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BIG SPRING SCHOOL DISTRICT
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2001
INDEX
Independent auditors' report
Combined balance sheet - all fund types and account groups -
June 30, 2001
Combined statement of revenue, expenditures and changes in fund
balances - All Governmental Fund Types -
year ended June 30, 2001
Statement of revenue, expenditures and changes in fund balances -
actual and budget - General and Athletic Funds -
year ended June 30, 2001
Statement of revenue, expenses and changes in fund balance/retained
earnings - Food Service Fund -
year ended June 30, 2001
Statement of cash flows - Food Service Fund -
year ended June 30, 2001
Page
Number
4 - 5
Notes to financial statements -
June 30, 2001 8 - 19
JAMES E. LYONS
HOWARD R, GREENAWALT
CREEDON R. HOFFMAN
JOHN H. KLINGLER
DEBORAH J. KELLY
R. A. GREENAWALT 11956-1983)
A. A. REIDINGER (RETIRED)
C. EDWARD ROGERS, JR.
GREENAWALT & COMPANY, P.C.
CERTIFIEO PUBLIC ACCOUNTANTS
400 WEST MAIN STREET
MECHANICSBURG, PENNSYLVANIA 17055
(717) 766-4763
FAX (717) 766-2731
TNDEPEIVD~-I,~' AUDZTORS ' REPORT
62 WEST POMFRET STREET
CARLISLE, PA 17013
(717) 243-4822
FAX (717) 258-9372
Board of School Directors
Big Spring School District
Newville, Pennsylvania
We have audited the accompanying general-purpose financial statements of Big Spring
School District as of June 30, 2001 and for the year then ended. These general-purpose
financial statements are the responsibility of the District's management. Our
responsibility is to express an opinion on these general-purpose financial statements
based on our audit.
We conducted our audit in accordance with auditing standards 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 general-purpose financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the general-purpose financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall general-purpose financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the accompanying general-purpose financial statements present
fairly, in all material respects, the financial position of Big Spring School District
as of June 30, 2001, the results of its operations and the cash flows of its Food
Service Fund for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated September 21, 2001 on our consideration of Big Spring 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 conjunction with this report in considering the results of our audit.
GREENAWALT & COMI~ANY, 'P.C.
September 21, 2001
Mechanicsburg, Pennsylvania
MEMBERS -- AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS -- PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
BIG SPRING SCHOOL DISTRICT
COMBINED BALANCE SHEET -
ALL FUND TYPES AND ACCOUNT GROUPS
JUNE 30, 2001
Assets and other debits
Cash
Investments
Due from other funds
Accounts receivable
Delinquent taxes receivable
(net of $ 267,808 allowance
for uncollectibles)
Food service inventories
Food service equipment
(net of $ 273,965
accumulated depreciation)
Land, buildings and equipment
Amount to be provided for
general lonG-termdebt
Total assets and
other debits
Liabilities
Payroll and benefits payable
Accounts payable
Deferred revenue
Due to other funds
Due to student organizations
Bonds and notes payable
Compensated absences
Total liabilities
Governmental Fund Types
Capital Capital
General Athletic Reserve Pro~ects
$ 2,664,328 $ 9,354 $ 351,192 $ 9,268,443
3,861,412 - - 4,775,657
31,677 - - 184,357
1,013,893 - -
500,000
$ 8,071,310 $ 9,354 $~ $14 228 457
$ 1,147,003 $ $ $ -
269,862 12,454 -
360,209 - -
184,357 - -
1,961,431 12,454 0 0
Fund equity and other credits
Invested in general fixed assets -
Fund balances/retained earnings
Reserved -
Unreserved 6,109,879
Total fund equity and
other credits
Total liabilities, fund
equity and other credits
(3,100) 351,192
14,228,457
6,109,879 (3,100) 351,192 14,228,457
$ 8,071,310 $ 9,354 $ 351.192 $14,228,457
The accompanying notes are an integral part of these financial statements.
