HomeMy WebLinkAbout09-1616~~~ l~ ~(~ C'~ ~~
T-~y~
EAST PENNSBORO AREA SCHOOL DISTRICT
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2008
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS' REPORT IAR - 1 to IAR - 2
MANAGEMENT'S DISCUSSION AND ANALYSIS MDA - 1 to MDA - 8
BASIC FINANCIAL STATEMENTS
District-wide financial statements
Statement of net assets FS - 1
Statement of activities FS - 2
Fund financial statements
Balance sheet -governmental funds FS - 3
Reconciliation of the governmental funds balance sheet
to the statement of net assets FS - 4
Statement of revenues, expenditures, and changes
in fund balances -governmental funds FS - 5
Reconciliation of the governmental funds statement of revenues, expenditures,
and changes in fund balance to the statement of activities FS - 6
Statement of net assets -proprietary funds FS - 7
Statement of revenues, expenses, and changes in net assets -proprietary funds FS - 8
Statement of cash flows -proprietary funds FS - 9
Statement of net assets -fiduciary funds FS - 10
NOTES TO FINANCIAL STATEMENTS FS - 11 to FS - 27
BUDGETARY COMPARISON INFORMATION -GENERAL FUND BCI - 1
~7`ECa.
Greenawalt & Company, P.C.
CERTIFIED PUBLIC ACCOUNTANTS James E. Lyons
Howazd R. Greenawalt
Since 1955 Creedon R. Hoffman
Deborah I. Kelly
Scott J. Christ
INDEPENDENT AUDITORS' REPORT
Board of School Directors
East Pennsboro Area School District
Enola, Pennsylvania
We have audited the accompanying financial statements of the governmental activities, the business-type activities,
each major fund, and the fiduciary funds of East Pennsboro Area School District as of and for the year ended June
30, 2008, which collectively comprise the District's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the District's management. Our responsibility is to express opinions on
these financial statements based on our audit. The prior year summarized comparative information has been derived
from the District's June 30, 2007 financial statements and, in our report dated November 20, 2007 we expressed
unqualified opinions on the respective financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information.
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 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.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the fiduciary funds
of East Pennsboro Area School District, as of June 30, 2008, and the respective changes in financial position, and,
where applicable, cash flows thereof 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 our report dated January 5, 2009, on our
consideration of East Pennsboro Area School District's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards
and should be considered in assessing the results of our audit.
IAR - 1
400 West Main Street • Mechanicsburg, PA 17055 . 717.766.4763 . Fax 717.766.2731
62 West Pomfret Street • Carlisle, PA 17013.717.243.4822 • Fax 717.258.9372
www.greenawalt.cc
Board of Directors
East Pennsboro Area School District
Management's discussion and analysis on pages MDA - 1 through MDA - 8 and budgetary comparison information on
page BCI - 1 are not a required part of the basic financial statements but are supplementary information required by
accounting principles generally accepted in the United States of America. 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.
rt?~,ra~,a,~t~ ~~
GREENAWALT & COMPANY, P.C.
January 5, 2009
Mechanicsburg, Pennsylvania
IAR - 2
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
Our discussion and analysis compares our financial position at June 30 of 2008, 2007 and 2006. It also
provides an overview of our financial performance for the two years between these periods, fiscal years
ended June 30, 2008 and 2007, in accordance with governmental reporting requirements. Please read our
discussion and analysis in conjunction with the District's financial statements, which begin on page FS-1.
FINANCIAL HIGHLIGHTS
• Our financial position remained viable at the end of 2008, however, our direct expenses exceeded
our revenues. We have maintained sufficient net assets and fund balances, and established a budget
that should result in a stable financial position through 2008 - 2009.
• In 2007, we used available capital funds to complete additional renovation projects at the Middle
School.. At the end of that year, there was a balance of about $630,854 remaining in our Capital .
Projects Fund. During 2008, we used $108,495 of those funds for additional renovations to the
middle school leaving a fund balance of $531,024.
• For 2008, we paid down $2.6 million of our General Obligation Debt. No additional debt has been
incurred. Our budget for 2009 does not call for additional debt and we again expect to have
adequate financial resources to meet all of our debt service obligations.
• The District has provided operating revenues within the constraints of ACT 1 of 2006, through
significant reductions of operating expenses. The District is concerned with these constraints and
the impact in the future.
• The District provides medical coverage through the South Central Trust (SCT). Over the last three
years the District has accumulated a surplus within the risk sharing pool. This has enable to the
District to contain costs and provide stability for future years as the cost of medical coverage
fluctuates from year to year based on claims. The reserved fund balances for the District's reserve at
South Central Trust were $324,564, $1,455,000 and $2,074,000 at December 31, 2006, 2007 and
2008, respectively.
USING THESE FINANCIAL STATEMENTS
This report consists of a series of financial statements. The Statement of Net Assets and the Statement of
Activities (on pages FS-1 and FS-2) provide information about the activities of the District as a whole, and
present alonger-term view of the District's finances than Fund statements. Fund financial statements are on
pages FS-3, FS-5 and FS-7 through FS-10. For governmental activities, these statements tell how District
services have been financed in the short run, as well as show the amount remaining for future spending.
Proprietary fund statements provide information about non-governmental operations, in this case food
services. Fiduciary funds statements report funds held in trust by the District for such things as scholarship
grants.
M DA - 1
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
The Reconciliation of the Govemmental Funds Balance Sheet on page FS-4 connects governmental fund
balance to the total net assets balance from the Statement of Net Assets. The reconciliation on page FS-6
does the same for the components of the changes in fund balances.
Reporting the District as a Whole
The statements present financial activities and the results of those activities in two categories, Governmental
and Business-type. Capital assets (land, buildings, improvements, furniture and equipment) are presented
with all .other assets. Long-term debt is presented with all other liabilities. This is distinctly different from
the Fund statements in which assets and liabilities are separated into various funds such as General and
Capital Projects.
The approach to measurement of revenue and expense is similaz to that used in the private sector and is
referred to as following the accrual basis of accounting. This is discussed further in the notes to the
financial statements.
Reporting the District's Most Significant Funds
The funds statements provide financial information about the District's significant funds rather than the
District as a whole. There are three fund types, Governmental, Proprietary and Fiduciazy. The use of each
type of fund is described in the notes to the financial statements. Unlike the financial statements that
measure revenues on the accrual basis, the funds statements report revenues only to the extent cash has been
received, or is expected to be received in the near future.
The District as Trustee
The District acts as fiduciary for Students Activities and Agency Funds. In comparison to the
Governmental Funds, the amount held in the fiduciary fund is small. The fiduciazy fund net assets are
presented on page FS-10.
THE DISTRICT AS A WHOLE
Table A-1 summarizes and compares the Statement of Net Assets from page FS-1 of the financial
statements for each of the past three years. We have brought forwazd the 2006 balances from our 2007
MD&A. These balances are otherwise not a part of the 2007 financial statement package. Within this and
certain other schedules in our discussion, we have presented the dollaz figures in thousands, unless
otherwise indicated, to make them easier to read. This has resulted in rounding differences, and some
columns may not add within a schedule.
MDA-2
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
Table A-1
Statement of Net Assets
Governmental Activities
Current and other assets
Capital assets
Total assets
2008 2007 2006
$ 6,643 $ 8,059 $ 8,644
38,575 39,963 40,576
$ 45,218 $ 48,022 $ 49,220
Current and other liabilities
Long-term liabilities
Total liabilities
Capital assets (net of related debt)
Restricted for capital projects
Unrestricted
Total net assets
Total liabilities and net assets
$ 2,683 $ 2,815 $ 2,934
34,756 37,442 39,983
37,439 40,257 42,917
4,640 3,495 1,460
531 631 1,682
2,608 3,639 3,161
7,779 7,765 6,303
$ 45,218 $ 48,022 $ 49,220
Business-type Activities
2008 2007 2006
$ 110 $ (21) $ (55)
280 310 135
$ 390 $ 289 $ 80
$ 43 $ 52 $ 43
43 52 43
280 310 135
67 (73) (98)
347 237 37
$ 390 $ 289 $ 80
Total net assets are the difference between total assets and total liabilities, and represent resources that can
be used to pay for future operations and capital improvements. The bulk of our assets are capital assets.
These have been paid for using borrowed money and do not add significantly to our net asset value. The
restricted portion of net assets represents cash and investments that can only be used for buildings and
improvements. The remaining restricted fund balance will be used to fund future capital maintenance
projects such as new roofing.
Our current and other assets have decreased by $1,284,882 from 2007 to 2008.
Table A-2 summarizes and compares activity presented in the Statement of Activities (page FS-2). It shows
the activity behind the increase in total net assets over the year ending June 30, 2008.
MDA-3
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
Revenues
Program revenues
Charges for services
Operating grants
and contributions
Capital grants
and contributions
General revenues
Taxes
State general subsidies
Other
Total revenues
Direct expenses
Excess (deficiency before transfers)
Transfers
Change in net assets
Table A-2
Statement of Activities
Governmental Business-type
Activities Activities Totals
2008 2007 2008 2007 2008 2007
$ 230 $ 235 $ 823 $ 784
4,527 3,939 378
466 521 _
349
$ 1,053 $ 1,019
4,905 4,288
- 466 521
20,893 2,1,507 - - 20,893 21,507
4,663 4,496 - - 4,663 4,496
355 645 4 (7) 359 638
31,134 31,343 1,205 1,126 32,339 32,469
30,954 29,637 1,261 1,171 32
215 30
808
, ,
180 1,706 (56) (45) 124 . 1,661
(167) (244) 167 244 _ _
$ 13 $ 1,462 $ 111 $ 199 $ 124 $ 1,661
The growth in Total Revenues from our Total Primary Governmental activities was in line with the increase
in our direct expenses. Similar to 2007, this resulted in an excess of revenues over expenses, increasing our
net asset balance by $124,632.
