HomeMy WebLinkAbout04-0369SHIPPENSBURG AREA SCHOOL DISTRICT
FINANCIAL REPORT
JUNE 30, 2003
CONTENTS
INDEPENDENT AUDITOR'S REPORT
Management's Discussion and Analysis
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Balance Sheet - Governmental Funds
Reconciliation of the Governmental Funds Balance
Sheet to the Statement of Net Assets
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - Governmental Funds
Reconciliation of the Governmental Funds Statement
of Revenues, Expenditures and Changes in Fund
Balances to the Statement of Activities
Statement of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual - General Fund
Statement of Net Assets - Proprietary Fund -
Food Service
Statement of Revenues, Expenses and Change in Net
Assets - Proprietary Fund - Food Service
Statement of Cash Flows - Proprietary Fund -
Food Service
Statement of Fiduciary Net Assets
Statement of Change in Fiduciary Net Assets -
Combined Scholarship Trust Funds
Notes to Financial Statements
1-2
3-12
13 -14
15
16
t7
18
19
20
21
22
23 - 24
25
26
27 - 41
CONTENTS (Continued)
SUPPLEMENTARY INFORMATION
General Fund - Schedule of Revenue
General Fund - Schedule of Expenditures
Combining Balance Sheet - Non-Major Governmental
Funds
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Non-Major
Governmental Funds
Combining Statement of Fiduciary Net Assets -
Activities Funds
Combining Statement of Changes in Fiduciary Net
Assets - Scholarship Trust Funds
Independent Auditor's Report on Compliance and
on lnternal Control over Financial Reporting
Based on an Audit of the Basic Financial
Statements Performed in Accordance with
Government Auditing Standards
Independent Auditor's Report on Compliance with
Requirements Applicable to Each Major Program
and Internal Control over Compliance in
Accordance with OMB Circular A-133
Schedule of Findings and Questioned Costs
Schedule of Expenditures of Federal Awards
Summary Schedule of Prior Year's Audit Findings
42 - 43
44 - 49
50-51
52-53
54 - 55
56 - 57
58 - 59
60 - 61
62 - 63
64 - 68
69
[IBart ] BOYER a R TTER
CERTIHED PUBLIC ACCOU~sF/,d~TS AND CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
Board of School Directors
Shippensburg Area School District
Shippensburg, Pennsylvania
We have audited the accompanying financial statements of the governmental activities, the business4ype
activities, each major fund, and the aggregate remaining fund information of the Shippensburg Area
School District, as of and for the year ended June 30, 2003, which collectively comprise the Shippensburg
Area School District's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the Shippensburg Area School District's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Governtnent Auditing Standar&,
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 opinions.
As explained in Note 2 to the financial statements, the Shippensburg Area School District adopted
Governmental Accounting Standards Board (GASB) Statements No. 34, Basic Financial Statements and
Management's Discussion and Analysis, No. 37, Basic Financial Statements - and Management's
Discussion and Analysis - For State and Local Governments: Omnibus, and No. 38, Certain Financial
Statement Note Disclosures, and GASB Interpretation No. 6, Recognition and Measurement of Certain
Liabilities and Expenditures in Governmental Fund Financials.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business4ype activities, each major fund,
and the aggregate remaining fund information of the Shippensburg Area School District, as of June 30,
2003, and the respective changes in financial position and cash flows thereof, where applicable, and the
respective budgetary comparison for the General Fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards', we have also issued a report dated August 19, 2003,
on our consideration of the Shippensburg Area School District's internal control over financial reporting
and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That
report is an integral part of an audit performed in accordance with Gover,menl Auditing Standards and
should be read in conjunction with this report in considering the results of our audit.
CAMP HILL
STATE COLLEGE
The management's discussion and analysis on pages 3 through 12 are not a required part of the basic
financial statements but are 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 required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Shippensburg Area School District's basic financial statements. The combining and individual
non-major fund financial statements and other schedules, listed in the table of contents as supplementary
information are presented for purposes of additional analysis and am not a required part of the basic
financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for
purposes of additional analysis as required by the U. S. Office of Management and Budget Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic
financial statements of the Shippensburg Area School District. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated,
in all material respects, in relation to the basic financial statements taken as a whole.
Chambersburg, Pennsylvania
August 19, 2003
MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A)
The discussion and analysis of the Shippensburg Area School District's (District) financial performance
provides an overall review of the District's financial activities for the fiscal year ended June 30, 2003.
The intent of this discussion and analysis is to look at the District's financial performance as a whole;
readers should also review the transmittal letter, notes to the basic financial statements and financial
statements to enhance their understanding of the District's financial performance.
The Management's Discussion & Analysis (MD&A) is an element of the new reporting model adopted by
the Governmental Accounting Standards Board (GASB) in their Statement No. 34 Basic Financial
Statements and Management's Discussion and Analysis for State and Local Governments issued in June
1999. Certain comparative information between the current year and the prior year is required to be
presented in the MD&A. However, because this is the first year of implementing the new reporting
model, certain necessary comparative information of the previous year was not prepared. Considering the
financial resources necessary to prepare this information for the prior year, and that the GASB Statement
No. 34 permits the omission of the comparative information in the first year of adoption of the new
reporting model, the District has elected to exclude the information in this report. Subsequent reports,
however, will include the comparative information.
FINANCIAL HIGHLIGHTS
Special Education
The trends of prior years indicated that during the fiscal year 2002-2003, the Shippensburg Area School
District would experience another year of significant increases in costs for Special Education Instruction.
Alternative Education
Alternative Education costs increased significantly during the 2002-2003 fiscal year. The District
transferred increased financial resources to fund Alternative Education Placements for at-risk students
during the fiscal year.
Building Program
Due to increased enrollment, the District is planning to build a Grade 4-5 building and to complete limited
renovations on the James Burd and Nancy Grayson Elementary Schools. The District applied for and
received a variance of Pennsylvania Department of Education's (PDE) 20-year rule for reimbursable
projects. The District will receive state reimbursement on the renovations of the existing elementary
schools and the new Grade 4-5 building.
Borrowin~
The Board of School Directors approved borrowing up to 20 million dollars from the New Garden
Variable-Rate Bond Pool in anticipation of the building programs addressed above. The first installment
($10,000,000) will be received in December 2003.
Scholarship Funds
The Board of School Directors approved transferring the District's Scholarship Funds to the
Shippensburg Area School District Educational Foundation. The transfers were completed in June 2003,
The Scholarship Funds were:
Class of 1950 Scholarship Fund
David R. Landis, Jr. Scholarship Fund
Class of 1936 (C.B. Derrick) Scholarship Fund
Travis Griffith Scholarship Fund
Larry Carey Music Scholarship Fund
FFA Scholarship Fund
Class of 1945 Scholarship Fund
Andrea Gantt Memorial Scholarship Fund
Table A-1 summarizes the major features of the District's financial statements, including the portion of
the District they cover and the types of information they contain. The remainder to this overview section
of the MD&A explains the structure and contents of the statements.
Scope
Table A-1
Major Features of Shippensburg Area School District's
Government-Wide and Fund Financial Statements
Government-Wide
Statements
Entire District
(except fiduciary
funds)
Required Financial Statement of Net
Information Assets
Accounting Basis
and Measurement
Type of
asset/liability
information
Type of inflow~
outflow information
Statement of
Activities
Accrual accounting
and economic
resources focus
All assets and
liabilities, both
financial and capital,
and short-term and
long-term
All revenues and
expenses during the
year, regardless of
when cash is
received or paid.
Fund Statements
Governmental Funds
The activities of the
District that are not
proprietary or
fiduciary, such as
education,
administration and
community services.
Balance Sheet
Statement of
Revenues,
Expenditures and
Changes in Fund
Balances
Modified-accrual
accounting and
current financial
resources focus
Only assets expected
to be used up and
liabilities that come
due during the year
or soon therea~er; no
capital assets
included
Revenues for which
cash is received
during or soon after
the end of the year;
expanditums when
goods or services
have been received
and payment is due
during the year or
soon thereafter
Proprietary Funds
Activities the District
operates similar to
private business -
Food Service
Statement of Net
Assets
Statement of
Revenues, Expenses
and Changes in Net
Assets
Statement of Cash
Flows
Accrual accounting
and economic
resoumes focus
All assets and
liabilities, both
financial and capital,
and short-term and
long-term
All revenues and
expenses during the
year, regardless of
when cash is
received or paid
Fiduciary Funds
Activities in which
the District is the
trustee or agent to
someone else's
Scholarship Funds
and Activity Funds
Statement of
fiduciary net assets
Statemant of changes
in fiduciary net
Accrual accounting
and economic
resources focus
Ail assets and
liabilities, both short-
term and long-term
All revenues and
expenses during the
year, regardless of
when cash is
received or paid
OVER VIEW OF FINANCIAL STATEMENTS
Government-Wide Statements
The government-wide statements report information about the District as a whole using accounting
methods similar to those used by private sector companies. The Statement of Net Assets includes all of
thc government's assets and liabilities. All of the current year's revenues and expenses are accounted for
in the Statement of Activities regardless of when cash is received or paid.
The two government-wide statements report the District's net assets and how they have changed. Net
assets, the difference between the District's assets and liabilities, are one way to measure the District's
financial health or position.
Over time, increases or decreases in the District's net assets are an indication of whether its financial
health is improving or deteriorating, respectively.
