Loading...
HomeMy WebLinkAbout01-646371~. 01-(,"f~,3 SHIPPENSBURG AREA SCHOOL DISTRICT FINANCIAL REPORT JUNE 30, 2001 CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 1-2 FINANCIAL STATEMENTS Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenue, Expenditures and Changes in Fund Balances - Ali Governmental Fund Types Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Statement of Revenue, Expenses and Changes in Retained Earnings (Deficit)/Fund Balance - Proprietary Fund Type and Non-Expendable Trust Fund Statement of Cash Flows - Proprietary Fund Type and Non-Expendable Trust Fund Notes to Financial Statements SUPPLEMENTARY INFORMATION General Fund Schedule of Revenue Schedule of Expenditures 3-6 7-8 10 11-12 13 - 26 27 - 28 29 - 34 CONTENTS (Continued) SUPPLEMENTARY INFORMATION (Continued) Special Revenue Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balances Combining Statement of Revenue, Expenditures and Changes in Fund Balances - Budget and Actual Cafeteria Fund Schedule of Revenue Non-Expendable Trust Fund Combining Balance Sheet Combining Statement of Revenue, Expenses and Changes in Fund Balance Agency Funds Combining Balance Sheet Student Activities Funds Combining Balance Sheet Statement of Cash Receipts and Cash Disbursements - Earned Income Tax Fund 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 Government.duditing Standards 35 36 37 -38 39 40 - 41 42 - 43 44 45 46 47 - 48 CONTENTS (Continued) SUPPLEMENTARY INFORMATION (Continued) Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 49 o 50 Schedule of Findings and Questioned Costs 51 - 52 Schedule of Expenditures of Federal Awards 53 - 56 Notes to Schedule of Expenditures of Federal Awards 57 Summary Schedule of Prior Year's Audit Findings 58 [ BOYER & RITTER CEI~ImE~ PUBLIC ACCOUN'rANTS AND CONSULTANTS INDEPENDENT AUDITOR'S REPORT Board of School Directors Shippensburg Area School District Shippensburg, Pennsylvania We have audited the accompanying general purpose financial statements of the Shippensburg Area School District, as of and for the year ended June 30, 2001, as listed in the table of contents. These general purpose financial statements are the responsibility of the School District's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards 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 United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements ar~ free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As explained in Note 1 to the general purpose financial statements, the School District has recorded General Fixed Assets at values as determined by an American Appraisal Associates report. Under accounting principles generally accepted in the United States of America, General Fixed Assets should be recorded at cost or estimated historical cost. In our opinion, except for the departure from accounting principles generally accepted in the United States of America described in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Shippensburg Area School District, as of June 30, 2001, and the results of its operations and the cash flows of its proprietary fund type and non-expendable trust funds 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 2, 2001, 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 Government Auditing Standards and should be read in oonjunction with this report in considering the results of our audit. CAMP HILL CARLISLE CHAMBERSBURG LEWISTOWN An Ir~Jependently Owned Member of ti're McGladrey Network W~rldwide Service Through RSM Interr~tional STATE COLLEGE Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Shippensburg Area School District taken as a whole. The accompanying Schedule of Expenditures of Federal Awards, as required by the U. S. Office of Management and Budget Circular A-133, ,4udits of States, Local Governments, and Non-Profit Organizatians, and the schedules on pages 27 through 46 are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. Chambersburg, Pennsylvania August 2, 2001 SHIPPENSBURG AREA SCHOOL DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS June 30, 2001 ASSETS General Governmental Fund Types Special Revenue Capital Project Capital Athletic Reserve Construction Cash Investments Receivables Taxes - net Due from other funds Federal subsidies State subsidies Other Inventories Land and site improvements Buildings and improvements Furniture and equipment - net of accumulated depreciation in Enterprise Fund Amount to be provided for retirement of general long-term debt Amount to be provided for compensated absences Totalas~ See Notes to Financial Statements. $ 258,199 2,168,952 679,623 34,284 117,088 160,416 71,341 8,645 $ 14,726 $ o 375,000 $ 3,489,903 $ 115,784 8,645 $ 389,726 $ 115,784 _ Proprietary Fund Type Enterprise Cafeteria Fiduciary Fund Types Trust and Agency Account Groups Non- Expendable Trusts Agency General Fixed Assets General Long-Term Debt Totals (Memorandum Only) 8,678 $ 286 42 42 40,375 33,791 1,842 $ 59,870 434 597,371 $ 51,396 38,087,305 8,495,353 - $ 889,461 2,344,606 679,623 409,284 117,374 160,458 71,817 40,375 51,396 38,087,305 8,529,144 14,990,000 14,990,000 650,352 650,352 83,214 $ 62,146 $ 597,371 $ 46,634,054 $ 15,640,352 $ 67,021,195 SHIPPENSBURG AREA SCHOOL DISTRICT COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS June 30, 2001 Governmental Fund Types Special Revenue Capital Project LIABILITIES AND FUND EQUITY General Athletic Capital Reserve Construction Liabilities Due to other funds Intergovernmental Accounts payable Deferred revenue Accrued expenses Salaries and benefits Payroll withholdings Amount available for student activities Bonds payable Compensated absences payable Total liabilities Fund Equity Contributed capital Investment in general fixed assets Unreserved retained deficit Fund balances Reserved for Athletic Capital reserve Reading Non-expendable trusts Unreserved Total fund balances Total fund equity Total liabilities and fund equity See Notes to Financial Statements. $ 375,000 $ 343,796 522,613 982,904 79,405 $ $ 356,057 115,784 2,303,718 356,057 115,784 2,987 !,183,198 8,645 33,669 1,186,185 8,645 33,669 - 1,186,185 8,645 33,669 $ 3,489,903 $ 8,645 $ 389,726 $ 115,784 Proprietary Trust and Agency Account Groups Fund Type Non- General General Totals Enterprise Expendable Fixed Long-Term (Memorandum Cafeteria Trusts Agency Assets Debt Only) $ $ 34,284 $ $ $ 409,284 336,680 336,680 770 300 1,107 817,814 22,091 544,704 982,904 161,998 241,403 63,302 63,302 - 14,990,000 14,990,000 - 650,352 650,352 22,861 300 597,371 15,640,352 19,036,443 281,401 281,40 I 46,634,054 46,634,054 (221,048) (221,048) - 8,645 - 33,669 - 2,987 61,846 61,846 - 1,183,198 61,846 1,290,345 