Governmental Activities
Table A-3, shown on the next page, presents expense information from the Statement of Activities for
governmental activities. The total cost of services represents the actual cost of providing the services while
the net cost represents the amount of cost that is not recovered through program revenues, meaning user
charges, grants and contributions. The total net cost of services of $25,730,447 must be recovered through
general revenue, primarily taxes and state subsidies. Amounts not recovered will reduce funds available for
future years.
MDA-4
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
Classroom instruction
Instructional student support
Administrative and financial support
Operation and maintenance of buildings
Student transportation
Student activities
Community services
Interest on long term debt
Total governmental activities
State general subsidies revenues
Total needs from taxes and other local sources
Table A-3
Governmental Activites
_ Direct Expenses
2008 2007
$ 19,067 $ 18,049
2,953 2,944
3,308 3,066
2,471 2,484
1,140 980
650 643
2 2
1,363 1,469
$ 30,954 $ 29,637
The total net cost of services was .8 percent higher than the previous year.
Business-Type Activities
(4,663) (4,496)
$ 21,068 $ 20,446
Table A-4, is similar to the previous table, except it presents business-type service costs. Note that almost
all of the cost of food services is paid by program revenues.
Table A-4
Business-type Activities
Direct Expenses Program Revenues Net Expense
2008 2007 2008 2007 2008 2007
Food services $ 1,261 $ 1,171 $ 1,201 $ 1,133 $ 60 $ 38
Investment earnings (4) (6)
Total net expense $ 56 $ 32
The District forgave $150,000 of funds advanced to the Food Service Fund during the 2000 school year and
are included as transfers in the Food Service Fund. There were no other significant changes during the year
with the net cost of services remaining about the same in 2008 as in 2007.
DISTRICT'S FUNDS
The information in Table A-5 summarizes and compares the Governmental Funds' Balance Sheet for June
30, 2008, 2007 and 2006. Note that we again brought forward 2007 and 2006 balances from our 2007
MD&A. This information is not otherwise a part of the 2008 financial statement package. The groupings
are the same as those used in the Statement of Net Assets.
Program Revenues Net Expense
2008 2007 2008 2007
$ 3,831 $ 3,313 $ 15,236 $ 14,736
216 220 2,737 2,724
111 106 3,197 2,960
57 65 2,414 2,419
472 400 668 580
70 70 580 573
- - 2 2
466 521 897 948
$ 5,223 $ 4,695 25,731 24,942
MDA-5
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
Table A-5
Governmental Fund Balances
2007-2008 2006-2007
2008 2007 2006 Chance %Chanae Chance %Chance
General Fund -reserved $ 2,074 $ 1,455 $ - $ 619 $ 1
4
General Fund -unrestricted
1,027
1,979
3,100
(952) ,
55
(1
121)
Capital Projects Fund -reserved 531 631 1,682 (100) ,
Special Revenue Fund -unrestricted
359
457
434
(98) (1,051)
23
Total governmental funds $ 3,991 $ 4,522 $ 5,216 $ (531) -11.7% $ 694 -13.3%
Total reserved $ 2,605 $ 2,086 $ 1,682 $ 519 $ 404
Total unrestricted - undesignated 1,386 2,436 3,534 (1,050) (1,098)
Total governmental funds $ 3,991 $ 4,522 $ 5,216 $ (531
.-.__~ -11.7% $ °
(694) -13.3 /°
As previously mentioned, the basis of measurement for fund assets and liabilities is different than that used
in the Statement of Net Assets. The differences between the total governmental fund balance of $3,991,003
and the total net assets of $7,778,891 are itemized in the reconciliation presented within the financial
statements on page FS-4.
The items that caused the change in fund balance during the year are presented in the Statement of
Revenues, Expenditures and Changes in Fund Balances within the financial statements on page FS-5. The
fund balance decreased by $530,982 because the total fund expenditures, including transfers, were greater
than the total fund revenues.
General Fund Budgetary Highlights
Table A-6 has been summarized from the comparative budget information presented on page BCI-1 of the
required supplemental information. The total variance was favorable in that we budgeted that total
expenditures would be higher than total revenues by $950,611, when in fact our total expenditures, before
transfers, exceeded our revenues by $132,637.
Table A-6
Budget to Actual Comparsion
Budget Actual
2008 2007 2008 2007
Total revenues
Total expenditures
Excess revenues (expenditures)
$ 32,805 $ 30,734
33,756 32,276
(951) (1,542)
$ 31,756 $ 31,010
31,889 30,605
(133) 405
Other financing sources (uses)
Net change in fund balance
(701) (370)
$ (1,652) $ (1,912)
(201) (71)
$ (334) $ 334
Variance
2008 2007
$ (1,049) $ 276
1, 867 1,671
818 1,947
500 299
$ 1,318 $ 2,246
MDA-6
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
CAPITAL ASSETS
Table A-7 summarizes the Changes in Capital Assets note to the financial statements on pages FS-20. The
original cost of the capital assets on the books at June 30, 2008 was $63,241,114. Each year, for capital
assets other than land and construction in progress, this amount is depreciated (reduced in value) to reflect
usage. The net balance of $38,574,686 is the amount remaining after this reduction.
As construction projects are completed, related construction in progress balances are moved into the
buildings and improvements category, and depreciated over the estimated useful life of the improvement.
During the year our capital projects activity was limited to carrying renovations to existing buildings.
Table A-7
Capital Assets
Governmental activities
Land
Construction in progress
Buildings and improvements
Furniture, equipment
and library books
Total governmental capital assets
2008 2007 2006
$ 326 $ 326 $ 326
- - 339
36,998 38,]80 38,138
1,251 l ,457 1,773
$ 38,575 $ 39,963 $ 40,576
Business-type activities
Furniture and equipment
DEBT ADMINISTRATION
$279,994 $310,115 $135,171
Table A-8 summarizes the Long-Term Liabilities note to the financial statements on pages FS-21 to FS-24.
Most of the debt relates to general obligation bonds issued by the District to pay for capital improvements.
Our ability to raise future funds through the issuance of debt depends on how well our existing bonds are
rated by the investment community. Currently, the District is rated by Standard and Poor's as AAA. ACT 1
of 2006 impacts a school district's ability to incur debt without voter approval. The District does not
anticipate incurring additional debt in the near future.
Table A-8
Long-term Liabilities
Governmental activities
General obligation debt
Capital leases
Compensated absences
Unamortized bond costs
2008 2007 2006
$ 34,650 $ 37,270 $ 39,875
- 11 71
632 750 699
(526) (589) (662)
$ 34,756 $ 37,442 $ 39,983
MDA-7
EAST PENNSBORO AREA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2008
Each year, the District pays interest to bond holders and pays down a portion of the outstanding debt,
referred to as redemption. During 2008, our redemptions totaled $2,620,000. There were no re-financing of
current debt.
Next Year's Budget
Table A-9 compares the original budget for 2008 to the 2009 budget that was approved on June 16, 2008.
Table A-9
Budget Comparsions
2008-2009
Total revenues
Total expenditures
Excess revenues (expenditures)
Other financing sources (uses)
Net change in fund balance
2007-2008 Chance
$ 33,789 $ 32,331 $ 1,458
33,941 33,420 521
(152) (1,089) 937
(533) (563) 30
_$ (685) $ (1,652) $ 967
Similar to our 2008 budget, our budgeted expenditures for 2009 exceed budgeted revenues.
MDA-8
V ~
O
~ N
(n O
M
N
C
Q ~ O
Z (~ C
VQ~o
W Z N
O
~ ~ M ~
Q ~ W •N
W j C
~ g -~ ~
m ~- ~
~ ~ a~°i
Z cq •~
Z ~
W ~
a
~ ~
W
y
N
O
O N '
0
~ N r O ti~ 0 CO Op
O 00 O M r r CV
~ tfi O h N (p a0 ~ M
O
N r O Op
~j M f~ 00
O 0 0^ O
O COO r
O M
~~
M
_O O)
r O) O In N d' ~ h
O
(h CO ~ In
00 Ch CO r O
N OO 00 ~
O
0 0 0 ~ (A O r O N N
'~Y O N M~ M ~
~ O~ 0~~~ ~ O lCj r
O M N
0
N M N
r 0
O
' C
0
r h NOM
~..
N CO O
~ CO O O r
M
M ~ M ~ M M O 00
~ 64 (~
69
O N' 0~ O CO sr CA CO ~
000 r O O 0 0 O N O ^
1~ M O N O O O
r N
O
O r r 0 0 ~ M N 0 OO
~
0 0
00 O O
O CO M M O
0
O ~
f ~
00 ~ 000 ~ ~ ti r U ~ N N O ^ ~ ~ `ct ~ CO CO r C
Oj r ~-
p N~ 0 N d' r M 0 CO M~ ~~ ~ M t~ ~ M ~ ~
O
M
~
v
r N 0 C
C
O
'
CN ~ ch N cO
~ EA d}
D. N ~
~ ' M N ~ ~ ~ ~~ ~ O ~ 0 ~ ~ ~ ~
0 00
~ ' O~
N
~,, y N O h O N ~ a
0 ~ O) a0 c
O
'' w O
0 0 N CA O ~ ~ 0 (O CO N
•> r N r ~ ~ ~
N M 0 M
N
y Q
m
~ d4 V}
b9
~ ~
~C M ONO o~0 M O O~0 O N COO
r M ~ O N
O O ~• O O O
~
O ct N
r O
C y M r O t0 O M N 00 00 N r tO t0 M p 0 DD
O N
M ~ 0
0 r
0
N N tnO000 tiM~ ~aOON~
O
' ~ ~ O CO CO
O
0 0
0
0 r h N
0
0
00
sl'
C :~
~ (O O ~ r M N
N O s1
C
M h r~ ~ M IN
~
O
~
M 00
n r
N
N r 0 l
f
C
O
M
Q ~t N M M ~ N ti
~ ~ ~
c
O
• y
~
•U
d
~ 0
C
N ;D
y
N ~ w
.O
fCl d
~
.
