE9 IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED TUNE 30, 1990 W Revenue Local sources State sources Federal sources Total revenue Expendituree Instruction SupporC services Operation of noninetruc.tlonal services Facilities acquisition, construction and improvements Debt service Total expanditurea Exceee of revenues ovei (under) expenditures Other financing sources (uses) Receipts from other LEA's Refunds of prior years' expanditurea Interfund transfers in (out) Net proceeds from the issuance of long-term debt Debt service - refunded bond issue Total other financing sources (uses) Excaea of revenues and other financing eourcPa over (under) expenditures and other financing uses Fund balances, July 1, 1997 Fund balances, June 30, 1998 Special Capital Oe~ v e proiecte $ 14,091,299 $ 33,232 $ 504,624 5,505,626 - ~~~~. 19.9]3.959 ~ 3.232 504.624 12,375,453 - 5,366,549 - _ 329,670 109,42G - 55,538 - 915,004 1, O40f,~3`3, 3S1' 85.E 1s, 167,361 104,420 1.266,855 746,098 (7 L,1S0) (762,231) 56,252 - _ 41,227 - _ (90,787) 69,950 - - 19,195,G03 __ (8.069.495) 6.69j7 69,980 }1.076.108 752,790 (1,2081 10,313,577 667,032 _, 3.465 -0- $ 1.919.022 $ 2.257 $ 10.313.6')7 The accanpanying notes are an integral part of these financial statements • 3 - s EAST PENNSBORO AREA 3CNOUL DISTRICT COM[iINED STATEMENT OF REVENUE, EXPENDITURES AND CRANdEB IN FUND BALANCES - BUDdET AND ACTUAL - ~ GENERAL AND SPECIAL REVENItE FUNDS YEAR ENDED .71INE 30, 1990 denaral Fund ~ Variance Favorable et ~~' 1Unfavorable) Revemte and other financing sources Local sources $ 13,784,328 $ 14,091,299 $ 306,971 ~ State sources 5,674,573 5,585,626 (88,947) Federal sources 242,638 236,534 __ 6 104) Total revenue and other financing sources 19, 701, 539 ,1,4~ 913145 __ 211. 920 ~ .Expenditures and other financing uses Instruction Regular programs 9,892,128 '9,363,496 28,642 Special proyrame 1,.889,020 1,080,515 8,513 Vocational education programs 225,597 225,597 - Other insl-ructional programs 136,038 132,549 3,489 ~ Adult education programs 8,5].7 8,438 79 Community College education programs 264,890 264,868 22 Total instruction 12.416,198 ,~._2,375~453 90,7Q~ M Support services Pupil personnel 481,823 474,652 7,171' Inettuctional staff 652,632 617,520 35,112 Administration 1,472,523 1,417,750 54,773 Pupil health 244,515 232,156 12,359 Business 193,640 193,226 414 Q Operation and maintenance of plant services 1,749;761 1,731,190 10,613 Student transportation services 615,980 615,209 771 Central 56,182 36,821 13,361 Other support. services 48.071 48,067 ~ ii Total support services 5 515'17 5,366,5Q~ _}4B~S78 (Continued) (~ -a -EAST pENNSBORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EX['ENDITURES ANA CHANGES IN FUND BALANCES - AUDOET AND ACTUAL - dENERA.L AND SPECIAL REVENUE FUNDS (Cont'd.) YEAR ENDED JUNE 30, 1998 Expenditures and other financing ueae (COnt'u.> Qperation of noninatructional services Student aotlvitiea Community services Total aporation of non» instructional services Facilities arquieition, construction and improvement services Debt service Total expenditures Excess of revenue over (under.) expenditures Other financing: eourcea (uses) Receipts from other LEA's Refunds of prior year expenditures Interfund transfers in (out) Budgetary reserve Total other financing sources (uses) Excess of revenues and other financing sources over (under) expenditures and other financing uses Fund balance, July 1, 1997 Fund balance, June 30, 1998 CJ ~._~~naral Fund , Variance ~ Favorable Bud e, Actual U avarab $ 322,977 _ 30~g48 353.425 85,605 1,235.371 19,.605f 806 $ 309,555 $ 13,422 20.115 10,333 329,670 55,538 1.04J,151 19.16,7,361 95,733 746,098 23.755', ~ 30,147 195,220 438,445 650. 3CZ5 O - 56,252 56,252 50,000 41,227 (8,773) (94,990) (90,797) 9,203 ,_ 628 700) _,~ 628.7 (673,690) ~ 6.692 _ 680.382 (577,957) 752,790 1,330,747 620,615 6 7 U32 4,6,417 $ 42,658 $ 1,419,8L2 $ 1,377,164 The accompanying notes are an integral parr of these financial statements. - 5 - Variance Favorable @udcek Actual n£ varablel t 7 4~ w~ i J J $ 83,012 $ 104,420 $ (21,408) 83.012 104,420 21 ~QO ) 0 -0- -0 -~ 0 , - 0 -. 