60,353 61,846 46,634,054 47,984,752 $ 83,214 $ 62,146 $ 597,371 $ 46,634,054 $ 15,640,352 $ 67,021,195 SHIPPENSBURG AREA SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUND TYPES Year Ended June 30, 2001 General Governmental Fund T~s Special Revenue Capital Athletic Reserve RcveHue Local sources State appropriations Federal appropriations Total revenue Expenditures Instructional Support services Operation of non-instructional services Debt service Capital outlay Total expenditures 1 i,284,404 9,879,284 657,517 $ 55,814 $ 21,821,205 55,814 14,370,696 6,633,748 263,200 163,152 1,720,950 556,580 22,988,594 163,152 556,580 Defic~ncyofrevenue overexpend~ures Other Financing Sources (Uses) Operating transfers in Operating Wansfers out Refunds of prior years' expenditures Interest Proceeds from sale of equipment Other financing sources (uses) - net (1,167,389) (107,338) (556,580) (457,902) 36,157 267,779 5,253 82,902 375,000 778 (148,713) 82,902 375,778 Deficiency of revenue and other fmancing sources over expenditures and other financing uses Fund Balances - July 1, 2000 Fund Balances - June 30, 2001 (1,316,102) (24,436) (180,802) 2,502,287 33,081 214,471 1,186,185 $ 8,645 $ 33,669 _ See Notes to Financial Statements. Capital Project Construction Totals (Memorandum $ 11,340,218 9,879,284 657,517 21,877.019 14,370,696 6,633,748 109,625 535,977 1,720,950 368,577 925,157 478,202 24,186,528 (478,202) (2,309,509) 457,902 (457,902) 36,157 20,925 289,482 5~53 20,925 330,892 (457,277) (i,978,617) 457,277 3,207,116 $ $ 1,228,499 SHIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND Year Ended June 30, 2001 Budget Actual Revenue Variance Favorable (Unfavorable) Local sources State appropriations Federal appropriations Total revenue Expenditures Instructional Support services Operation of non-instructional services Other Total expenditures Deficiency of revenue over expenditures Other Financing Sources (Uses) Budgetary reserve Operating transfers out Refi~nd of prior years' expenditures Interest Proceeds from sale of equipment Other financing uses - net Deficiency of revenue over expenditures and other financing uses Fund Balance - July 1, 2000 Fund Balance - June 30, 2001 See Notes to Financial Statemems. 11,828,278 $ 11,284,404 $ (543,874) 9,861,970 9,879,284 17,314 428,471 657,517 229,046 22,118,719 21,821,205 (297.514) 14,376,574 14,370,696 5,878 6,644,112 6,633,748 10,364 263,601 263,200 401 1.721,446 1,720,950 496 23,005,733 22,988,594 17.139 (887,014) (1,167,389) 280,375) (74,300) 74,300 (481,120) (457,902) 23,218 36,157 36,157 267,779 267,779 5,253 5.253 (555,420) (148,713) 406,707 (1,442,434) (1,316,102) $ 126,332 2,502,287 $ 1,186,185 SHIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS (DEFICIT)/FUND BALANCE - PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND Year Ended June 30, 2001 Operating Revenue Proprietary Fiduciary Fund Type Fund Type Totals Enterprise Non-Expendable (Memorandum Cafeteria Trust Only) Sales Operating Expenses Donated commodities used Food and milk Labor, taxes and benefits Professional and technical services Supplies Electricity Trash removal Extermination fees Equipmem repairs and maintenance Advertising Travel Dues and fees Depreciation Scholarships Total operating expenses Operating loss Nonoperating revenue Interest Federal subsidies State subsidies Value of donated commodities Social security subsidy Retirement subsidy Contributions Total nonoperating revenue Net income Retained Earnings (Deficit)/Fund Balance - July 1, 2000 Retained Earnings (Deficit)/Fund Balance - Julle 30, 2001 $ 615,266 $ $ 615.266 48,850 48,850 338,565 338,565 421,694 - 421,694 4,181 - 4,181 19,716 19,716 20,000 20,000 2,418 2,418 1,364 1,364 13,383 13,383 602 602 691 691 400 400 10,034 10,034 - 3,800 3,800 881,898 3,800 885,698 (266,632) (3,800) (270,432) 1,991 3,426 5,417 196,420 196,420 26,497 26,497 48,850 48,850 12,560 12,560 2,632 2,632 1,040 1,040 288,950 4,466 293,416 22,318 666 22,984 61,180 See Notes to Financial Statements. 10 SHIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND Year Ended June 30, 2001 Proprietary Fiduciary Fund T~e Fund T~ae Totals Enterprise Non-Expendable (Memorandum Cafeteria Trust Only) 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 Noncapital Financing Activities Federal subsidies State subsidies Contributions Net cash provided by noncapital financing activities Acquisition of equipment Cash Flows From Investing Activities Investment income Change in investments Net cash provided by investing activities Net increase in cash Cash: July 1, 2000 June 30, 2001 $ (Continued) 615~66 $ $ 615.266 (427~26) (4,134) (431,360) (421,694) - (421,694) (233,654) (4,134) (237,788) 196,420 196,420 41,689 41,689 1,040 1.040 238,109 1,040 239,149 1,991 3,426 5,417 (117) (117) 1,991 3,309 5.300 6,446 215 6,661 2~2~2 1,627 3.859 8,678 $ 1,842 $ 10,520 11 F F SHIPPENSBURG AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE AND NON-EXPENDABLE TRUST FUND (Continued) Year Ended June 30, 2001 Proprietary Fiduciary Fund Type Fund Type Totals Enterprise Non-Expendable (Memorandum Cafeteria Trust Only) 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: Due to other funds Accounts payable Deferred revenue Net cash used in operating activities (266,632) $ (3,800) $ (270,432) 10,034 48,850 10,034 48,850 (370) (434) (804) (3,158) (3,158) 91 91 (27,880) 100 (27,780) 5,411 - 5,4t I (233,654) $ (4,134) $ (237,788) See Notes to Financial Statements. 12 all SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies The accounting policies of the Shippensburg Area School District conform with accounting principles generally accepted in the United States of America as applicable to governmental units. The following is a summary of the School District's significant accounting policies: The Shippensburg Area School District's financial statements include the operations of all organizations for which the School Board exercises oversight responsibility. Oversight responsibility is demonstrated by financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters. The Shippensburg Area School District is the lowest level of government which has oversight responsibility and control over all activities related to public school education in the Commonwealth of Pennsylvania. The District receives funding from local, state and Federal government sources and must comply with the requirements of these funding-source entities. However, the District is not included in any other governmental "reporting entity" since the School Board members are elected by the public and have decision-making authority, the power to designate management, 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. Basis of Presentation - Fund Accounting: The accounts of the School District are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund arc accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue and expenditures or expenses. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are summarized by type in the financial statements. The following fund types and account groups are used by the School District: Governmental Fund Types Governmental Funds are those through which most governmental functions of the School District are financed. The acquisition, use and balances of the School District's expendable financial resources and related liabilities (except those accounted for in Proprietary and Payroll Funds) are accounted for through Governmental Funds. The measurement focus is upon determination of changes in financial resources rather than upon net income determination. 13 SHWPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note I. Summary of Significant Accounting Policies (Continued) Ba..~sis of Presentation - Fund Accounting (Continued): Governmental Fund Types (Continued) General Fund The General Fund is used to account for all financial transactions not accounted for in another fund. Revenue is primarily derived from local property, per capita and occupation taxes, and state and Federal distributions. Many of the more important activities of the School District, including instruction, administration of the School District and certain non-instructional services are accounted for in this fund. Special Revenue Funds Special Revenue Funds are used to account for specific governmental revenue (other than major capital projects) that are legally restricted to expenditures for specified purposes. The Athletic Fund is authorized by Section 511 of the Public School Code of 1949 to account for the revenue and expenditures of athletic activities. The Capital Reserve Fund (Section 2932 is authorized by P.L. 145, Act of April 30, 1943, known as Section 2932 School Laws of Pennsylvania) accounts for (1) monies transferred during any fiscal year from appropriations made for any particular purpose which may not be needed, and (2) surplus monies in the General Fund of the School District at the end of any fiscal year. This fund is included in the financial statements as a Special Revenue Fund. Capital Project Fund The Capital Project Fund is used to account for financial resources available for the acquisition or construction of major capital facilities (other than those financed by proprietary and trust funds). 14 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note !. Summary of Significant Accounting Policies (Continued) Basis of Presentation - Fund Accounting (Continued): Proprietary Fund Types Proprietary Funds are used to account for the School District's ongoing activities which are similar to those often found in the private sector. The measurement focus is upon determination of net income and capital maintenance. Proprietary Fund: Enterprise Fund The Cafeteria Fund accounts for all revenue and expenses pertaining to cafeteria operations since such operations are financed and operated, in a manner similar to a private business enterprise. It is the intent of the governing body that the cost of providing such goods or services to the students on a continuing basis be financed or recovered primarily through user charges or cost reimbursement plans. Fiduciary Fund Types Fiduciary Funds are used to account for assets held by the School District in a Trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. Fiduciary Fund: Trust and Agency Funds Trust and Agency Funds are used to account for assets held by the School District in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. Agency funds are custodial in nature and do not involve measurement of results of operations. Agency funds include the student activity fund, payroll fund and earned income tax fund. The Trust Fund includes the non-expendable scholarship funds. The Activity Fund accounts for the monies authorized by Section 511 of the Public School Code of 1949 for school publications and organizations. The Activity Fund is an Agency Fund but is separate from other Agency Funds because of legal requirements. 15 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) Basis of Presentation - Fund Accounting (Continued): Account Groups: General Fixed Assets Account Group This account group is used to record all property, plant and equipment of the School District except that which is accounted for in the Enterprise Fund. General Long-Term Debt Account Group This account group presents principally the balance of long-term debt which is backed by the full faith and credit of the School District. Long-term debt accounted for in the Enterprise Fund is excluded. Basis of Accounting: The District applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary funds apply Financial Accounting Standards Board (FASB) pronouncements, Accounting Principles Board (APB) opinions and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedures issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. Basis of accounting refers to when revenue and expenditures are recognized in the accounts and reported in the financial statements. All Governmental Funds utilize the modified accrual basis of accounting. Under this method, revenue is recorded when susceptible to accrual, i.e., both measurable and available. "Available" means collectible within the current period or soon enough thereafter to pay current liabilities. Such revenue items, which are accrued in the year to which they apply, are principally property taxes and inter-governmental reventle. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long- term debt which are recognized when due. Disbursements for inventory-type items and prepaid expenses are considered expenditures at the time of purchase. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Agency Funds are also accounted for using the modified accrual basis of accounting. 