er C ~ ~
~
O O
p
U C
Q
~ C1 "y' ~
7 G w 3 'C3
O U O
N
' ~
0~ ~
~
~O C0 C -p N
N 'O
L
y N
O
3 ~
C O N +-,
y~Lns
l0
>, `
N
7
. ~
O
y ~ w ~ N d •U N p _
~
>. ~ ~ y
O C ~ _
y ~ v
0) "."
o
O
~
C 0)
Q
> j~~
C C6
>^
~ ~- C
o o °'
' N
y 'o
.., ~
C
y 'O
C8 p
L
p
0)
X N ~
~
O v >
O ~ y~ CA
y C~
C y
~
C y 0 0
~L
L y y
y
N w y
N CO
y y
0 N '
N O C O O ~ _
N ~'' y
0 0 •N i.,
O ~ y
~ y
O
L L~
y ~ L y L O C L
y -0 y N ~ C 7 y_ 0)
O
N . ~ y
r
.a
fCi
; C
~ . m = ~
> ~
.y.
a ~ ~ d d N T d
~ ~ 0) ~
~ =
,
~
E ~ ~ U
~ ~ m
~ m > a~ .
c y ~ m ~ m ca w ~ Ta
a> a> ~
~
(6
~p O ~ ~ O o m ~ -o o ~ ~
y '
N ~'
0 C O w ~> N C N tIl q
N
6 C~
N y
C
O O y~
y
~UF- DO a ~~~UU C~ l
_Qo_ C~ ~
~Q._.i '
N ~
y
~ ~
~
t6
Q J Z
y
N
y
y
CO
N
c
C
CO
y
w
ca
»°
H
c
a~
a~i
w
y
~U
C
N
C
C~
N
y
N
L
O
a
N
N
C
C
N
N
co
y
+~+
O
C
c
.~
c
N
a
U
U
tCi
N
t
H
lL
ti
O
O
N
M
U_
C
_~ ~
D O -o
J N C
M
0 W O N
V > Z N
N U ~
Q Q ~
p' O ~
Q ~ W ~
~~~ o
C
OH}_
Z ~ ~ ~
Z ~ _C
W LL.
a ° -~
N
a ~
W ~
t
to
(U
N
to
Q
N
~ ~ ~ ~ HMV ~ ~ O n ~ (O r h
E ~ ~ ~ 0
f~ N f~ O N M
~ ~ D) Q) O M v ~ CO r
r ~ C
O ~ Cp0 f~ ~ 0~0 N N NV ~ j ~
CA
M N l() ~ f~ ~
n r~ rn v u~ ~n rn V M
rn ~
rn ~ In CD ~
c0 O N to ~ _
~ sf (O ~ r
~~~v ~
~
~ ao co ~ co ~--v co CO
~ M ~
.
-
... N ~
N ~ ~
~ N N `" CO c0
E+9
N ~ O) ~' I~ CO O a0 !~
O (A 0 0 M M ~ r 'V
~ (O CD e} O O
M M 0 (O 00 `-' ~ M
N f~ ~ CO v O h
... N
Ef?
fA
N ~ ~ V IVY' (tD O 00 !~
ODD ~ Obi COO M ~ ~ ~ ~
ui m co v ao o .= ~ o
N ~ ~ ~ (00 v v 000 ~
v N
~ ~
~ ~
EA
~ M r N O to ~ ~ ~
O) CO ~ ~ O a00 N
~ .~-- O O N M !~
(D N r ~ ~ N U
M ~"
69
o o
Cn0 1~ CO Oi
r ~ N
b4
~ N O ~ 1~ 0 O ~ to
i~ M r ~ ~ f10 CO O
N O O O M N r~ t0
1~ (V f~ r p p r CV M
O ~ M Vim' ~ ~ M ~
lA N M N ~ r p
r M
M
O
O
CO
(O
M
O
O
i
i
O
O
00
M
M
(O
CV
N
O
COO
N
00 n Cp0 (00 r ~ ~ .~- ~ .fir- N M lCy
~ 0 00 Cp lt7 r r M V
t0 0 ~
O O 00 M 00 M ~(j ~j
~ r n~ M COO O 0 ~ O r
N ~ M ~ N N 00 00
fH
i ~ ~ 0 i ~ 0 d' M f~ f~ ~
O CO (D M Q~i ~ cp0
~ ~
O M M I~ O O
O cD ~ ~" N M
ffl
h 0 CA ~ ~ n CO ~ N ~ (O
0 a00 COO ~ ~ ~ M .M-
CO N ~
M N N M~ (h r_ ^ ~ l[j CO
~ ~ O
~ I~ r V M t0 0 ~ ~ ~
~ ~ M ~ ~ .. t0 ~ ~
N N N
to
v
d4
M
M
M
~C1
O
0 N
~ ~
~ C
~ ~
N C
N N
to
N
~ 3 7
~ ~ N C C
X ~ > >
~ X ~ ~ 7 ~ N y ~ COf
CA ~ p~o ~` y h ~ ~ y C ~
7 ~ U N N~ 19 C C ~ CA ~
r ~ ~ C X _~pp ~~ ~ ~ C
~ N N~ '"' N U C~ y C ~ N
` C fU ~ ~ ~ O w ~ .c to w
N N O~ W V~ L "'~ ~ C~ N y y
M C ~ > .~.. ~ ~ N N
~ ~ ~O(n ~ L N N
U Z Z
Z F'
.~
N
O
C O
~ N
U
C
N
N
7 ~
C
~ T (n
N i N
Q' ~ '>
C
C j Q
N m
X
W
N w
Z ~
N .ON.
C ,>
> Q
O •~
.n' U
c
~U
~ C
C
~ C
.~. '-
~ ~ a
0_
O
N.
t7f
L (n
U
to
N
_~ ~
~ X
W
~ c
o ~ ~
a a a~
~ ~ o
O (6 ~ U
C1 ~U C ~
~ 3 N C N ~6
c`0 ~ c 4C-- c N ~ N
O ... N C (C1 O _~ d C ._~
a •> j N~ jp N Z Of N
W> C O~>_ tOp p O V
C C6 fp
O m C C~ C~~ w C~ y
O O O C CE f0
C C N +`+ ~ O O~ N
7 X 7 7 .C ~ N ~ y~ ~
LL ~ W (A 'p Q 3 O p w N O
~ ~SQOO_cnU ~ .N Li
O ~
m
to
U
O
O
U
N
.~.
N
C
N
w
..~-.
to
N
•U
C
CO
C
t~.,
0)
to
N
O
C6
a
rn
.S
c
co
N
CC
N
w
O
C
~I
C
.~
C
C6
(Q
U
fQ
N
t
H
N
lL
_U ~
0
N
V~ Z ~"~
~ ~ c
J J ~
~ Z o
= W O
Q ~ o ~
W _`p
~pi° c
Q C~ w ~
O ~ ~ c
~ W -' c
~ W ii
m =
~ ~
Z W .N
U ~
Z
f"' m (n
~ ~
W ~
N
O
F-
O
O
N
b
V
O~NN000 N
~VOe-'~t0 t(')
(~ON'~t00 f~
~ N ~ ~ O ~ M
'~TOr-(D tt O
c'o N .-- I ~
69 yg
ONE-f~i-O ~
N 00 r 00 M O M
I~ ~- f~ 00 to O O
~ O 00 ~ Ch ~ M
O ~ (O O to
N N 0
~ 69
~ i ~ ~ i ~ ~
O O
~ ~
d' ~
~' ~
N N
~ ~
ao Op
~ ~
ao Op"
M M
ch ch
69 69
~ ~ ~ ~ ~ ~ ~
M tD ~
~ ~ ~
~ ~
00 N O 1~ ~ O 00
~ 00 Ln 00 M O 0II
M ~ ~ 00 to O O
N
~U N
N ~
ao
N ~
_ Z
ay
N N
U ~
rte.. U
~ O
U p`_
N
N
C
N
000 M O M NI 0II
00 1~ CD O ~
•--
~ I EA
N
N
C
N
~ fq ~
N N .~ O ~ N (A
t ~ ~ ~ ~ ~ ~
~ •~ .t.+
V +t+ >
' N ~
V O O
O X ~
c
cu o
o~
~
o
.c ~ •~
N X N ~ ~
N L o. F-
NUH~
~O N
a
N
Q
•- M ~ N ~
N~7'M~ ch
O M CO t~ tp
N O ~ CO to
~ 00 ~ r
c0 cfl O c'0
~ ch
Efl
~~OO 00
~
I~ r CO O
~
CO d' 0 ~
ch ~ ch ~
~ N
~ ~
~ ~ ~
(O
r r
aD ~ N
r' N
69
~ ~-
N
p
j
N nj
' M ~ r 00
O ~ ~--
~
OCA~ ~
CO d' ~" N
M I~ N M
~ N
64
N
~ ~
N
U ~'
~
a
(~
fn
~ C fn
'~ fA
~ C 7
fp
.~. N
~ N Q'0 N ~
~
~ o N ~
•~- coo a
w
co
O ~ c . ~
o o ~
N
FO-
'-' ~ U N ~
~o Qao
N
J
~O O`- O N
~~ 0
000 p
j ~
O ~ ~ CO r
n
M ~ 1~ to M
c0 ~t rn ~t ~ o
D
~ ~ ~ ti
E,9
'tt O O O M r-
O O 0
N
(
0 O O
~ V' c0 rn ~ rn
O O M
~ ~ ~
N r ~rj ffl
d9
i i ~ 00 00 ~
~ ~ ~
N N N
~ ~
~
M O
c
~ M
M M M
ER
.~ ~ ~
O v ~n
O ~
M
~ ~ ~
' O O '
O 0 00 O
(
0 CO O
O p ~
~
N r ~vj 0
~3
fn
.~.. ~
~~ a' fC C
p_ ~ ~ `~
~ 'N ~
O- 0) C ~ N
C
U n 3 ~ N
~ ~
~O ~O ~ N ~
'O 'O }' N'V
ZZ=°'°-
N ~ ~
N O N
~~~
N
0)
U
C
f0
tU
C
H
N
0)
U
C
f0
fII
C
w
C
f0
0)
Q
co
~o
H
c
a~
N
v7
N
~U
C
N
C
~_
N
N
N
L
v-
O
(0
a
N
O
N
C
C
f0
N
f~
(A
O
C
O
C
.T
C
n3
n
U
U
m
N
t
M
EAST PENNSBORO AREA SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2008
Total fund balances -Governmental funds
$ 3,991,003
Amounts reported for governmental activities in the statement
of net assets are different because:
Capital assets are not financial resources and therefore are not reported
as assets in the governmental funds. At year end, the cost of capital
assets is $ 63,241,114 and the accumulated depreciation
is $ 24,666,428
38,574,686
Taxes receivable will be collected, but are not available soon enough to
pay for the current year's expenditures, and therefore are deferred in the
governmental funds. At year end, these taxes receivable consist of:
Real estate taxes $ 408,329
Personal taxes 12 877
Earned income taxes (227,225) 193,981
Certain liabilities are not due and payable in the current year, and therefore
are not reported as liabilities in the governmental funds. At the year end,
these liabilities consist of:
Bonds payable (34,650,000)
Capital lease obligations
Compensated absences (631,706)
Long-term liabilities (35,281,706)
Accrued interest on bonds payable (414,362) (35,696,068)
Costs related to the issuance of bonds are reported as expenditures
in the governmental funds. At year end, the remaining unamortized
bond related costs consist of:
Bond issuance costs 189,209
Bond discounts (premiums) (22,470)
Refunding costs 548,550 715,289
Total net assets -Governmental activities $ 7,778,891
The accompanying notes are an integral part of these financial statements.