83,012 104,420 (21.408') (50x712) l71.1~i8) (20,476) 50,712 59,980 19,268 50,712 69,980 19,268 -o- (1,2oe) (1,2oei -0-. _ 3,465 ~~ 3.465 __ T $ -0- $ 2.257 $ 2,257 1) Cl ~~ EAST pENNSBORO AREA SCHOOL D29TRICT COMBINED 9TATF,MENT OF REVENUE, EXPENSES NND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES YEAR ENDED JUNE 30, 1998 Operating revenue -Local sources - food service revenue Total operating revenue Operating expenses Payments to food service eenkractor Donated commodities consumed Supplioe Depreciation Total operating expenses operating income (lose) Nonoperating revenue (expenses) Earnings on investments Skate sources Federal sources Federal sources - donated commodities Total nonoperating revenue (expenses) Income (loss) before Cransfare Fund transfers Noncash contributions from General Fund Net income (lose) Retained earnings, July 1, 1997 Retained earnings, June 30, 1998 P'ocd a24rvice S 412.oee 12 060 542,491 25,357 11,OS9 6.308 565 215 _ (173, ].27) 1,514 13,356, 120,654 _~5 357 .. 16E3, 001 ' (4,246). _~__,19. 062 14,816 62.443- $ 7,.....~„~ ;, The accompanying notes are an integral part of these financial statements. ;~, 4 ;'1 i 7 J j J EAST PENN98ORO AREA SCHOOL DISTRICT COMBINED STATEMENT OF CASH FLOW9 ~ ALL PROPRIETARY FUND TYPES YEAR ENDED JUNE 30, 1995 Cash flows from operating activities Operating income (lose) Ad~ustmenta to reconcile operating income (loos) to net cash provided by operating activities Depreciation Donated eommoditiee consumed Decroase (increase) in Inventory Accounts receivable Increase (decrease) in Accounts gayable Net cash used in ogerating activities .Cash flows from noncapital financing activities Subsidies received State Federal Fund transfers Net cash provided by noncapital financing activities Cash flows from investing activities Earnings on investments Payment for purchases oP equipment Net cash used in investing aeti.vities Net increase in cash Cash and equ.ivalente, July 1, 1997 Cash"and equivalents, June 30, 1998 Food ' 8ervioe $ (173,127) ' 6,308 25,357 1, 3'13 (3,021) 54, 923 (88,107) ~I, 13,356 128,654 19.062 161,072 1;514 114. 382 ) (12.868) 60,017 42,81E $ _ 102.033 The accompanying notes are an integral part of these financial statements, - 7 ~J r 1, Reporting entity EAST PENNSHGRO AREA SCHOOL DISTRICT NO'CE9 TO FINANCIAL STATEMENTS JUNE 30, 1998 ;-~ Eaat Penneboro Area School District is the level of government which has oversight responsibility and control over activities related to public school education. The report includes services provided 6y the District to residents within its boundaries: the Cumberland County communities of East Penneboro Township and the Ho rough of West Fairview. Services provided include a comprehensive curriculum foz pximary and secondary education as well as spacial education and vocational ,_~ education programs. 1'he District receives revenue from local, state and federal sources and must comply with Che requirements of these funding sources, Criteria established in Governmental Accounting Standards Board Statement Number 14 were used in determining Che entities to be included in the reporting entity. These criteria include basic items ouch as financial interdependency, selection ~ of governing authority, designation of management, ability to significantly influence operations, accountability for fiscal matters, scope of public service and special financing relationships. A11 operations of the District are included 1n the reporting entity. There are no component units that meet the above criteria for inclusion in this reporting entity. }towevar, the District is a participant in three jointly- governed operations, each of which is a separate legal entity that offers educational services to the Dietxict and its residents. Each entity serves ae•~eral school districts, eo the following entities are no l• included in this reporting entity. Capital Area Intermediate Unit - provides special education services and programs. Cumberland-Perry Area Vocational-Technical School - provides vocational and technical education services and programs. __~ Elarr.iaburg Area Community College - provides community college education services and programs. 