To assess the overall health of the District, additional non-financial factors, such as changes in the
District's property tax base and the performance of students, must be considered.
The government-wide financial statements of the District are divided into two categories:
Government activities - All of the District's basic services are included here, such as instruction,
administration and community services. Property taxes and state and Federal subsidies and grants finance
most of these activities.
Business-Type Activities - The District operates a food service operation and charges fees to students,
staff and visitors to cover the costs of the food service operation.
Fund Financial Statements
The District's fund financial statements provide detailed information about the most significant funds -
not the District as a whole. Some funds am required by state law and by bond requirements.
Governmental funds - Most of the District's activities are reported in governmental funds, which focus on
the determination of financial position and change in financial position, not on income determination.
They are reported using an accounting method called modified-accrual accounting, which measures cash
and all other financial assets that can readily be converted to cash. The governmental fund statements
provide a detailed short-term view of the District's operations and the services it provides. Governmental
fund information helps the reader determine whether there are more or fewer financial resources that can
be spent in the near future to finance the District's programs. The relationship (or differences) between
governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and
governmental funds is reconciled in the financial statements.
Proprietary funds - These funds are used to account for the District's activities that are similar
to business operations in the private sector; or where the reporting focuses on determining net
income, financial position, changes in financial position, and where a significant portion of
funding comes through user charges. When the District charges customers for services it
provides - whether to outside customers or to other units in the District - these services are
generally reported in proprietary funds. The Food Service Fund is the District's proprietary fund
and is the same as the business-type activities reported in the government-wide statements, but
provides more detail and additional information such as cash flows.
Fiduciary funds - The District is the trustee, or fiduciary, for several scholarship funds. All
fiduciary activities are reported in a separate Statement of Net Assets. We exclude these
activities from the District's other financial statements because the District cannot use these
assets to finance operations.
FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE
The District's total net assets were $8,061,050 at June 30, 2003.
Table A-2
As of June 30, 2003
Net Assets
Governmental Business-Type
Activities Activities Total
Current and other assets $ 4,362,661 $ 43,730 $ 4,406,391
Capital assets 20,557,416 105,136 20,662,552
Totalassets $ 24,920,077 $ 148,866 $ 25,068,943
Current and Other Liabilities
Long-term liabilities
Total liabilities
$ 3,842,752 $ 53,713 $ 3,896,465
13,084,931 26,497 13,111,428
$ 16,927,683 $ 80,210 $ 17,007,893
Net Assets
Invested in capital assets, net of
related debt $ 7,062,416 $ 346,791 $ 7,409,207
Restricted 79,565 79,565
Un restricted 850,413 (278,135) 572,278
Total net assets $ 7,992,394 $ 68,656 $ 8,061,050
Most of the District's net assets are invested in capital assets (land, site improvements buildings, and
equipment). The remaining unrestricted net assets consist of designated and undesignated amounts. The
designated balances are amounts set aside to fund future purchases or capital projects as planned by the
District.
The results of this year's operations as a whole are reported in the Statement of Activities. All expenses
are reported in the first column. Specific charges, grants, revenues and subsidies that directly related to
specific expense categories are presented to determine the final amount of the District's activities that are
supported by other general revenues. The two largest general revenues are the Basic Education Subsidy
provided by the Commonwealth of Pennsylvania, and the local taxes assessed to community taxpayers.
Table A-3 restates information from the Statement of Activities in a different format.
Table A-3
Fiscal Year Ended June 30, 2003
Changes in Net Assets
Governmental Business-Type
Activities Activities
Revenues
Program revenues
Charges for services $ 131,463 $ 628,699
Operating grants and contributions 4,822,428 295,541
General revenues
Property taxes 9,711,322
Other taxes 2,596,131
Grants, subsidies and
contributions, unrestricted 6,512,823
Other 136,777 782
Total revenues 23,910,944 925,022
Expenses Instruction
Instructional student support
Administrative and financial support
Operation and maint, of plant services
Pupil transportation
Student activities
Community services
lnterest on long-term debt
Unallocated depreciation expense
Food services
Total expenses
15,571,051
1,846,990
1,839,558
1,757,218
1,531,751
413,280
13,971
545,986
1,056,182
24,575,987
922,037
922,037
Change in net assets
$ (665,043) $
2,985 $
Total
760,162
5,117,969
9,711,322
2,596,131
6,512,823
137,559
24,835,966
15,571,051
1,846,990
1,839,558
1,757,2t8
1,531,75I
413,280
13,971
545,986
t,056,182
922,037
25,498,024
(662,058)
The tables below present the expenses of both the Governmental Activities and Business-Type Activities
of the District.
Table A-4 presents the District's eight (8) largest functions - instructional programs, instructional student
support, administration, community services, operation and maintenance of plant, pupil transportation,
food service and each program's net cost (total cost less revenues generated by the activities). This table
also shows the net costs offset by the other unrestricted grants, subsidies and contributions to show the
remaining financial needs supported by local taxes and other miscellaneous revenues
Table A-4
Fiscal Year Ended June 30, 2003
Governmental Activities
Total Net
Cost of Cost of
Functions/Programs Services Services
Instruction $ 15,571,051 $ 12,573,281
Instructional student support 1,846,990 1,661,394
Administrative 1,839,558 1,788,928
Operation and maintenance 1,757,218 1,029,286
Pupil transportation 1,531,751 595,771
Student activities 413,280 357,585
Commun/ty services 13,971 13,683
Interest on long-term debt 545,986 545,986
Unallocated deveciation 1,056,182 1,056,182
Total governmental activities 24,575,987 19,622,096
Less unrestricted grants, subsidies
6,512,823
Total needs for grants, taxes
and other revenues
$ 13,109,273
Table A-5 reflects the activities of the Food Service Program, the only business-type activity of the
District.
Table A-5
Fiscal Year Ended June 30, 2003
Business-Type Activities
Functions/Programs
Food services
Add: investment eamings
Total business-type activities
Total Net
Cost of Cost of
Services Services
922,037 $ 2,203
782
$ 2,985
The Statement of Revenues, Expenses and Changes in Fund Net Assets for this proprietary fund will
further detail the actual results of operations.
THE DISTRICT FUNDS
At June 30, 2003, the District's governmental funds reported a combined fund balance of $1,134,024,
which reflects a decrease of $409,796 from June 30, 2002. The primary reasons for this decrease are
specific to two funds:
General Fund
>' Planned adherence to School Board Policy to maintain a fund balance of five percent.
Increased effort to provide alternative education programs for at risk-students.
Capital Reserve Fund
Planned expenditures for roof repairs.
General Fund Budget
During the fiscal year, the Board of School Directors (Board) authorizes revisions to the original budget
to accommodate differences from the original budget to the actual expenditures of the District. All
adjustments are again confirmed at the time the annual audit is accepted, which is after the end of the
fiscal year and not prohibited by state law. A schedule showing the District's original and final budget
amounts compared with amounts actually paid and received is provided.
The District applies for Federal, state and local grants. These grants cannot always be anticipated in the
budgeting process. Budgeted revenues increased by $150,629 as a result of additional approved grants.
Budgeted expenditures and other financing uses also increase by this same amount to compensate for the
additional approved grants. Transfers between specific categories of expenditures/financing uses
occur during the year. The most significant transfers are from the budget reserve to specific
expenditures.
10
Capital.4sset and Debt Administration
CAPITAL ASSETS
At June 30, 2003, the District had $20,557,416 invested in a broad range of capital assets, including land,
buildings and furniture and equipment.
Table A-6
Fiscal Year Ended Jane 30, 2003
Governmental Activities
Capital Assets - Net of Depreciation
2003
Land $ 51,396
Site improvements 562,766
Buildings 16,263,523
Furniture and equipment 3,679,731
$ 20,557,416
DEB T A D M1NIS TRA TI ON
As of July l, 2002, the District had total outstanding bond principal of $14,620,000. During the year,
the District made payments against principal of $1,125,000 resulting in ending outstanding debt as of
June 30, 2003, of $13,495,000.
Table A-7
Fiscal Year Ended June 30, 2003
Outstanding Debt
General Obligation Bonds
Series of 1997
Series of 2001
Series of 2001A
2003 2002
$ 540,000 $ 930,000
3,155,000 3,885,000
9,800,000 9,805,000
$13,495,000 $14,620,000
Other obligations include accrued vacation pay and sick leave for specific employees of the District.
More detailed information about our long-term liabilities is included in Notes to the Financial Statements.