FS-4
ti
O
O
N
U z `'~'
a~
~ z° u=.. ~
1- Q J ~
yW~oo a~i
~ Z O C
J ~ W N W
OF-~o
DZch ~
C)aWw~
~ Z u,
~ W ~ ~
^ o
W W ~ ~ o
Q Z U W ~
OjJQo
~ W Q W c
~~°°>'-
m ~-Ow.co
O =
Z I-~l=- ~
Z Z W c
~ ._
a Wf~O N
N ~ ~ N
.~
W ~ _
U ~
L
'~ r- ~ N O IpCJ. ~ ~ M O O ~ ~ p ~ ~
~ O N N N (D N N E .-- ~ p~ O O O
O tD N O ~ O 0 0 0 ~p ~ M 0 0^ ~ ~ ~ N
O M M ~- ~' N M to (D .-- ~ tN N p r v CO
N N r 00 ~ pp ~ ,~ ~ ~ ~ N l(y
M M .~ to d'
_N ~
~ 6R
O
N .-- N h N O M~~ CO O ^
n ~ ~ N ~
op N (O I~ ~ ~ O O) O ~ O ~ O N
W O O O M Cfl O O n t0 O) ~ ~ ~ O
O
p c'o N ~ M ~ N d• N a00 ~ 'NV fM0 ~ N M N 07
O CO ~ O~ O ~ O O N O N ~' •-
N N .- 00 M O O M N " v ~ ~ O
M ~' M
69
' O ~ p ~' ~ n' ' ~ r ~ O~ O
N ~ M (~~ ~ r OOj ~ ~ 1 ~ M ~
N h
N j ~ ~ ~ ~ ~ N
d N
~ ~
~ ~
i ~ ~ ~ ~ ~ ~ ~ ~ ~ P^7 ~ i i pp ^ N r
N ~ a? ~ ~ ~ N ~
~ r ~
• N ~ ~ O O ~ ~ ~ (O aD
~~ r ~ ~ ~ '~~' M
U ~
O ~ O o
0
a`
w
~ ~
_m
CNO ~ fN0 ~ ~ CO M I~ O O M M ~ ~ ~ ~ O O O ~
f0 O M a0 O O ~ O ~ et ~ ~ (D ~ a00 ~ O N
~ 1~ ~ N ~ CO O t~ ~ M ~ op N ~ ~vj CO N
fMD O (~O. ~! ~ ~ ~ ~ O ~ a00 ~ N .MM.. ~ ~ C
r r ~ r
U' N M o0 0o M M M M C
~ ~ N
a~
L
•«..
O
N
Q.
(0
^ ~.
N ~ ~
~ j ~
~ ~ •C
M
C '- C
'O (B
N l4 ~ y ~ ~ d ~
~ N j N ~
N ~ U fC ~ d 7 N" N C H N
N L N N 'a w N O~~~ ~ OI ~
ul y to U> U C ~, n• Q O^ N 7 C O d t_ ~ Cf a 0)
U U U 3~ ~ •~ f6 N~ U N 0 0 0 0 ~ ~ ~ C
~ ~ ~ O C N U U C~ U1 ~~ V O 7 i i >'
O O p~ ~ y O ,~ ~ O Z :C .V ~ C C` 2` ~ u7 N f0
Vl to to N~ y '~ N O O 4. C • V ~ N N y N N Q
y ~ ~~ y ~ G •C .~.. N f' N N C C y y ~ ~ C C E
O O O ~p ~ +-~ N Q C d~ ~ X C '~ C L C ~ fC f0 O
'p 7 0 f6 N ~, L~ 1- O H V f6 f0 U
(D
~ W LL ~ ~ ~ 7 7 L
~ Z LL. LL 1-
w
~ M pp
p~ n N
~ ~
O ~ tt
M pp ~
~ M v
H3
(n O) d' N O n
~ ~ ~ ~ V ~
~_
~ 3~~
Q o
WO ~ o
m w
Z
W o .N •c
~ m ~ w w
N
W N
C V01
~ y ~ ~ l6
~ U) C ~
(0 O QJ C
W N (0 ~ O
Z W y a ~ N
~ ~ U ~ m a ~
~ m
J ~ N ui vi N •~
V Z~z ~ ~ ~_
N W W ~ o'a ~~`a o
~ ca
~pWO a~i ~ w o
W (~ Z ~ is 3 ~ 3 w
L~L = ~ ~ .~O. C U ~O IC
O Q ~p `
~pUW ~ •c ~ ~ m ~
- o w-
m_pZW ~ ~ ~s~. a`°i -`o
y I"' Q = `~ N~ O N w
Z Q~~ a O _ a .L. ~
Z .:.i W~ N 2 O O~
O H a~ c a>
F' ~ ~ w w ~ a
U ~ rn ~ a >
aWZ •L"i :4 _c my o
W f0 C ~. y l0 01
W W O ~~ C U w
c ~ y O N ~
N ~ N ~ ~
W w a~i ~ aci ~ aai c°~
~ C +~-• N X N N
Z 3 fA w ~ O
W "' a~ o ~ w
w •~ = c rn
C C
~ N N '~ ~ N C
u- c ~ ;~ a aai c c
a
Z C7 f0 X ~p U X 'L-' UN_1
O•
W
W .~, N N y ~~ ~ (~ N
W ~ ~ N> c a x m o
a s o h o w a;
Q ~ C ~ w N y C w X fp N ~ O
f"' f0 y O N t6 C N .0. O p~ O C
Cn ~ O ~~- O to D N w p d O
U N
C 0) O p p f0 X '~ l6 N C d 0
w ~ ~' U off.. C N C a (Q C
O l0 (6 .O. QJ O O N
~ a~ ~ 'y m a~ E m a~ d m ~ a~
c o ~ yU~ o ~~dw c~ a~
r ~ o 'y a~ ~ o w
w •a `°
c ~ m > ~ o o ~
o U o m rn m p
!-o Q
O O ~
~ N ~ ~
M t0
O~j O ~ (O Cp M
N N •" r
CO
N
69
i ~
n
O
O
r ~
.. c
~ N
a~ ~
N
N ,~ N
~ t/1 y U w
N ~ ~ ~ O N
~ ~> f0
O ~ ~ C ~ U >.
~ W _R N N ,~ N
.a C w Q. ~ ~- C Cf
N t0 y
C N U t4 C N +0+ a
o ~ ~
~ ~ ~ a 3•~ w
N C
mr d d °a a°i
o ~ s = a
~ E m ~ aai ~ w
NN O y U O O
C U d „' N = N
f0 ~ .U f0 ~ a l~0
a a E m u`~i c o
~ U L ~ Q C w N
d a~ ,~ o y c a
c c a rn c` o o f
N U 7 L t~ C U
3 ~ M 3 N O` y
.0.. C t/1 ~- > ~ C
~ w -
~ ~ R ~ w
N O ~ c c .O c N m
E a~ a~ - _
m ~ X E t N F- f0
a L .LO. N ~ f- Y ~ V
.L.. ~ C (O N O~ C j, C
'N a rn >. °~ m c~
O O j O t~A «L. ~ N "~ fn
E rn ~ ~ `~ ~~ °' m '~ r
C N N .C w
C ` O
mpg °. m o wa o a~'i ~
N w
a
l9
-O y N y a O C 7 ~ p N Q
a ~ •U ~ ~UU., pr
O O N N~ L O X U ~~ ~~ ~
w ~ ~. r ~ O. ~~N, N (0 N ~
C ~0 O O C C N y C yNy ~1 N
O C rL- N w O N O O U ,O O C
U O~ N `' O N w ~ O C a .O-~
U C •~ C ~ y '~ C p O ~ C ~ N
a o~ a E o'~ o-d o m E~
p O a N a~ N vOi N~ N O ~ N
l6 (A f0
~ ~ ~ C C N ~ ~ ~ ~ f0 j > N
Vl X 7 0 'C N N O a C O O ~
(n U l0 O- w f0 :6 .~ N C7 O
m E
O .C C N a ++ p, N> O. l0 C
o ~w~ o.E 'o.~ m w E a~ w~
~ ~ ~ o a d `~ ~ .~ af0i ~ w a~ ~
c~ o E ~ M. o .~ N ~~,
U Q N~ o T o N o a m ~
~ a ~ a ~ ~ ~ w c ~ c ~
c aXi ~ v E ca E aci E~ •~ v
o m o m o ~ a T~ a~ v
m m a .n a w a axi a E ~ ~
t r
U I-
N
c
O
C
N
N
f0
N
N
w
•C
N
.a?
f6
W
3
0
z
w
ca
T
N
z
I-
N
a
C
w
C
N
i
N
0
rn
d
w
C
~ N
y
7
N
~' 3
U ~
fC0
C ~
w ~
L .