- 2 -
Proprietary Fiduciary
Fund Types Fund Types
Food
Service Activity
Account Groups
General General
Fixed Assets Long-Term Debt
198,707 $ 135,935
$
30,736
111,198 - -
- - 18,561,721 -
- - 19,741,444
$ 340,64--1 $ 135,935 $ 18,561,721 $ 19,741,444
3,393 $ - $ - $ -
1,474 - - -
17,549 - - -
31,677 - - -
- 135,935 - -
- - - 19,017,864
74,279 - 723,580
128,372 135,935 0 19,741,444
- 18,561,721
212,269 -
212,269 0 18,561,721 0
$ 340,641 $ 135,935 $ 18,561,721 $ 1--9,741,444
BIG SPRING SCHOOL DISTRICT
COMBINED STATEMENT OF REVENUE, EXPENDITURES
AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 2001
Revenue
Local sources
State sources
Federal sources
General Athletic
Capital Capital
Reserve Projects
$ 12,232,293 $ 61,429 $ 47,036 $ 1,231,940
10,683,501 - - _
366,933 - - _
Total revenue
23,282,727 61,429
47,036 1,231,940
Expenditures
Instruction
Support services
Operation of noninstructional
services
Facilities acquisition,
construction and
improvement services
13,677,086 -
6,967,386 -
364,882 125,171
132,301 -
1,374,349 64,495
t,178,981
Total expenditures
21,009,354
2,273,373
125,171 1,506,650 1,243,476
Excess of revenue over
(under) expenditures
(63,742) (1,459,614) (11,536)
Other financing sources (uses)
Proceeds from term loan
Receipts from other districts
Refund of prior years'
expenditures
Debt service
Governmental transfers
Food service transfers
1,200,000
33,042
56,289
(1,487,510)
~1,260,000)
(28,000)
60,000
60,000
(15,763,340)
1,200,000 -
(19,771) -
Total other financing
sources (uses)
(1,486,179)
1,180,229 (15,763,340)
Excess of revenue and other
financing sources over
(under) expenditures and
other financing uses
Fund balances, July 1, 2000
Fund balances, June 30, 2001 $ 6,109,87~ $
787,194 (3,742)
5,322,68~ 642
(3,100) $
(279,385) (15,774,876)
630,577 30,003,333
351,192 $ 14,228,457
The accompanying notes are an integral part of these financial statements.
BIG SPRING SCHOOL DISTRICT
STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES - ACTUAL AND BUDGET
GENERAL AND ATHLETIC FUNDS
YEAR ENDED JUNE 30, 2001
Revenue
Local sources
State sources
Federal sources
Total revenue
Expenditures
Instruction
ReGular programs
Special programs
Vocational education programs
Other instructional programs
Adult education programs
Total instruction
Support services
Pupil personnel
Instructional staff
Administration
Pupil health
Business
Operation and maintenance
of plant services
Student transportation services
Other support services
Total support services
Operation of noninstructional services
Student activities
Community services
Total operation of
noninstructional services
Total expenditures
Actual
$ 12,232,293
10,683,501
366,933
23,282,727
10,115,478
2,555,278
449,025
557,305
13,677,086
568,369
798,189
1,428,680
183,931
508,036
1,963,727
1,496,340
20,114
6,967,386
349,394
15,488
364,882
21,009,354
General
Budget
$ 12,096,015
11,124,606
356,049
23,576,670
10,327,459
2,592,594
488,212
560,915
8,220
13,977,400
615,248
834,483
1,431,704
194,193
529,708
1,973,449
1,496,341
32,220
7,107,346
356,167
15,488
371,655
21,456,401
Variance
Favorable
(Unfavorable)
$ 136,278
(441,105)
lO,88~
(293,943)
211,981
37,316
39,187
3,610
8,220
300,314
46,879
36,294
3,024
10,262
21,672
9,722
1
12,106
139,960
6,773
6,773
447,047
BIG SPRING SCHOOL DISTRICT
STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES - ACTUAL AND BUDGET
GENERAL AND ATHLETIC FUNDS (Cont'd.)
YEAR ENDED JUNE 30, 2001
Excess of revenue over (under)
expenditures
Other financing sources (uses)
Proceeds from term loan
Receipts from other districts
Refund of prior years' expenditures
Debt service payments
Transfers (to) from other funds
Budgetary reserve
Total other financing
sources (uses)
Excess of revenue and other financing
sources over (under) expenditures
and other financing uses
Fund balances, July 1, 2000
Fund balances, June 30, 2001
General
Actual Budget
Variance
Favorable
(Unfavorable)
$ 2,273,373 $ 2,120,269 $ 153,104
1,200,000 1,200,000
33,042 33,042
56,289 250,000 (193,711)
(1,487,510) (2,228,978) 741,468
(1,288,000) (1,705,900) 417,900
- (35,391) 35,391
(1,486,179) (3,720,269) 2,234,090
787,194 (1,600,000) 2,387,194
5,322,685 4,268,257 1,054,428
$ 6.109,879 $ 2,668,257 $ 3,441r622
The accompanying notes are an integral part of these financial statements.