2. Summary of significant accounting policies The accounting records of East Pennsboro Area School District are maintained on J the basis of accounting practices prescribed or permitted by the Manual of Accounting and Related Financial Procedures f.or. Pennsylvania School Syetema, issued by the Pennsylvania Department of Education in accordance with the provisions of the School Laws of Fennsylvania, These practices are in conformity with generally accepted .accounting principles as applicable to governmental units. A summary of the more sign.ificauk accounting policies follows. `:1 - 8 - 4.1 EAST PENNSBORO AREA SCHOOL DISTRICT' NOTES TO F'TNANCIAL STATEMENTS (Cont'd,l ~Tl)NE J0, 1998 2, Summary of significant accounting policies (Cant'd.) ~, Fund accounting The accounting records of the District are organized on the basis of fund types and account groups. Each Eund type may consist of several. different funds, Each fund is a separar.e entity with self-balancing acc:aunts which comprise its aeseke, liabilities, fund balance/retained earnings, revenues and expenditures/expenses ae appropriate, The fund types and the account groups utilized by Eaet Pennsboro Area. School District are as follows: Governmental Fund Tvoes Governmental Funds are those through which moat governmental functions are financed. The acquisition, use and balances of Che District's expandable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental. funds. The measurement focus is upon determination of changes in .financial resources, rather than upon net income determination. The funds of the District included in this category are: General Fund - The General Fund is used to account for all finanoial transactions not accounted for in another Eund. Revenues are primarily derived from local proporty, per capita, occupation, earned income taxes and State and Federal distributions. Many of the more Important activities of the Setwol District, including instruction, administration ~ of the School District and certain noninstructional services are accounted for in this fund. Special Revenue Fund - Special. Revenue Funds era 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 fox financial resources to be used for khe acquisition or construcCion of capital facilities. l' Proprietary Funds account for operations that are financed and operated in a manner similar to private business enterprises; Proorietarv Fund Tvues Food Service Fund - The Food Service Fund is used to account far Che financial transactions associated with the operations of the cafeterias. [; - 9 ij EAST PENNSSORO AkEA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) SUNE 30, 1998 , 2. Summary of"significant accounting policies (COnt'd,) Fund accounting (Cont'd.) Fiduciarv Fund Tvoea Fiduciary Funds (Trust and Agency Funde) era need to account for assets held by a governmental unit in a trustee capacity or as an agent for other funds or enkities. Agency Funde are custodial in nature and do rtot involve measurement of the results of operations: Trust and Agency Account - Accounts for proceeds from activities open to the ontire student body and faculty, Agency funds also Include a central payroll fund. The payroll fund accourtta Por salaries earned by District employees. TC handles the disbursing of such amounts to the employees attd to taxing and other agencies on their behalf.. Activity Fund - Accounts for programs operated and sponsored by various clubs and organizations within the schools. Activity funds are Agency Funde which are separately accounted for because of legal regttiramenta, Account GroUpa Account groups are not funds. They are only concerned with the measurement of financial position and are not involved with the measurement of results of operations. General Fixed Asaeta - General Fixed Aaset~ account for the District's investment in fixed assets exclusive of those included in the Food Service Fund. ~ General Lony-Term Aebt - Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt AccouhL Group. Saaie of accounting ~ The accounting and financial reporting treatment applied by the different Eund types is based on L•heir measurement fetus, which determines when revenues and expenditures are recognized, EAST PENNSBORO AREA SCHOOL DISTRICT NOTES TO FiNA-NCIAL STATEMENTS (ConC'd.l JUNE 30, 1998 ~ 2. Summary of significant accounting policies (Cont'd.) Basis of accounting (Cont'd.) Governmental Fund Twos ~. 