16 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) Basis of Accounting (Continued): The Cafeteria Fund uses the full accrual method of accounting: Furniture and equipment utilized by the Cafeteria Fund is recorded as fixed assets of that Fund (at cost), and is depreciated therein on a straight-line basis over an estimated useful life of 12 years. The fixed assets, net of accumulated depreciation, are a component of retained earnings. Donated commodities received by the Cafeteria Fund are inventoried at estimated cost to purchase comparable products locally or at cost figures provided by the Federal government if comparable products are not locally available. Inventories are valued on a first-in, first-out basis; remainder inventories at year-end are a component of retained earnings. The School District does not attempt to allocate "building-wide costs" to the Cafeteria Fund. Thus, General Fund expenditures which partially benefit the Cafeteria Fund (utilities, janitorial services, insurance, etc.) are not proportionately recognized within the Cafeteria Fund; similarly, the Cafeteria Fund does not recognize a cost for the building space it occupies (no rental-of-facilities expense). Budgets and Budgetary Accounting: The School District adopts an annual budget for the General Fund. The budget is maintained on a modified accrual basis by function and object, with expenditures controlled by line item. Appropriations lapse at the end of each year and must be reappropriated. The School Board approves budget transfers between and within depa[iments of the School District's General Funds. Budgeted amounts are as originally adopted or as amended by the School Board at various times. Cash and Cash Equivalents: For purposes of the Statement of Cash Flows, cash equivalents include time deposits, certificates of deposit, and all highly-liquid debt instruments with original maturities of three months or less. Investments: Investments are stated at market value. Allowance for Estimated Uncollectible Taxes and Deferred Tax Revenue: The allowance for estimated uncollectible taxes is based upon an historical estimate of delinquent taxes that will not be collected. Deferred tax revenue is based upon an historical estimate of delinquent taxes expected to be collected subsequent to the first sixty days of the following fiscal year. 17 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies (Continued) Use of Estimates: The preparation of general purpose financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. General Fixed Assets: General Fixed Assets are recorded at replacement values as determined by an Industrial Appraisal Company report dated October 31, 2000, except for land, which is recorded at cost. Accounting principles generally accepted in the United States of America require General Fixed Assets to be recorded at historical or estimated historical cost. Original-purchase and replacement equipment are charged to the appropriate General Fund expenditure account as prescribed by the Pennsylvania Department of Education. No depreciation has been provided on General Fixed Assets. General Long-Term Debt: The General Long-Term Debt Account Group consists of.' 1. Sick leave and vacation payable. 2. Outstanding General Obligation Bonds - Series of 1996 issued on July 15, 1996. 3. Outstanding General Obligation Note - Series of 1997 (refinancing of Series of 1991) issued on January 16, 1997. 4. Outstanding General Obligation Bonds - Series of 1997 issued on December 3, 1997. 5. Signet Leasing - computer system. Totals - Memorandum Only: The columns on the combined financial statements are not necessary for a fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. They are presented to facilitate financial analysis. Aggregation of this data is not comparable to a consolidation as interfund eliminations have not been made. Note 2. Cash and Investments The cash and investment policies of the District are governed by statute. Cash must be held in insured depositories approved by the School Board and must be fully collateralized. Permissible investments include United States Treasury Bills and short-term obligations of the United States Government or its agencies or instrumentalities, shares of an investment company whose investments are restricted to the preceding categories and which are invested in the above government instruments, and fully-insured or collateralized certificates of deposit issued by banks or savings and loan associations. 18 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 2. Cash and Investments (Continued) Cash The District's carrying amount of cash deposits at June 30, 2001, for all funds amounted to $949,331. Of the total bank balance of $1,492,257, $113,221 was covered by Federal depository insurance. The remainder of $1,379,036 is covered by pooled collateral maintained in conformity with Act 72. The carrying amount of cash and investments as presented on the balance sheet includes petty cash of $1,050. 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. Investments Certain of the District's investments which may be classified (under standards set by the Governmental Accounting Standards Board) are either insured, registered, or securities which are held by the District's agent in the District's name. Accordingly, all such items are classified in Category 1. Investments may also be categorized as Category 2, which is defined as uninsured or unregistered investments for which the securities are held by the broker's or dealer's trust deparhnent or agent in the District's name, and Category 3, which is defined as uninsured or unregistered investments for which the securities are held by the broker or dealer or by its trust department or agent but not in the District's name. The District has no investments which would be classified in Categories 2 or 3. However, the District does have investments which are not in any of the three defined categories because securities are not used as evidence of the investment. The District's investments are categorized below to give an indication of the level of risk assumed at June 30, 2001, (based on bank balances): U. S. Government Securities Mutual Funds Category Non- 1 2 3 Categorized $ 2,168,952 $ $ $- 115,784 $ 2,168,952 $ $ $ 115,784 19 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 3. Property Taxes Property taxes are levied on July I st. Taxes are collected at a discount until August 31st, at their face amount from September I st until October 31 st, and include a penalty thereafter. The taxes are billed and collected by elected tax collectors. The County Tax Bureaus collects delinquent real estate taxes for the School District. Note 4. Taxes Receivable and Deferred Revenue A summary of the taxes receivable and related accounts are as follows: Amount Uncollected taxes - real estate $ 466,713 Uncollected taxes - personal Interest and commissions - net Realty transfer taxes Taxes Receivable - Net Taxes to be collected within 60 days Deferred revenue - delinquent taxes Allowance for uncollectible taxes Taxes Receivable - Net Deferred Revenue Delinquent taxes Grants Donated commodities - Cafeteria Fund 20 192,349 2,067 18,494 $ 679,623 $ 178,196 522,609 (21,182) $ 679,623 $ 522,609 4 22,091 $ 544,704 