- 5 -
Athletic
Actual
(63,742)
BudGet
$ (78,600)
Variance
Favorable
(Unfavorable)
$ 14,858
60,000
60,000
78,600
78,600
(18,600)
(18,600)
(3,742)
642
(3,742)
642
$ ____~__/~kO_Q ) $ 0 $ (3,100)
BIG SPRING SCHOOL DISTRICT
STATEMENT OF REVENUE, EXPENSES AND
CHANGES IN FUND BALANCE/RETAINED EARNINGS
FOOD SERVICE FUND
YEAR ENDED JUNE 30, 2001
Operating revenue
Sales
Operating expenses
Salaries and wages
Employee benefits
Food and milk
General supplies
Other expenses
Utilities and fuel
Depreciation
Total operating expenses
Operating loss
Nonoperating revenue
State sources Meal subsidies
Social security and retirement subsidies
Federal sources
Meal subsidies
Donated commaodities earned
Interest earned
Total nonoperating revenue
Loss before transfers
Fund transfers
General Fund contributed services
Capital Reserve Fund equipment purchases
Net income
Fund balance/retained earnings, July 1, 2000
Fund balance/retained earnings, June 30, 2001
609,674
337,039
110,787
386,768
6,790
10,000
36,000
24,984
912,368
(302,694)
33,029
15,652
171,560
54,625
8,715
283,581
(19,113)
28,000
19,771
28,658
183,611
212 269
The accompanying notes are an integral part of these financial statements.
- 6 -
BIG SPRING SCHOOL DISTRICT
STATEMENT OF CASH FLOWS
FOOD SERVICE FI/ND
YEAR ENDED JUNE 30, 2001
Cash flows from operating activities Cash received from users
Cash payments to employees for services
Cash payments to suppliers for goods and services
Cash payments for other operating expenses
Net cash used in operating activities
Cash flows from non-capital financing activities
Grants and subsidies
State sources
Federal sources
General Fund contributed services
Net cash provided by non-capital financing activities
Cash flows from investing activities
Interest earned
Net cash provided by investing activities
Net increase in cash
Cash, July 1, 2000
Cash, June 30, 2001
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
Donated commodities earned
Decrease (increase) in assets
Accounts receivable
Inventories
Increase (decrease) in liabilities
Accounts payable
Deferred revenue
Due to other funds
Compensated absences
Net cash used in operating activities
612,317
(496,742)
(344,048)
(45,961)
(274,434)
51,590
198,508
28,000
278,098
8,715
8,715
12,379
186,328
198,707
(302,694)
24,984
54,625
2,643
(4,849)
(5,461)
5,254
(48,775)
(161)
(274,43_4)
The accompanying notes are an integral part of these financial statements.
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
1. Reporting entity
Big Spring 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 its
boundaries: the Cumberland County Townships of Cooke, Lower Frankford, Upper
Frankford, Lower Mifflin, Upper Mifflin, North Newton, South Newton, Penn and
West Pennsboro, and the Borough of Newville. Services provided include a
comprehensive curriculum for primary and secondary education as well as special
education and vocational education programs. The District receives revenue from
local, state and federal sources and must comply with the requirements of these
funding sources.
Criteria established in Governmental Accounting Standards Board Statement Number
14 were used in determining the entities to be included in the reporting entity.
These criteria include basic items such as financial interdependency, selection
of governing authority, designation of management, ability to significantly
influence operations, accountability for fiscal matters, scope of public service
and special financing relationships. All operations of the District are included
in the reporting entity.
There are no component units that meet the above criteria for inclusion in this
reporting entity. However, the District is a participant in two jointly-governed
operations, each of which is a separate legal entity that offers educational
services to the District and its residents. Each entity serves several school
districts, so the following entities are not included in this reporting entity.
Capital Area Intermediate Unit provides special education services and
programs.