'These funds are ar_countad for using a "currant financial resourcea° , measurement focus (a modified accrual hasis of accounting). Revenues are recorded when auecoptible to accrual (both measurable and available), Available means collected within the current period or soon enough thereafter to pay current liabilities. Expenditures are generally recognized wher_ L-he related fund liability ie incurred, Exceptions to thin general rule include principal and interest on general .long-term debt which is recognized when duo. Disbursements for inventory type items and prepaid. expenses era conei,dered expenditures at the time of purchase. prOprJ;,etarv Fund Tvpas The Food Service Fund uses the "flow of economic resources" measurement focus, which is a modified accrual method of accoitnti.ng. Donated commodities are inventoried at an estimated cost value when received. Inventories (valued on the first-in, first-out method) era recorded as an asset, and the portion represented by donated commodities is recorded as deferred revenue. Food service equipment ie capitalized, with depreciation (computed on the straight-line method using an estimated ueeful life of .l2 years) recorded ae an operating expense. Fiduciary Fynd Twee Trust. and Agency accounts era custodial in nature (assets equal (~ liabilities), and do not involve measurement of results of operations. Those Eunds era accounted for in essentially the same manner ae - Governmental Funds. ~cecunt Groups Land, buildings and equipment are recorded at historical coat or at estimated historical cost if actual historical cost is not available. Depreciation is not computed on general fixed assets. Interest costa paid duriny the construction period is eapital.ized as part of the constructed assets. Long-term debt is offset by an amount to be provided by future taxation or other revenue sources. Bonds payable in future years are recorded as District debt. Ltterest on bonds i.s recorded when such interest is due. _ 11 _ EAST PENN500R0 AREA SCHOOL DISTRICT NOTES TU FINANCIAL9TATEMENI'S (COnt'd,l ', ,TUNE 3V, 1998 A, 2, Summary of significant accounting policies (Cont'd.) Basis of accounting (Cont'd.) gocount Oroucs (CO t'd. ~~ Compensated absences (those for which employees receive payl are recorded uainy 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 unueod leave and applies the contracted rate for employees eligible for termination payments. The District allows only restricted sabbatical leave and a~ therefore has no recorded liab.iliey in advance of the eabbati,cal. ' Cash and cash equivalents The Districts pools cash resources of certain funds in order to facilitate the management of cash. Aa part of this cash management program sponsored by the ~~ District's depositary institution, overnight repurchase agreements are bought and sold on a regular basis to increase interest earnings. Cash and cash equivalents applicable to a particular fund are readily identifiable. The balances in the pooled cash management accounts are available to meet current operation requirements, For purposes of the Food Service Fund statement of cash flows, the District considers all deposits purchased with an original maturity of three months or lees Co be cash or cash equivalents. Budgets The District adopts, prior to the beginning of each fiscal year, an annual budget for the Gene rats Fund and Athletic Fund. Apart 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. LJnused appropriations expire at the end of each year. `~ Revenue - Local sources Real estate, occupation and per capita taxes are levied as of July 1 with a legal, enforceable claim against the taxpayer and/or property. These taxes are recognized ae revenue when received during the fiscal year and also estimated to be received within sixty days after the end of the fiscal year. Amounts estimated '~ to be received between sixty days .and one year after the end of the fiscal year are recorded ae deferred revenue. An allowance for uncollect•ibles is recorded Eor 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 recognixad as revenue when received during the fiscal year or soon enough thereafter to be susceptible to accrual. - 12 - J