11
The comparison of revenue and expenditure categories is as follows:
Table A-8
Revenues and Expenditures
Localrevenues
States reveneus
FedemFother revenues
2002-2003 2001-2002
53.900/0 54.00o/0
43.60% 43.80%
2.50o/o 2.20o/o
Instruction 63.60% 64.30%
Support services 28.10% 28.00%
Non-instructional/community 1.40% 1.40%
Fund transfers/debt 6. 90% 6.30%
CONTACTING THE DISTRICT FINANCIAL MANAGEMENT
Our financial report is designed to provide oar citizens, taxpayers, parents, students, investors and
creditors with a general overview of the District's finances and to show the Board's accountability for the
money it receives. If you have questions about this report or wish to request additional financial
information, please contact Deborah Westover, Business Administrator/Board Secretary, at the
Shippensburg Area School District, 317 North Morris Street, Shippensburg, PA
12
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF NET ASSETS
June 30, 2003
ASSETS
Current Assets
Cash
Investments
Receivables
Taxes ~ net of allowance
for uncollectibles
Federal subsidies
State subsidies
Other
Internal balances
Inventories
Total current assets
Governmental Business-Type
Activities Activities Total
$ 428,645 $ 7,135 $ 435,780
2,404,952 2,404,952
896,225 896,225
143,488 6,764 150,252
105,527 887 106,414
188,420 159 188,579
28,682 28,682
28,785 28,785
4,195,939 43,730 4,239,669
Noncurrent Assets
Bond issuance costs - net
Land and improvements - net
Building and improvements - net
Furniture and equipment - net
Total noncurrent assets
166,722 166,722
614,162 614,162
16,263,523 16,263,523
3,679,731 105,136 3,784,867
20,724,138 105,136 20,829,274
Total assets
$ 24,920,077 $ 148,866 $ 25,068,943
See Notes to Financial Statements.
13
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable
Current portion of long-term debt
Accrued expenses
Salaries and benefits
Payroll withholdings
Internal balances
Accrued interest payable
Deferred revenue
Governmental
Activities
$ 1,131,291
1,185,000
1,223,501
240,829
62,131
Business-Type
Activities Total
$ 899 $ 1,132,190
13,249 1,198,249
1,223,501
240,829
28,682 28,682
62,131
10,883 10,883
Total current liabilities
Noncurrent Liabilities
General obligation debt
Note payable
Compensated absences
Total noneurrent liabilities
Total liabilities
Net Assets (Deficit)
Invested in capital assets - net of
related debt
Restricted for:
Capital reserve
Athletic
Unrestricted
Total net assets
Total liabilities and net assets
3,842,752
12,310,000
774,931
13,084,931
16,927,683
53,713 3,896,465
12,310,000
26,497 26,497
774,931
26,497 13,111,428
80,210 17,007,893
7,062,416 346,791 7,409,207
76,309 76,309
3,256 3,256
850,413 (278,135) 572,278
7,992,394 68,656 8,061,050
$ 24,920,077 $
14
148,866 $ 25,068,943
SHIPPENSBURG AREA SCHOOL DISTRICT
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2003
ASSETS
Cash
Investments
Receivables
Taxes - net of allowance
for uncollectibles
Federal subsidies
State subsidies
Other
Due from other funds
Total assets
LIABILITIES AND FUND BALANCES
Accounts payable
Due to other funds
Accrued expenses
Salaries and benefits
Payroll withholdings
Deferred revenues
Total liabilities
Fund Balances
Reserved for
Capital reserve
Athletic
Unreserved
Total fund balances
Total liabilities and fund balances
General
$ 72,014
2,404,952
896,225
143,488
105,527
188,420
47,555
$ 3,858,181
$1,058,774
1,223,501
55,153
466,294
2,803,722
1,054,459
1,054,459
Non-M~or Total
Governmental Govemmental
Funds Funds
16
$ 152,659 $ 224,673
2,404,952
$ 152,659
896,225
143,488
105,527
188,420
47,555
$ 4,010,840
$ 72,516 $ 1,131,290
578 578
73,094
1,223,501
55,153
466,294
2,876,816
$3,858,181 $ 152,659 $ 4,010,840
76,309 76,309
3,256 3,256
1,054,459
79,565 1,134,024
SHIPPENSBURG AREA SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
June 30, 2003
Amounts reported for governmental activities in the Statement
of Net Assets am different because:
Total Fund Balances - Governmental Funds
Capital Assets used in governmental activities are not financial resources
and; therefore, are not reported as assets in governmental funds. The cost
of assets is $34,432,553 and the accumulated depreciation is $13,875,137.
Property taxes receivable will be collected this year, but are not
available soon enough to pay for the current period's expenditures,
and; therefore, are deferred revenues in the funds.
Governmental funds report bond issuance costs as expenditures.
However, in the Statement of Activities the cost of the issuance is
allocated over the life of the debt issue. This is the amount by
which bond issuance costs exceeds accumulated amortization.
Long-term liabilities, including bonds payable and conpensated absences,
are not due and payable in the current period, and; therefore, are not reported
as liabilities in the funds. Long-term liabilities at year-end consist of:
Bonds payable (13,495,000)
Accrued interest (62,131 )
Compensated absences (774,931)
Total net assets - governmental activities
See Notes to Financial Statements.
1,134,024
20,557,416
466,294
166,722
04,332,062)
7,992,394
17
SHIPPENSBURG AREA SCHOOL DISTRICT
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES 1N
FUND BALANCES - GOVERNMENTAL FUNDS
Year Ended June 30, 2003
Revenues
Local sources
State appropriations
Federal appropriations
Total revenues
General
Non-Major Total
Governmental Governmental
Funds Funds
$12,978,257 $ 46,516 $ 13,024,773
10,510,169 10,510,169
608,770 608,770
24,097,196 46,516 24,143,712
Expenditures
Instructional
Support services
Operation of non-instructional services
Construction/improvement services
Debt service
Principal
Interest
Total expenditures
15,449,913 15,449,913
6,850,262 107,46l 6,957,723
293,564 133,710 427,274
34,948 34,948
1,125,000 1,125,000
515,705 515,705
24,269,392 241,171 24,510,563
Deficiency of revenues over expenditures
(172,196) (194,655) (366,851)
Other Financing Sources (Uses)
Refund of prior years' receipts
Operating transfers in
Operating transfers out
Total other financing sources (uses)
(42,945) (42,945)
374 241,684 242,058
(241,684) (374) (242,058)
(284,255) 241,310 (42,945)
Net change in fund balances
(456,451) 46,655 (409,796)
Fund Balances-July 1,2002
Fund Balances- June 30, 2003
1,510,910 32,910 1,543,820
$ 1,054,459 $ 79,565 $ 1,134,024
See Notes to Financial Statements.
18
SHIPPENSBURG AREA SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE
STATEMENT OF ACTIVITIES
Year Ended June 30, 2003
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in thc Statement of
Activities are different because:
Capital outlays are reported in governmental funds as expenditures.
However, in the Statement of Activitias, the cost of those assets are
allocated over their useful lives as depreciation expense. This
is the amount by which depreciation exceeds capital outlays
in the period.
Capital outlays
Less depreciation expense
45,431
(1,056,182)
The net effect of various miscellaneous transactions involving capital
assets (ie. sales, trade-ins, and donations) is to increase net assets.
Because some property taxes will not be collected for several
months afier the District's fiscal year ends, they are not considered
as "available" revenues in the governmental funds. Deferred tax
revenues increased by this amount this year.
Interest on long-term debt in the Statement of Activities differs from the
amount reported in the governmental funds because interest is
recognized as an expenditure in the funds when it is due, and thus
requires the use of current financial resources. In the Statement of
Activities, interest expense is recognized as the interest accrues,
regardless of when it is due. The additional interest accrues in the
Statement of Activities over the amount due is shown here.
Some expenses reported in the Statement of Activities do not require
the use of current financial resources, and therefore, they are not
reported as expenditures in governmental funds.
The issuance of long-term debt provides current financial resources
to governmental funds, while the repayment of the principal of long-
term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net assets. Also,
governmental funds report the effect of issuance costs, premiums,
discounts, and similar items when debt is first issued, whereas these
amounts are deferred and amortized in the Statement of Activitias. This
amount is the net effect of thase differences in the treatment of long-term
debt and related items.
Repayment of long-term debt
Amortization of bond issuance costs
1,125,000
(17,794)
Change in net assets of governmental activities
See Notes to Financial Statements.
19
(409,796)
(1,010,751)
(1,297)
(232,745)
4,667
(78,193)
1,107,206
(620,909)
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL - GENERAL FUND
Year Ended June 30, 2003
Budgeted Amounts
Original Final
Actual
Variance with Final
Budget Favorable
(Unfavorable)
Local sources $ 13,403,812 $ 13,449,285 $ 12,978,257 $ (471,028)
State appropriations 10,331,693 10,424,606 10,510,169 85,563
Federal appropriations 605,330 617,574 608,770 (8,804)
Total revenues 24,340,835 24,491,465 24,097,196 (394,269)
Expenditures
Instructional
Support services
Operation of noninstmctional services
Construction/improvement services
Debt service
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other Financing Sources (Uses)
Refund of prior years' receipts
Operating transfers in
Operating transfers out
Budgetary reserve
Total other financing uses
Net change in fund balance
15,211,653 15,439,195 15,449,913
6,920,715 6,850,263 6,850,262
292,076 293,557 293,564
34,948
1,655,715 1,702,836 1,640,705
24,080,159 24,285,851 24,269,392
(10,718)
1
(7)
(34,948)
62,131
16,459
260,676 205,614 (172,196) (377,810)
(42,945) (42,945)
374
(239,684) (241,684) (241,684)
(100,000)
(339,684) (284,629) (284,255)
$ (79,008) $ (79,015) (456,451)
1,510,910
$ 1,054,459
Fund Balance-July 1,2002
Fund Balance- June 30, 2003
See Notes to Financial Statements.