Cumberland-Perry Area Vocational-Technical School provides vocational and
technical education services and programs.
2. Summary of significant accounting policies
The accounting records of Big Spring School District are maintained on the basis
of accounting practices prescribed or permitted by the Manual of Accounting and
Related Financial Procedures for Pennsylvania School Systems, issued by the
Pennsylvania Department of Education in accordance with the provisions of the
School Laws of Pennsylvania. These practices are in conformity with generally
accepted accounting principles as applicable to governmental units. A summary of
the more significant accounting policies is as follows:
- 8 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
2. Summary of significant accounting policies (Cont'd.)
Fund accounting
The accounting records of the District are organized on the basis of fund types
and account Groups. Each fund type may consist of several different funds. Each
fund is a separate entity with self-balancinG accounts which comprise its assets,
liabilities, fund balance/retained earnings, revenues and expenditures/expenses
as appropriate. The fund types and account Groups utilized by BiG Spring School
District are as follows:
Governmental Fund Types - These are the funds through which most Governmental
functions are provided. The acquisition, use and balances of the District's
expendable financial resources and related liabilities (except those accounted
for in proprietary funds) are accounted for through Governmental funds.
The General Fund accounts for all financial resources except those required
to be accounted for in other funds. The majority of District activities,
including instruction, administration and other services are accounted for
in this fund.
The Athletic Fund is a special revenue fund that accounts for the revenues
and ~xpenditures for athletic purposes.
The Capital Reserve Fund provides for unspecified future construction or
equipment needs.
The Capital Projects Fund accounts for bond proceeds and the expenditure of
those funds.
Proprietary Fund Types - These funds account for operations that are financed
and operated in a manner similar to private business enterprises.
The Food Service Fund accounts for the financial transactions associated
with the operations of the cafeterias.
Fiduciary Fund Types (Trust and Agency Funds) - These funds account for assets
held in a trustee capacity or as an agent for other funds or entities.
The Activity Fund accounts for programs operated and sponsored by various
clubs and organizations within the schools.
Account Groups - These account Groups are not funds. They are only concerned
with the measurement of financial position and are not involved with the
measurement of results of operation.
General Fixed Assets accounts for land, buildings and equipment.
General LonG-Term Debt accounts for bonds, notes and compensated absences
payable in future years.
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
2. Summary of significant accounting policies (Cont'd.
Basis of presentation
The accounting and financial presentation methods of the different fund types are
based on their measurement focus, which determines when revenues and expenditures
are recognized.
Governmental Fund Types - These funds use the "current financial resources"
measurement focus, which is a modified accrual method.
Revenues are recorded when susceptible to accrual (both measurable and
available). Available means collected within the current period or soon enough
thereafter to pay current liabilities.
Expenditures are generally recognized when the related fund liability is
incurred. Exceptions to this general rule include principal and interest on
general long-term debt which is recognized when due. Disbursements for
inventory type items and prepaid expenses are considered expenditures at the
time of purchase.
Proprietary Fund Types - The Food Service Fund uses the "flow of economic
resources" measurement focus, which is a full accrual method. Presentation
follows accounting pronouncements required for private business enterprises,
unless those pronouncements conflict with or contradict governmental
accounting pronouncements.
Donated commodities are inventoried at an estimated value when received.
Inventories (valued on the first-in, first-out method) are recorded as an
asset, and the portion represented by donated commodities is recorded as
deferred revenue.
Food service equipment is capitalized, with depreciation (computed on the
straight-line method using an estimated useful life of 12 years) recorded as
an operating expense.
Compensated absences are recognized as operating expenses and the cumulative
amount is recorded as a liability within the fund.
Fiduciary Fund Types (Trust and Agency Funds) - These funds use a modified
accrual method. They are custodial in nature (assets equal liabilities), and
are not involved with the measurement of results of operations (revenues and
expenditures).
Account Groups - Land, buildings and equipment are presented at cost.
Depreciation is not computed on these assets. Additions and disposals had been
estimated since the previous outside valuation report, which was updated to
October 1999.
- 10 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
2. Summary of significant accounting policies (Cont'd.)
Basis of presentation (Cont'd.)
Account Groups - (Cont'd.)