EAST PENNSEORO AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) :TUNE 30, 1998 2, Summary of significant accounting policies (Cont'd.l Revenue - State sources State subsidies due the Uiserict as current fiscal year entitlements are recognized as revenue in the current fiscal year. Revenue - Federal sources Federal program funds applicable to expenditures in the currant fiscal year but expected to be received in the next f.iecal 'year are recognized as revenue 'in the current fiscal year. pension plan Substantially all full-time and part-L•ime employees of the District paxticipate in a cost•~aharing multiple employer defined benefit pension plan. The District recognizes expenditures or expenses equal to its contractually-required contributicne, subject to the modified accrual basis of accounting in governmental Yunds. Inter-fund transactions Expenditures by 'she General Fund for the benefit of other funds are reflected in the respective skatemente of revenue. and expenditures/expenses, based on management's estimates. The Dietx~icC does not attempt to allocate all coats which benefit the other funds due to the difficulties associated with the measurement of such benefits. 3, Cash and investments The District's cash and cash equivalents consist of cash balances deposited in financial institutions and repur.ehase agreements purchased by the District from the financial institutions ae part of a cash management., account. Cash at. June 30, 1998 is categorized as follows: Cash and cash equivalents Change funds Insured (FUTC) Collateral held in the Uietrict's Warne Collateral not held in the District's Hama Total 13 - Carrying Va1a ue $ soo 100,000 _ 137, 983 Bank Balance S - 100,000 462.77 , $ 23B~4S3 $ 5 2 77 EAS'C PENNSBORO AREA SCHOUL DISTRICT NOTES TO FINANCIAG STATEMENTS (Cont'd) JUNE 30, 1998 ~ 3, Caeh and investments (Cbnt'd.l The types of authorized invearmente are limi ted by state regulations. The District's investments consist of deposits in authorized pooled investment funds These investments are carried at cast which app roximatee market . .value.' At June 30, 1990, all Investments of the Trust were either obligatio ns of the U.S. ~~ Government or its agencies or instrumentalities, or deposits insu red by F'UIC, and are categorized as follows: Carrying Market Isivestments Value _ Value ~7 Insured (FDIC) $ _ $ Collateral held in the District's name - _ Collateral not held in the District's name ~ p 0. Pooled investments: PA Local Government Investment Trust 2,040,034 2,048,034 PA Local Government InvestmenC Trust Arbitrage Rebate Management Program 989,615 989,615 PA Treasurer's Invest Program for Local GovernmenCS _9,916,630 9.416,630 Total $ 12.454,279 $ 12,454.279 !'~ Investment policies followed during the year ended Juna 30, 1998 did not significantly alter the categorization of investments shown above. 4. Accounts receivable 0 Accounka receivable at June 30, 1990 consist of the following: Food ' General Service Fund Fund (~ Federal subsidies $ 119,556 $ 1,263 Stale subsidies 231;326 115 Due from other governmental units 35,414 - Due from EIT/OP'P collector 396,682 - Other receivables ~~ (} $ 732.978 $ 3,517. S, Delinquent taxes receivable As explained in Note 2, taxes are recorded as revenue only when received, or, in the ease of delinquent real estate taxes, available within sixty days. The remaining balance of delinyuent taxes receivable are recorded as deferred revenue 1n accordance with school accounting policies. Deferred tax revenue amounted to ' $ 351,017 at June 30, 1998. Delinquent kaxas receivable as reflected on the June 30, 1990 balance sheet consist of the following; (,~ - 14 - EAST FENNBBORO AREA °CNOOL DISTRICT ~ NOTFi9 TO FINANCIAL STATEMENTS (Conq'd.) JUNE 30, 1998 5, Delidquant taxne receivable (Cont'd.) Real TOCal EBtata Perxs~~l 1991 and prior years. $ 191,585 $ - $ 191,585 1992-93~ 81,870 9,622 72,248 E~ 1.993-94 101,926 1,013 100,913 1494-95 115,979 2,667 113,312 1995-96 116, 7'76 1,~i19 115, 359 , 1996-97 244,295 96,222 150,073 1997-99 ,_,g 5 6 173.111 _,},x,2,845 1,348,397 274,053 1,074,334 '~ Lase: Allowance for uncollectibles ~ ~ 97 9 ~111,12N __ 0 7 7 Tatal $ 376,5G2 $ 162,925 $ 213.577 6. general Fixed Aesete As explained