20
374
374
$ (377,436)
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF NET ASSETS
PROPRIETARY FUND - FOOD SERVICE
June 30, 2003
ASSETS
Current Assets
Cash
Receivables
Federal subsidies
State subsidies
Other
Inventories
Total current assets
Noncurrent Assets
Furniture and equipment - net
Total assets
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable
Current portion of long-term debt
Due to other funds
Deferred revenues
Total current liabilities
Noncurrent Liabilities
Loan payable
Total liabilities
Net Assets (Deficit)
Invested in capital assets - net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
21
7,135
6,764
887
159
28,785
43,730
105,136
148,866
899
13,249
28,682
10,883
53,713
26,497
80,210
346,791
(278,135)
68,656
148,866
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS -
PROPRIETARY FUND - FOOD SERVICE
Year Ended June 30, 2003
Operating Revenues
Food service revenue
Operating Expenses
Labor, taxes and benefits
Professional and technical services
Disposal services
Electricity
Equipment repairs and maintenance
Extermination services
Advertising
Printing and binding
Travel
Supplies
Food and milk
Donated commodities used
Depreciation
Equipment - replacement
Dues and fees
Total operating expenses
Operating loss
Nonoperating Revenues (Expense)
Investment income
Federal subsidies
State subsidies
Value of donated commodities
Interest expenses
Total nonoperating revenues (expense)
Change in net assets
Net Assets - July 1, 2002
Net Assets - June 30, 2003
See Notes to Financial Statements.
22
628,699
450,893
4,208
2,182
20,000
6,018
1,296
561
464
923
27,553
355,131
35,984
10,792
4,979
547
921,531
(292,832)
782
217,378
42,179
35,984
(506)
295,817
2,985
65,671
68,656
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF CASH FLOWS -
PROPRIETARY FUND - FOOD SERVICE
Year Ended June 30, 2003
Cash Flows From Operating Activities
Cash received from meal sales
Cash payments for goods and services
Cash payments to employees for services
Net cash used in operating activities
Cash Flows From NoncapJtal Financing Activities
Federal subsidies
State subsidies
Net cash provided by noncapitai
financing activities
Cash Flows From Capital and Related Financing Activities
Proceeds from extended term financing
Acquisition of equipment
Principal paid on financing agreements
Interest paid on financing agreements
Net cash used in capital and related
financing activities
Cash Flows From Investing Activities
Investment income
Netincreasein cash
Cash:
July 1,2002
June 30, 2003
628,699
(415,703)
(450,893)
(237,897)
217,378
42,179
259,557
52,995
(60,875)
(13,249)
(506)
(21,635)
782
8O7
6,328
7,135
Continued)
23
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF CASH FLOWS -
PROPRIETARY FUND - FOOD SERVICE
Year Ended June 30, 2003
Reconciliation of Operating Loss to Net Cash Used
in Operating Activities
Operating loss
Adjustments to reconcile operating loss to net
cash used in operating activities
Depreciation
Value of donated commodities
Changes in assets and liabilities:
(Increase) decrease in:
Receivables
Inventories
(Decrease) increase in:
Accounts payable
Deposits payable
Due to other funds
Deferred revenues
Net cash used in operating activities
See Notes to Financial Statements.
$ (292,832)
10,792
35,984
(7,317)
3,491
221
4,267
12,886
(5,389)
$ (237,897)
24
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF FIDUCIARY NET ASSETS
June 30, 2003
ASSETS
Cash
Accounts receivable
Total assets
LIABILITIES
Due to student groups
Total liabilities
$
$
Combined
Scholarship
Trust Funds
Combined
Activities
Funds
$ 98,059
56
$ 98,115
$ 98,115
$ 98,115
See Notes to Financial Statements.
25
SHIPPENSBURG AREA SCHOOL DISTRICT
STATEMENT OF CHANGE IN FIDUCIARY NET ASSETS
COMBINED SCHOLARSHIP TRUST FUNDS
Year Ended June 30, 2003
Additions
Contributions
Interest
Total additions
Deductions
Transfer to SASD Educational Foundation
Scholarships
Total deductions
Change in net assets
Net Assets - July 1, 2002
Net Assets - June 30, 2003
See Notes to Financial Statements.
26
4,578
1,843
6,421
63,629
4,450
68,079
(61,658)
61,658
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
The Shippensburg Area School District operates two elementary schools, one middle school and one high
school in Shippensburg, Pennsylvania. The District operates under current standards prescribed by the
Pennsylvania Department of Education in accordance with the provisions of the School Laws of
Pennsylvania. The District operates under a locally-elected nine member Board form of government.
The financial statements of the Shippensburg Area School District (the District) have been prepared in
accordance with accounting principles generally accepted in the United States of America (GAAP) as
applied to governmental units. The Governmental Accounting Standards Board (GASB) is the
authoritative standard setting body for the establishment of governmental accounting and financial
reporting principles. The more significant of these accounting policies are as follows:
A. Reporting Entity
The Shippensburg Area School District's financial statements include the operations of all entities for
which the School Board exemises oversight responsibility. Oversi~t 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, the 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.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of
Activities) report information on all of the non-fiduciary activities of the primary government and its
component units. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a significant extent on fees
and charges for support. Likewise, the primary government is reported separately from certain legally
separate component units for which the primary government is financially responsible.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1) charges to customers or applicants who
pumhase, use or directly benefit from goods, services, or privileges provided by a given function or
segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not included among program
revenues are reported as general revenues.
27
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note !. Summary of Significant Accounting Policies (Continued)
B. Government-wide and Fund Financial Statements (Continued)
Separate fund financial statements are provided in the report for all of the governmental funds, proprietary
funds, and fiduciary funds of the District, even though the latter are excluded from the government-wide
financial statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements. Non-Major funds are aggregated and
presented in a single column. Fiduciary funds am reported by fund type.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The District complies with accounting principles generally accepted in the United States of America
(GAAP) and applies all relevant Governmental Accounting Standards Board (GASB) pronouncements.
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements.
Revenues are recorded when earned and expenses am recorded when a liability is incurred, regardless of
the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements
imposed by the provider have been met. Net assets (total assets less total liabilities) are used as a practical
measure of economic resources and the operating statement includes all transactions and events that
increased or decreased net assets. Depreciation is charged as expense against current operations and
accumulated depreciation is reported on the Statement of Net Assets.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified-accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues am considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
government considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Revenue from Federal, state and other grants designated for payment of specific
School District expenditures is recognized when the related expenditures are incurred; accordingly, when
such funds are received, they are recorded as deferred revenues until earned. Expenditures generally are
recorded when liabilities are incurred, as under accrual accounting. However, debt service expenditures,
as well as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
When both restricted and unrestricted resources are available for use, it is the District's policy to use
restricted resources first, then unrestricted resources as they are needed.
Governmental funds are those through which most governmental functions of the District are financed.
The acquisition, use and balances of the District's expendable financial resources and related liabilities
(except those accounted for in proprietary funds) are accounted for through Governmental Funds.
28
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note I. Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
The District reports the following major governmental funds:
The General Fund is the District's primary operating fund. It accounts for all financial resources
except those required to be in another fund. Revenues are primarily derived from local property,
earned income, per capita and occupational taxes, and state and Federal distributions. Many of the
more-important activities of the District, including instruction, administration of the District and
certain non-instructional services are accounted for in this fund.
The District operates one enterprise fund, the Food Service Fund. This fund accounts for the
activities of the District's food service program.
Additionally, the District reports the following non-major governmental funds:
The Athletic Funds are authorized by Section 511 of the Public School Code of 1949 to account
for the revenues and expenditures of athletic activities. The funds account for gate receipts and
other revenues from athletic events and certain budgeted costs of the District's athletic programs.
The Capital Reserve Fund (Section 2932 is authorized by P.L. 145, Act of April 30, 1943, known
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 District at the end of any fiscal year. This fund is
included in the financial statements as a Special Revenue Fund.
The Capital Projects Fund is used to account for financial resources available for the acquisition or
construction of major capital facilities (other than those financed by proprietary funds).
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with the proprietary fund's principal on-going operations. The principal operating revenues of
the District's enterprise fund is food service charges. Operating expenses for the District's enterprise
fund include food production costs, supplies, administrative costs, and depreciation on capital assets. All
revenues or expenses not meeting this definition are reported as nonoperating revenues and expenses.
The District does not attempt to allocate "building-wide costs" to the Food Service Fund. Thus, General
Fund expenditures which partially benefit the Food Service Fund (utilities, janitorial services, insurance,
etc.) are not proportionately recognized within the Food Service Fund; similarly, the Food Service Fund
does not recognize a cost for the building space it occupies (no rental-of-facilities expense).
The District accounts for assets held by the District in a trustee capacity in private-purpose trust
funds. These funds account for activities of the various scholarship accounts, the sole purpose of
which is to provide annual scholarships to particular students as prescribed by donor stipulations.
29
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note I. Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
The Activity Funds account for the monies authorized by Section 511 of the Public School Code of
1949 for school publications and organizations. A portion of the Activity Funds is an Agency Fund
which is separate from other Agency Funds because of legal requirements. 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.
D. Budgets and Budgetary Accounting
An operating budget is adopted prior to the beginning of each year for the General Fund on a modified-
accrual basis of accounting. The General Fund is the only fund for which a budget is legally required. The
Pennsylvania School Code dictates specific procedures relative to adoption of the District's budget and
reporting of its financial statements:
The District, before levying annual school taxes, is required to prepare an operating budget for
the succeeding fiscal year.