Long-term debt is offset by an amount to be provided by future taxation or
other revenue sources. General obligation bonds and notes payable in future
years are recorded as District debt. Interest on long-term debt is recognized
when such interest is due.
Compensated absences (those for which employees receive pay) are presented
using the termination payment method. A liability is 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.
Budgets
The District adopts, prior to the beginning of each fiscal year, an annual budget
for the General Fund and Athletic Fund. A part of this budget process is the
adoption of local tax rates, subject to various legal restrictions. The District
approves subsequent budget revisions (primarily transfers between expenditure
categories) as necessary. Unused appropriations expire at the end of each year.
The General Fund budget was amended after its adoption to provide for additional
revenue and expenditures of federal and state programs in the amount of
$ 429,263.
Revenue - Local sources
Local revenues are recognized when received during the fiscal year or soon enough
thereafter to be susceptible to accrual.
Real estate, occupation, residence and per capita taxes are levied as of July 1
with a legal, enforceable claim against the taxpayer and/or property. Amounts
estimated to be received within one year after the end of the fiscal year, but
not soon enough to be susceptible to accrual, are recorded as deferred revenue.
An allowance for uncollectibles is recorded for taxes estimated not to be
collectible within one year after the end of the fiscal year.
Revenue - State sources
State revenues due the District as current fiscal year entitlements are
recognized as revenue in the current fiscal year.
11 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
2. Summary of significant accounting policies (Cont'd.)
Revenue - Federal sources
Federal revenues applicable to expenditures in the current fiscal year but
expected to be received in the next fiscal year are recognized as revenue in the
current fiscal year.
Inter-fund transactions
Expenditures by the General Fund for the benefit of other funds are reflected in
the respective statements of revenue and expenditures/expenses, based on
management's estimates. The District does not attempt to allocate all costs which
benefit the other funds due to the difficulties associated with the measurement
of such benefits.
Pension plan
Substantially all full-time and part-time employees of the District participate
in a cost-sharing multiple employer defined benefit pension plan. The District
recognizes expenditures or expenses equal to its contractually-required
contributions, subject to the modified accrual basis of accounting in
governmental funds.
3. Cash and investments
Cash (other than $ 80 cash on hand) consists of checking accounts in financial
institutions and pooled funds in which the District owns a prorata share of the
fund assets and is categorized as follows:
Insured (FDIC)
Collateral held in the District's name
Collateral not held in the District's name,
including public funds collateralized as
permitted by Act 72
Pooled funds
Carrying Bank
Value Balance
200,000 $ 200,000
333,114 347,812
533,114 547,812
12,094,765 12,786,131
$ 12,627,879 $ 13,333,943
For purposes of the Food Service Fund statement of cash flows, cash consists of a
checking account and pooled funds.
- 12 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
3. Cash and investments (Cont'd.)
Investments, which are presented at fair value, are as follows:
Fair Amortized
Value Cost
Money market funds
Repurchase agreement (pooled)
Pennsylvania Local Government Investment Trust
United States Agencies obligations
Investments are categorized as follows:
$ 533,539 $ 533,539
4,775,657 4,775,657
2,631,901 2,631,901
695,972 697,32~
$ 8,637,069 $ 8,638,426
Insured
Collateral held in the District's name
Collateral not held in the District's name
Pooled investments
1,229,511 1,230,868
1,229,511 1,230,868
7,407,558 7,407,558
$ 8,637,069 $ 8,638,426
The types of authorized investments are limited by state regulations. Investment
policies followed during the year did not significantly alter the categorization
of investments shown above.