in Noto 2, buildings and equipment are reflected on the balance sheet under the Oeneral Fixed Aeaeta group of Accounts elated at histo rical coat or estimated historical coat if actual historical costa are not available. A summary of changes in fixed easels for the year ended June 30,.1930 is as follows: ~ Tranefere Beginning and End' ,of Year, Pydditione Disoosals of Year general fixed assets Land and ~ - improvements $ 325,856 $ - $ - $ 325,E56 Buildings and ' improvements 21,105,440 142,915 - 21,248,255 Furniture and equipmenC _2y595.715 1s 257.527 - 3,853,242 ~ $ 24,027,011 $ 1,400,342 $ ~„~~0- $ 25,927..353 i~ - 15 - ~, t i,7 u'7 •_~ J EAST PENNSBORO AREA SCHOOL DISTRICT' NOTES TO FINANCIAL STAT~MENT9 (COnt'd,) JUNE 30, 1998 6, Genoral Fixed Assets (Cont'd.) Transfers Beginning and End -2_.~4~_ Additione DispOeala Qf Xear Food Service Fund .Fixed assets Furniture and equipment Accumulated $ 198,823 $ 14,302 $ $' 213,205 depreciation (171.739) ~_,~.308) _ (178,097) $ ~ 2~,~Bq $ ~'0~ $ ~~ $ ~1~ 7, General obligation bond s and notes payable A summary of changes ended June 30 1 99 in general obligation bonds i and not:ea payable for. the year , . 8 e ae follows: Payments Beginning and other 8nd of. Year_ Additione DQcr eas A~_YQar General Obligation Bonds Series of 1992, 2.'704 to 5.809, maturing 9j1/2012 $ 7,855,000 $ Series of 1989, 6.408 to 7.95#, maturing 9/1/2006 5,334,930 ' Series A of 1997, 3.806 to S,OSi, maturing 9/1)2011 _ Series AA of 1997, 4.006 to 4,208, maturing 9/1/2001 _ 13,189,930 General Obligation Notes, Series A of 1997, Vmriable rate, maturing 1/3/2000 $ 7,855,000 $ 355,298 (a) 810,000 4,880,228 8,220,000 - 8,220,000 1.115,000 _ 1,115,000 9,69Q,298 0,665,000 14,215,224 10,000.000 10,000.000. $ 13.189,930 $ 19..690.298 $ 8.665,000 $ 24,215,228 la) Represents accreted interest. on Capital Appreciation Bonds. - 16 W • F.AS'f PEDRJSBORO AREA SCf]OOL llISTR'ICT NOTES TO FINANCIAL STATEMENTS ICont'd JIINE 30, 1996 7, General obligation bonds and notes payable (Cant'd.) Total enlteduled debt service payments for all general obligation debt ae of Juno 30, 1998 are ae follows: ~ Series All Other Series _ of 1989 Capital Appreciation Year Total Principal, Interest Bonds ll) ,~ 199A-1999 $ 1,A52,606 5 195,000 $ 647,808 $ 810,000 ' 1999-2000 12,009,2].6 10,590,000 619,216 600,000 2000-2001 1,797.,160 640,000 381,160 770,000 2001-2002 1,786,565 675,000 353,565 760,000 ' 2002-2003 1,392,985 305,000 332,965 755,000 2003 and Chereafter 11,341 362 6,93C,000 1,846,362 2.565,000 ~ j Totals $ 30,176,].16 $ 19,335,000 $ 4,381,116 $ 6460.000 (1) Reflects final maturity value of Capital Appreciation Bonds. Cj In AugusC 1997, the District borrowed $ 9,335,000 through the iesuanre of General Obligation Bonds, Series A and Series AA of 1997. Interest on the Series A bonds, in the aggregate principal amount of $ 8,220,000, .range from 3.808 to 5.051 and mature from 1996 through 2011. Nat proceeds from the Series A bonds wereuaed to refund the District's General Obligation Bonds, Series of 1992. Intexeat pn the Series AA bonds, in the aggregate principal amounts of $ 1,115,000, range from ~~ 4.00 to 4.20 and mature from 1999 through 2001. Net proceeds from the Series AA bonds will be used toward the purchase and installation of. computers and infrastructure to implement the District's technology plan. On September 2, 1997, the District borrowed $ 10,000,000 through Cheissuanca of ' the General Obligation Note, Series A of 1997 to the Emmaus General Authority of Emmaus, Pennsylvania. Interest on this note ie payable monthly at a variablo rata of .558 above the "weekly rata", up to a maximum of 15.558. At June 30, 1996,'the effective rate was 4.255. The note is due and payable in full on January 3, 2000, Proceeds from the note are to be used t'o finance the coat of planning, designing, constructing and equipping cf elementary echaol projects or alteration and renovations to existing facilities. During the year ended June 30, 1996, $ 349,630 of interest was paid within the Capital Projer_ts Fund. As part of the Series A of 1997 Note, the District was required to enter into ,a Credit Agreement wiCh Bayeriscle Landesbapk Girozentralo, Naw York Branch in which the Bank agrees