N ~
L O
O N
m
N
~ «
O 'a
a~
~ C
f6
N ~
a m
N ~
N
~ .'C-.
a
m c
a~oi p
~a w
'a y
m
U m
co
LL
EAST PENNSBORO AREA SCHOOL DISTRICT
STATEMENT OF NET ASSETS -PROPRIETARY FUNDS
JUNE 30, 2008
(With Summarized Financial Information for June 30, 2007)
Assets
Cash and cash equivalents
Due from other governments
Other receivables
Inventories
Total current assets
Furniture and equipment (net of accumulated depreciation)
Total assets
Liabilities
Due to other funds
Accounts payable
Deferred revenues
Total current liabilities
Net assets
Invested in capital assets (net of related debt)
Unrestricted
Total net assets
Total liabilities and net assets
Food Service
2008 2007
$ 90,724
6,232
526
12,786
110,268
279, 994
$ 390,262
$ 106, 058
7,668
15, 737
129,463
310,115
$ 439,578
$ -
27, 720
14,858
42,578
279, 994
67,690
347,684
$ 390,262
$ 150, 000
37,999
14,842
202, 841
310,115
(73,378)
236,737
$ 439,578
The accompanying notes are an integral part of these financial statements.
FS-7
EAST PENNSBORO AREA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS -PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
(With Summarized Financial Information for the Year Ended June 30, 2007)
Operating revenues -Food service revenue
Operating expenses
Other purchased service
Food and milk
Other supplies
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses)
Earnings on investments
Loss on sale of fixed assets
State sources -meal subsidies
Federal sources -commodities
Federal sources -meal subsidies
Total nonoperating revenues (expenses)
Income (loss) before transfers and special items
Transfers from other funds
Change in net. assets
Net assets -beginning
Net assets -ending
Food Service
2008 2007
$ 822,563
$ 784,221
1,124, 943
54, 577
39,829
41,358
1,260,707
(438,144)
3,659
41, 646
54, 577
281, 885
381,767
(56, 377)
167,324
110,947
236,737
$ 347,684
1,048,771
42,145
36,714
43,456
1,171,086
(386,865)
6, 326
(13,154)
40, 572
42,145
265, 972
341, 861
(45,004)
244,126
199,122
37,615
$ 236,737
The accompanying notes are an integral part of these financial statements.
FS-8
EAST PENNSBORO AREA SCHOOL DISTRICT
STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
(With Summarized Financial Information for the Year Ended June 30, 2007)
Operating activities
Cash received from users
Cash payments to suppliers for goods and services
Cash payments for other operating expenses
Net cash provided by (used for) operating activities
Non-capital financing activities
State sources
Federal sources
Notes and loans received (repaid)
General fund contributed services
Capital projects fund contributed services
Net cash provided by (used for) non-capital financing activities
Food Service
2008 2007
$ 822,054 $ 794,505
(1,136,053) (1,041,154)
_ (36,047) _ (40,038)
(350,046) _ (286,687)
41,877
283,090
(150,000)
156, 087
11,238
342,292
40,450
264,486
(30,000)
12,571
231, 555
519, 062
Capital and related financing activities
Cash payments for equipment _ (11,238) (231,555)
Net cash provided by (used for) capital and related financing activities (11,238) (231,555)
Investing activities
Earnings on investments
Net cash provided by (used for) investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents -beginning
Cash and cash equivalents -ending
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash
provided by (used for) operating activities
Depreciation
Donated commodities
Net change in other assets and other liabilities
Accounts receivable
Inventories
Accounts payable
Deferred revenue
Total adjustments
Net cash provided by (used for) operating activities
3,658 6,326
3,658 6,326
(15, 334) 7,146
106,058 98,912
$ 90,724 $ 106,058
$ (438,144) $ (386,865)
41,358 43,456
54,577 42,145
(525) 8,161
2,951 (3,325)
(10,279) 7,617
16 2,124
88, 098 100,178
_$ (350,046) $ (286,687
The accompanying notes are an integral part of these financial statements.
FS-9
EAST PENNSBORO AREA SCHOOL DISTRICT
STATEMENT OF NET ASSETS -FIDUCIARY FUNDS
JUNE 30, 2008
(With Summarized Financial Information for June 30, 2007)
Assets
Cash and cash equivalents
Total assets
Liabilities
Due to student groups
Total liabilities
Net assets
Total liabilities and net assets
Student Totals
Activities 2008 2007
$ 83,700 $ 83
700 $ 88
232
, ,
$ 83,700 $ 83,700 $ 88
232
,
$ 83, 700 $ 83
700 $ 88
232
, ,
83,700 83,700 88,232
$ 83,700 $ 83,700 $ 88,232
The accompanying notes are an integral part of these financial statements.
FS-10
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
East Pennsboro Area School District is the level of government which has oversight responsibility and control
over activities related to public school education. The report includes services provided by the District to residents
within the boundaries of the Cumberland County municipality of East Pennsboro Township. Services provided
include a comprehensive curriculum for primary and secondary education as well as special education and
vocational education programs. The District receives revenue from local, state and federal sources and must
comply with the requirements of these funding sources.
The financial statements of East Pennsboro Area School District have been prepared in accordance with
generally accepted accounting principles 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. Accounting guidance is also provided through the Comptroller's
office for Pennsylvania Department of Education. The more significant of these accounting policies are as follows:
Reporting entity
Governmental Accounting Standards Board Statement No. 39 "Determining Whether Certain Organizations are
Component Units" (an amendment of Statement No. 14), established the criteria for determining the activities,
organizations and functions of government to be included in the financial statement of the reporting entity. In
evaluating the District as a reporting entity, management has addressed all potential component units which may
or may not fall within the school's financial accountability. The criteria used to evaluate component units for
possible inclusion as part of the District's reporting entity are:
• Economic resources received or held by the separate organization are entirely for the direct benefit of the
District or its constituents.
• The District is entitled to, or has the ability to access a majority of the economic resources received or
held by the separate organization.
• The economic resources received or held by an individual organization that the District is entitled to (or
has the ability to) access is significant to the District.
There are no component units that the District feels meet all the above criteria for inclusion in this reporting entity.
Jointly-governed organizations
The District is a participant in four jointly-governed organizations, each of which is a separate legal entity that
offers educational services to the District and its residents. Each of these entities serves several school districts
and/or municipalities and therefore are not included in this reporting entity. These entities do not have taxing
power, but are required to adopt an annual budget, which is funded primarily by its member Districts or others that
use its services. Complete financial statements for these entities can be obtained from the respective entity's
administrative office.
FS - 11
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Jointly-governed organizations (Cont'd.)
West Shore Tax Bureau provides earned income tax collection services.
Capital Area Intermediate Unit provides special education services and programs.
Cumberland Perry Area Vocational Technical School provides vocational and technical education
services and programs.
Harrisburg Area Community College provides community college education services and programs.
Basis of presentation -District-wide financial statements
District-wide financial statements (i.e., the statement of net assets and the statement of activities) report
information on all of the nonfiduciary activities of the District. As a general rule the effect of interfund activity has
been eliminated from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are presented separately from business-type activities which rely to a significant
extent, on fees and charges for support.
The district-wide financial statements are presented using the economic resources measurement focus and the
accrual basis of accounting as are the proprietary fund and the fiduciary fund financial statements. Revenues are
recognized when earned and expenses are recognized when a liability is incurred, regardless of the timing of
related cash flows. Real estate and personal taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue 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 and amortization are charged as an expense against current operations. Accumulated
depreciation and unamortized costs are presented in the statement of net assets.
The statement of activities demonstrates the degree to which the direct expenses of given functions or programs
are offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function or
program. Program revenues include charges to customers who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or program. In addition, program revenues include grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
program. Taxes and other items not properly included among program revenues are presented as general
revenues.
Basis of presentation -Fund financial statements
Fund financial statements are also provided for all governmental funds, proprietary funds, and fiduciary funds of
the District. Major individual governmental funds and major individual proprietary funds are presented as separate
columns in the fund financial statements. Nonmajor funds, if any, are aggregated and presented in a single
column. Fiduciary funds are presented by fund.
FS-12
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation -Fund financial statements (Cont'd.)
The governmental funds are presented 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 are considered to be available when they are received within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the District considers tax revenue to be
available if received within 60 days of the end of the fiscal period, except for earned income tax revenue which
may be considered available if received within 60 to 90 days of the end of the fiscal year, depending upon the
frequency of payments from the District's collection bureau. Revenue from federal, state and other grants
designated for payment of specific expenditures is recognized when the related expenditures are incurred;
accordingly, when such funds are received, they are recognized as deferred revenues until earned. Expenditures
generally are recognized when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recognized only when payment is due.
Proprietary funds generally follow standards for accounting and financial presentation for private business
enterprises to the extent. that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board.