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 5. Accrued Salaries and Benefits Accrued salaries and benefits at June 30, 200 t, consist of the following: Amoum Accrued salaries $ 897,680 Retirement 9,818 Social security 68,673 Workers' compensation 6,733 $ 982,904 Accrued salaries represent teachers' salaries earned during the 2000-01 school year which will be paid subsequent to June 30, 2001. Accrued retiremem represents the public school employees' retirement board contribution for the second quarter of calendar year 2001, including the portion pertaining to accrued salaries at June 30, 2001. Accrued social security represents the District's liability arising from accrued salaries at June 30, 2001. Note 6. Cafeteria Fund Inventory The composition of Cafeteria Fund inventory is as follows: Amount Materials and supplies $ 5,904 Purchased food 12,380 Donated food 22,091 $ 40,375 21 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 7. Fixed Assets A summary of changes in fixed assets for the year ended June 30, 2001, follows: General Fixed Assets Land and site improvements Buildings and improvements Furniture and equipment July 1, 2000 Changes June 30. 2001 51,396 $ $ 51,396 36,693,173 1,394,132 38.087,305 8.336,950 158,403 8,495,353 $ 45,081,519 $ 1,552,535 $ 46,634,054 Enterprise Fund Fixed Assets Machinery and equipment Accumulated depreciation $ 368,586 $ $ 368,586 (324,761) (10,034) (334,795) $ 43,825 $ (10,034) $ 33,791 The net change in fixed assets are combinations of new assets purchased and increases in the appraisal values of all assets. Note 8. General Long-Term Obligations A summary of the reporting entity's general long-term obligations as of June 30, 2001, and transactions during the year then ended follows: General Long-Term Obligations: General Obligation Bonds - Series of 1996 General Obligation Bonds - Series of 1997 Compensated absences payable Balances Balances July 1, 2000 Increase Decrease June 30, 2001 $ 4,980,000 $ $ 610,000 $ 4,370,000 10,980.000 360,000 10,620,000 662,302 11,950 650,352 $16,622,302 $ $ 981,950 $15,640,352 22 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 8. General Long-Term Obligations (Continued) General Obligation Bonds - Series of 1996 - On July 15, 1996, the School District issued General Obligation Bonds in the principal amount of $4,995,000. The bonds bear annual interest with rates ranging from 4.60% to 5.25%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging from $5,000 to $825,000 through November 15, 2006. General Obligation Bonds - Series of 1997 - On December 3, 1997, the School District issued General Obligation Bonds in the principal amount of $11,080,000. The bonds bear annual interest with rates ranging from 4.00% to 5.10%. Interest is payable semi-annually on November 15 and May 15, and the bonds mature serially in amounts ranging from $100,000 to $1,645,000 through November 15, 2012. The following is a schedule of principal and interest to service long-term bond, note, and capital lease obligations of the School District: Year Principal Interest Total 2001-2002 $ 1,015,000 $ 704,961 $ 1,719,961 2002-2003 1,065,000 657,048 1,722,048 2003-2004 1,115,000 605,565 1,720,565 2004-2005 1,170,000 550,733 1,720,733 2005-2006 1,225,000 492,545 1,717,545 Thereafter 9,400,000 1,571,241 10,971,241 $ 14,990,000 $ 4,582,093 $ 19,572,093 23 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 9. Compensated Absences Upon retirement, employees are paid for unused sick days at rates varying with length of service and job classification subject to various maximums. These amounts are recorded as expenditures in the period taken or in the year of separation. The amount presented in the general long-term debt account group is an estimate. All teachers and administrators retiring with at least 25 years of service in the Pennsylvania Public School Employees' Retirement System (PSERS) and 15 years of service in the District, are paid by the District tbr 40% of their accumulated unused sick days (to a maximum of 100 days) at the rate of $50 per day. Support staff with at least 15 years of service with PSERS and the District will receive payment for 100% of their accumulated unused sick days at $50 per day, up to a maximum of $4,500. Support staff supervisors with at least 25 years of service with PSERS and 15 years of service with the District receive payment for 100% of their unused sick days at a rate of $50 per day up to a maximum of $5,500. For the year ended June 30, 2001, benefits attributed to employees retiring during the 2000-01 year amounted to $6,125 for 3 participants. Note 10. Due To/From Other Funds Individual fund receivable and payable balances at June 30, 2001, were as follows: Receivables Payables General fund $ 34,284 $ 375,000 Payroll Capital reserve Earned income tax fund 24 - 20,983 375,000 - 13,301 $ 409,284 $ 409,284 SHIPPENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 11. Post-Employment Benefits Under the Consolidated Omnibus Reconciliation Act (COBRA), the District provides healthcare benefits to eligible former employees and their dependents. Requirements are outlined by the Federal Government for this coverage. The premium plus a 2% administrative fee is paid in full by the eligible participant. This program is offered for a duration of up to 18 months or 36 months after an employee's termination date. At June 30, 2001, there were 11 participants covered under COBRA. Note 12. 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 2000-01 year was $34,392, comprised of a self-insured retention of $18,415 and a contribution to the Central Fund of $15,977. 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 are approximately 79 districts participating in the pool. If there is a deficiency in the pooled funds, each member is assessed a proportionate share. Upon withdrawal by an individual member from the pool, the terminating member has no rights to funds in the pool. Note 13. Defined-Benefit Pension Plan Plan Description: The School 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 and death benefits. 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. The Public School Employees' Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the defined-benefit pension plan. That report may be obtained by writing to Public School Employees' Retirement System of Pennsylvania, P.O. Box 125, Harrisburg, Pennsylvania, 17108 or by calling 717-787-8540. 