4. Accounts receivable
Accounts receivable are as follows:
Local sources
Earned income taxes
Other items
State sources
Federal sources
Other receivables
General
Fund
$ 663,298
24,835
163,874
93,616
68,270
$ 1,013,893
13 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
5. Delinquent taxes receivable
Delinquent taxes receivable and the related deferred revenue are as follows:
Real estate taxes
Occupation, residence and per capita taxes
Delinquent taxes receivable
Allowance for uncollectibles
Estimated to be collectible within one year
Portion recognized as revenue
462,448
305,360
767,808
267,808
500,000
150,000
Portion recorded as deferred revenue
$ 350,000
6. Land, buildings and equipment
Changes in land, buildings and equipment were as follows:
July 1, 2000 Additions Disposals June 30, 2001
Land and improvements
Buildings and systems
Equipment
$ 326,110 $ 400,000 $ - $ 726,110
13,436,207 500,000 - 13,936,207
3,749,404 300,000 (150,000) 3,899,404
General fixed assets
$ 17,511,721 $ 1,200,000 $ (150,00Q) $ 18,561,721
Food service equipment
$ 385,392 $ 19,771 $ (20,000) $ 385,163
7. Bonds and notes payable
Changes in bonds and notes payable were as follows:
Fixed rates
1997 Series
1998 Series
Capital
lease for
computers
Variable rates
1989 F-14
Subseries
1989 H-13
Subseries
1999 Series
2000 Series
July 1, 2000
$ 4,035,000 $
9,635,000
184,380
Issuances
Scheduled
Redemptions
- $ (365 000
- (375 000
(76 516)
10,000,000 - (10,000,000)
5,000,000 (5,000,000)
4,965,000 (185,000)
1,200,000 -
End of Year
June 30, 2001 Interest Rates
$ 3,670,000 5.075%
9,260,000 3.875% to 4.650%
107,864 7.180%
4,780,000 3.875%
1,200,000 2.875%
$ 33,819,380 $ 1,200,000 $(16,001,516) $ 19,017,864
14 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
7. Bonds and notes payable (Cont'd.)
Debt service payments were as follows:
General Capital
Fund Projects Fund
Principal payments
Interest payments
Ail other items
$ 816,516 $ 15,185,000
657,448 578,340
13,546
$ 1,487,510 $ 15,763,340
Scheduled debt service requirements are as follows:
Fixed Rates
Year Ending
June 30 Principal Interest
Variable Rates
Principal Interest Total
2002 $ 852
2003 835
2004 840
2005 880
2006 915
2007 - 2011 4,105
2012 - 2016 3,145
2017 - 2018 1,465
195 $ 589
669 548
000 510
000 472
000 432
000 1,517
000 765
000 100
508 $ 195,000 $ 219,725 $ 1,856,428
946 1,405,000 212,169 3,001,784
798 210,000 169,725 1,730,523
683 220,000 161,587 1,734,270
481 230,000 153,063 1,730,544
782 1,320,000 623,294 7,566,076
320 1,640,000 343,131 5,893,451
783 760,000 44,563 2,370,346
$ 13,037,864 $ 4.938,30--1 $ 5,980,000 $ _1,927,257 $ 25,883,422
The 1989 Subseries, totaling $ 15,000,000, matured and were paid off during the
year ended June 30, 2001.
The 1999 Series pays interest at a variable rate of .55% above the "weekly rate",
not to exceed 25.00%.
In August 2000, the District issued its 2000 Series which pays interest at a
variable rate, which is "75% of the 30 day LIBOR rate~, not to exceed 12.00%. The
General Fund transferred the proceeds of this Series to the Capital Reserve Fund,
to be available for capital improvement projects. This Series is subject to
repayment during the year ending June 30, 2003.
The bonds and notes payable contain options which would allow the District to
call any or all remaining bonds and notes as follows:
Description
Callable on or After
1997 Series
1998 Series
1999 Series
2000 Series
Not callable
October 1, 2003
Upon 45 days notice
Any date
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BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
8. Compensated absences
Changes in compensated absences were as follows:
July 1, 2000 Net Chanqe June 30, 2001
General Long-Term Debt
Teachers $ 494,626 $ 10,802 $ 505,428
Custodians 48,281 6,297 54,578
Secretaries 73,471 4,629 78,100
Aides 16,417 (1,077) 15,340
Administrators 79,930 (9,796) 70,134
$ 712 725 $ 10,855 $ 723,580
Food Service Fund
$ 74,440 $ (161) $ __74,279
Payments for compensated absences recorded in General Long-Term Debt are made
through General Fund expenditures in the year the absence is taken or the
employee retires. At retirement or death, while in School District service,
employees (with at least 10 years service in the School District) or their
beneficiaries shall choose one of the following options (subject to a maximum of
$ 12,000 for administrators and $ 6,500 for all other employees):
1. Accumulated unused sick leave days times $ 50 per day
2. Number of full years of service in the District times $ 150 per year
9. Pension plan
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
Public School Employees' Retirement System, PO Box 125, Harrisburg, PA 17108-
0125.