The District is required to publish notice by advertisement, at least once in two newspapers of
general circulation in the municipality in which it is located, and within fifteen days of final
action, that the proposed budget has been prepared and is available for public inspection at the
administrative office of the District.
Notice that public hearings will be held on the proposed operating budget must be included in the
advertisement; such hearings are required to be scheduled at least ten days prior to when final
action on adoption is taken by the Board.
Legal budgetary control is maintained at the sub-function/major-object level. The Board of School
Directors may make transfers of funds appropriated to any particular item of expenditure by legislative
action in accordance with the Pennsylvania School Code. Management may amend the budget at the sub-
function/sub-object level without Board approval. Appropriations lapse at the end of the fiscal period.
Budgetary information reflected in the financial statements is presented at or below the level of budgetary
control and includes the effect of approved budget amendments.
E. Assets, Liabilities, and Net Assets or Equity
Cash and Cash Equivalents: For purposes of the Statement of Cash Flows presented for the proprietary
fund, the District considers all highly~liquid investments with maturities of three months or less when
purchased to be cash equivalents.
Investments: Investments are stated at market value.
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Liabilities, and Net Assets or Equity (Continued)
Allowance for Estimated Uncollectible Taxes and Deferred Revenues: The allowance for estimated
uncollectible taxes is based upon an historical estimate of delinquent taxes that will not be received within
one year of the fiscal year-end. Deferred revenues are based upon an historical estimate of delinquent
taxes expected to be received within one year of the fiscal year-end.
The portion of taxes receivable which is expected to be received within sixty days of June 30 is recorded
as revenue in the current year. The remaining amount of taxes receivable which is expected to be
received within one year from June 30 is recorded as deferred revenues. All other amounts in taxes
receivable are written off as estimated uncollectible taxes.
Inventories: On government-wide financial statements, inventories are presented at the lower of cost or
market on a first-in, first-oat basis, and are expensed when used.
A physical inventory of the Food Service Fund's food and supplies was taken as of June 30, 2003. The
inventory consisted of government-donated commodities which were valued at estimated fair market
value, and purchased commodities and supplies, valued at cost using the first-in, first-out (FIFO) method.
The District has adopted an inventory recordkeeping system which does distinguish between donated and
purchased commodities. Accordingly, deferred revenues for donated commodities has been recorded.
Capital Assets and Depreciation: Capital assets, which include property, plant, and equipment, and
infrastructure assets, are reported in the applicable governmental or business-type activities column in the
government-wide financial statements. Capital assets are capitalized at the discretion of management,
unless the assets are acquired by debt proceeds, in which case the assets must be capitalized.
Management considers various factors in the capitalization of assets, including the asset's estimated
useful life, cost, and the extent to which the asset is part ora larger capital project. The District's capital
assets include library books, classroom texts, computer equipment, classroom furniture, and other
instructional equipment, subject to the on-going discretion of management. The costs of normal
maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not
capitalized.
Depreciation is provided for fixed assets on the straight-line basis over the estimated useful lives of the
assets or group of assets as determined by management.
31
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Liabilities, and Net Assets or Equity (Continued)
Long-Term Obligations: In the government-wide financial statements, and proprietary fund type in the
fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental or business-type activity columns in the Statement of Net Assets. Bond
premium and discounts, as well as issuance costs, are deferred and amortized over the life of the issue
using the effective interest method. Bonds payable am reported net of applicable bond premium or
discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related
debt.
In the fund financial statements, governmental fund types recognize bond premium and discounts, as well
as bond issuance costs, during the current period. The face amount of the debt issued is reported as other
financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Compensated Absences: Under the system of financial accounting and reporting for Pennsylvania School
Systems, the District accrues certain accumulated employee benefits, such as unpaid vacation and sick
pay. Calculation of this amount is determined by the appropriate vacation, sick and retirement lump-sum
payments which would be available to employees if they would leave or retire from the District and is
adjusted for expected turnover rates of employees. Accrued benefit days, multiplied by appropriate salary
amounts, are reflected as a long-term liability unless retirements are likely within the upcoming fiscal
year. Those costs determined to be current year costs are reflected as a liability of the General Fund. As
of June 30, 2003, this liability is $774,931.
Transfers: Advances between funds that are not expected to be repaid are accounted for as transfers. In
those cases when repayment is expected, the advances are accounted for through the various due from and
due to accounts.
Fund Balance:
The District classifies fund balances as follows:
Reserved
Reserved fund is used to denote that portion of the fund balance, which is not available for expenditure
appropriation or is legally segregated for a specific purpose.
· Reserved for athletics represents that portion of fund balance legally restricted to athletic
programs.
· Reserved for capital reserve represents that portion of fund balance legally restricted to capital
projects.
Unreserved
Designated is used to indicate intentions for financial resource utilization.
Undesignated is used to denote that portion of fund balance which is available
appropriations.
32
for
SH[PPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Liabilities, and Net Assets or Equity (Continued)
Use of Estimates: Management uses estimates and assumptions in preparing financial statements. These
estimates and assumptions affect the reported amounts of assets and liabilities and the reported revenue
and expenditures and disclosures.
Total Columns on Combining Governmental Fund Statements: Total columns on the combining
governmental fund financial statements are captioned "Memorandum Only" to indicate that they are
presented only to facilitate financial analysis. Data in these columns does not present financial position,
results of operations or cash flows, in conformity with accounting principles generally accepted in the
United States of America. Neither is such data comparable to a consolidation, lnterfund eliminations
have not been made ia the aggregation of this data.
Note 2. Change in Accounting Principles
During the year ended June 30, 2003, the District adopted Statements of Governmental Accounting
Standard (SGAS) No. 34, Basic Financial Statements and Managemeut's Discussion and Analysis, No.
37, Basic Financial Statements - and Management's Discussion and Analysis - For State and Local
Governments: Omnibus, and No. 38, Certain Financial Statement Note Disclosures, and Interpretation
No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund
Financials. Adoption of these pronouncements is predicated upon management's belief that the
prescribed reporting model, by incorporating new information and restructuring previous/y-reported
information, will be more comprehensive, informative and useful thm~ previously-utilized reporting
models.
Note 3. Deposits and Investments
Under Section 440.1 of the Public School Code of 1949, as amended, the District is permitted to invest
funds consistent with sound business practices in the following types of investments:
· U.S. Treasury Bills.
· Short-term obligations of the U. S. Government or its agencies or instrumentalities.
· Deposits in savings accounts or time deposits or share accounts of institutions insured by:
1. The Federal Deposit Insurance Corporation (FDIC), or
2. The Federal Savings and Loan Insurance Corporation, or
3. The National Credit Union Share Insurance Fund
to the extent that such accounts are so insured, and for any amounts above maximum insurable
limits, provided that approved collateral as provided by law shall be pledged by the depository.
· Obligations of(a) the United States of America or its agencies or instrumentalities backed by the
full faith and credit of the United States of America, and (b) the Commonwealth of Pennsylvania
or instrumentalities thereof backed by the full faith and credit of these political subdivisions.
· Shares of investment companies whose investments are restricted to the above categories.
33
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 3. Deposits and Investments (Continued)
The deposit and investment policy of the District adheres to state statutes and prudent business practices.
There were no deposit or investment transactions during the year that were in violation of either state
statutes or the policy of the District.
Deposits
The District's carrying amount of cash deposits at June 30, 2003, for all funds amounted to $533,839. Of
the total bank balance of $671,987, $112,603 was covered by Federal depository insurance. The
remainder of $559,384 is covered by pooled collateral maintained in conformity with Act 72.
Act 72 is an act standardizing the procedures for pledges of assets to secure deposits of public funds 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.
The carrying amount of cash and investments as presented on the balance sheet includes petty cash of
$1,000.
Investments
GASB # 3, Deposits with Financial Institutions, Investments, and Reverse Repurchase Agreements,
requires the disclosure of carrying amounts and market values by the following categories:
Category I are insured or registered securities held by the District or its agent in the District's name.
Registered securities are those registered in the District's name.
Category 2 are uninsured and unregistered, with securities held by the counterparty's trust department
or its agent in the District's name.
Category 3 are uninsured and unregistered, with securities held by the counterparty or by its trust
department or agent but not in the District's name.
The District invests in the Pennsylvania School District Liquid Asset Fund (PSDLAF) and the
Pennsylvania Local Government Investment Trust (PLGIT) as authorized by the Board. PSDLAF was
established to enable school districts to pool funds for investment in instruments authorized by Section
440.1 of the Pennsylvania School Code of 1949, as amended. PLGIT assures that it will not place
deposits with any single-issuing institution if the largest participant's share exceeds $100,000, unless such
deposits are collateralized as prescribed by Act 72 of the Commonwealth of Pennsylvania. These funds
have the characteristics of open-end mutual funds and are not subject to credit risk classification.