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
fund's principal ongoing operations. Operating expenses for the District's proprietary fund include food production
costs, supplies, administrative costs, and depreciation on capital assets. All revenues or expenses not meeting
this definition are presented as nonoperating revenues and expenses.
Fund accounting
The accounts of the District are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing
accounts which comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as
appropriate. Resources are allocated to and accounted for in individual funds based upon the purposes for which
they are to be spent.
When both restricted and unrestricted resources are available for use, it is the District's general policy to use the
restricted (primarily operating grants) resources first, then unrestricted resources as they are needed.
The District has the following major types of funds:
Governmental Funds -These funds account for the activities through which most of the District's operations
are provided.
FS-13
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation -Fund financial statements (Cont'd.)
Fund accounting (Contd.)
Proprietary Funds -These funds account for the operations of the District that are financed and operated in a
manner similar to private business enterprises.
Fiduciary Funds -These funds account for the assets held by the District as a trustee or agent for individuals,
private organizations and/or governmental units and are therefore not available to support the District's own
programs.
The District presents the following major governmental funds:
The General Fund is the primary operating fund. It accounts for all financial resources except those required
to be accounted for in another fund.
An operating budget is adopted prior to the beginning of each year 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 budget adoption and financial
statement presentations. The District, before levying annual school taxes, is required to prepare an
operating budget for the succeeding fiscal year. This process includes the publishing of notices by
advertisement, that the proposed budget has been prepared and is available for public inspection at the
administrative office of the District, and that public hearings are held on the proposed operating budget
which 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 may approve
transfers of funds appropriated to any particular item of expenditure in accordance with the Pennsylvania
School Code. Management may amend the budget at the sub-function/sub-object level without Board
approval, provided it is not at a higher level than the Board adopted budget.
In order to preserve a portion of an appropriation for which an expenditure has been committed by a
purchase order, contract or other form of commitment, an encumbrance is recognized. Unused
encumbrances expire at the end of each year.
Included in the budget are program budgets as prescribed by the federal and state agencies funding the
program. These budgets are approved on a program by program basis by the federal and state funding
agencies.
FS - 14
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation -Fund financial statements (Cont'd.)
Fund accounting (Cont'd.)
The Capital Projects Fund accounts for bonds proceeds and the expenditure of those funds for Capital
outlays.
The Capital Reserve Fund accounts for transfers from other funds and related investments earnings for
capital outlays not accounted for in another fund.
The Special Revenue Fund accounts for athletic revenues and proceeds of other specific revenue sources
that are restricted to expenditures of those funds for athletic and other specified purposes.
The District reports the following Proprietary Fund:
The Food Service Fund accounts for the operations of the cafeterias.
The District reports the following Fiduciary Fund:
The Student Activities Fund accounts for programs operated and sponsored by various clubs and
organizations within the schools.
Cash and cash equivalents and investments
The District's cash and cash equivalents are considered to be cash on hand, demand deposits (including pooled
investments), and short-term investments with original maturities of three months or less from the date of
acquisition.
The types of authorized investments are limited by State regulations. Pooled investment funds are required to be
operated in accordance with State regulations.
Investments, including pooled investments, are presented at fair value.
Taxes and taxes receivable
Real estate taxes are levied as of July 1 with a legal, enforceable claim against the property and/or taxpayer.
Amounts not collected within six months (December 31) are considered delinquent and submitted to outside
agencies/entities for collection actions.
FS-15
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Receivables and payables between funds
Activity between funds that represent lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as "due to/from other funds". Any residual balances outstanding between the governmental
activities and business-type activities are reported in the government-wide financial statements as "internal
balances". Any balances between funds are short-term items pending periodic repayments.
Inventories
Inventories are presented at the lower of cost or market on a first-in, first-out basis, and are expended when used.
Donated commodities are recognized as revenue and are inventoried at an estimated cost value.
Capital assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks, and
similar items), are presented in the applicable governmental or business-type activities columns in the district-
wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of
more than $ 1,000 and an estimated useful life in excess of one year. Management has elected to include certain
homogeneous groups with individual costs of less than $ 1,000 as capital assets for financial reporting purposes.
In addition, capital assets purchased with long-term debt may be capitalized regardless of the thresholds
established. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of
normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not
capitalized.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Buildings 40
Building improvements 15 to 40
Site improvements 20
Furniture, fixtures and equipment 5 to 15
Library books 7
Proprietary fund equipment purchases are capitalized at cost and depreciated on a straight-line basis over useful
lives of 5 to 12 years.
FS - 16
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Confd.)
JUNE 30, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Long-term liabilities
In the district-wide financial statement, and in the proprietary fund types in the fund financial statements, long-
term debt and other long-term obligations are presented as liabilities in the applicable governmental activities or
proprietary fund statement of net assets. Refunding costs and bond premiums and discounts are amortized over
the life of the bonds using the effective interest method and the straight-line method. Bond issuance costs are
presented as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as
bond issuance and refunding costs, as current period. expenditures. The face amount of debt issued is presented
as other financing sources while discounts and refunding costs on debt issuances are presented as debt service
expenditures. Issuance costs, whether or not withheld from the actual debt proceeds received, are presented as
support service expenditures.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain presented amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Comparative information
Comparative totals for the prior year have been presented in the accompanying financial statements in order to
provide an understanding of changes in the District's financial position and operations. Certain amounts
presented in the prior year have been reclassified in order to be consistent with current year's presentation.
However, presentations of prior year totals by fund and activity type have not been presented in each of the
statements since their inclusion would make the statements unduly complex and difficult to read. Summarized
comparative information should be read in conjunction with the District's financial statements for the year ended
June 30, 2007, from which the summarized information was derived.
New accounting policies
The Governmental Accounting Standards Board (GASB) has issued several statements which will become
effective in future reporting years. The statement which will have the greatest impact on the District is GASB 45
"Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions". The
statement sets new accounting standards for state and local government employers that offer retiree health
benefits and other non-pension postemployment benefits. It will require the accrual of liabilities and expenses of
other postemployment benefits (OPEB) over the working career of plan members. This GASB statement will
impact future district-wide financial statements, but will have no impact on the fund financial statements which use
the modified accrual basis of accounting. The effective date of GASB 45 for the District is the June 2009 fiscal
year. The District has begun the process of measuring the effect of the postemployment benefits and is evaluating
the impact this pronouncement will have on the District's financial statements.
FS-17
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
DEPOSITS AND INVESTMENTS
Pennsylvania statutes provide for investment of governmental funds into certain authorized investment types
including U.S. Treasury bills, other short-term U.S. and Pennsylvania government obligations, and insured or
collateralized time deposits and certificates of deposit. The statutes do not prescribe regulations related to
demand deposits; however, they do allow the pooling of governmental funds for investment purposes.
Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned
to it. The District policy requires that all deposits in excess of FDIC insurance coverage be collateralized with
approved collateral as provided by law. At June 30, 2008, the District's deposits totaled $ 892,079 and the bank
balances totaled $ 1,366,416. Of the bank balances, $ 100,000 was covered by federal depository insurance and
$ 1,266,416 was collateralized under Act No. 72 of the 1971 Session of the Pennsylvania General Assembly, in
which financial institutions were granted the authority to secure deposits of public bodies by pledging a pool of
assets, as defined in the Act, to cover all public funds deposited in excess of Federal Depository Insurance limits.
The pledges collateral is held by the Federal Reserve Bank, but is not titled in the District's name.
The District also has cash equivalents with the Pennsylvania Local Government Investment Trust (PLGIT). PLGIT
is a common law trust established pursuant to the Intergovernmental Cooperation Act and related statutes for the
purpose of pooling investments. It is a fundamental policy of PLGIT to maintain a net asset value of $ 1 per share,
but there can be no assurance that the net asset value will not vary from $ 1 per share. PLGIT may only purchase
securities which are permitted under PA law. At June 30, 2008, the District's deposits in PLGIT totaled
$ 2,202,065.
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The
District does not have a formal investment policy for interest rate risk. The weighted average maturity of the
securities held by PLGIT is generally less than 90 days.
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The District
does not have a formal investment policy for credit risk. The District's deposits in PLGIT were rated "AAAm" by
Standard & Poor's.
Cash and cash equivalents at June 30, 2008 are as follows:
Governmental activities $ 2,919,720
Business-type activities 90,724
Fiduciary funds 83.700
$ 3.094.144
FS - 18
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
TAXES RECEIVABLE
Taxes receivable are as follows:
Taxes Taxes
Receivable Allowance for Receivable Deferred
(Gross) Uncollectibles _ lNetl Tax Revenue
Real estate taxes $ 573,800 $ 28,690 $ 545,110 $ 408
329
Earned income taxes 228,195 - 228 195 ,
(227 225)
Personal taxes 17.170 4.293 12.877 12
877
General Fund 819,165 32,983 786,182 .