to issue a letter of credit in the amounC of $ 10,247,727 to a provide Eunds for the repayment of the note through Jattuary 2000, if other financing has not been arranged. - 17 - ~. n EAST PENNSBORO AREA SCHOOL DISTRICT NOTE9 TO FINANCIAL 9TATEMENT9 (Cont'd,) JUNE 30, 1998 iii 8, Compensated absences At June 30, 1498, the General Long-Term Debt Group of Accounts includes a liability for compensates] absences of $ 572,538. Paymahts for compensated abaencea are made through General Fund expenditures in the'year the absence ie used or ttie employee retires. When an employee retires with unused compensated absences, the Disl-rict'a payout policy is as follower Emergency and personal - no payout required Vacation (administrative par.sonnel only) - unused varation days (not to exceed 5 days) are paid at the time of separation Sickness - no payout required Personal days - unused personal days (not to exceed 5 days) are paid at a rate equal to the average rate paid to substitute teachers Retirement with aC least seven years of service retiring professional employees with at least seven consecutive years of District employment immediately prior to retirement are eligible to receive a severance payment equal to $ 150 times the number of continuous years of service to the DietriaC up to a maximum amount of $ 3,000 (20 years) R.eti.rement with 30 or more years of service - retiring full time professional employees with at least 30 years of experience, including at least 15 years with the District, may be entitled to a retirement incentive bonus of between $ 1,000 and $ 10,000 depending on age and total years of experience Changes in compensated absences were ae follows: Balance Nat Increase Balance Julv 1, 1997 acre se June 30,1998 Vacaticn pay $ 9,591 $ 2,036 $ 11,627 Severance payments 366,548 25,352 391,900 Retirement incentives 119.491 49,520 169,011 Totals $ 495,630 $ 76.908 $ 572..538 - 48 - t EAST PENNSBURO AREA SCHOOL DISTRICT NOTES TO FINANCIAL 9TATEh1ENTS lCont'd,l ' .PJNE 30, 1990 9, Lease commitments At ,Tune 30, 1990, the District wan leasing four photocopying machines pursuant to various lease agreements which are being accounted for as operating leases. Totdl ~ lease rental payments during the year ended June 30, 1990 were $.58,228. Minimum sat lease rental payments for future periods are expected to be an follows: . - 1998-1999 $ 53,410 1999-2000 25,803 2000-2001 6,085 ~~ 2001-2002 2,028 10, Pension plan The District contributes to a governmental cosk.-sharing multiple-employer defined benefit pension plan administered by the Pennsylvania School Employees Retiremenk System (PSERS). Benefit provisions of the plan are established un<ier the `~ provisions oP the PSERS Code (the Code) and may be amended by an act of the Pennsylvania Skate Leyislature. The plan provides retirement, disability and death benefits, ].eginlatively mandated ad hoc cook-of-living adjustments, and healthcare insurance premium assistance to qualifying plan members and beneficiaries. It also provides For refunds of a membe.r's accumulated ' contribution upon termination of a member's. employment in the public school sector. PSERS issues a publicly available financial report that includes financial statements for the plan. That report may be obtained by writing to PSERS, P.O. Box 125, Harrisburg, PA 17108-0125, The contribution policy is set by the Code and requires contributions by active employees and by participating employers. Plan members are required to contribute ` 5.25 percent of their compensation if they joined the plan before July 22, 1903, and 6.25 percent if they joined on or after that date. The contributions required of participating employers is based on an actuarial. valuation and is expressed as a percentage of annual covered payroll during the period .for which the amount ie determined. Diekricte pay the entire employer contribution rate and are reimbursed by the Commonwealth in an amount equal tc 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 employer rate. The District's contributions to PSERS for the years ending June 30, 1990, 1997 and 199G were $ 930,331, $ 1,075,186 and $ 1,142,616, respectively. Those amounl:s are equal to the required contribution for each year. 11, Managementaervices The cafeteria facilities of the District were operated by a third party vendox•. Under the terms of the contract, the vendor provides for the operation and maintenance of food services as required by law, with the policies subject to the ~` approval of the District. Operating coats, management fees and administrative casts are billed monthly to the District. 