34
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 3. Deposits and Investments (Continued)
Investments (Continued)
At June 30, 2003, the investments of the District were as follows:
Orrstown Bank
U. S. Government Securities
1
Category Non-
2 3 Categorized
$ $
2,404,952
Note 4. Taxes Receivable, Deferred Revenues and Estimated Uncollectible Taxes
A summary of the taxes receivable and related accounts at June 30, 2003, follows:
Uncollected taxes - real estate
Uncollected taxes - personal
Interest and commissions - net
Earned income taxes
Realty transfer taxes
Taxes Receivable - Net
Taxes to be collected within 60 days
Deferred revenues - delinquent taxes
Allowance for uncollectible taxes
Taxes Receivable - Net
Deferred Revenues - General Fund
Delinquent taxes
Deferred Revenues - Food Service Fund
Student deposits
Donated commodities
$
$
$
$
Amount
625,304
68,321
20,100
134,194
48,306
896,225
443,370
466,294
(13,439)
896,225
466,294
4,267
6,616
10,883
35
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 5. Interfund Accounts
Individual fund receivable and payable balances at June 30, 2003, are as follows:
Inter fund Inter fund
Receivables Payables
General Fund $ 28,682 $
Food Service 28,682
$ 28,682 $ 28,682
Note 6. Food Service Fund Inventory
The composition of Food Service Fund inventory at June 30, 2003, is as follows:
Amount
Materials and supplies $ 5,513
Purchased food 16,656
Donated food 6,616
$ 28,785
Note 7. Property Taxes
Property taxes are levied on July 1st. Taxes are collected at a discount until August 31st, at their face
amount from September 1st until October 31st, 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
District.
36
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 8. General Fixed Assets
Capital asset activity for the year ended June 30, 2003, was as follows:
July 1, 2002
Governmental Activities
Land and site improvements $ 929,939 $
Buildings and improvements 25,485,158
Furniture and equipment 7,989,853 45,43 l
Total Governmental Activities Assets 34,404,950 45,431
Decreases June 30, 2003
$ $ 929,939
25,485,158
(17,828) 8,017,456
(17,828) 34,432,553
Less accumulated depreciation
Land and site improvements
Buildings and improvements
Furniture and equipment
Total accumulated depreciation
Governmental Activities, Capital
Assets - Net
289,545 26,232
8,667,238 554,397
3,878,703 475,553
12,835,486 1,056,182
315,777
9,221,635
(16,531) 4,337,725
(16,531) 13,875,137
$21,569,464 $ (1,010,751) $ (1,297) $20,557,416
Business-Type Activities
Machinery and equipment
Accumulated depreciation
Business-Type Activities, Capital
Assets - Net
$ 397,046 $ 60,875 $ $ 457,921
(341,993) (10,792) (352,785)
$ 55,053 $ 50,083 $ $ 105,136
Depreciation expense was charged to the functions/programs of the District as follows:
Governmental Activities Instruction
Instructional student support
Adminstration and financial support
Operation and maintenance of plant services
Student activities
Community services
Total governmental activities
Business-Type Activities
Food Service
Total School District
37
Amount
810,513
85,876
86,136
44,600
28,567
490
1,056,182
10,792
1,066,974
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 9. Accrued Salaries and Benefits
Accrued salaries and benefits at June 30, 2003, consist of the following:
Amount
Accrued salaries $ 1,091,141
Retirement 40,853
Social security 83,323
Workers' compensation 8,184
$ 1,223,501
Accrued salaries represent teachers' salaries earned during the 2002-03 school year which will be paid
subsequent to June 30, 2003. Accrued retirement represents the public school employees' retirement
board contribution for the second quarter of calendar year 2003, including the portion pertaining to
accrued salaries at June 30, 2003. Accrued social security represents the District's liability arising from
accrued salaries at June 30, 2003.
Note 10. Long-Term Debt
During the fiscal year ended June 30, 2003, general long-term debt changed as follows:
General Long-Term Obligations:
General Obligation Bonds -
Series of 1997
General Obligation Bonds -
Series of 2001
General Obligation Bonds -
Series A of 2001
Compensated absences payable
Balances Balances
July 1, 2002 Increase Decrease June 30, 2003
$ 930,000 $ $ 390,000 $ 540,000
3,885,000 730,000 3,155,000
9,805,000 5,000 9,800,000
696,738 78,193 774,931
$15,316,738 $ 78,193 $ 1,125,000 $14,269,931
General Obligation Bonds - Series of 1997 - On December 3, I997, the District issued General Obligation
Bonds in the principal amount of $11,080,000. The bonds bear annual interest rates ranging from 4.00%
to 5.10%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially
in amounts ranging from $130,000 to $410,000 through November 15, 2004. These bonds were partially
refinanced with General Obligation Bonds - Series A of 2001.
General Obligation Bonds - Series of 2001 - On September I, 2001, the District issued General
Obligation Bonds in the principal amount of $4,500,000. The bonds bear annual interest rates ranging
from 2.60% to 3.65%. Interest is payable semi-annually on November 15 and May 15, and the bonds
mature serially in amounts ranging from $750,000 to $830,000 through November 15, 2006.
38
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 10. Long-Term Debt (Continued)
General Obligation Bonds - Series A of 2001 - On October 15, 2001, the District issued General
Obligation Bonds in the principal amount of $9,805,000. The bonds bear annual interest rates ranging
from 2.40% to 4.20%. Interest is payable semi-annually on November 15 and May 15, and the bonds
mature serially in amounts ranging from $25,000 to $1,660,000 through November 15, 2012.
The District is in compliance with all debt covenants of the outstanding bond issues. Those covenants
include the following: the District shall include the annual debt service in its budget for the fiscal year,
shall appropriate these amounts from its general revenues, and shall punctually cause the payment of the
principal and interest of each of the bonds.
Maturities of the long-term debt issues are as follows:
Year Principal Interest Total
2003-2004 $ 1,185,000 $ 476,080 $ 1,661,080
2004-2005 1,285,000 434,078 1,719,078
2005~2006 1,325,000 390,908 1,715,908
2006-2007 1,375,000 344,630 1,719,630
2007-2008 1,425,000 295,553 1,720,553
2009-2013 6,900,000 630,048 7,530,048
$ 13,495,000 $ 2,571,297 $ 16,066,297
Comvensated Absences - Under the terms of the Districfs employment policies, employees are
reimbursed for accrued vacation upon retirement or other termination of employment. The
reimbursement rate is established by the employment contract and varies by employee classification. In
addition, employees are granted sick days per school year and any unused sick days are permitted to be
carried over to future years. Upon retirement from the District, employees are reimbursed for
accumulated sick days equal to the number of unused days multiplied by an amount per the employment
contract. The employees are also offered options regarding retirement payouts as prescribed in the
contract if certain conditions are met. For the year ended June 30, 2003, benefits attributed to employees
retiring during the 2002-03 year amounted to $17,290 for 4 participants. The total liability for accrued
vacation, sick leave and retirement bonuses at June 30, 2003, has been reflected in the Statement of Net
Assets and totals $774,931.
Note 11. Post-Employment Benefits
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the District provides healthcare
benefits to eligible former employees and their dependents. Requirements am outlined by the Federal
Government for this coverage. The premium plus a 2% administrative fee is paid in full by the eligible
participant. This pro,'am is offered for a duration of up to 18 months or 36 months after an employee's
termination date. At June 30, 2003, there were 18 participants covered under COBRA.
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 12. Defined-Benefit Pension Plan
Plan Description:
The District contributes to the statewide Public School Employees' Retirement System (the System), a
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, legislatively-mandated
ad hoc cost-of-living adjustments, and healthcare insurance premium assistance to qualifying annuitants.
Membership in 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 benefit provisions of the Pennsylvania Public School Employees' Retirement Code (the Code) to
the Pennsylvania General Assembly (Act No. 96 of October 2, 1975, as amended),(24 Pa. C.S. 8101-
8535). The Public School Employees' Retirement System issues a publicly-available comprehensive
annual financial report that includes financial statements and required supplementary information for the
defined-benefit pension plan. This report may be obtained by writing to Barbara D. Flurie, Office of
Financial Management, Public School Employees' Retirement System of Pennsylvania, P.O. Box 125,
Harrisburg, Pennsylvania, 17108-0125. This report is also available in the Publications Section of the
PSERS website at www.psers.state.pa.us.
Funding Policy:
The contribution policy is established by the Public School Employees' Retirement Code and requires
contributions by the active employees, the District and the Commonwealth.
Contribution Rates:
The current contribution rate for active employees joining the System before July 22, 1983, is set by law
at 5.25% or at 6.50% of the employee's qualifying compensation. For active employees joining the
System on or after July 22, 1983, and who were active or inactive as of July 1, 2001, the rate of
contribution is 6.25% or 7.50% of the employee's qualifying compensation. Members who joined the
System after June 30, 2001, contribute at 7.50%. For all new hires, the higher contribution rates began
with service rendered on or after January 1, 2002.
District Contributions:
The District's required contributions are based upon an actuarial valuation. For the fiscal year ended
June 30, 2003, the District's rate of contribution was 1.15% of covered payroll. The 1.15% rate is
composed of a pension contribution rate of 0.18% for pension benefits and 0.97% for healthcare
insurance premium assistance. The District is required to pay the entire contribution and will be
reimbursed by the Commonwealth in an amount equal to the Commonwealth's sham as determined by
the income-aid ratio (as defined in Act 29 of 1994), which is at least one-half of the total District's rate.
The District's contributions to the Plan for the years ended June 30, 2003, 2002, and 2001, were
$156,031, $152,183, and $242,658, respectively, and are equal to the required contributions for each
year.
SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
Note 13. Participation in Risk Sharing Pool
The District is a participant in a risk sharing pool to provide workers' compensation coverage, The
expense for this coverage for the 2002-03 year was $89,750, comprised of a self-insured retention of
$18,068 and a contribution to the Central Fund of $71,682. Actual claims during the year are first paid
out of the self~insured retention. Claims that exceed the self-insured retention are satisfied by the Central
Fund. The Central Fund maintains excess insurance to cover any claims that exceed $400,000 per
accident. There am approximately 79 districts participating in the pool If there is a deficiency in the
pooled funds, each member is assessed a proportionate share of the deficiency. Upon withdrawal by a
member from the pool, the terminating member has no rights to funds in the pool.
Note 14. Risk Management
The 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 throe prior years.
41
SUPPLEMENTARY INFORMATION
SHIPPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF REVENUE
Year Ended June 30, 2003
Local sources
Real estate taxes
Current
Interim
Public utility tax
Payments in lieu of taxes
Current per capita taxes
679
511
Occupation tax
Occupational privilege tax
Earned income tax
Real estate transfer taxes
Delinquent real estate taxes
Delinquent per capita taxes
679
511
Delinquent occupation tax
Interest
IDEA
Rentals
Tuition
Reading recovery
Receipts from other LEAs
Refunds and other miscellaneous revenue
Total revenue from local sources
9,066,344
90,613
[8,268
6,311
48,703
48,703
143
51,266
1,935,028
331,130
780,799
8,173
8,173
146,544
50,064
216,312
913
23,077
53,945
8,125
85,623
12,978,257
State appropriations
Basic instructional subsidy
Read-to-Succeed
Charter schools
School performance
Section 1305 and 1306
Homebound instruction
Vocational education
Alternative education
Driver education
Special education
Transportation
(Continued)
6,512,823
82,826
8,395
14,616
24,968
1,612
73,486
39,960
2,905
1,429,538
946,200
42
SHIPPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF REVENUE (Continued)
Year Ended June 30, 2003
Revenue (Continued)
State appropriations (Continued)
Rentals and sinking fund payments
Health services
Social security reimbursement
Retirement reimbursement
Total state appropriations
Federal appropriations
Title I - Grants to Local Educational Agencies
Eisenhower Professional Development State Grants
Safe and Drug-free Schools and Communities
Innovative Education Program Strategies
Medical Assistance Program
Total Federal appropriations
Other Financing Sources
Operating transfers in
Total revenue
698,931
61,590
519,009
93,310
10,510,169
406,625
154,579
11,158
21,184
15,224
608,770
374
$ 24,097,570
43
SH1PPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF EXPENDITURES
Year Ended June 30, 2003
Expenditures
Instructional
Regular programs
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Other objects
Total regular programs
Special programs
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Other objects
Total special programs
Vocational education programs
Salaries
Employee benefits
Purchased services
Property
Other
Supplies
Property
Other objects
Total vocational education programs
(Continued)
44
7,734,047
1,517,686
72,468
104,180
419,883
420,988
34,932
2,518
10,306,702
1,835,163
414,458
926,637
103
41,533
22,777
3,984
236
3,244,891
361,768
65,054
855
588,504
19,837
37,717
325
1,074,060
SHIPPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued)
Year Ended June 30, 2003
Expenditures (Continued)
Instructional (Continued)
Other instructional programs
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Total other instructional programs
Adult education programs
Salaries
Employee benefits
Purchased services
Other
Supplies
Other objects
Total adult education programs
Community college education program
Total instructional
Support Services
Pupil personnel
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Other objects
Total pupil personnel
(Continued)
45
599,926
104,006
39,234
74
5,133
7,487
2,053
757,913
44,369
9,926
650
2,080
160
57,185
9,162
15,449,913
483,727
97,012
198,428
75
2,501
4,187
4,795
1,024
791,749
SH1PPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued)
Year Ended June 30, 2003
Expenditures (Continued)
Support Services (Continued)
Instructional staff
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Other objects
Total instructional staff
Administration
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Other objects
Total administration
Pupil health
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Property
Total pupil health
(Continued
449,708
94,331
7,072
24,919
9,229
135,670
80,404
2,154
803,487
951,361
202,572
155,929
1,706
57,324
15,905
19,508
14,383
1,418,688
187,039
41,997
16,185
125
5O
5,273
1,085
251,754
46
SHIPPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued)
Year Ended June 30, 2003
Expenditures (Continued)
Support Services (Continued)
Business
Salaries
Employee benefits
Purchased services
Professional and technical
Property
Other
Supplies
Other objects
Total business
Operation and maintenance of plant services
Salaries
Employee benefits
Purchased services
Property
Other
Supplies
Property
Other objects
Total operation and maintenance of plant services
Student transportation services
Purchased services
Professional and technical
Other
Supplies
Other objects
Total student transportation services
(Continued)
47
172,512
48,956
2,585
285
24,997
3,916
555
253,806
581,918
146,092
601,709
112,977
200,955
5,926
180
1,649,757
7,725
1,520,770
3,236
20
1,531,751
SH1PPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued)
Year Ended June 30, 2003
Expenditures (Continued)
Support Services (Continued)
Central service
Purchased services
Professional and technical
Property
Other
Supplies
Property
Other objects
Total central service
Other support services
Total support services
Operation of Non-Instructional Services
Student activities
Salaries
Employee benefits
Purchased services
Property
Other
Supplies
Other objects
Total student activities
(Continued)
48
19,161
23,535
842
47,494
34,825
250
126,107
23,163
6,850,262
228~462
26,547
12,000
9,116
3,273
195
279,593
SHIPPENSBURG AREA SCHOOL DISTRICT
GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued)
Year Ended June 30, 2003
Expenditures (Continued)
Operation of Non-Instructional Services (Continued
Community services
Salaries
Employee benefits
Supplies
Other objects
Total community services
Total operation of non-instructional services
Facilities acquisition, construction and improvement services
Purchased services
Professional and technical
Other
Refund of prior years' receipts
Debt service
Operating ~ansfers out
Total other
Total expenditures
6,40l
612
2,258
4,700
13,971
293,564
34,948
42,945
1,640,705
241,684
1,925,334
24,554,021
49
SHIPPENSBURG AREA SCHOOL DISTRICT
COMBINING BALANCE SHEET ~ NON-MAJOR GOVERNMENTAL FUNDS
June 30, 2003
Special Revenue
Middle School Senior High Capital
Athletic Athletic Reserve
ASSETS
Cash $ 369 $ 5,461 $ 146,829
Total assets $ 369 $ 5,461 $ 146,829
LIABILITIES AND FUND BALANCES
Accounts payable
Due to other funds
Total liabilities
$ $
1,996 $ 70,520
578
578 1,996 70,520
Fund Balances
Reserved for
Capital reserve
Athletic
Total fund balances
76,309
(209) 3,465
(209) 3,465 76,309
$ 369 $ 5,461 $ 146,829
Total liabilities and fund balances
Capital Project Totals
(Memorandum
Construction Only)
$ $ 152,659
$ $ 152,659
$ 72,516
578
73,094
76,309
3,256
79,565
$ 152,659
51
SHIPPENSBURG AREA SCHOOL DISTRICT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
Year Ended June 30, 2003
Special Revenue
Middle School Senior High Capital
Athletic Athletic Reserve
Revenues
Local sources $ 7,842 $ 38,158 $ 509
Total revenues 7,842 38,158 509
Expenditures
Support services
Operation of non-instructional services
Total expenditures
107,461
30,674 103,036
30,674 103,036 107,461
Excess(deficiency) ofrevenues
over expenditures
(22,832) (64,878) (106,952)
Other Financing Sources (Uses)
Operating transfers in
Operating transfers out
Total other financing sources (uses)
21,917
21,917
69,267 150,500
69,267 150,500
4,389 43,548
(924) 32,761
3,465 $ 76,309
Net change in fund balances
(915)
Fund Balances (Deficit) - July 1, 2002
Fund Balances (Deficit) - June 30, 2003
706
$ (209) $
Capital Project
Construction
$ 7
7
7
(374)
(374)
(367)
367
$
Totals
(Memorandum
Only)
$ 46,516
46,516
107,461
133,710
241,171
(194,655)
241,684
(374)
241,310
46,655
32,910
$ 79,565
53
SHIPPENSBURG AREA SCHOOL DISTRICT
COMBINING STATEMENT OF FIDUCIARY NET ASSETS -
ACTIVITIES FUNDS
June 30, 2003
James Burd
Elementary
Activity Fund
ASSETS
Cash $ 9~256
Accounts receivable
Total assets $ 9,256
Nancy Grayson
Elementary Middle School
Activity Fund Activity Fund
$ 1,324 $ 17,132
7
$ 1,324 $ 17,139
LIABILITIES
Accounts payable
Amount available for student activities
Total liabilities
$ $
9,256 1,324
$ 9,256 $ 1,324
$
17,139
$ 17,139
54
Totals
Senior High (Memorandum
Activity Fund Only)
$ 53,353$ 81,065
7
$ 53,353$ 81,072
$ 156 $ 156
53,197 80,916
$ 53,353 $ 81,072
55
SHIPPENSBURG AREA SCHOOL DISTRICT
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS -
SCHOLARSHIP TRUST FUNDS
Year Ended June 30, 2003
Class of Class of Class of
1936 1945 1950
Additions
Contributions $ 223 $ 300 $
Interest 268 2 928
Total additions 491 302 928
Deductions
Transfer to Foundation
Scholarships
Total deductions
Changes in net assets
Net Assets - July 1, 2002
Net Assets - June 30, 2003
8,285 202 29,925
400 100 2,000
8,685 302 31,925
(8,194) (30,997)
8,194 30,997
$ $ $
56
Travis E.