25 SHB~PENSBURG AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS Note 13. Defined-Benefit Pension Plan (Continued) Funding Policy: The contribution policy is set by the Code and requires contributions by the active employees, School District and the Commonwealth. The current contribution rate for active employees joining the System before July 22, 1983 is set by law at 5.65% of their annual covered salary. For active employees joining the System on or after July 22, 1983, the rate of contribution is 6.25% of their annual covered salary. Prior to July 1, 1995, the School District and the Commonwealth shared equally the contribution rate. Effective July 1, 1995, the School District is required to pay the entire contribution rate. The School District will be reimbursed by the Commonwealth in an amount equal to the Commonwealth's share as determined by the income aid ratio (as defined in Act 29 of 1994), which is at least one half of the total School District rate. The School District's contributions to the Plan for the years ended June 30, 2001, 2000, and 1999 were $242,658, $549,081, and $673,146, respectively, which were equal to the required contributions for each year. Note 14. Risk Management The Shippensburg Area School District is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets and errors or omissions. Significant losses are covered by commercial insurance for all major programs. For insured programs, there have been no significant reductions in settlement coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. 26 SUPPLEMENTARY INFORMATION SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF REVENUE Year Ended June 30, 2001 Revenue Local sources Real estate taxes Current Interim Public utility tax Paymems in lieu of taxes Current per capita taxes 679 511 Occupational privilege lax Earned income tax Occupation tax Real estate transfer taxes Delinquem real estate taxes Delinquent per capita taxes 679 511 Delinquent occupation tax Rentals Tuition Reading recovery CISC Miscellaneous 7,481.371 48,930 43.206 6,351 46,733 46,733 76,235 1,404,308 1,027,917 208,317 523,892 5,663 5,663 155,495 12,039 13,575 19,500 5,000 153A76 Total revenue from local sources 11,284,404 State appropriations Basic instructional subsidy Read to Succeed Section 1305 and 1306 Performance incentives Homebound instruction Vocational education Alternative education Driver education Special education Transportation 6,138,837 i15,876 35,373 43,665 1,944 25,723 35,558 2A85 1,277,660 842,667 (Continued) 27 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF REVENUE (Continued) Year Ended June 30, 2001 Revenue (Continued) State appropriations (Continued) Rentals and sinking fund payments Medical and dental services Social security reimbursement Retirement reimbursement Total state appropriations Federal appropriations Title I - Grants to Local Educational Agencies Eisenhower Professional Development State grants Innovative Education Program Strategies Medical Assistance Program Impact Aid IDEA Goals 2000 Total Federal appropriations Other financing sources Refunds of prior years' expenditures Interest Proceeds from sale of equipment Total other financing sources Total revenue 28 694,013 57,107 491.519 116.857 9,879,284 334,586 17,044 86,599 52,288 587 140,691 25,722 657,517 36,157 267,779 5253 309,189 $ 22,130.394 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES Year Ended June 30, 2001 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 Property Other Supplies Property Total special programs Vocational education programs Salaries Employee benefits Purchased services Property Other Supplies Property Total vocational education programs (Continued) 7,490~985 1,428,979 22,847 72,866 241,794 459,811 36,039 2,874 9,756,195 1,648,861 332,925 934,987 29 74,120 25,162 37,038 3,053,122 327,623 57,425 2,359 506,784 9,045 9.277 912,513 29 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2001 Expenditures (Continued) Instructional (Continued) Other instructional programs Salaries Employee benefits Purchased services Professional and technical Property Other Supplies Other objects Total other instructional programs Adult education programs Salaries Employee benefits Purchased services Property 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) 471.329 80,237 18,585 33 14,189 1,113 300 585,786 39,424 8,758 1,077 495 2,555 55 52,364 10,716 14,370,696 466,036 86,919 139,391 149 1,804 13,841 3,435 4,938 716,513 30 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2001 Expenditures (Cominued) 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 Supplies Total pupil health (Continued) 31 418,048 84,824 13,180 32,059 10,007 158,899 369,919 601 1,087,537 925,972 173,881 102,945 2,732 54,924 14,772 17,939 16,985 1,310,150 125,462 26,661 15,738 90 5,317 173,268 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2001 Expenditures (Continued) Support Services (Cominued) 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) 32 161.694 43,108 1,297 175 28,175 3,166 377 237,992 556,002 134,718 441,849 94,048 287,495 5,868 180 1,520,160 7,218 1,499,017 3,428 2O 1,509,683 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Continued) Year Ended June 30, 2001 Expenditures (Cominued) Support Services (Cominued) Central service Purchased services Professional and technical Property Other Supplies Proper~y 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 Property Other objects Total student activities (Continued) 33 20,501 18,185 614 651 15,273 2,500 57,724 20,721 6,633,748 197,298 22,496 12,000 9,684 4,038 1,500 85 247,101 SHIPPENSBURG AREA SCHOOL DISTRICT GENERAL FUND - SCHEDULE OF EXPENDITURES (Coutioued) Year Ended June 30, 2001 Expenditures (Cominued) Operation of Non-lnstructional Services (Continued) Community services Salaries Employee benefits Purchased services Professional and technical Supplies Other objects Total community services Total operation of non-instructional services Other Debt service Operating transfers out Total other Total expenditures 34 5,720 592 300 4,787 4,700 16,099 263,200 1,720,950 457.902 2,178,852 $ 23,446,496 SHIPPENSBURG AREA SCHOOL DISTRICT SPECIAL REVENUE FUNDS - COMBINING BALANCE SHEET June 30, 2001 Middle School Athletic Fund Senior High Athletic Fund ASSETS $ 461 Cash LIABILITIES AND FUND BALANCES Fund balances Total $ 461 $ 8,184 $ 8,645 35 $ 8.184 $ 8,645 SHIPPENSBURG AREA SCHOOL DISTRICT SPECIAL REVENUE FUNDS - COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended June 30, 2001 Middle School Senior High Athletic Fund Athletic Fund Total Revenue $ 10,965 $ 44,849 Local sources Expenditures Operation of non-instructional services Deficiency of revenue over expenditures Other Financing Sources Operating transfers in Deficiency of revenue and other financing sources over expenditures Fund Balances - July 1, 2000 Fund Balances - June 30, 2001 55,814 36 32,255 130,897 163,152 (21,290) (86,048) (107,338) 