19 - EAST PENN9HUR0 AREA SCNOOL DISTRICT NOTES TO FINANCIAL 3TATEMENT9 (Cont'd,) ^! J1RdE 30, 1998 12, Other poet-employment retiz'oment benefits The'DietricL- offers one poor-employment benefit to retired professional employees other than pension benefits as discussed in Nota 10, For employees with twenty or more years of service to the District, the District will pay the basic medical insurance premiums for five yearn (excluding family coverage) following reti.roment. This benefit amounted to approximately $ 64,000 during the year ended June 30, 1998 and covered 20 eliyible retired employees. The District dose allow other smployeea not eligible for this benefit to remain in its group medical ~ insurance plan upon payment by the retired employes of rho cost of such covaraye, 13. Risk management The District is exposed to various risks of loss related to torte; theft af, damage to, and destruction of assets; errors and omisaione; injuries Co 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 uniheured losses to the District. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. For purposes of. State unemployment compensation lawn, 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 f;~ contributions to the group based vn 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. 14. Commitments and contingencies tJ The collective baryaining agreement between the District and the teaching staff expires on August 31, 2000. In the normal course of preparing for thr.aubsequent school year, the District has awarded bids for various auppliea, 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 era governed by various rules and regulations of the grantor agencies. Costa charged to the respective grant programs are aubjecC to audit and review by the g.rankor ;' ayenciea; tlaerefoza, 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. 20 ~t ~:.~, v~ EAST PENN9HOR0 AREA 9CH004 DISTRICT NOTES 'Tb FINANCIA4 STATEMENTS (COnt'd.l JUNE 30, 1998 14,,Commitmentn and contingeneiea (Cont'd.) The District itt contingently liable for repayment of Eaet Pennsboro School District. Authority Revenue Donda, Series of 1965, 1968 and 1973. Those issues were refunded by the deposit of funds into an irretvocable escrow account in amounts sufficient to retire the bonds and intezesC when due. Because of the refunding, these bonds era not included as general obligation dabs on the District's balance sheet. At June 30, 1998, the amount of Authority Bonds still outatand.ing totaled $ 1,960,000. The District, during the .normal course oP business, ie subject to numerous disputes and r.laims. At Juno 3U, 1990, Che District is named ae .a party in actions for which the potential liability cannot presently be determined. District management feels that the actions ttre generally without merit and they intend to vigorously contest Lhe claims. It is managemenC'e opinion that the ultimate outcome of the actions will not have a mater.tal affect on the District's financial position. 15. Subsequent events 9n September 15, 1998, the District issued $ 9,780,000 of General Obligation Bonds, Series A of 1998. The proceeds of thane bonds will be used for Che planned renovation projects at the West Creek Hills Elementary School and the Middle School. The bonds will mature in various amounts from 2000 through 2015 and will bear interest at annual rates ranging from 4.106 to 4.706. Additionally; on October 1, 1998, the District borrowed $ 10,000,000 through the issuance of the GenP,.Ial Obligation Note of 1998 to the Emmaus General Authority of Emmaus, Pennsylvania. Proceeds of the borrowing will be used toward ronovatione and alterations to hiyti school facilities and athletic fields, 21 W i '~~ 1 ~ 1 (C, ~ ~ ' L_ ~ °~. <1~ is , ~i ~ ~'r~ r r ~, ~. ~iiii~ i ~... .. C~ G~ 1. ~ ~ ~ 7. l70 ~d G~tEnawo4.~ ;t C,~ , ~ ~? G, C.~a~ 139w'f A • ',