The contribution policy is established by the Code and requires contributions by
active members, employers and the Commonwealth. Active members are required to
contribute 5.25 percent of their qualifying compensation if they joined the
system prior to July 22, 1983, and 6.25 percent if they joined on or after that
date.
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BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
9. Pension Dlan (Cont'd.)
Contributions required of employers are based upon an actuarial valuation. For
the fiscal year ended June 30, 2001 the employer contribution rate was 1.94
percent of covered payroll, composed of 1.64 percent for pension benefits and .30
percent for healthcare insurance premium assistance. The District's contributions
to PSERS for the years ending June 30, 2001, 2000 and 1999 were $ 241,893,
$ 555,774 and $ 703,008, respectively. Those amounts are equal to the required
contributions for each year.
10. Postemployment benefits other than pension benefits
Under the negotiations agreement with Big Spring Education Association, the
District shall provide for continuance of health care insurance after retirement
until age 65. This health care insurance shall be at the retiree's expense,
except that employees who retire after thirty or more years with the District,
shall have up to five years of health care insurance benefits provided on the
basis of the District paying 50% of the cost and the retiree paying 50% of the
cost. The District finances this benefit on a pay-as-you-go basis. For the year
ended June 30, 2001 the District incurred a total cost of $ 39,849 to provide
this benefit to 20 participants.
11. Risk management
The District is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to
employees; and natural disasters. The District maintains commercial insurance
coverage covering each of those risks of loss. Management believes such coverage
is sufficient to preclude any significant uninsured losses to the District.
Settled claims have not exceeded this 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.
The District's health insurance plan allows each participant to choose one of the
three coverage options available through South Central Trust. South Central Trust
is not a risk sharing Dool. The Trust was established for processing claims and
obtaining reinsurance through commercial insurance carriers. The Trust has
reinsurance for claims in excess of $ 75,000 specific (per person) and 125%
aggregate (estimated District annual cost). A summary of District transactions
with the Trust is as follows:
- 17 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
11o Risk management (Cont'd.)
District balance, July 1, 2000
$ 598,668
District payments to the Trust
Rebates and reimbursements
Interest income
$ 1,663,978
24,086
32,678
Total receipts
1,720,742
Claims paid by the Trust
Stop loss premiums (reinsurance)
Administrative and other fees
1,565,607
122,393
72,569
Total payments
1,760,569
District balance, June 30, 2001
$ 558,841
District management considers the balance to be adequate for unpaid claims.
Therefore, no amounts are presented in these financial statements as due to or
due from the District as of June 30, 2001.
12. New accounting pronouncements
During the year ended June 30, 2001, the District implemented Government
Accounting Standards Board (GASB) Statement No. 33, 'Accounting and Financial
Reporting for Nonexchange Transactions". The effect of GASB 33 had no impact on
revenue or fund balance of the District. However, assets and liabilities were
both increased for revenues meeting the definition of nonexchange transactions.
During the year beginning July 1, 2002, the District will be required to
implement GASB 34, 'Basic Financial Statements - and Management's Discussion and
Analysis - for State and Local Governments-. The effect of GASB 34 will
significantly affect how the District presents its financial statements. The
District receives information from various sources, including the Pennsylvania
Department of Education, and expects to be ready to satisfactorily implement this
accounting standard.
13. Commitments and contingencies
The District's contract with its teaching staff is scheduled to expire in June
2004.
The District is in the process of constructing a new high school. Total project
costs are currently estimated to be $ 30,500,000, of which approximately
$ 2,000,000 of site acquisition and pre-construction professional fees, etc. had
been incurred through June 30, 2001.
- 18 -
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2001
13. Commitments and contingencies (Cont'd.)
In the normal course of business, the District is subject to legal disputes and
claims. The District does not anticiDate any material losses from any pending or
threatened litigation.
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 is also audited by the State's Department of the Auditor General.
FindinGs, if any, from these audits could result in the repayment of funds, or
the receipt of additional funds.
14. Subsequent events - General obligation bonds
In July 2001, the District issued its 2001 Series of bonds payable in the amount
of $ 15,500,000. After discounts and issuance costs of $ 181,000, the remaining
$ 15,319,000 provided the estimated amount necessary to fully finance the
construction of the District's new high school. The annual debt service on the
2001 Series will be approximately $ 1,265,000.
- 19 -