Griffith
310
310
10,162
500
10,662
(10,352)
10,352
David R.
Landis, Jr.
Larry Carey
Vocal Music
$
319 3
319 3
FFA
Fair
10,471 113 911
500 250 200
10,971 363 1,111
(10,652) (360) (1,103)
10,652 360 1,103
$
Totals
Andrea Gantt (Memorandum
Memorial Only)
57
$ 4,055 $ 4,578
8 5 1,843
8 4,060 6,421
3,560 63,629
500 4,450
4,060 68,079
$ $ $
(61,658)
61,658
[BsP I BOYFR & RITTER
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
Web Site: www cpabr, coti1
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 basic financial statements of Shippensburg Area School District as of and for the
year ended June 30, 2003, and have issued our report thereon dated August 19, 2003. We conducted our
audit in accordance with auditing staodards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the Un ited States.
Compliance
As part of obtaining reasonable assurance about whether Shippensburg Area School District's basic
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 Auditing Standards.
Internal Control over Financial Rel>orting
In planning and performing our audit, we considered 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.
CAMP HILL
STATE COLLEGE
This report is intended solely for the information and use of the Board of School Directors, management,
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.
Chambersburg, Pennsylvania
August 19, 2003
59
[13hR] BOYFR & R TTER
CERTIFIED PL~3LIC ACCOt~rrANTS ANt) CONSULTANTS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND
INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133
Board of School Directors
Shippensburg Area School District
Shippensburg, Pennsylvania
Compliance
We have audited the compliance of Shippensburg Area School District with the types of compliance
requirements described in the U S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of its major Federal programs for the year ended June
30, 2003. Shippensburg Area School District's major Federal programs are 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 each of its major Federal
programs is the responsibility of the District's management. Our responsibility is to express an opinion on
the District's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit 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 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 provided 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, Shippensburg Area School District complied, in all material respects, with the
requirements referred to above that are applicable to each of its major Federal programs for the year
ended June 30, 2003.
CAMP HILL
CARLISLE CHAMIBERSBURG LEWISTOWN
STATE COLLEGE
Internal Control Over Compliance
The management of 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 Federal programs. In 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 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 Iow
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 consider to
be material weaknesses.
This report is intended for the information and use of the Board of School Directors, management,
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.
Chambersburg, Pennsylvania
August 19, 2003
61
SHIPPENSBURG AREA SCHOOL DISTRICT
Schedule of Findings and Questioned Costs
Year Ended June 30, 2003
Section 1--Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
· Material weakness(es) identified: __ Yes X No
· Reportable condition(s) identified that is (arc)
not considered to be a material weakness(es)? __ Yes X None Reported
Noncompliance material to financial statements
noted? Yes X No
Federal Awards
Internal control over major programs:
· Materialweakness(es) identified? Yes X No
· Reportable condition(s) identified that is (are)
not considered to be a material weakness(es)? Yes X None Reported
Type of auditor's report issued on compliance for the major programs: Unqualified
· Any audit findings disclosed that are
required to be reported in accordance
with Section .510(a) of Circular A-1337 Yes X No
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SHIPPENSBURG AREA SCHOOL DISTRICT
Schedule of Findings and Questioned Costs
Year Ended June 30, 2003
Identification of the major programs:
CFDA Number(s)
84.010
84.027
Name of Federal Programs/Cluster
Title I - Grants to Local Educational Agencies
Special Education - Grants to States
Dollar threshold used to distinguish between
type A and type B programs
Auditee qualified as low-risk auditee?
$300,000
__Yes __
X No
Section II - Financial Statement Findings
A. Reportable Conditions in Internal Control
Them were no findings relating to the financial statement audit required to be reported.
B. Compliance Findings
There were no 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
Them were no findings relating to the Federal awards required to be reported in accordance
with Section .510(a) of OMB Circular A-133.
B. Compliance Findings
There were no findings relating to the Federal awards required to be reported in accordance
with Section .510(a) of OMB Cimular A- 133.
63
SHIPPENSBURG AREA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2003
U. S. Department of Education
Passed through the Pennsylvania
Department of Education:
Title l - Grants to Local Educational Agencies
Title 1 - Grants to Local Educational Agencies
Title V - Innovative Education
Title V - Innovative Education
Title I1 - Improving Teacher Quality
Title II - Improving Teacher Quality
Title Il - Education Technology
Classroom Size Reduction
Safe and Drug-free Schools and Communities
Safe and Drug-free Schools and Communities
Passed through the Lincoln
Intermediate Unit Consortium
Special Education - Grants to States
Individuals with Disabilities Education Act
Total U. S. Department of Education
Source
Code
Federal
C.F.D.A.
Number
84.010
84.010
84.298
84.298
84.281
84.281
84.318
84.340
84.186
84.186
84.027
84.027
Pass-
Through
Grantor's
Number
013-030387
013-020387
011-030387
011-020387
020-030387
020-020387
055-030387
088-020387
100-030388
100-020388
N/A
N/A
Grant
Period
02-03
01-02
02-03
01-02
02-03
01-02
02-03
01-02
02-03
01-02
02-03
01-02
U.S. Department of Emergency Management
Public Assistance Grants
Snow Removal
D
(Continued)
83.544
N/A
02-03
Program
or Annual
Award
$ 423,706
$ 338,939
$ 12,110
$ 11,873
$ 153,983
$ 17,188
$ 11,036
$ 101,892
$ 15,739
$ 13,798
$ 227,064
$ 190,282
N/A
Total
Received
(Refunded) in
Fiscal Year
310,718
69,023
10,495
1,622
102,655
5,521
7,863
32,607
6,296
4,246
227,064
778,110
Accmed
(De~rred)
Revenue~
7/1/2002
$
66,795
1,622
8,281
13,296
4,132
(18,462)
75,664
65
Revenue
Recognized
404,397
2,228
12,110
133,773
8,696
19,311
11,044
114
216,312
18,462
826,447
1,873
Expenditures
404,397
2,228
12,110
133,773
8,696
19,311
11,044
114
216,312
18,462
826,447
1,873
Accrued
(Deferred)
Revenue at
6/30/2003
93,679
1,615
31,118
2,760
833
4,748
(10,752)
124,001
1,873
SHIPPENSI/URG AREA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
Year Ended June 30, 2003
U. S. Department of Agriculture
Passed through the Pennsylvania
Department of Education:
National School Lunch Program
National School Lunch Program
Pass-
Federal Through
Source C.F.D.A. Grantor's
Code Number Number
Grant
Period
I(F) 10.555 N/A 02-03
I(S) N/A N/A 02-03
Special Milk Program for Children
Passed through the Pennsylvania
Department of Agriculture:
Food Donation (a)
Total U. S. Department of
Agriculture
Total Expenditures of Federal Awards
I(F) 10.556 N/A 02-03
I(F) 10.550 N/A 02-03
Source Codes:
Legends:
D - Direct Funding
I - Indirect Funding
(F) - Federal Share
(S) - State Share
(a) Donated commodities valued at local market values
(b) Total amount of commodities received from
Department of Agriculture
(c) Inventories at July 1, 2002
(d) Total amount of commodities used
(e) Inventories at June 30, 2003
See Notes to Schedule of Expenditures of Federal Awards.
66
Accrued
Program Total Received (Deferred)
or Annual (Refunded) in Revenue at Revenue
Award Fiscal Year 7/1/2002 Recognized
Expenditures
Accrued
(Deferred)
Revenue at
6/30/2003
N/A 206,610 213,234
N/A 26,525 27,412
N/A 4,004 4,144
213,234
27,412
4,144
6,624
887
140
N/A (b) 30,595 (c) (12,005) 35,984
(d)
35,984
(e)
(6,616)
267,734 (12,005) 280,774 280,774
1,045,844 $ 63,659 $ 1,109,094 $ 1,109,094
Test of 50% Rule: Total Expenditures
Less State Expenditures
Total Federal Expenditures
Programs selected for testing as major programs:
Title I ~ Grants to Local Educational Agencies
I.D.E.A.
$ 1,109,094
27,412
$ 1,081,682
$ 406,625
234,774
$ 641,399
1,035
$ 126,909
/ 1,081,682 = 59.30%
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SHIPPENSBURG AREA SCHOOL DISTRICT
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Note 1. Significant Accounting Policies
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 the financial
statements of the District presented on the accrual basis of accounting, as contemplated by accounting
principles generally accepted in the United States of America.
Note 2. Title I - Grants to Local Educational Agencies
The Title I - Grants to Local Educational Agencies has been audited in accordance with OMB Circular
A-133.
Note 3. Individuals With Disabilities Education Act
The Individuals With Disabilities Education Act has been audited in accordance with OMB Circular A-
133.
68
SHIPPENSBURG AREA SCHOOL DISTRICT
SUMMARY SCHEDULE OF PRIOR YEAR'S AUDIT FINDINGS
Year Ended June 30, 2003
There were no audit findings for the year ended June 30, 2002.
69