193
981
Full accrual adjustment - ,
- - (193.981)
Governmental activities $ 819.165. $ 3 9R. $ 786.182 $
DUE FROM/TO OTHER FUNDS AND INTERFUND TRANSFERS
Interfund balances are as follows:
Assets Liabilities
General Fund $ 3,150 $ 2,921 Capital Projects Fund
Capital Projects Fund 81.561 81.790 Special Revenue Fund
$ 84.711 84.711
Interfund transfers were as follows:
Other financing sources Other financino uses
Food Service Fund $ 156,087 $ 156,087 General Fund
Athletic/Special Revenue Fund 45,100 45,100 General Fund
Food Service Fund 11,237 11,237 Capital Reserve Fund
DUE FROM OTHER GOVERNMENTS
Due from other governments are as follows:
Governmental Business-type
Activities Activities
Local sources -other taxes $ 49,648 $
State sources 279,682 748
Federal sources 341.557 5.484
$- 67~ 8~7 6.23
FS-19
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
CHANGES IN CAPITAL ASSETS
Capital asset activity for the year was as follows:
Governmental activities
Capital assets not being depreciated
Land
Construction in progress
Capital assets being depreciated
Buildings and improvements
Furniture and equipment
Library books
Accumulated depreciation
Buildings and improvements
Furniture and equipment
Library books
Beginning Ending
Balance Increases Decreases Balance
$ 325,826 $ - $ - $ 325,826
325, 826 - - 325.826
56,375,409 244,272 - 56,619,681
5,295,490 195,571 (152,580) 5,338,481
928.045 29.081 - 957,126
62.598,944 468.924 (152.580) 62,915,288
(18,195,369) (1,426,218) - (19,621,587)
(3,998,762) (315,374) 152,580 (4,161,556)
(767,380) (115.905) - (883.285)
(22,961,511) (1,857.497) 152.580 (24,666.428)
Total capital assets being depreciated, net 39.637.433 (1.388.573) - 38.248.860
Governmental activities capital assets, net ~ 39.963.259 (1.388.57) $ - X8.574.686
Business-type activities
Capital assets being depreciated
Furniture and equipment
Accumulated depreciation
Furniture and equipment
Capital assets being depreciated, net
Business-type activities capital assets, net
$ 613,282 $ 11,237 $ - $ 624,519
(303.167) (41.358) - (344.525)
310.115 (30.121) - 278, 994
FS-20
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
CHANGES IN CAPITAL ASSETS (Cont'd.)
Depreciation expense was charged to functions/programs as follows:
Governmental activities
Instruction $ 772 589
Instructional student support 699,180
Administrative and financial support 270,709
Operation and maintenance of plant 76,190
Transportation 11,105
Student activities 27 724
1.857.x.
Business-type activities -Food service $ 41 35~
DEFERRED REVENUES
Governmental funds present deferred revenue in connection with receivables for revenues that are not
considered to be available to pay liabilities of the current period. Governmental funds also defer revenue
recognition with resources that have been received, but not yet earned. Deferred revenues in the General fund of
$ 211,622 consist of $ 193,981 taxes receivable not received within 60 to 90 days of the end of the fiscal period,
and $ 17,641 of resources that have been received but not yet earned.
Deferred revenue in the proprietary funds and the district-wide financial statements represents resources that
have been received but not yet earned.
LONG-TERM LIABILITIES
A summary of the changes in all long-term liabilities for the year ended June 30, 2008 is as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
General obligation debt $ 37,270,000 $ - $ 2,620,000 $ 34,650,000 $ 2,830,000
Capital leases 11,355 - 11355 -
Compensated absences 749.869 _ 88.836 _ 207.000 _ 631,705 115.000
Governmental activity
long-term liabilities $ 38.031.224 $ 88.836 $ 2.838.355 35.281.705 2.945.0
FS-21
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
LONG-TERM LIABILITIES (Cont'd.)
A. General obligation notes and bonds payable
Changes in general obligation notes and bonds payable were as follows:
General Obligation Bonds:
Series A of 2001
Series of 2003
Series A of 2003
Series of 2004
Series A of 2004
Series of 2006
Beginning Scheduled Ending
Balance New Issue Refunding Redemptions Balance
$ 5,380,000 $ - $
7,620,000 - _
4,615,000 - _
9,990,000 - _
3,100,000 - _
3.190.000 - _
33, 895, 000 - _
$ 1,000,000 $ 4,380,000
665,000 6,955,000
270, 000 4, 345, 000
5,000 9,985,000
345,000 2,755,000
90.000 3.100.000
2,375,000 31,520,000
General Obligation Notes:
Series of 1999 3.375,000
= 245.000 3.130,000
37.270.000 $ - $ - 2.620.000 34.650.000
Amounts
Due Within
Interest Rates Maturity Date Callable Date One Year
GOB Series A of 2001
GOB Series of 2003
GOB Series A of 2003
GOB Series of 2004
GOB Series A of 2004
GOB Series of 2006
GON Series of 1999
1.95% to 3.80%
2.75% to 3.75%
2.00% to 3.90%
3.00% to 4.00%
1.65% to 4.00%
3.45% to 4.05%
Variable
FS - 22
September 2011
February 2015
August 2020
August 2018
February 2015
August 2021
February 2018
September 2006 $ 1,035,000
August 2008 685,000
August 2008 275,000
February 2009 5,000
February 2011 355,000
August 2012 220,000
Not callable 255.000
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
LONG-TERM LIABILITIES (Cont'd.)
A. General obligation notes and bonds payable (Cont'd.)
Scheduled debt service requirements, payable by the General Fund, are as follows:
Year Ending June 30
2009
2010
2011
2012
2013
2014-2018
2019-2023
Principal Interest Total
$ 2, 830, 000 $ 1,156,192 $ 3, 986,192
2,925,000 1,069,052 3,994,052
3,035,000 972,548 4,007,548
3,145,000 868,294 4,013,294
3,165,000 782,640 3,947,640
16,105,000 2,127,013 18,232,013
3.445.000 170,166 3.615.166
7.145.905
B. Capital lease obligations
Changes in capital lease obligations were as follows:
HP Financial Services
C. Compensated absences
Beginning Ending
Balance Additions Payments Balance
$ 11.355 $ - $ 11.355 $
Changes in compensated absences were as follows:
Governmental activities
Severance payments
Vacation leave
Beginning Ending
Balance Net Change Balance
$ 689, 998 $ (121, 870) $ 568,128
59.871 3.706 63.577
$ 749.869 (118. ) $ 631.705
FS - 23
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
LONG-TERM LIABILITIES (Cont'd.)
Compensated absences (those for which employees received pay) are presented using the termination
payment method. A liability is computed using estimates which apply historical data to current factors. The
District maintains records of unused leave and applies the contracted rate for employees eligible for
termination payments. The District allows only restricted sabbatical leave and therefore does not present any
liability in advance of the sabbatical. Payments for compensated absences are made in the year the absence
is taken or the employee retires. When an employee retires, the payout is as follows:
Vacation (administrative personnel only) -unused vacation days (not to exceed 5 days) are paid at the
time of separation.
Sickness - no payout required except to retirees who meet the requirements below for severance
payments
Personal days -unused personal days (not to exceed 5 days) may be carried over but no payment is
required upon termination
Retirement severance payments -retiring employees with at least seven consecutive years of District
employment immediately prior to retirement, at least twenty years of service to the District, and at least
thirty years of total school service credited under the State Retirement System are eligible for severance
payments based on years of service and accumulated sick leave days. The retirement payment amount is
equal to $ 300 times the number of years of continuous District service to a maximum of $ 9,000 for thirty
years. In addition, eligible retirees are reimbursed for accumulated unused sick leave in excess of one
hundred days to a maximum of three hundred days at a rate of $ 50 per day for a maximum payment of
$ 10,000 for accumulated sick leave. Additional severance is payable to retirees with a minimum of
twenty years of service to the District of $ 20,000 payable over five years. This new severance benefit
replaces post-employment health benefits provided under the prior contract. Total maximum severance
payments to each eligible retiree under the new collective bargaining agreement in effect through August
31, 2009 is $ 39, 000.
OPERATING LEASES
The District leases photocopying machines and modular office buildings pursuant to various lease agreements
which are being accounted for as operating leases. Total lease rental payments during the year ended June 30,
2008 were $ 170,080. Minimum net lease rental payments for future periods are expected to be as follows:
2008-2009 $ 173,193
2009-2010 167,124
2010-2011 167,124
2011-2012 101,440
Total $ 608.881
FS-24
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
MANAGEMENT SERVICES
The cafeteria facilities of the District .were operated by a third party vendor. Under the terms of the contract, the
vendor provides for the operation and maintenance of food services as required by law, with the policies subject
to the approval of the District. Operating costs, management fees and administrative costs are billed monthly to
the District.
PENSION PLAN
Substantially all full-time and part-time employees of the District participate in the pension plan. The District
recognizes expenditures or expenses equal to its contractually-required contributions, subject to the modified
accrual basis of accounting in governmental funds.
The District contributes to The Public School Employees' Retirement System (the System), a governmental cost
sharing multiple-employer defined benefit plan. The plan is under the authority of the Public School Employees'
Retirement Code (the Code), as amended. The plan provides retirement and disability, legislatively mandated ad
hoc cost-of-living adjustments, and healthcare insurance premium assistance to qualifying annuitants. The
System issues a comprehensive annual financial report that includes financial statements and required
supplementary information for the plan. A copy of the report may be obtained by writing to the System at PO Box
125, Harrisburg, PA 17108-0125, or by accessing the System's website at www.osers.state.oa.us.
The contribution policy is established in the Code and requires contributions by active members and employers.
Contribution rates for active members are set by law and are dependent upon members' class. In most cases, the
contribution rates based on qualified member compensation are as follows:
Membership Class T-C Active members hired before July 22, 1983 5.25%
Membership Class T-C Active members hired on or after July 22, 1983 6.25%
Membership Class T-D Active members hired before July 22, 1983 6.50%
Membership Class T-D Active members hired on or after July 22, 1983 7.50%
Active members newly hired after July 1, 2001 are automatically Class T-D. The contribution rates for all
members in Membership Class T-D were effective January 1, 2002.
Contributions required of employers are based upon an actuarial valuation. For the fiscal year ended June 30,
2008, the employer contribution rate was 7.13 percent of covered payroll, composed of 6.44 percent for pension
benefits and 0.69 percent for healthcare insurance premium assistance. The District's contributions to the system
for the years ending June 2008, 2007 and 2006 were $ 1,066,639, $ 937,264, $ 668,163, respectively. Those
amounts are equal to the required contributions for each year.