20,902 62,000 82,902 (388) (24,048) (24~36) 849 32,232 33,081 $ 461$ 8,184$ 8,645 SHIPPENSBURG AREA SCHOOL DISTRICT SPECIAL REVENUE FUNDS - COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Year Ended June 30, 2001 Middle School Athletic Fund Bud[et Actual Revenue Local sources $ 12,391 $ 10,965 Expenditures Operation of non-instructional services Deficiency of revenue over expenditures Other financing sources Operating transfers in Excess (deficiency) of revenue and other financing sources over expenditures Fund Balances - July 1, 2000 Fund Balances - June 30, 2001 Variance Favorable (Unfavorable) $ (1,426) 33,093 32,255 838 (20,702) (21,290) (588) 20,902 20,902 $ 200 (388) $ (588) 849 46] 37 Budget 37,420 $ Senior Hish Athletic Fund Variance Favorable Actual (Unfavorable) 44,849 $ 7,429 Budget $ Total Variance Favorable Actual (Unfavorable) 49,811 $ 55,814 $ 6.003 131,943 130,897 1,046 165,036 163,152 1,884 (94,523) (86,048) 8,475 (115,225) (107,338) 7,887 90.523 62,000 (28,523) 111,425 82,902 (28,523) (4,OOO). (24,048) $ 32.232 $ 8,184 (20,048) 38 (3,800) (24,436) $ (20.636) 33,081 $ 8,645 SHIPPENSBURG AREA SCHOOL DISTRICT CAFETERIA FUND - SCHEDULE OF REVENUE Year Ended June 30, 2001 Operating Revenue Lunches Regular Smdems Adults A la carte Miscellaneous Total operating revenue Nonoperating Revenue Interest Federal subsidies State subsidies Social securiW subsidy Retirement subsidy Value of donated commodities Total nonoperating revenue Total revenue 39 $ 296,834 12.360 275,987 30,085 615.266 1,991 196,420 26,497 12,560 2,632 48,850 288,950 $ 904,216 SHIPPENSBURG AREA SCHOOL DISTRICT NON-EXPENDABLE TRUST FUND - COMBINING BALANCE SHEET June 30, 2001 Class of 1936 Class of t950 Travis E. Griffith ASSETS Cash $ 212 $ 173 $ Investments 7,600 31,300 Accounts receivable 434 - Total assets $ 8~.46 $ 31,473 $ LIABILITIES AND FUND BALANCE Liabilities Accounts payable Fund balance Total liabilities and fund balance 40 200 $ - 8,046 31,473 8 10,340 10,348 10,348 $ 8,246 $ 31,473 $ 10,348 David R. Landis, Jr. LarD' Carey Music 5 $ 10,630 6O3 $ FFA Fair Scholarship 841 $ Total 1,842 59,870 434 10,635 $ 603 $ 841 $ $ 10,635 - $ 603 100 $ 741 62,146 300 61,846 $ 10,635 $ 603 $ 841 $ 41 62,146 SHIPPENSBURG AREA SCHOOL DISTRICT NON-EXPENDABLE TRUST FUND - COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND BALANCE Year Ended June 30, 2001 Class of Class of Tmvis E. 1936 1950 Griffith Operating Expenses Scholarships Total operating expenses Nonoperating Revenue Interest Contributions Total nonoperafing revenue Net income (loss) Fund Balance - July I, 2000 Fund Balance - June 30, 2001 42 $ 200 $ 2,000$ 500 200 2,000 500 519 1,738 569 200 719 1,738 569 519 (262) 69 7,527 31,735 10,279 $ 8,046$ 31,473 $ 10,348 David R. Larry Carey FFA Fair Landis, Jr. Music Scholarship Total $ 500 $ 500 $ 100 $ 3,800 500 500 100 3,800 578 21 I 3,426 - 840 1,040 578 21 841 4,466 78 (479) 741 666 10.557 1,082 61,180 $ 10,635 $ 603 $ 741$ 61,846 43 SHIPPENSBURG AREA SCHOOL DISTRICT AGENCY FUNDS - COMBINING BALANCE SHEET June 30, 2001 Student Activity Fund Payroll Earned Income Fund Tax Fund Total ASSETS Cash Total assets 64,409 $ 182,981 $ 3,4.9,981 $ 597.371 LIABILITIES Due to other funds Intergovernmental Accounts payable 1,107 $ 20,983 $ 13,301 336,680 34,284 336,680 1,107 Accrued expenses Payroll withholdings Amount available for student activities Total liabilities 161,998 63,302 161,998 63.302 44 SHIPPENSBURG AREA SCHOOL DISTRICT STUDENT ACTIVITIES FUND - COMBINING BALANCE SHEET June 30, 2001 ASSETS Cash Total assets Elementary Middle School Senior High Activity Fund Activity Fund Activity Fund Total 8,392 $ 15,482 $ 40,535 $ 64,409 8,392 $ 15,482 $ 40.535 $ 64.409 LIABILITIES Accounts payable Amount available for student activities Total liabilities $ 1,107$ $ 1.107 8,392 14,375 40,535 63,302 8,392 $ 15,482 $ 40,535 $ 64,409 45 SH1PPENSBURG AREA SCHOOL DISTRICT STATEMENT OF CASH RECEIPTS AND CASH DISBURSEMENTS - EARNED INCOME TAX FUND Year Ended June 30, 2001 Cash Receipts Earned income tax collections Occupation tax collections Interest from temporary investments Miscellaneous income Total cash receipts 3,622,577 100,002 26,599 980 3,750.158 Cash Disbursements Earned income tax collections distributed to municipalities and districts Shippensburg Area School District Hopewell Township Newburg Borough Shippensburg Borough Shippensburg Township Southampton Township Cumberland County Franklin County Orrstown Borough Outside districts Occupation tax collections distributed to municipalities and districts Hopewell Township Shippensburg Area School District Shippensburg Borough Shippensburg Township Southampton Township Outside districts Refunds Interest distributions Miscellaneous expense Total cash disbursements Deficiency of cash receipts over cash disbursements 1,404,308 154,908 17,579 307,179 113,974 349,055 452,095 9,308 906,851 1,434 76,235 20,783 27,083 8,940 30 31,394 29,231 1361 3,911,548 $ (161,390__~_) 46 [ BOYER & PtlTTER CERTIFIED PUBLIC ACCOUNTANTS .~ND CONSULTANTS 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 GOVERNMENTA UD1TING STANDARDS Board of School Directors Shippensburg Area School District Shippensburg, Pennsylvania We have audited the general purpose financial statements of the Shippensburg Area School District as of and for the year ended June 30, 2001, and have issued our report thereon dated August 2, 2001. In our report, our opinion was qualified because the School District has recorded General Fixed Assets at values as determined by an Industrial Appraisal Company report. Under accounting principles generally accepted in the United States of America, General Fixed Assets should be recorded at historical or estimated historical cost. 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 Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the Shippensburg Area School District's general purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Renorting In planning and performing our audit, we considered the Shippensburg Area School District's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively iow 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 2, 2001 48 [ BOYER & P ITTER CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS WEB SITE: www.cpabr.com INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON 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. O~ce of Management and Budget (OMB) Circular ,4-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2001. 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, andNon-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 provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the District's compliance with those requirements. In our opinion, the Shippensburg Area School District complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2001. CAMP HILL CARLISLE CHAMBERSBURG LEWISTOWN STATE COLLEGE An ln(lel~ndent .ly Owr~d Mcn~er of the ,~oladrey Network Worldwide Service Throt~n RSM lnterrlatlorlal ln__ternal Control Over Compliance The management of the Shippensburg Area School District is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and gr~nts 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 low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. 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 2, 2001 ~ ~ 50 isI SHIPPENSBURG AREA SCHOOL DISTRICT Schedule of Findings and Questioned Costs Year Ended June 30, 2001 Section I - Summary of Auditor's Results Financial Statements Type of auditor's report issued: Qualified Internal control over financial reporting: Material weakness identified: Yes X No Reportable condition(s) identified that are not considered to be material weakness(es)? Yes X None Reported Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major programs: · Material weakness identified? Yes X No · Reportable condition(s) identified that is not considered to be 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- 13 Yes X No 51 SHIPPENSBURG AREA SCHOOL DISTRICT Schedule of Findings and Questioned Costs Year Ended June 30, 2001 Identification of the major programs: CFDA Number(s) 84.010 Name of Federal Programs/Cluster Title I - Grants to Local Educational Agencies 10.555 10.556 National School Lunch Program Special Milk Program for Children Dollar threshold used to distinguish between type A and type B programs $300,000 Auditee qualified as iow-risk auditee? Yes __ X No Section H - Financial Statement Findings A. Reportable Conditions in Internal Control There were no findings relating to the financial statement audit required to be reported. B. Compliance Findings There were no compliance findings relating to the financial statement audit required to be reported. Section IH - Federal Award Findings and Questioned Costs A. Reportable Conditions in Internal Control There were no findings relating to the Federal awards as required to be reported in accordance with Section .510(a) of OMB Circular A-133. B. Compliance Findings There were no findings relating to the Federal awards as required to be reported in accordance with Section .510(a) of OMB Circular A-133. 52 SHIPPENSBURG AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2001 Source Code Federal C.F.D.A. Number Pass Through Grantor's Number U. S. Department of Education Impact Aid Passed through the Pennsylvania Department of Education: Title I - Grants to Local Educational Agencies Title I - Grants to Local Educational Agencies Innovative Education Program Strategies Innovative Education Program Strategies Innovative Education Program Strategies Eisenhower Professional Development State grants Eisenhower Professional Developmem State grants Eisenhower Professional Development State grants Class Size Reduction Title I - Accountability Grants Passed through the Lincoln Intermediate Unit Consortium Safe and Drug-free Schools and Communities Safe and Drug-free Schools and Communities Total U. S. Department of Education U. S. Department of Health and Human Services Passed through the Pennsylvania Depa~lment of Education Medical Assistance Program Medical Assistance Program Total U. S. Department of Health and Human Services D 84.041 84.010 84.010 84.298 84.298 84.298 84.281 84.281 84.281 84.340 84.348 84.186 84.186 93.778 93.778 N/A 013-01-0387 13-000387 011-01-0387 11-000387 11-000387 020-01-0387 20-000387 20-990387 088-01-0387 103-01-0387 1000-10812 100-000812 44-007387 44-007387 53 Grant Period 00-01 00-01 99-00 00-01 99-00 99-00 00-01 99-00 98-99 00-01 00-01 00-01 99-00 00-01 99-00 Program or Annual Award Total Received (Refunded) in Fiscal Year $ 587 $ 587 $ $ 329,673 $ 329,673 $ 11,059 $ 11,194 $ 67,196 $ 13,171 $ 13,628 $ 13,755 $ 71,315 $ 16,092 Accrued (Deferred) Revenue at 7/1/2000 $ 13,199 $ 14,233 Revenue Recognized Expenditures $ 587 $ 587 $ 263,738 197,804 Accrued (Deferred) Revenue at 6/30/2001 9,585 4,478 67,196 196,596 253 67,196 329,673 329,673 1,208 1,208 7,025 12,122 917 61,806 65,935 11,059 11,059 1,474 4,225 4,225 - 8,155 917 13,077 13,077 3,967 3,967 6,052 71,315 71,315 9,509 3,707 3,707 3,707 10,908 11,723 13,199 13,199 11,723 i1~723 2,291 647,889 273,1 i 7 463,740 463,740 88,968 N/A 22,734 50,855 50,855 N/A (1~433~ 1,433 1,433 28,121 22,734 (1,433) 52,288 52,288 28,121 54 SHIPPENSBURG AREA SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Year Ended June 30, 2001 U. S. Department of Agriculture Pass Federal Through Source C.F.D.A. Grantor's Code Number Number Grant Period Passed through the Pennsylvania Department of Education: National School Lunch Program National School Lunch Program Special Milk Program for Children Passed through the Pennsylvania Department of Agriculture: Food Distribution (a) Total U. S. Department of Agriculture Total Expenditures of Federal Awards I(F) 10.SSS N/A 00-01 I(S) N/A N/A 00-01 I(F) 10.556 N/A 00-01 I(F) 10.550 N/A 00-01 Source Codes: D - Direct Funding I - Indirect Funding (F) - Federal Share (S) - State Share Legends: (a) Donated commodities valued at local market values (b) Total amount of commodities received from Department of Agriculture (c) Inventories at July 1, 2000 (d) Total amount of commodities used (e) Inventories at June 30, 2001 See Notes to Schedule of Expenditures of Federal Awards. 55 Program or Annual Award N/A N/A N/A Accrued Accrued Total Received (Deferred) (Deferred) (Refunded) in Revenue at Revenue Revenue at Fiscal Year 7/I/2000 Recosnized Expenditures 6/30/2001 191,737 191,737 191,737 26,456 26,456 26,456 4,398 4,398 4,398 N/A (b) 54,261 (c) (16,680) 48,850 (d) 48,850 (e) (22.091) 276,852 $ 947,475 (16,680) 271,441 $ 255,004 $ 787,469 271,441 (22,091) $ 787,469 $ 94,998 Test of 50% Rule: Total Expenditures Less State Expenditures Total Federal Expenditures Program selected for testing as major programs: Title I - Grants to Local Educational Agencies National School Lunch Program Cluster $ 787,469 26,456 $ 761,013 $ 330,881 196,135 $ 527,016 / 761,013 = 69.25~ 56 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 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. National School Lunch Program Cluster The National School Lunch Program Cluster has been audited in accordance with OMB Circular A-133. 57 SHIPPENSBURG AREA SCHOOL DISTRICT SUMMARY SCHEDULE OF PRIOR YEAR'S AUDIT FINDINGS Year Ended June 30, 2001 There were no prior audit findings for the year ended June 30, 2000. 58