FS - 25
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
OTHER POST-EMPLOYMENT RETIREMENT BENEFITS
Under the District prior collective bargaining agreement, expired as of August 31, 2005, the District offered one
post-employment benefit to retired professional employees other than pension benefits as discussed in the
previous note. For employees with twenty or more years of service to the District retiring prior to September 1,
2005, the District pays the basic medical insurance premiums for five years (excluding family coverage) following
retirement. The District does allow other employees not eligible for this benefit to remain in its group medical
insurance plan upon payment by the retired employee of the cost of such coverage.
The District finances this benefit on apay-as-you-go basis. For the year ended June 2008, there were 23 eligible
participants and the total estimated net cost to the District for all retirees was $ 170,000 ($ 253,800 claims paid
plus plan costs for the retirees less $ 83,800 premiums paid by the retirees). Please refer to the new accounting
policies note on page FS-17 for additional information on Postemployment Benefits Other Than Pension Benefits.
RISK MANAGEMENT
Health insurance
The District is a member of South Central Trust for processing claims and obtaining reinsurance through
commercial insurance carriers. The District participates in a risk sharing investment pool with four other Districts
and one local vocational-technical school. The District has reinsurance for claims in excess of $ 125,000 specific
(per person). The District has a maximum lifetime benefit of $ 5,000,000 per person. District transactions with the
trust were as follows:
Amount available in the trust, beginning
Payments to the trust
Claims paid by the trust
Administrative and other fees, net of interest earned
Stop loss premiums and commissions
$ 1,703,703
2,993,581
$ (2,148,104)
(80,920)
(116.423)
(2,345.447)
Amount available in the trust, ending
The amount available in the trust was as follows:
Accrual for actual claims incurred
Accrual for administrative and other fees
Amount available for accrued costs, ending
Prepaid health insurance
Amount available in the. trust, ending
$ 270,837
7.000
277,837
2.074,000
FS - 26
EAST PENNSBORO AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2008
RISK MANAGEMENT (Cont'd.)
Health insurance (Cont'd.)
There are various methodologies for estimating a reasonable level for claims that have been incurred but not
reported (IBNR). District management has selected the methodology of '45 days of paid claims'. District
management believes this methodology provides an adequate amount for accrued costs.
Other insurance
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters. The District maintains commercial insurance coverage covering each
of those risks of loss. Management believes such coverage is sufficient to preclude any significant uninsured
losses to the District. Settled claims have not exceeded this commercial coverage in any of the past three fiscal
years.
For State unemployment compensation laws, the District is self-insured, which is a common practice for local
governmental units. Any unemployment claims are paid by the District on a quarterly basis as incurred.
For workers' compensation insurance, approximately 80 Districts participate in a public entity risk sharing pool
(School Districts Insurance Consortium) for processing claims and obtaining reinsurance through commercial
insurance carriers. Under this plan, the District's annual cost. should not exceed standard commercial insurance
rates.
COMMITMENTS AND CONTINGENCIES
The District's collective bargaining agreement with its teaching staff expires August 31, 2009.
In the normal course of preparing for the subsequent school year, the District has awarded bids for various
supplies, fuel contracts, etc. No major commitments in excess of routine requirements have been made by the
District.
The District participates in numerous state and federal grant programs which are governed by various rules and
regulations of the grantor agencies. Expenditures charged to the respective grant programs are subject to audit
and review by the grantor agencies; therefore, any findings or adjustments by the grantor agencies could have an
effect on the recorded grants receivable and/or deferred grant revenues, and on the related grant revenues and
expenditures. The District does not anticipate any material disallowance of program expenditures.
The District has no material contract commitments for construction and improvement projects at June 30, 2008.
The District is named as a defendant in various lawsuits, all in the ordinary course of business. The District
intends to vigorously defend itself against these actions. Legal counsel for the District has advised that they
cannot offer an opinion as to the probable outcome of all such actions. In the opinion of management, the ultimate
liabilities, if any, resulting from these claims will not have a material adverse effect on the financial position of the
District.
FS - 27
C (D~f~~ Gn V'N ' 01~OON000I~OD~rrd• ~ ' O M 00 '
O
0 ~
N
O
O f~000~
r~'rh 0
In 0r N M~f~~7 MOMrN Op ~-
ll•)h CO M M
O ~ N
U ~
E
M N `~ a0
a0 (ONON~tNONO O In
•-
' In 0
N
N 7Q OOCON '7 t~ O ao ao ~
~t a0 Q~ (~
7 O ~ N
00f~ NC4(Drrr V N CO f~ O f~ N O
r _
~ r
r
r r
M
> C U
a~ ~a
~ °
'~ ~ ~,
C C
N (0~=M1~ h 000 ' I~hOlplnaO~MfOinrlnOlnO N In I~O QO ~P N
~ ~
O I~f~00l~
r-hN ~ CO
r rN ~1n01~1~N~OrCO N~lt)(fl
~N (OIOInNr(DCONO M r
N
~O
~ N
N
0) ~ M0~'M l0 ~a0
~
D
i
• M .
--
~ >¢
O
r f
N MO
O
(OaONMd
MO r00M0
O
'
O r fD OOO h N O
m NN f ONCOM~ V
rN~~ ~ ~N
S ~( O
~ M 0
~
O
f0 7 (
vD i C
O
... l I
A
v M C
0
r O
~
C .- M
•
LL .~ Q
O O Ep
~
W
U
Z ~ N 0 N h O
CD CO (OIL 0 N •- 0 n I~ N OO OO M OD M N 0 00 1~ 0 0 00 M
NMMM(ONtnONMtO~ODOODfO~~C1 O ch
~ ~' O
a0
O O O
O
=
O
0M0000 O
00000000rr0rODNC0001~ V O A
(O
r O
D ~ O
E f~tnN~ CO
MOf~M to Nr'OfV OD InI~CO~~~~0000rM1~ 00
M M~PM~O~MttMMNONM COtn 00 CV
M a--
O M
M
O
m Q COO(O~ f~ OOI~Mrcpr000N~A~Y'~~ to 000 V ~ M er r
~ r r 00 r
N M ('M M r ~-- N r CM r
r
(h
M
F- Z ~ M
V ~ Q ~ d4
Z
y N ~
W Z 00
0 U
O _
0) 0000001n
tAfp~•r 00
~•-000CD CD CDMOCO~Y'OO~MlAMC000r000D (O
r MCpN00Mt!')lA Orrtq~(pln(p 0
(D~O(OlnrrMM~OIn(00r~~r N r
r
(p t~OCO
0
000 (O
d• 00
~T
'
~
N r~~00 V' Oi0000cM00~(Of~aDQitn00i[)
('MO to O _
~O
~ 'V
~ Z ~
3
00M000 r
rO~~I~M lC)CO •-- CV O
O = J
m
NMI~~ 00 ~hNrNe~ (Of~ t1)
fONMr~N~rNln~rll') In O h• In OOIA ~ 0
O
O
~ M
~
Nr00
N
~~ r N N~ ~ M ~
v`~~
~--
U
_ ~ W Z C
L ~ M
L
Q w - ~ H~
7
Q w
W
~ Q Q
~ ~ Z ~ 000001
to tt f~ 0 I~
l
) 0000 NMMrNODCO`cl'0N0 M to
~ CO M 0 N r M 00 ~ 00 (O N N lp (O O ~ r ~
' OD
0 0000
0 0 0 CO
~ 00
cr
~
Q rr
!
ty N ~000lnlnf~MOh
~t0C40f~rOlt7O h 001 N ~
H w
D U~
O 7
m ~1A0000 ~
0r0N M ~'~'OCOMODr~0~0COR00(000000
00~f'~h('7rrOp~lpO0NN00rNMN 00
CO MOB
COOtn N
~ O
0
Z Q
~ NNMV M
CV r 00 N vNM ~NOrNln000M v N v
r
'
V O M(D
v f~
-
O
~ :C N M ~f
V
CV C
'7 M
r ~ r ~
X Z
m
QW `
w p ~ es
Z
w C7 ~
~~
aW
°°
>
~'
w
N
~
Q
Wp ~
F- ~
z --
w ~
~ a
W o•
~
1¢- axi
a`>
~ o
c v,
o
07 in
a ~ ~
c
a~
w ~
to O C y
E ~ v
~
N
C o
~
~ ~
~ ~ 0) ~ ~
~ ~ ~ ~ N
y
a~ s w
x
7 OS
~' n °' ~ ~ ~_ v, _a w
~
U
~ a~ v ~ ~
C
tp 01
C
(4
°, m c f0
~ U
'O
~ ~ f6 f0
E E ~ c a~ ~ E
Z ~
rn U ~ d f6
~
~ ~ c ~
a> a~ ~
~ ~
a
c ~ y ~~~ °~ >.n°-
~
~ ~ ~
~ o
~ m c
~ ~ ~ o ~ c
rnn.~
C O OS N
° o
~
2L^
c
m ~
~
~ V1
~' ~
C
~ ~ ~
a
a~
7 > > r/1 w
N h y ~
y
~
a
~~•
c
fl- n C in C O .. OS rn +`~ vOi ~ C Z .~.. a
i rn
i ~ C
N~
~' N F U .o •~ ~ ~. ~ .C L C~ N~ ~- N E~ N H W C m 0) 0) C C
v
d c~ c~
w rnm c~s E•Q: E•n'm ~~ c °~~ E'na
m c rnrn
es
m
~ o o:° a~
CJJI~Il v ~ no.- o ~ Nv > > fl-Y a~ww o ns a~
cam(!)>OUaSQamOcnUOv~UUO c ~ ~ m
`° ~ ~
~• H CO L
~ U
•O
~
~ W O Z li 1i
U
m
' ~
~. ~.~
J r~F ~
-'7 ... -.~.
;
\~ ~
~~ !` ~ 7 ~;:
~
~ ~
~y 'J
--~ C
i
~~ - - t J
.~ C.S'~ ..t.;~.
~!:' ~(°.
``~V
V
~~
\ ~